[Marxism] Blacks, Latinos and the Democratic Primaries -- a Bureau of Electoral Cretinism special report

[Louis Proyect]

http://louisproyect.wordpress.com/2008/01/09/obamas-economic-advisers/

Last night I was on my stationary exercise bike watching early MSNBC 
news coverage of the New Hampshire primaries prior to vote totals 
being reported. The pundits were falling all over each other in 
praise of Barack Obama's campaigning skills. I was especially struck 
by Tom Brokaw's describing the Black candidate as "A thoroughbred who 
has broken away from the pack," a perfect encapsulation of the 
idiotic horse race character of these elections.

Despite the intense rivalry between Obama and Hillary Clinton, they 
both are cut from the same mold, namely the Bill Clinton presidency. 
In his 2004 speech to the Democratic Party convention titled "The 
Audacity of Hope", Obama adopted the bipartisan, centrist pose 
perfected by Hillary's husband during his regime:

     The pundits, the pundits like to slice-and-dice our country into 
Red States and Blue States; Red States for Republicans, Blue States 
for Democrats. But I've got news for them, too. We worship an 
"awesome God" in the Blue States, and we don't like federal agents 
poking around in our libraries in the Red States.

Since Obama's speeches are rather thin on substance, you have to 
extrapolate their meaning from sentences such as the following, which 
occurred in the same 2004 address:

     Now, don't get me wrong. The people I meet — in small towns and 
big cities, in diners and office parks — they don't expect government 
to solve all their problems. They know they have to work hard to get 
ahead, and they want to. Go into the collar counties around Chicago, 
and people will tell you they don't want their tax money wasted, by a 
welfare agency or by the Pentagon.

Since welfare was gutted long ago, we can only presume that this 
reference was meant to establish Obama's belt-tightening fiscal 
outlook. Although it is not widely understood, Obama is pretty much 
committed to the neoclassical economics outlook of his home-town 
University of Chicago. Since becoming Senator, he has relied on the 
advice of a professor named Austan Goolsbee, who calls himself "a 
centrist, market economist" (Washington Times, July 16, 2007).

Goolsbee has been a columnist for Slate.com and the NY Times, as well 
as a standup comedian. His economics are not meant as a joke, as I 
understand it. His columns are written very much in the same vein as 
fellow U. of Chicago neoclassical economist Steven Levitt's 
"Freakonomics," examining everyday problems such as "Why you get 
stuck for hours at O'Hare." Most are fairly uncontroversial except 
for the swipe he took at Michael Moore's "Sicko", whose single-payer 
recommendations violate his free market principles.

Another adviser with a particular interest in health care is David 
Cutler, a Harvard economist who was also an adviser to Bill 
Clinton–surprise, surprise. Cutler wrote an article for the New 
England Journal of Medicine in 2006 asserting that "The rising cost 
 
of health care has been the source of a lot of saber rattling in the 
media and the public square, without anyone seriously analyzing the 
benefits gained."

Anxious to show the good side of rising costs, Cutler and a group of 
other economists defend the idea that a powerful and profitable 
medical industry can serve as an engine of economic growth in the USA 
as the wretched Gina Kolata reported in the August 22, 2006 NY Times.

     By 2030, predicts Robert W. Fogel, a Nobel laureate at the 
University of Chicago Graduate School of Business, about 25 percent 
of the G.D.P. will be spent on health care, making it "the driving 
force in the economy," just as railroads drove the economy at the 
start of the 20th century


     Other economists agree.

     "We have to spend our money on something," says Robert E. Hall, 
a Stanford University economist.

     In a paper published in The Quarterly Journal of Economics, Dr. 
Hall and Charles I. Jones of the University of California, Berkeley, 
write: "As we get older and richer, which is more valuable: a third 
car, yet another television, more clothing — or an extra year of life?"

     David Cutler, an economist at Harvard, calculated the value of 
extra spending on medicine. "Take a typical person aged 45," he said. 
"They will spend $30,000 more over their lifetime caring for 
cardiovascular disease than they would have spent in 1950. And they 
will live maybe three more years because of it."

I guess this is why they call economics the dismal science. It should 
be noted in passing that the aforementioned Robert W. Fogel was the 
co-author with Stanley Engerman of "Time on the Cross", a book that 
argued that slaves actually had it pretty good under the plantation 
system. His latest book is titled "The Escape from Hunger and 
Premature Death, 1700–2100: Europe, America, and the Third World" 
that posits a "technophysio evolution" that is filled with 
Panglossian enthusiasm about capitalism's ability to bring prosperity 
to the developing world.

