By Walden Bello*
(Intervention of the author at the panel on “The World in Crisis and Alternative Pathways,” Asia-Europe People’s Forum, Brussels, Oct. 3, 2010.)
Some say that the problem with us progressives as this time of crisis is that we do not have an alternative paradigm to pit against the discredited neoliberal paradigm. I disagree. I think the elements of the alternative based on the values of democracy, justice, equality, and environmental sustainability are there and have been there for sometime, the product of collective intellectual and activist work over the last few decades.
The Politics of Failure
The key problem is, in my view, the failure of progressives to translate their vision and values into a program that is convincing and connects with the people trapped in the terrible existential conditions created by the global financial crisis. This is a process that is preeminently political, that is, a fluid enterprise where one translates one’s strategic perspective into a “tactical program”—for want of a better word–that takes advantage of the opportunities, ambiguities, and contradictions of the conjuncture to construct a critical mass for progressive change from diverse class and social forces.
It is therefore important for us to look at the political experience of the global progressive movement in order to understand why our side has been derailed and how we can fight back to political relevance. The experience of the Obama presidency in the US is, in my opinion, rich in this regard. In the American political context, Obama is a social democrat, and his candidacy was supported by the broad left. There was no illusion that he was anti-capitalist, but there were expectations that he would initiate a program of recovery and reform similar in ambition to Roosevelt’s New Deal. The electoral base that brought him to power was full of potential, being one that cut across class, color, gender, and generational lines. His ability to bring this base together on a message of change achieved what was then thought to be impossible—the election of an Afro-American as president of the United States—and showed how social and political structures can be made to bend by smart political leadership.
Two years after his spectacular electoral victory, President Barack Obama and the Democrats face a rout in the US polls in early November. Indeed, Obama and his party remind one of a rabbit on the railroad track that is hypnotized by the light of an oncoming train. What happened? Whereas Obama seemed to do all the right things in his quest for the presidency, he seemed to make all the wrong moves as chief executive.
His prioritizing health care reform, a massively complex task, has been identified by many as his key blunder. I think this decision certainly contributed to the debacle, but there were a number of more important factors that relate mainly to his handling of the economic crisis, which was the primordial concern of the electorate.
Six Reasons behind the Debacle
First of all, as the Times of London commentator Anatole Kaletsky has pointed out, Obama took responsibility for the crisis. In his quixotic quest for a bipartisan solution, he made George W. Bush’s problem his own. This was something Margaret Thatcher and Ronald Reagan never did. They took no responsibility for the economic problems of the 1970’s, heaping the blame totally on their liberal predecessors and eschewing any bipartisan alliance with those they considered their ideological enemies. This tough stance towards ideological foes was also characteristic of Roosevelt, who did not hesitate to slam–and slam hard–those he termed the “economic royalists.”
Second, in so far as Obama and his lieutenants picked a group to portray as villains, this was Wall Street. Yet saying the financial elite brought on the crisis while bailing out key Wall Street financial institutions, ranging from Citigroup to AIG, on the grounds that they were “to big to fail” involved Obama in a terrible contradiction. The least that he could have done was to remove the existing boards and top managers of these organizations as a condition for government funds. Instead, unlike in the case of GM, they were retained and continued to collect sky-high bonuses to boot.
The strong sense of a disconnect between word and deed was exacerbated rather than alleviated by the Democrats’ financial reform. The measure did not have the minimum conditions for a reform with real teeth: the banning of derivatives, a Glass-Steagall preventing commercial banks from doubling as investment banks; the imposition of a financial transactions tax or Tobin tax; and a strong lid on executive pay, bonuses, and stock options.
Third, Obama had a tremendous opportunity to educate and mobilize people against the fundamental factor that brought on the crisis: the neoliberal or market fundamentalist approach that deregulated the financial sector. While Obama did allude to unregulated financial markets as the key problem during the campaign, he refrained from demonizing neoliberalism after he took office, thus presenting an ideological vacuum that the resurgent neoliberals did not hesitate to fill. Probably a major reason he did not launch a full-scale ideological offensive is that his key lieutenants for economic policy, National Economic Council head Larry Summers and Treasury Secretary Tim Geithner, had not broken with neoliberal thinking.
Fourth, the stimulus package of $787 billion was simply too small to have a significant effect, that it is, to bring down or hold the line on unemployment. Here, Obama cannot say he did not have good advice. Paul Krugman, the Nobel laureate, and a whole host of Keynesian economists were telling him this from the very start. For comparison, the Chinese stimulus package of $580 billion was much bigger relative to the size of the economy than the Obama package. For the White House now to say that the employment situation would now be worse had it not been for the stimulus is, to say the least, politically naïve. People operate not with wishful counterfactual scenarios but with the facts on the ground, and the facts have been rising unemployment, with no relief in sight.
