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A Year of Obama

by Albert Scharenberg Wednesday, Nov. 18, 2009 at 4:42 PM

"Not learning lessons from the bank collapse reproduces or strengthens the dominance of the financial sector. The danger of a repetition of the crisis grows..The political right-wing slanders the health reform project as an `attack on freedom.'"


The US between Reform Policy and Rightwing Propaganda Campaign

By Albert Scharenberg

[This article published in: Blatter fur deutsche und internationale Politik 11/2009 is translated from the German on the Internet,]

The rejoicing had no limits when Barack Obama won the presidential election in the United States a year ago after an election campaign emphasizing “hope” and “change.” The fact that an African-American was elected president for the first time represented a profound turning point in US history. Obama’s entrance in the White House in January gave hope to many people at home and abroad for a new political direction of the world’s most powerful country.

As an echo of the euphoria and the soaring hope that the new strong man would make everything better, the Norwegian Nobel committee awarded the Nobel Prize for peace at the beginning of October to the American president. “Seldom has it happened that a person like Obama attracted the attention of the world and kindled new hopes for a better future,” we read in the explanation.

Indeed, Obama is not Bush. That alone marks an inestimable change. The Nobel committee rightly referred to Obama’s initiative for disarmament of nuclear weapons and his engagement for multilateral projects (which he recently explained in his address at the UN). In addition, he is carefully abandoning the course of the Bush administration. Obama’s reference to the Islamic world (as in his Cairo speech), his hesitant promotion of environmental- and climate protection, his ending plans for stationing missiles in Eastern Europe and the current withdrawal of most US armed forces from Iraq were cited as evidence.

While enthusiasm about the new president continues abroad as the decision of the Nobel committee illustrates, the euphoria in the United States is fading. The reasons for this disillusionment lie on one side in the objective obstacles that impede the reform policy – the constitutional hurdles, the power of pressure groups and the resistance of the political rightwing. On the other side, Obama’s cautious projects and his approach to Republicans elicit increasing disappointment of his supporters from the election campaign.

Central problems await solution. In the first weeks of his presidency, the new president proposed several reforms that symbolized a breach with the policy of his predecessor. Conversion of other central promises like closing Guantanamo is still in the future. Obama sees himself driven into a corner regarding Afghanistan where the Taliban gradually gained the upper hand despite massive American troop reinforcements according to supreme commander General Stanley McChrystal.

The situation hardly looks better in domestic policy. Ten months after assuming office, the new president and his administration face immense political pressure after a summer marked by slackening reform zeal, half-hearted compromises and growing resistance of the American rightwing. Obama threatens to fail in the two most important domestic policies of his government: combating the crises and health reform.


Combating the financial- and economic crises clearly had priority at the start of Obama’s presidency. Within weeks, an economic program of 0 billion sailed through the Congress that curbed the fall of the US economy though it could not stop the fall. In the meantime, the rising unemployment numbers that climbed to ten percent in September (unofficially 17 percent with the millions who are not statistically included), the highest level in a quarter century, prove that this program was much too modest despite its impressive size. That was the criticism of the Nobel Prize winner for economics, Paul Krugman. The concessions made by Obama sought to move some Republican representatives and senators to agreements (especially tax cuts instead of infrastructure investments) considerably diluted the goals. At the end there were only three republicans who cooperated. As a result the economic output collapses again. More and more persons suffer under the hardship of unemployment (welfare state cushioning hardly exists in the United States).

The development in the banking sector is very different. At first, the worst effects of the crisis seemed overcome. The profits of the banks now amount to 31.5 percent of business profits, more than in the years of the real estate bubble [cf. Dean Baker, “Banks 1 – America 0” in: The Guardian, 10/5/2009]. This development may be an even greater problem for the government since the pendulum in the financial sector is swinging back to business as usual. Trade with derivatives increases rapidly; readiness to gain ever-higher profits is growing again and the debate over the necessity of stronger regulation has almost completely died away. Obama himself has an essential part in this since he largely left the reconstruction of banking policy in his cabinet to the guardians of Wall Street (Timothy Geithner and Lawrence Summers) and made the goat into the gardener. He rejected the advice of economists who showed feasible alternatives to Wall Street dominance (like Joseph Stiglitz, James K. Galbraith and Paul Krugman). This confirms fears expressed before his assumption of power that a democratic president would do little to enforce social interests against powerful private interests.

The bank bailout proved politically disastrous because of the growing uneasiness in society and because Barack Obama promised in the election campaign that the days of corporate lobbyists “as agenda-setters in Washington are at an end.” Obama cannot succeed in this way in convincing citizens stricken by the crisis that he will do as much for them as for banks and corporations.

