Blogs > HNN > Only One Man Can Help a President Obama Rebuild the American, and Global Economies

Oct 27, 2008 2:47 am

Only One Man Can Help a President Obama Rebuild the American, and Global Economies

If Barack Obama is elected President there will be little doubt that the financial crisis of the last few months helped win him the election. But will an Obama Administration be able to solve the world's most complex economic crisis in almost a century?

Of the two candidates, Obama has more clearly recognized the need, as he describes it, for “new direction,” “new leadership,” and a “real change in the policies and politics of the last eight years.”

Yet merely turning the clock back eight years, to the Halcyon days of the Clinton Administration, won't do the trick. However lofty Obama's rhetoric, the reality is that his chief economic advisors, people such as Clinton alumni Robert Rubin and Lawrence Summers, were among the biggest supporters of the deregulation of financial markets and cheap-credit driven growth that led to the current mortgage, credit and financial crises.

It's hard to imagine that officials who invested so much in the system now in collapse could accept the need for a significant reorientation of the American economy, nevermind lend a hand in what French President Nicholas Sarkozy rightly describes as the “refoundation of world capitalism.”

At the heart of such a refounding would be ensuring a more equitable and sustainable distribution of global resources and wealth. As Obama declared during the last debate, “When you spread the wealth around it's good for everybody.”

The problem is that for over a generation our economy has been built around the myth that no such spreading was necessary. Americans bought into the ideology that we could consume like the rich without actually being wealthy, and, as important, without considering the economic, and ultimately ecological, costs of the consumer-driven “American way of life.”

It's hard to see how, while managing at least two wars and numerous other threats to our national security, Obama would be able to devote the time, energy and political capital necessary to shepherd the country towards what amounts to a new social contract. Making the task harder is his well-documented difficulties forging connections with either middle or upper class Americans—Joe the Plumber or Joseph the hedge fund manager.

Obama needs help. Only one figure in contemporary American politics combines an uncanny ability to “feel the pain” of working and middle class Americans while retaining the trust of Wall Street; who has the command of the bully pulpit necessary to convince Americans across the socio-economic spectrum of the need for a new bottom line, and the detailed knowledge of policy-making in the global age required to manage what will be a long and painful transition to a new order.

That person is, of course, Bill Clinton.

It was Clinton, after all, whose 1992 campaign was driven by the slogan “It's the economy, Stupid!” One of his first moves after being elected was to convene an “Economic Summit” in Little Rock, where 300 policy-makers, scholars, business and labor leaders discussed how best to transform the American economy to meet the challenges of the emerging global system.

During the next eight yers, the Clinton Administration would manage both the greatest and most widely distribute generation of wealth in the United States since World War II.

It is true that towards the end of the 1990s Wall Street began to pull too far away from Main Street, which coupled with Clinton's uncritical embrace of Free Trade as the panacea for the ills of the developing world, helped lay the groundwork for the frenzied deregulatory policies of his successor.

But Clinton's instincts and sympathies always remained with the working and middle classes, whose overall rise in standard of living he counts as his “greatest accomplishment” as President. As important, more than most politicians Clinton has a record of learning from mistakes, and for being able to talk convincingly both to Main Street and Wall Street.

Clinton's activities since leaving office, as head of the Clinton Global Initiative, have added to his prestige on the world stage and to both his knowledge of the possibilities and the innumerable pitfalls involved in bringing about far-reaching social and economic change.

Indeed, while the annual gatherings of the CGI has been characterized (and in some quarters, derided) as “elitist,” Clinton has been ahead of the curve in understanding the need to enlarge the policy-making conversation—to bring the most innovative scholars, business leaders, grass roots activists, artists and policy-makers into the same room to share their multifarious insights and experiences in order to meet the difficult challenges facing the United States and the world today.

After eight years of Bush Administration arrogance, greed and incompetence, the world is desperate for such a holistic and transformative strategy for change, one that can brings people together across political, economic, and national lines towards a common purpose.

However lofty Obama's vision, he will just be claiming the mantle of authority at a political moment when there is little time for on the job learning. And while his running mate, Joe Biden, has a stronger middle class appeal, his expertise in foreign policy will be sorely needed for other urgent tasks.