Politics in a time of crisis is not for the fainthearted, and the middle-of-the road approach represented by the size of the stimulus was the wrong response to a crisis that called for a political gamble: the deployment of the massive fiscal firepower of the government in the teeth of the predictable howls of anger from the right.
Fifth, Obama and Federal Reserve Board Chairman Ben Bernanke deployed mainly Keynesian technocratic tools—deficit spending and monetary easing—to deal with the consequences of the massive failure of market fundamentalism. During normal downturn these countercyclical tools may suffice to reverse the downturn. This was, however, a very serious collapse that standard Keynesianism could address in a very limited way. Besides, people were looking not only for relief in the short term but for a new direction that would enable them to master their fears and insecurities and give them reason to hope.
In other words, Obama failed to locate his Keynesian technocratic initiatives within a larger political and economic agenda that could have fired up a fairly large section of American society. This agenda could have had three pillars: 1) the democratization of economic decision-making, from the enterprise level to the heights of macro-policymaking; 2) an income and asset redistribution strategy that went beyond increasing taxes on the top two per cent of the population; and 3) the promotion of a more cooperative rather than competitive approach to production, distribution, and the management of resources. This agenda of social transformation was hardly too left and could have been accommodated within a classical social democratic framework. People were simply looking for an alternative to the Brave New Dog-eat-dog World that neo-liberalism had bequeathed them. Instead, Obama offered a bloodless technocratic approach to cure a political and ideological debacle.
Related to this absence of a program of transformation was the sixth reason for the Obama debacle, which was his failure to mobilize the grassroots base that brought him to power. This base was diverse class-wise, in generational terms, and in terms of ethnicity but it was united by palpable enthusiasm, an element that was so evident in Washington, DC, and in the rest of the country on inauguration day in 2009. With his preference for a technocratic approach and a bipartisan solution to the crisis, Obama allowed this base to wither away instead of exploiting the explosive momentum it possessed in the aftermath of the elections. At the eleventh hour, Obama and the Democrats are talking about firing up and resurrecting this base. But the dispirited and skeptical troops that have long been disbanded and left by the wayside rightfully ask: around what?
The Right Makes the Right Moves
In contrast to Obama, the right understood the demands and dynamics of politics at a time of crisis, as opposed to politics in normal times.
While Obama persisted in his quest for bipartisanship, the Republicans adopted a posture of hardline opposition to practically all of his initiatives.
Unlike Obama and the Democrats, the right posed the conflict in stark political and ideological terms, between left and right, between “socialism” and “freedom,” between the oppressive state and the liberating market, using all the catchwords and mantras they could dredge up from American bourgeois ideology.
Finally, in contrast to Obama’s neglect of the Democratic base, the right eschewed Republican interest-group politics, with Fox News, Sarah Palin, and the Tea Party movement stirring up the right-wing base to “capture” the Republican Party and drive a no-compromise, take-no-prisoners politics. Here it is useful to adopt Arno Mayer’s distinction between conservatives, reactionaries, and counterrevolutionaries to understand what has happened to the Republican Party in the last few weeks, with the string of successes in the primaries by the Tea Party movement. In Mayer’s terms, the counterrevolutionaries, with their populist, anti-insider, and grassroots-driven politics are displacing the conservative elites that have long held sway in the Republican Party.
With their anti-spending platform, the Republicans and Tea Partiers that might capture the House and the Senate in November will probably bring about a worse situation than today. In which case, some argue, Obama and the Democrats might get a second chance to repeat Bill Clinton’s victory at the polls in 1996 owing to the political overreach by the Republicans led by Newt Gingrich after their triumph in the midterm elections of 1994. But this is, in my view, a desperate illusion. These generation’s counterrevolutionaries and their backers are skilled in the politics of blame, and they are likely to be successful in painting the worsening situation as a result wholly of Obama’s “socialist policies,” not of drastic cuts in government spending.
Lessons for the Left
So what lessons can progressives derive from the Obama debacle?
First, the problem lies not so much in our lack of a strategic alternative as in our failure to translate our strategic vision or paradigm into a credible and viable political program.
Second, politics in a period of crisis is different from politics in a period of normality, being more fluid and marked by the volatility of class, political, and intellectual attachments.
Third, politics is the art of creating and sustaining a political movement from diverse class and social forces through a flexible but principled political program that is able to adapt to changing circumstances.
Fourth, there is no such thing as an objectively determined situation. The art of politics is using contradictions, spaces, and ambiguities of the conjuncture to “bend” structures and institutions and create a critical mass for change. Class, economic, and political structures may condition political outcomes; they do not determine them.
*Member of the House of Representatives of the Philippines representing Akbayan and senior analyst of Focus on the Global South.