This is also economically disastrous. Not drawing consequences from the banking collapse reproduces or strengthens the dominance of the financial sector. The danger of a repetition of the crisis grows.

The one-year anniversary of the Lehman bankruptcy shows drastically the trifling effect of Obama’s populist criticism of the bonus payments and his appeal for responsibility when they are merely presented verbally and not supported with substantial regulations. Not a single bank executive heard Obama’s address to Wall Street in which the president admonished the branch.

In addition, the deficit in the state budget inherited from the Bush administration dramatically increased because of the gigantic sums expended for the bank bailout and economic support. At present the monthly deficit amounts to 0 billion and .4 trillion for the 2008/09 fiscal year and could be even higher in 2010. Who will have to pay this difference at the end? In Obama’s declaration of intent, the health care reform should be organized in a cost-neutral way for the state budget.


Health care reform is the political field that could decide the domestic fate of the new president before being in office for a year. Like all other democratic candidates for president, Obama emphasized a fundamental reform of the public health system. Such a reform is urgently needed. In the richest economy of the world, around 50 million people live without health insurance. Health insurers can legally exclude sicknesses from insurance coverage that pre-dated the insurance policies. Retroactive cancellations of policies that usually occur because of increased hospital costs are permissible. As a rule, this means the sudden fall into poverty for the affected.

The public health system is one of the largest economic sectors of the US. It amounts to around one-sixth of the total US economy. The profits and the interests of profiteers are correspondingly gigantic. The latter – at the beginning of Bill Clinton’s presidency – prevented basic changes of the public health system by supporting all important political candidates in their election campaigns with massive donations and in this way ensured their political loyalty. This is true in American election campaigns for senators and presidential candidates. Only the one with the “right” or financially strong friends is elected.

The central goals of the health care reform are introduction of a universal health care and expansion of Medicaid, government insurance for persons on social security. The reform should be financed through higher taxes on the rich as Obama already promised in the election campaign and cost-reductions in the extremely expensive US public health system (which is one of the reform goals).

When the new administration made its proposals for health reform, the project was supported by high public approval ratings. However the project started going downhill after a summer marked by vigorous criticism of lobbyists in alliance with an offensive of the political rightwing. Whether anything will be passed at the end that deserves the title “reform” seems open. Little will remain of the ambitious plans from the time of the election campaign.

First, forget about introduction of a state health insurance for everyone (“single payer”) advocated by many liberals and leftists. Single-payer was not even a subject of the discussions in the Obama team. Instead there is agreement on a so-called public option. The core of this proposal is introduction of a state health insurance that should canvass for customers in competition with private insurance companies. Presumably this could succeed since it will not have to yield any profits and thus could offer cheaper policies.

This proposal of a public option immediately drew the attention of the mammoth insurance corporations who do not want to be exposed to any competition. Their lobbyists have long adjusted to this “threat” and “persuaded” rightwing democrats in the Senate, the so-called blue dogs, with massive donations to block any bill that contains a public option.

A fundamental problem of the new administration is revealed here. Although the democrats have an impressive majority in both houses of Congress, implementing the reform project is hard. Obama’s attempts to win republican representatives for his reform policy were obviously in vain (there has only been the support of one republican Senator Olympia Snowe from Maine for health reform). He sees himself confronted with objective hurdles that lie in the specific structure of the American political system.

While the House of Representatives is based on proportional representation corresponding to the population number, every state in the more powerful Senate is represented with two senators. This rule ensures that large states are massively under-represented while the sparsely settled states of the South and the West – the heartland of American conservatism – have disproportional influence. This rule makes difficult progressive reforms – see the role of the blue dogs – even when the party of the president has a nominally large majority in both houses. Thus the action possibilities of the supposedly “most powerful actors of the world” are massively limited – by the political order and powerful corporate interests.

In August the president declared the public option was not a central point of the reform. A cooperative solution is also conceivable. The bill of the Senate Finance committee was blocked since the middle of October and did not mention the public option any more. Max Baucus, a democrat from Montana, whose campaigns were mainly financed by insurance companies [cf, led the assault. John Nichols,, 10/13/2009].

The problem here is that Obama could give up too much political terrain to win republicans for his reforms. Since the gradual withdrawal of the public option which most democrats, net-roots and other activists of the election campaign regard as central and which a large social majority support, the president is now criticized for the first time by the American left who largely kept quiet for a long time. On the other hand, union representatives changed and abandoned the public option while many congressional representatives declared they would only approve a reform that includes this. The president runs the risk of offending the most active core of his electoral base with his policy of balance.