Given this dynamic, imagine the impact on world financial markets, and consumer confidence, if Obama announced that he was appointing former President Clinton to head a commission tasked with forging the national and global consensus to refound our economies on a surer and more sustainable footing.

Some might say that in the middle of a war on terror, and with the global economy spiraling into recession, stability and well-tested remedies are the order of the day, rather than pressing for far reaching changes to the very basis of the American economy. But history offers a precedent for taking bold action in the midst of war and economic turmoil.

In 1944, a year before the end of World War II, the United States brought together the major industrial states to establish a new instituional architecture for the global economy. The resulting Bretton Woods sysem helped ensure that out of the ashes of global war an unprecedented level of economic prosperity was enabled.

The same level of cooperation between industry, labor and government will be necessary to refound the American and global capitalism on a more sustainable and equitable footing today. Barack Obama has the intelligence and vision to achive such a transformation, but he can't do it alone. With a policy-maker and communicator of Clinton's stature to help shape the national conversation, there is every reason to think that both Main Street and Wall Street can transcend narrow interests and outmoded identities to forge a sustainable path back to economic prosperity, at home and around the world.

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Lawrence Brooks Hughes - 11/2/2008

President Obama, if there ever is one, will need help from one man, and you were half right, because his name is Bill. The last name is Ayers. In order to properly establish the red revolution in America he will actually get Ayers, (at least on the phone), who is said to have ghosted his book (the earlier, well-written one). If the great day is really at hand, Ayers will become an important historical figure, as influential as Col. House. Or perhaps more like Rasputin. Ayers is no dummy. He saw the futility of bombing and turned his efforts to subverting the school children instead--with tremendous success. Few Americans under 35 have any knowledge of capitalism today, or know why they should defend it, thanks to the relentless toil of people like Ayers. The election of Obama be the culmination of Ayers'life work, a triumph for him and his wife, as well as for Jeremiah Wright. In Ayers' case, the old adage, "If at first you don't succeed, try, try again," will have proven true.

Raul A Garcia - 10/30/2008

We need to create wealth and sustain it to rescue this economic beast that is whimpering of late. This means real wealth, not simply a credit line from a fly-by-night lender. You can't do it by throttling business either or marketing a glossy Hollywood fabrication for a season or some "feel-good" antics. I think conditions require a "hundred days" of real work and implementation- the Congress is certainly in Obama's favor for such a drama.

Lorraine Paul - 10/28/2008

Mr LeVine thank you for responding to my comment. You make several good points, such as the various analyses and interpretations of Marx. I have commented on another thread regarding the role of the middle-classes, and even of the aristocracy, in the struggle for social justice down the ages.

This could be said to be epitomised within the Marx/Engels paradigm whereby both are from the middle-class and, indeed, Marx's wife, Jenny was of the aristocracy.

Unfortunately, any collaboration of, to use your terminology, Main Street and Wall Street is doomed from the outset. It may work for a time, even decades, but eventually there will be a breakdown in the relationship. It will always fail because the aspirations of both classes are inimical to each other. Wall Street is primarily concerned with producing 'profit' for stockholders, Main Street is concerned with getting a larger share of wealth that they produce.

A rather 'vulgar' interpretation I admit. However, my own observations down the years, together with my studies have led me to this conclusion.

During the 1980's and into the early 1990's in my own country, Australia, we had a melding of government, business and trades unions which worked. In fact a friend of mine sat on a committee whose role it was to enhance this trifecta!!

Unfortunately, the rise of the economic (ir)rationalists put an end to this most beneficial era! Just as in the US, it has been downhill from there.

The greed of various "Wall Streets" throughout the world will always overcome, eventually, the goodwill of other sectors of society!

