Despite breaking just about all of his campaign promises, insisting on his authority to legally kill American citizens even on U.S. soil and the recent string of scandals in his administration, Barack Obama still has one thing going for him: at least he has improved the lot of the poor and narrowed the wealth gap between them and the rich. Or has he?
From 2009 to 2011 the upper 7 percent of American households saw their average net worth rise by 28 percent while the wealth of the remaining 93 percent fell. This can be partly attributed to the fact that the more well-off tend to have more of their assets invested in stocks and other financial instruments while poorer people usually have more of their wealth invested in their homes. The popping of the housing bubble – fueled by extremely low interest rates and money printing by the Fed – consequently hit the poor much harder than the rich. Subsequent policy measures turned out to be more of the same in the form of “quantitative easing” (i.e. money printing) and still lower interest rates. Such policies invariably funnel more money into the hands of Wall Street, as evidenced by the recent Dow Jones and S&P record highs. That is all great news for those that have their wealth invested there, but unfortunately those that do not are left holding the bag when the Federal Reserve Note dollars trickle down and push up prices.
The fact that such policies are still being pursued today should not be a surprise considering Obama’s appointees for key positions in his administration. In the wake of the financial crisis Timothy Geithner and Larry Summers were brought on board, both of whom had served in the Clinton administration under Treasury Secretary Robert Rubin – who would later join Citigroup as an advisor and board member. After helping to bring about the crisis, Obama appointed them to “solve” it though a top banker’s quote, referring to Geithner as “our man in Washington” as he would help avert systematic changes, would suggest otherwise. Furthermore, as president of the Federal Reserve Bank of New York, Geithner had been heavily involved with the bailouts of both Bear Stearns ($30 billion) and AIG ($7.6 billion). Larry Summers literally left Wall Street, in the form of global investment management firm D.E. Shaw , for D.C. to go right back afterwards. Talk about a revolving door.
Paul Volcker, was chosen by Obama to be the chairman of the Economic Recovery Advisory Board, a position he held from February 2009 to January 2011. Volcker started his career as an economist at the Federal Reserve Bank of New York, after which he joined Chase Manhattan Bank, where he worked for 7 years. He then served as under-secretary of the Treasury for 10 years before becoming chairman of the Federal Reserve Bank under Carter and later under Reagan. His post-Federal Reserve career was also spent alternating between Wall Street and Washington, D.C. Sounds like the kind of economic advisor a president would seek out if he wanted to get tough on Wall Street..
Speaking of which, the media touted Obama’s appointment of Mary Jo White, a former U.S. attorney, as exemplifying his merciless attitude toward Wall Street. The fact that she had been a partner for Wall Street defense firm Debevoise and Plimpton and used her position to stop an investigation into an insider trading incident involving Morgan Stanley – a company she represented at the time – was conveniently left out of the picture.
Other writers such as Matt Taibi have done great work digging a lot deeper than this but even going over just some of the people in key positions in the Obama administration should help one understand how Obama’s actions could have been so diametrically opposed to his campaign rhetoric.
One of the very few promises he did not break, Obamacare is now shaping up to further widen the yawning wealth gap as millions of Americans stand to lose their health insurance while those that retain it will have to pay rates that have already increased by double digits. Tax increases resulting from Obamacare will be nearly twice the original estimate, while small and medium-sized businesses are having to let employees go or stop growing to avoid going broke. That is if there will even be enough doctors to run Obama’s disease management system. Apparently the entire system is such a wonderful idea that lawmakers are now looking to exempt themselves from it while forcing it on others.
Many Americans were dancing in the streets when Obama was first elected in ’08, believing his election signaled better times especially for the poor and for minorities. Unfortunately “change” turned out to be just another hollow buzzword used by just another political shill to win an election and get behind the lever of power. Obama has simply continued the same policies that have been pursued for decades by both Democrats and Republicans, only the rhetoric is different.
The upside is that more people than ever are now seeing through this political dog and pony show as the ill-effects of said policies start to take effect. During last year’s election campaign it became evident that a lot of the Obama enthusiasm had waned. By the end of his second term, when the chickens have finally come home to roost, even his staunchest supporters will have to engage in some serious mental gymnastics to defend their support for him.