Tuesday, June 17, 2008

Naomi Klein

Naomi Klein's Latest Column

Obama’s Chicago Boys
by Naomi Klein, June 13, 2008

Barack Obama waited just three days after Hillary Clinton pulled out of the race to declare, on CNBC, “Look. I am a pro-growth, free-market guy. I love the market.”

Demonstrating that this is no mere spring fling, he has appointed 37-year-old Jason Furman to head his economic policy team. Furman is one of Wal-Mart’s most prominent defenders, anointing the company a “progressive success story.” On the campaign trail, Obama blasted Clinton for sitting on the Wal-Mart board and pledged, “I won’t shop there.” For Furman, however, it’s Wal-Mart’s critics who are the real threat: the “efforts to get Wal-Mart to raise its wages and benefits” are creating “collateral damage” that is “way too enormous and damaging to working people and the economy more broadly for me to sit by idly and sing ‘Kum-Ba-Ya’ in the interests of progressive harmony.”

Obama’s love of markets and his desire for “change” are not inherently incompatible. “The market has gotten out of balance,” he says, and it most certainly has. Many trace this profound imbalance back to the ideas of Milton Friedman, who launched a counter-revolution against the New Deal from his perch at the University of Chicago economics department. And here there are more problems, because Obama—who taught law at the University of Chicago for a decade—is thoroughly embedded in the mindset known as the Chicago School.

He chose as his chief economic adviser Austan Goolsbee, a University of Chicago economist on the left side of a spectrum that stops at the center-right. Goolsbee, unlike his more Friedmanite colleagues, sees inequality as a problem. His primary solution, however, is more education—a line you can also get from Alan Greenspan. In their hometown, Goolsbee has been eager to link Obama to the Chicago School. “If you look at his platform, at his advisers, at his temperament, the guy’s got a healthy respect for markets,” he told Chicago magazine. “It’s in the ethos of the , which is something different from saying he is laissez-faire.”

Another of Obama’s Chicago fans is 39-year-old billionaire Kenneth Griffin, CEO of the hedge fund Citadel Investment Group. Griffin, who gave the maximum allowable donation to Obama, is something of a poster boy for an unbalanced economy. He got married at Versailles and had the after-party at Marie Antoinette’s vacation spot (Cirque du Soleil performed)—and he is one of the staunchest opponents of closing the hedge fund tax loophole. While Obama talks about toughening trade rules with China, Griffin has been bending the few barriers that do exist. Despite sanctions prohibiting the sale of police equipment to China, Citadel has been pouring money into controversial China-based security companies that are putting the local population under unprecedented levels of surveillance.

Now is the time to worry about Obama’s Chicago Boys and their commitment to fending off serious attempts at regulation. It was in the two and a half months between winning the 1992 election and being sworn into office that Bill Clinton did a U-turn on the economy. He had campaigned promising to revise NAFTA, adding labor and environmental provisions and to invest in social programs. But two weeks before his inauguration, he met with then Goldman Sachs chief Robert Rubin, who convinced him of the urgency of embracing austerity and more liberalization. Rubin told PBS, “President Clinton actually made the decision before he stepped into the Oval Office, during the transition, on what was a dramatic change in economic policy.”

Furman, a leading disciple of Rubin, was chosen to head the Brookings Institution’s Hamilton Project, the think tank Rubin helped found to argue for reforming, rather than abandoning, the free trade agenda. Add to that Goolsbee’s February meeting with Canadian consulate officials, who left with the distinct impression that they had been instructed not to take Obama’s anti-NAFTA campaigning seriously, and there is every reason for concern about a replay of 1993.

The irony is that there is absolutely no reason for this backsliding. The movement launched by Friedman, introduced by Ronald Reagan and entrenched under Clinton, faces a profound legitimacy crisis around the world. Nowhere is this more evident than at the University of Chicago itself. In mid-May, when university president Robert Zimmer announced the creation of a $200 million Milton Friedman Institute, an economic research center devoted to continuing and augmenting the Friedman legacy, a controversy erupted. More than 100 faculty members signed a letter of protest. “The effects of the neoliberal global order that has been put in place in recent decades, strongly buttressed by the Chicago School of Economics, have by no means been unequivocally positive,” the letter states. “Many would argue that they have been negative for much of the world’s population.”

When Friedman died in 2006, such bold critiques of his legacy were largely absent. The adoring memorials spoke only of grand achievement, with one of the more prominent appreciations appearing in the New York Times—written by Austan Goolsbee. Yet now, just two years later, Friedman’s name is seen as a liability even at his own alma mater. So why has Obama chosen this moment, when all illusions of a consensus have dropped away, to go Chicago retro?