Mark A. LeVine (UC Irvine History Professor) - 10/28/2008

thanks for your comment. i happen to be teaching marx this quarter, as i do most every year, so yes, i have heard of him. your reading of marx is, however, far more 'vulgar' than representative of the nuances contained in his writings, and particularly in the elaborations of his discussions of how ideologies are formed and contested by commentators such as gramsci, harvey and althusser.

it is certainly true that to the extent people define themselves primarily through their economic/class position/identity, then it will be hard for 'capitalists' to consider the interests of workers. BUT, there is no evidence that this is the only or even primary way that people can define themselves, especially when existential threats are happening. indeed, national identities have often trumped class identities, and capitalists have in the past been willing to sacrifice some profit for the national good--witness the unprecedented compact bt business, labor and the government in the US and western europe and japan that made the post-war welfare states possible.

so i'm not as pessimistic as you and would remind you that marx and engels were the first admit that while economic position and economic processes are the determinant engine of history in the last instance, there are many times when so-called superstructural elements can predominate over class calculations.

Mark A. LeVine (UC Irvine History Professor) - 10/28/2008

very cute--specially the princess leia levine. i have no illusions about clinton. i did not even vote for him in 96. however, i think he is incredibly smart and has a powerful command of the details of economic policy making, as well as "the vision thing" that will be crucial to communicate to americans just how huge the task is before us. i also think that he has a strong ability to learn from his mistakes.

i also don't think the internet boom was a 'bubble' in the same way the mortgage/credit bubble was. it was based on a genuine rise of a new sector in the economy that has profoundly changed the way we live. it became overvalued, and thus was brought down to earth, but it was grounded in real economic production, rather than just the production of more abstract wealth.

i also think that while i find much of the CGI stuff to be self-congratulatory and self-promoting by all those involved, in the end, at least clinton has been out there the last eight years trying to tackle intellectually the big issues that we now need to face. his instinct to involve artists and activists and others with business leaders and mainstream policy-makers and scholars is crucially needed today.

finally, i see no other figure on the american--or crucially--global political scene who can command the attention he does, and who can move comfortably in so many circules. i would love to have noam chomsky or tariq ali or david harvey or a host of other lefty intellectuals be put in charge of redesigning the global economic system (well actually, maybe i wouldn't, i'm not really sure...), but there is actually no chance of this happening.

i will share something about clinton told to me by tikkun editor michael lerner, who as you might know was, very briefly at the start of the first term, brought into the inner circle. at one meeting clinton said to him (and i'm paraphrasing something lerner told me years ago, so apologies to all concerned if this is not completely accurate): "i would love to enact all the far reaching reforms you are suggesting. but where are the people in the streets to support them? i can't expend all my political capital on pushing reforms that the vast majority of americans are not ready to consider. if you can bring a million people in the streets, then i can lead on this."

i think a decade and a half later, the current crisis is potentially producing the kind of moment where clinton's natural instincts can come to the fore, and where his genius as a communicator to the middle class can be used to pursue the kind of progressive agenda that would not have been possible to conceive of pushing even a few months ago, but which will still remain impossible if it is not laid out perfectly.

anyway, if you have a better suggestion i'm happy to hear it.

Lorraine Paul - 10/27/2008

Wall Street and Main Street getting together??

Have any of you people ever read even a smidgin of Marx?? They are, and always will be, on opposite poles.

Although not a Marxist, Naomi Klein has written an interesting and informative book called "The Shock Doctrine".

Mr Levine you are living in a dream world if you think that capital will ever give the working class <gasp!> (yes, I actually used the word 'class') their fair share of the wealth.

As an American academic once said to me....we are politically disabled, mainly because The Communist Manifesto never officially reached our shores until the 30s.

I would add, that to me it appears to be more that the people of the US have closed their minds to any type of new thought. One may not agree with what one reads, however, it will produce a culture in which newer thought can be raised and, hopefully, nurtured.

Reading never killed anyone...wars have!

Rea Andrew Redd - 10/27/2008

"Obie Wan Clinton! You are only hope!" said Princes Leia Levine to the hologram.

Michael Davis - 10/27/2008

I thought this was the best article ever on HNN until I got to the part where Bill Clinton is mentioned.

Why are you giving a pass to the guy who hired Robert Rubin and Larry Summers??
The economy, as you said, was a fake economy, built on internet bubbles and housing the 1990's just as much as it was the past eight years.

Irrational Exuberance joined our lingo in December 1996, just to remind you.
What about Nafta? Bill Clinton AND Al Gore championed that to no end.

The last thing Obama needs in his administration is an ego the size of Clinton's. Also, you're talking like Clinton would actually role up his sleeves and get to work.

What bilge.