The most vehement criticism of health reform – and of the president – is leveled by the political rightwing. The rightwing slanders the project regarding insurance companies as an “attack on freedom” and thereby invokes a classic American theme: criticism of the state and big government [cf. Albert Scharenberg, Comeback of the “liberal tradition”? The US after Bush in: "Blatter" 3/2008]. With their polemical attacks and mass mobilizations, a loose alliance of Christian fundamentalists, market liberals and extreme rightwing racists increasingly conquered the media air sovereignty in the summer in the debate over health care reform. Their strategy is simple. They try to gain the large majority of over 80 percent who have some form of health insurance [That a considerable part, 25%, are insured through state programs like Medicaid, Medicare and insurance for the relatives of the armed forces was suppressed.]. Uncertainty and fear about reform are spread by means of targeted disinformation.

The protests were articulated in decentralized town hall meetings in which the base of the Republican Party and other forces were up in arms against the new government in general and health reform in particular. In April and July, so-called tea parties were organized where rejection of taxes, big government and Obama were emphasized. The peak of the protests was the “Taxpayers’ March on Washington D.C. when tens of thousands took to the streets on September 12.

Since Obama’s assumption of office, the demonstrators were up in arms against everything coming from the White House. Some really went overboard. The governor of Texas, Rick Perry, proposed secession of his state. Republican congressman Spencer Bauchus from Alabama in the McCarthy manner recently exclaimed that one and a half-dozen “socialists” were in Congress. Representative Joe Wilson from South Carolina accused Obama of being a liar (“You lie”) during Obama’s speech on health reform before Congress. He later had to apologize for that outcry. The continuing protests do not start from the Republican Party. Despite their radicalization putting them on the far right on the political map way beyond European conservative parties, they are often seen as only part of the Washington establishment. The Christian right is the driving force behind the mass protests.

The strength of the radical Christian and nationalist rightwing is firstly its high mobilization capacity and secondly their media influence or media resonance. Younger voices like Laura Ingraham and Glenn Beck, the multimedia shooting star of the season, join sloganeers of the anti-Obama protests: Rush Limbaugh long in the business with a daily listenership estimated at 20 million [cf. David von Drehle, The Agitator, Ne3wsweek 9/28/2009]. Ruppert Murdoch’s Fox TV flanks their attacks against Obama.


The talk radio hosts articulate their verbal attacks in a coarse, fear-mongering and spiteful tone. Their daily multi-hour broadcasts have become laboratories of fear mongering and conspiracy theories. “I am worried that you may be worried,” Glenn Beck spurs on his listeners. In the 1960s, Richard Hofstadter described this as the “paranoid style” which has a long tradition in the US going back to the beginnings of the republic. This paranoid style extends from the fear of the “Illuminati” in the 18th century and fear of the freemasons and Jesuits in the 19th century to the paranoid anti-communism of McCarthy and the ultra-conservative John Birch society in the 20th century [Richard Hofstadter, “The Paranoid Style in American Politics,” in Harper’s Magazine, 11/1964].

The trademark of the radio broadcasts is the Manichean distinction between “we” and “they.” “We” are the good, diligent, patriotic Americans. “They” are the others, the bad, lazy, unpatriotic, liberal un-Americans. In the supposed battle between good and evil, the opponent is stylized as the enemy.

The radio moderators mix completely unconnected “facts” and construct conspiracy theories on the basis of this cocktail. In its time, the John Birch society madly claimed President Eisenhower was a communist secret agent of the Soviet Union. The litany of the alleged leftist media dominance or control is really classic. But the rightwing does further. Obama was compared to Hitler at the “tea parties.” Glenn Beck describes him as a “Marxist,” “fascist” and “Nazi.” In the summer Beck fanned the rumor FEMA plans concentration camps. The republican congresswoman Michele Bachmann from Minnesota speculated about building “re-education camps.”

The “birthers” are important in this conspiracy theory context. They openly doubt that Barack Obama was born in the United States. Although this is obviously nonsense, the “birthers” enjoy prominent support from television moderator Lou Dobbs on CNN. On the bestowal of the Nobel Prize for peace on the US president, Rush Limbaugh said: “I think he is the second Kenyan who won the prize.”

The potential explosiveness of the assertion Obama in reality was not born in the US is that only persons born in the US may become president in the US. Thus if the incumbent president saw the light of the world abroad his presidency would be illegal. A right to (armed) resistance could be drawn from this illegality {All persons born of American mothers are Americans, translators note). This intensifies the danger that often starts from the radical right and armed groups. An upswing of the militias is now occurring, those rifle-sport-groups that were widespread in the 1990s.

