Returning from an extended vacation in Europe, it’s been impossible for me to ignore the dark cloud of pessimism hanging over the United States. Americans are depressed about the economy, the BP/Gulf oil spill, and the war in Afghanistan. A majority of voters feel the US is on the wrong track. Is it? And has that perception made President Obama’s job impossible?
On June 28th, CNN interviewed former President Bill Clinton who commented about the American mood: “The American people hire you [the President] to win for them… Until people feel better about their own lives, they’re not going to feel good about their president.” At the moment, many Americans feel like losers.
It’s helpful to remember that Obama and his supporters came into this situation with open eyes. On November 5, 2008, the ONION headline was Black Man Given Nation’s Worst Job: the new president “will have to spend four to eight years cleaning up the messes other people left behind.” Barack Obama inherited a broken economy, crumbling US infrastructure, ill-conceived military campaigns in Afghanistan and Iraq, and a Federal bureaucracy that had been gutted by Republicans – a condition that produced the BP/Gulf oil disaster.
Nonetheless, Barack Obama has been in the job for eighteen months. While most Americans acknowledge that America’s problems originated in the Bush Administration, they look to Obama to fix them and to lift their spirits.
Clearly, the economy is shattered. Noting persistent high unemployment, the number of mortgage foreclosures, and the unwillingness of banks to lend and businesses to spend, many observers feel the recession will stretch on for years. They anticipate the Obama Administration will be powerless to change this circumstance and that will affect Democratic prospects in the mid-term elections.
The situation with the US economy parallels public perception of the BP/Gulf oil disaster. In April, Americans wanted Obama to provide a quick fix. When he appeared powerless to stem the flow of oil into the Gulf, his approval ratings fell. Now voters want a quick fix for the economy, but Obama can’t provide that.
Both the BP/Gulf oil disaster and the recession were the results of systemic failures. The proximate cause of the BP/Gulf oil spill was a methane explosion on April 20th. Investigation has indicated the explosion was the fault of the platform operators (under BP supervision), facilitated by lax oversight by the US Department of Interior’s Minerals Management Service.
The proximate cause of the global financial crisis and the ensuing recession was the bankruptcy of Lehman Brothers on September 14, 2008. Investigation has revealed this bankruptcy, and the collapse of similar firms, was the product of wild Wall Street speculation (the housing bubble, sub-prime mortgages, and mortgage-backed securities) and lax oversight by the Federal Reserve and US Treasury Department.
While most Americans understand what happened in each crisis, they have difficulty accepting the length of time it will take to fix these problems. It took ninety days before BP managed to stop the flow of oil from the broken well and it will take years to repair the environmental damage. It took six months before the stock market recovered from the 2008 financial panic and it will take years to climb out of the hole caused by the collapse of the era of easy money.
In both crises there was an underlying cancer having deeper roots than might be suspected giving the primary failure. The BP/Gulf oil debacle was the consequence of America’s addiction to fossil fuel and our childlike faith in technology – the belief that if it’s possible to drill a deep well then it must be safe. The current recession has a simpler and far more disturbing genesis: the failure of American capitalism.
While the Obama Administration appears to recognize America’s addiction to fossil fuel, as well as our naïve faith that technology will solve all our problems, it’s not clear they are prepared to brand contemporary capitalism as a failure. That’s not surprising; it’s similar to asking a public official to declare there is no Santa Claus. It flies in the face of a cherished myth. For many Americans it is unthinkable that the unfettered marketplace will not solve all our problems or that contemporary capitalism has brokenn its promise to provide a good life for all.
But that’s what has happened. Over the past thirty years, the American economic system has been tilted in favor of the rich and, in the process, democracy morphed into plutocracy. As a consequence, the consumer economy -- which presupposes a reasonable distribution of wealth and income – had to be held together by smoke and mirrors; most American went deeply into debt so they could maintain their standard of living. Now the diabolical charade has ended, but it’s left a legacy of pessimism and distrust. The economy is fractured.
Repair requires fundamental structural changes – such as breaking up the big banks – and a massive redistribution of income. But that’s not going to happen soon. Americans know they have cancer but they are nowhere near agreement on the course of treatment.
In the meantime, the US will go down a losing track. And Barack Obama’s job, if not impossible, will be very, very difficult.