The news is not all bad. Furman claims he will be drawing on the expertise of two Keynesian economists: Jared Bernstein of the Economic Policy Institute and James Galbraith, son of Friedman’s nemesis John Kenneth Galbraith. Our “current economic crisis,” Obama recently said, did not come from nowhere. It is “the logical conclusion of a tired and misguided philosophy that has dominated Washington for far too long.”

True enough. But before Obama can purge Washington of the scourge of Friedmanism, he has some ideological housecleaning of his own to do.


I am all about wait and see with BIG O. These economic gurus bring with them an actual economic policy which is something the chimp checked at the door before he set his cheerleader ass in the biggest chair in the country.

Besides anyone that is anti-Friedman is OK with me. Get in there and figure something out to make it work.

Gee what a novel idea, work.



carey said...

Here in San Diego we've just come off a huge golf weekend. I've got to tell you, how much fun was that????? It was sublime.

Obama will say alot of things. He has to, he's campaigning in the general now. No more primary, purely Democratic politics. It's all about winning the damn thing now.

My houses are in disarray for a while. Access to computers is limited for the time being. My time has become a commodity for the present. So much to do......

Hajji said...


I saw most of the amazing golf going on out there.


I couldn't believe so many people could stick around on a MONDAY!

A true playoff down to the last putt...people must've known that was gonna happen...thousands sat in the bleachers at 18 for hours, with no golf to see...waiting for that one putt...that one miss...

Amazing...I hope they didn't cause too much traffic congestion!


carey said...

Goodie, I got access to a computer again for a minute.


The traffic was handled beautifully. The tournament was near my sister's house--all in all it wasn't bad really. I'm moving a little south and inland from those gorgeous Torrey Pines cliffs.

If you get a chance everyone, the hearings on torture they're holding right now are breathtaking in their grime. You just hang your head when you hear this stuff.

DEN said...

Top firms from the United States and China will sign Monday more than 30 commercial deals worth billions of dollars ahead of senior level official talks on critical economic issues, an official said.

The inking of the agreements will be witnessed by Chinese Vice-Premier Wang Qishan and Commerce Minister Chen Deming, who are leading a cabinet team for two days of talks with the US side led by Treasury Secretary Henry Paulson and Federal Reserve chairman Ben Bernanke.

"We are going to have over 30 commercial deals worth several billions of dollars to be announced today involving hi-tech, manufacturing and telecommunication companies," Myron Brilliant, US Chamber of Commerce vice president for East Asia, told AFP.

Among the US companies that would be forging the deals are General Motors, Cisco, Ford, IBM, Oracle and Motorola while the Chinese side will include dominant local mobile operator China Mobile, he said.

The US Chamber of Commerce, led by its president, Tom Donohue, will host the deals' signing ceremony, which is expected to give a psychological boost to the US-China "strategic economic dialogue" (SED) beginning Tuesday at the Naval Academy in Annapolis, east of Washington.


More money mongering by the BIG BOYS

DEN said...

Trouble with the police? Check it out.

David B. Benson said...

The early tantrums of an angry planet.

Lessons from an Angry Planet

♥C♥rol said...

Micki, seems I have heirlooms once again. Jill must have had seed left from last year.

It's hard to decide if they're any better than the mass marketed ones. They do split and rot on the vine pretty fast, but the ones I did manage to eat seemed good enough.

Den, I, too, am reserving judgment on Obama. I've no idea what he'll do when he wins. More-than-likely he doesn't either. It will all unfold like...like an onion. I'm, of course, hoping for the best. SOOOO sick of having nothing but the worst of everything.

I've been waiting for the washer repairman since noon. They said somewhere between noon and 6:00. Great. Now I didn't get to go along for the ride with Bob & Izzy to his doctor appointment.

I still haven't got rid of my cold and now poor Bob caught it. Crap! That's not why he's going to the doctor. It's just a regular appointment.

micki said...

I don't recall where I read this, but it sure fits to a T the range of "messages" that one is willing to "hear" from his/her favorite candidate's rhetoric:

Far more messages are received than are ever actually sent.

micki said...

When are we going to learn the lessons from our angry planet?

Here we are heading into the next presidential election and not one damned thing of any magnitude has been done about mitigating climate change for years...and years. (Dammit Al, kick Obama's butt! Get tough for gawdsakes! Or you're going to look like "just another politician" again.)

Okay, so you all know that I am not "taken" with Obama -- especially because he promised to bring "change that we can believe in" and he hasn't convinced me that he has any real plans to make change. Nor am I convinced that he has the will to make important changes. And, now that he's gotten the nomination, the only "change" I've detected is that he's changing his tune from his primary rhetoric.

I doubt that he's brave enough -- or smart enough -- to take the country where it needs to go. Al Gore endorsing him in Michigan is, I guess, supposed to tell us that he's serious about global warming. Wow! Gore endorses him in an auto state. How bold!

