Clive Crook: Why Obama Must Be Radical

[babylonsister]

Why Obama Must Be Radical
Rather than splitting the difference between Democrats and Republicans, Obama needs to be bolder than both.

by Clive Crook

Saturday, Jan. 24, 2009


One of the things the country likes best about its new president is his taste for consensus. Barack Obama campaigned as a moderate, open to the views of people who disagree with him. His appointments seem to reflect the same attitude: He has chosen mostly centrists, including many veterans of the Clinton administration, with other viewpoints represented too. In planning his fiscal stimulus, Obama made a point of reaching out to Republicans in Congress. This attitude is widely admired, but one must ask whether Obama's preference for moderation, accommodation, and consensus is what these times require.

The economy's plight is extreme. Bold and unusual remedies are needed. This necessary radicalism, if you want to call it that, is not straightforwardly partisan, to be sure. This is not a matter of listening to one particular faction and ignoring everybody else. But at the same time, you cannot get to the right policy merely by trending to the middle and splitting differences between Democrats and Republicans.

Obama will have to be radical, first, in his approach to the shattered banking system. Despite the vast sums already committed to the effort to rescue banks and other financial institutions, the system is still broken. Lending has not recovered and confidence in the system's integrity is nowhere near restored. Without a well-functioning financial system to provide credit, business investment and consumer spending will stay suppressed, and the economy will revive only slowly, if at all. The first few hundred billion dollars of the Bush administration's Troubled Asset Relief Program were surely not wasted -- they contained the immediate crisis, despite the muddle and the changes of thinking -- but they were insufficient to fix the problem. Spending the second part of TARP in the same fashion, however, is likely to fail as well.

The Obama administration must grit its teeth and look afresh at the problem. The crux of the issue is the reluctance of the banks and the authorities to recognize the full extent of impaired assets. The hope was that asset values had undershot and, given time, would recover -- the perceived task was to hang on, patch and mend, and avoid an outright system-wide collapse in the meantime. Once, you could argue that this approach was worth a try. Now it is time to try something else.

The government must coldly examine the banks' assets and urgently come to a new reckoning. There is more than one way to proceed, but the key thing is that banks must be forced to write down their toxic assets -- not to "fair value," whatever that means, but all the way to what they are now worth in the market. This will make many banks insolvent. The best course then is to nationalize them. Even the ones that stay solvent will likely need the government to supply further new capital in exchange for equity.

more...

http://www.nationaljournal.com/njmagazine/wn_20090124_4191.php

[babylonsister]

1. Right or wrong? No opinions? nt

[Two Americas]

2. I agree with the author

What do you think, babylonsister? Are we not talking about "moving to the Left," at least in the way that word was once used? Are you behind that? Do you think we can express support for Obama moving in a more radical direction without the for-or-against Obama loyalty arguments breaking out and making it impossible to discuss the issue? One week people are saying "how can you be so stupid, of course Obama is a centrist and never claimed otherwise" and the next week he moves to the Left and the same people are saying "how could you be so stupid as to not trust Obama to move to the Left? So much for your whining and pouting."

I think for many of us who have been called whiners and pouters, we find it difficult to determine where the loyalty to Obama ends, and the hatred of the Left begins. I think Obama should move to the Left. Not because it is "what I want," but rather because I think it will be necessary. To be on the political Left means thinking that left wing political solutions are what are best for all of the people, and they are what always become inevitable and necessary when capitalism leads us into yet another life and death crisis. Obama does not need to change his "philosophy" to move to the Left, he merely needs to respond to the crisis effectively and rationally. That means moving to the Left. To be on the political Left is to recognize that what is ideal, and what is practical, are ultimately one and the same, not in contradiction to each other. The Left is advocacy for the working people, for the opposite of what the wealthy and powerful few want, and what they want is to turn us all into impoverished peasants. Battling back against them is the only way to save the people.

I think there can be no doubt that the leftists will support Obama moving to the Left. But what about the centrists and loyalists, who so far have seemed more interested in bashing the Left than anything else? Even when Obama does move to the Left, they mock and ridicule the people on the Left over that. It is not a very healthy environment for serious discussion.

Thanks for bringing these articles to us all the time, by the way. Much appreciated.