Another Harvard University adviser to Obama is Jeffrey Liebman, a 
Harvard economist who co-authored a paper on the feasibility of 
privatizing social security when he was an adviser to Bill Clinton. 
Apparently, the momentum toward adopting such a proposal was halted 
after the Monica Lewinsky affair put the president on the defensive. 
Liebman has co-authored a book on social security "reform" with 
Martin Feldstein, another Harvard economist who was–appropriately 
enough–the chairman of the Council of Economic Advisors under Ronald 
Reagan. In an article titled "The Rich, the Poor, and the Economists" 
that appeared in the January 2002 Monthly Review, Michael Yates notes 
the following:

     Before he became Reagan's chief economist, he [Feldstein] was an 
expert on the economics of social security. In published papers, he 
claimed to have empirically demonstrated that the social security 
system in the United States inhibited savings. Since savings are the 
source of capital investment, the implication of his research was 
that the social security system also reduced investment and thereby 
reduced the growth rate of the economy, since investment is the 
engine of economic growth.

     Feldstein's work fit nicely into the growing conservative 
movement which arose after the post World War Two boom came to an end 
in the early 1970s. The Keynesian economics that was gospel during my 
college years was giving way to a return to the pre-Keynesian theory 
that "freely" operating markets (free from the poison of government 
control and regulation) were the only solution to all economic 
problems. Led by the famous "Chicago Boys," especially Milton 
Friedman, the anti-Keynesians carried the day in the economics 
profession and still do. No wonder, then, that when Ronald Reagan 
became president, he tapped Feldstein to chair the Council. For 
years, Reagan had been railing against social security from his 
General Electric radio pulpit. Now here was an economist who could 
lend professional credence to Reagan's reactionary views. Social 
Security would be a tough nut to crack. It was an extremely popular 
program, run with great efficiency and effective in sharply reducing 
poverty among the elderly.

     There was just one problem. Feldstein's research was fatally 
flawed. Two staff economists at the Social Security Administration 
asked Feldstein for his supporting data. After three years of 
repeated requests, he sent the data to them. When they tried to use 
Feldstein's numbers to replicate his results, however, they could 
not. They uncovered an error in the computer program Feldstein had 
used, and when they corrected the error, the results were exactly the 
opposite of Feldstein's. That is to say, the social security system 
actually encouraged savings and, according to Feldstein's cherished 
"free market" theory, facilitated capital formation and economic 
growth. (For more on this, see "'Superstar' Feldstein and His Little 
Mistake" in Dollars & Sense, Dec. 1980, pp. 1-2 and the citations therein.)

One imagines that the average primary voter in Iowa or New Hampshire 
has not even the slightest clue that Obama is carrying around such 
baggage. For most of them, the mantras of "change" and "hope" are 
supposed to be sufficient to earn their vote, at least that was what 
was expected in New Hampshire. In utter defiance of the media 
coronation of Obama, Hillary Clinton was the choice of the people in 
this miserable, economically stagnant New England state. The World 
Socialist Website, whose political insights are sometimes undermined 
by their boilerplate calls for building revolutionary parties (i.e., 
their own) has a rather astute explanation for Clinton's victory:

     The outcome of the Democratic primary suggests that Clinton 
benefited from a growing concern among working class voters over the 
state of the US economy. Clinton was the only candidate to raise the 
growing danger of recession in Saturday's televised debate, and exit 
polls showed that the economy was the number one issue of those who 
turned out to vote, whether they cast a Democratic or a Republican 
ballot. A staggering 98 percent of those who voted in the Democratic 
primary said they were "very" or "somewhat" worried about the economy.

     Clinton ran ahead of Obama in the working class industrial city 
of Manchester, New Hampshire's largest, and there were significant 
class and economic distinctions between their voters. Clinton led 
Obama by sizeable margins among those with family incomes less than 
$100,000 a year, among union members, among those without college 
degrees, among those who felt that the state of the US economy is 
poor, and among those with children in the home. Her largest margin 
was among single working women.

     Perhaps the most striking distinction between Clinton and Obama 
voters concerned feelings about their family's economic futures. 
Those who said their families were "getting ahead" backed Obama by 48 
to 31 percent. Those who said their families were "falling behind"—a 
much larger group—voted for Clinton by 43 to 33 percent.

Of course, they will eventually be disappointed in a Clinton 
presidency because her economic program and his are virtually 
identical. In considering the "differences" between the two, I am 
reminded of what Fred Halstead used to say when he was running for 
president on the Socialist Workers Party ticket exactly 40 years ago: 
"Whoever wins the election, the American people will end up the losers."