Following Gore's endorsement, Obama should have taken the mic and said, "Now, here's what I plan to do....all public transportation will be free; all petroleum products for motor fuels will be rationed; conservation will be implemented across the board; long-distance rail service and light rail will be expanded and improved starting on Day One of an Obama administration; new technologies will be developed for alternative energy and storage; there will be an added tax on ALL products that are non-essential for human life; all plastic crap consumer goods from China will be banned; all government subsidies for ethanol production will be discontinued; there will be no more rebuilding of cities on previously flooded land -- move to higher ground; my administration will TELL industry such as the automobile industry -- start retrofitting to make railroad cars and affordable busses, because individual passenger vehicles will become passe; and that's just for starters!"

Must be dreaming....

David B. Benson said...

You're dreaming, but you might care to find the Will Rogers quote about Americans, automobiles, and bankruptcy...

micki said...

Is this it? Will Rogers talking about the Great Depression (I think.)

We are the first nation in the history of the world to go to the poor house in an automobile.

David B. Benson said...

I suspect so.

Little did he realize how true his words would be, only 70+ years later.

micki said...

Little did he realize how true his words would be, only 70+ years later.

Just goes to show ya...some things move at a glacial pace. Like change and stuff...


David B. Benson said...

Glacial pace is rather faster now.

Other tantrums:

More floods threaten south China

micki said...

So, in 2006 Washington State Legislature passed the nation's first ban on phosphates in dishwashing detergent -- Governor Gregoire signed the bill.

The law has two phases:  the first phase starts on July 1, 2008, when the phosphate ban starts in three counties (Spokane, Whatcom, and Clark). The second phase is in 2010 when the phosphate ban extends statewide.

Today our local rag published an article about the upcoming ban here in Whatcom County. True to form...the comments' section had crapola like this:

Now I need two storage closets. One for my phosphate fertilizer and one for dishwasher soap. You can buy both in Mt Vernon. The Mt. Vernon City Council supports business. I can fill my SUV with fertilizer, dishwasher soap and gasoline all at Mt. Vernon businesses.

Shop South | 06.17.08 - 6:17 am |

F**king environazis. People without any control in their personal lives forcing their world view on others. The revolution is coming soon. People are learning through their own lying eyes about the U.S. running out of trees - did not happen and global warming - not global. All a bunch of hype by the left and their fellow travelers.

I think that long hair, poor hygiene, and lawsuits are bad for the environment along with dope smoking left wingers. Maybe I can get them banned from Whatcom County. That would eliminate 99% of our problems.

Tired of the Meddling | 06.17.08 - 6:30 am | #

David B. Benson said...

Well, barley-n-hops time, now that I didn't solve any of the world's problems today (either).

Car♥l said...

I can't frickin' believe it! The washer guy didn't show! Grrrrr. Very weird. I don't recall ever being stood up like this.

We have an appointment tomorrow at 10:00. Hope he doesn't show up. We'll be callin' about it before we leave, that's for sure.

As for anything Obama says, I could care less at this point because it's ALL out of my hands. Whatever will be, will be. I'd say que sera if I could spell it. :)

Car♥l said...

Think I'll have a beer, too, Doc. Sounds good.

tytandanmar said...

Al Gore's eletric bill averages over $1,300 monthly. Come again Al on this global warming rap you have been handing out. That is up 10% over his last reported monthly average when he promised he would do what he could to make his home energy efficient. Like I said before, if any of you are truly serious about global warming, you will give up all use of and sources of energy that you claim contribute to global warming. Don't see that happening so I don't believe one word any of you or post about it or anything that is reported about it.

Biggest hypocrites of all!

DEN said...

We will quit using energy "will give up all use of and sources of energy" as soon as you do, pal.

Don't preach what you will not practice.

micki said...

Ty's leaving it in God's hands.

Que sera sera, or however it's spelled. (LOL, Carol! Good one.)

tytandanmar said...

That is why global warming is one of the biggest hoax's of all time. None of it's biggest preachers refuse to give up what they claim to be the cause.

Congrats to the Celtics on #17.

Caro°L° said...

Fascinating World Clock

{ò,ó}arol said...

Picking on Al Gore and his electric bill is lame, right-wing, I-don't-believe-in-global warming crap. If he decided to live only with candlelight and no heat it wouldn't make a bloody bit of difference.

The only thing that could make a difference is a government interested is saving the world. No such luck in this country. I recycle all my stuff, don't have a garbage pick up and what bloody difference does that make? See my point?

We need rules. We need regulations. We need the government to give a shit.

tytandanmar said...

The government works for the people. If the people do not do what they feel is necessary to combat the mortal enemy that they believe global warming to be, then nothing will be done. That is why it is a hoax and a hoax of the highest magnitude.