Obama: Hope or Hoax?

Even before Barack Obama was elected some people, notably most Republican politicians and their anti-federal government fellow travelers, imagined a socialist future, as if Vermont’s Bernie Sanders would become Secretary of the Treasury. More likely it would be some Clinton retread. Massive redistribution of wealth? As if.

After the election a struggle continued within the Democratic Party between progressives who wanted big changes, “Blue Dogs” who wanted deficit reduction, and those who hadn't taken a side or wanted Obama to split the difference and move slowly. The latter group was led by Rahm Emanuel – Rahmbo to his friends – the Illinois Democrat and former Clinton aide whom Obama tapped to be his chief of staff.

Could progressives affect the country’s direction under such circumstances? Some predicted that the Left wouldn’t be able to criticize the government as much, since there was a tendency to view the moment in epochal terms, as if past issues, including race, were no longer that relevant. Obviously that assessment was off the mark.

Was the country “tired” of ideology, as the media establishment suggested, or just a specific, bankrupt ideology – corporate fundamentalism? Red-baiting hadn’t worked during the presidential campaign – a major development in itself. But why? Was it because socialism sounded like an archaic label? Or, as some suggested ironically, had the Republicans inadvertently turned the election into a referendum on socialism – and did socialism win? Given the persistence of the tactic and post-election explosion of “Obama is a Muslim-Socialist” sentiment, that remains to be seen.

In any case, you could already feel the air leaking out of the change bubble by the end of 2008. As Obama began to reveal his White House team it became harder to continue believing the pre-election hype. Hillary Clinton, Rahm Emanuel, Gregory Craig, Eric Holder – the announcements suggested that the country was heading forward into the past. But it was still a bit soon to know for certain whether expectations were just a bit high or the promise of real change would turn out to be a hoax.

Some hoaxes are designed for personal advancement – Clifford Irving’s fake biography of Howard Hughes, for example, or Rosie Ruiz’s first place finish in the 1980 Boston Marathon. But sometimes a hoax influences public opinion enough to change the direction of a country. A case in point: The so-called Zinoviev letter, created by British intelligence, that claimed a Soviet revolution was about to take place in England. The scare was effective enough to get Brits to elect a conservative government. The rationale for the war in Iraq falls into the same category.

So, it was natural to be suspicious about promises of change. In a media-manipulated world, it’s harder each day to tell reality from fakery and misinformation. Although the rise of Obama didn’t yet qualify as a hoax – or just a bait-and-switch operation – there was a quite a bit of hype, mixed with enough reality to keep hope alive.

Throughout the election, for example, the prevailing line was that Obama received about half of his contributions in amounts of $200 or less. The implication was that, for once, regular people were making a difference. After a more thorough analysis by the Federal Election Commission, however, it looked like repeaters and large donors were more important for Obama than analysts had appreciated.

"The myth is that money from small donors dominated Barack Obama's finances," noted Michael Malbin, director of the Campaign Finance Institute. "Obama's fundraising was impressive, but the reality does not match the myth." Only 24 percent of his funds came from donors whose total contribution was $200 or less. This is similar to the 25 percent for George W. Bush in 2004, 20 percent for John Kerry in 2004, 21 percent for John McCain in 2008, 13 percent for Hillary Clinton, and 38 percent for Howard Deal in 2004.

Obama’s cabinet was another early sign that the change would be less dramatic than expected. The national security team included Bush-appointed Defense Secretary Bob Gates, who was asked to stay on for at least another year, Hillary Clinton as Secretary of State, Susan Rice as ambassador to the UN, and Retired Marine General James Jones, former NATO chief in Europe, as National Security Adviser.

On the domestic side there was Eric Holder, another former Clinton official, as Attorney General. Heading the economic team as Secretary of the Treasury would be Timothy Geithner, president and CEO of the Federal Reserve Bank of New York, while Lawrence Summers, former Secretary of the Treasury under Clinton, was picked to serve as Director of the National Economic Council. Geithner and Summers were touted as crisis managers. But they didn’t do so well in East Asia, helping to bring on a regional crisis in 1997 by pressuring governments to de-regulate international financial flows. At the time they insisted that bailout money go through the IMF, and delayed aid until most of the damage was done.

What else did they have in common? Ivy League backgrounds, stints at institutions like the IMF and World Bank, and work in or very near private sector banking. They were friends, had worked together before, and, for better and worse, were actively involved in shaping the global financial architecture we have today.

The mainstream media said that Obama's cabinet was mainly non-ideological. Yet many members had a record of support for corporate-friendly trade pacts, cutting public assistance programs as a strategy of "reform," and deregulatory policies in the financial sector. Overall, it was more like a team of insiders than a team of rivals.

Obama: Myths & Realities. Part two of three.

Part One: Barack in Wonderland
Part Three: Words vs. Deeds