In April, a report of the “homeland Security Office” warned of the growing danger of violent rightwing extremists. Since this warning, a doctor who performed abortions and a guard at the Holocaust museum in Washington D.C. were killed. The murderous threats against Obama are legion. The rightwing extremist subculture represented by Timothy McVeigh, perpetrator of the attack in Oklahoma City in 1985, grows alarmingly


In September, ex-president Jimmy Carter said health reform or other political projects is not behind the attacks on Obama. Rather the driving motive is racism. Paul Krugman sees the reason for the US being the only large industrialized country without universal health care in the history of racism and slavery [cf. Paul Krugman, “The Conscience of a Liberal. Reclaiming America from the Right,” New York 2007]. In fact, racism did not disappear with the black president. On the contrary, the circumstance that the president has a black complexion may even have a mobilizing effect in traditional districts, even in older generations that grew up in conditions where white supremacy and the firm belief that blacks are inferior was the norm. In this sense, a black leader in the White House deeply shakes the worldview of many male conservatives.

A sometimes disguised and sometimes open racism is an elementary element of the rightwing propaganda campaign. Thus Glenn Beck repeatedly called the black president a “racist.” He feared Obama had succumbed to “a deep-seated hatred of whites.” Beck even speculated that health reform was part of Obama’s plan to silently collect reparations from white America for the historic injustice committed on blacks. The arch-conservative Pat Buchanan went a step further and argued “whites now suffer what was done to blacks.” But where, one asks, is there a system of slavery in the United States where whites are treated as property and bruised with whips?

Many people at the base of the rightwing movement seem to think like Beck and Buchanan. There is abundant evidenced for their attitude – the Obama puppets at the town hall meetings (a rather direct allusion to racist mob law) or the calls for “White Power” and Confederate flags (of slave-holding southern states from the time of the American Civil War) at the “Taxpayers’ March.”

This racism already started during the election campaign. When Obama’s victory was clear, the mood at Republican events was increasingly raw. Cries of “traitor!,” “terrorist!” and “decapitate!” resounded until the republican Vice-president candidate Sarah Palin intervened.

Rejection of Obama is related to the fact that he can articulate brilliantly, not only that he is the first black president. Unlike his white predecessor in office, he hardly suffers from a verbal lapse. This combination – black and educated – strikes the nerve of the anti-intellectual current of rural America. A clear majority of white men voted against Obama a year ago.


The fact that the United States now has a black president for the first time contributed to the resistance of the rightwing who refuse to come to terms with the changing realities of a multicultural society – and to the end of the era of the unchallenged global hegemony of the US.

However the rightwing resistance does not necessarily mean a weakening for President Obama and the Democratic Party. This is a social minority, as public opinion polls attest again and again. Therefore the protests in the long-term in no way necessarily help the republicans. Quite the contrary! Their policy threatens to become a demographic suicide for the party that emphasizes the struggle against Obama and the closing of ranks with the extreme right instead of its own programmatic renewal and opening. The rapidly changing composition of the population contributed substantially to Obama’s election victory [cf. Albert Scharenberg, “Black President” in: "Blatter" 12/2008]. Republicans evidently refuse to deem a government as legitimate that is embodied by their political opponent. In short, their permanent negative campaigning may pester Obama but this will not lead to their own hegemony.

The pressure that starts from this loud minority and the disinformation campaign may not be underrated – with regard to the great health reform project where the right wing sits in one boat with the powerful insurance corporations. The future of Obama’s presidency essentially depends on the outcome of this conflict. If the reform fails, the new president only one year after taking office will be seriously weakened politically. To that extent, Obama is condemned to find a way to overcome the current obstacles.

In addition, the inadequate policy against the economic crisis and the growing budget deficit increase the unease in the population. Irrespective of the health care reform, this could burden democratic candidates in the 2010 congressional elections. In this case, the same fate threatens Obama as Bill Clinton who faced a republican majority in Congress for the next six years of his administration.

Finally, the Afghanistan war threatens to become the Achilles heel of the democratic administration – not only because a Nobel Prize winner for peace wages war. Criticism of “Obama’s war” has not been limited to the left-liberal camp. Whether the president can overcome the powerful military-industrial complex must be doubted.

Nevertheless Obama could emerge strengthened if he can avoid a Waterloo at Hindu-kusch and successfully bring about a health care reform by the end of the year. With all necessary criticism of Obama’s administration, that would be the best that could happen to the country under these circumstances.

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