Obama: "Shellacked" but already capitulating

The Republicans stormed the House, but Wall Street really won.

Last night, as I obsessively flipped around cable TV channels, I noted that whether I landed on Fox or CNBC or MSNBC, the same two main coverage items were being debated: 1) the Tea Party, and 2) the victorious Republicans (including the ones also labeled Tea Party candidates – even though they were not actually running as a separate Party – a trick that progressives have never managed to pull off). All the TPGOP's were singing from the same song sheet: extend Bush’s tax cuts, kill what they refer to as Obamacare, and cut spending in some manner devoid of specific detail – and of course, get Americans back to work – the free-market way – by reducing government constraints on businesses so they can stop worrying about rules and thus somehow spontaneously start hiring more. (Note: to underscore this strategy, CNBC paraded a bunch of CEO’s on screen throughout the night.)

The TPGOP left the innocuous financial reform bill alone for the most part, except to make clear, as Incoming House Majority whip (aka 2012 contender), Eric Cantor did, that they don’t want onerous regulations (much better to wait until the next leg of this crisis and the loss of more jobs and homes, apparently.)

There was far less discourse about what the winning Democrats wanted, because beyond mentioning how this vote was really a referendum on Obama anyway. Though, let’s face it, we’re all tired of the promises anyway, not because we’re impatient – it takes time to create jobs – but because it’s no fun being lied to.

Here’s what wasn’t mentioned – first, as many other have noted, the cost and logic of two wars, and second, the cost and logic of bailing out  and now, propping up, Wall Street as it heads decisively (despite Obama and Pelosi’s promises of ‘those days of fill-in-the-blank being over'.) No winning Republican mentioned repealing the financial reform bill, since it doesn’t really reform finance. Score 1 for Wall Street. No winning Democrat thought that maybe since the Republican Tea Partiers were so anti bailouts, they should suggest a strategy that dials back ongoing support for the banking sector that continues to foreclose on homes, deny mass lending restructuring despite their federal windfall, and rake in trading profits, or underscore commitment to put the Fed in check. The Democrats can’t suggest that, because they were complicit. Score 2 for Wall Street.

In other words, nothing will change. And that, more than the disillusionment of his supporters that he would actually stand by his campaign rhetoric, is why, Obama will lose the White House in 2012.

Post election day, the Dow shot to a 2010 high, bank stocks rallied 2% on average, and the Fed announced they’d buy (read: shift to their books) another $600 billion of Treasury bonds (read: our debt.) The fictional boosting of the financial economy, absent the real boosting of the general economy marches on sans debate.

This morning, Obama had the chance to at least attempt to re-engage the voters who believed in his mantra of change. In his contrition speech, he took responsibility (read: apologized) for making it seem like he extended government too much (thereby taking on the language of the Republican opponents) explaining that we were in an emergency situation (not that the banks screwed up and stole the life rafts). He ensured businesses he was still on their side (in case the fact that he’s keeping Wall-Street lackey, Treasury Secretary, Tim Geithner on, and extolled Larry Summers on the Jon Stewart show, wasn’t enough of a sign).

It is likely, the Democrats will fear losing their seats in 2012, and vote more with the pro-business center going forward. That would be a mistake for them, and bad for the country. It would be better to be honest with themselves. The health care bill, for example, really did lead to a 14% increase in premiums this year for 90 million Americans (and that's just counting the ones covered by the Blue Cross /Blue Shield complex.) The solution to this hike shouldn’t be repealing the bill as the Republicans want, but capping costs (like every one wants) and providing single payer to all, which will force a competitive pricing structure relative to the private insurers – at thus, reduce an endlessly growing business and personal cost. The financial reform bill still leaves the biggest banks, too big. 

Sadly, Obama showed preemptive signs of capitulation with two words; ‘free market.’ Towards the end of the Q&A session following his speech, Obama said that the free market has to be “nurtured and cultivated”, and that he had to take responsibility to make clear to the business community and the country that the most important thing we can do is boost and encourage our business sector and make sure that they are hiring. His facial expression was as hollow as his words. He added that “we” (I’m assuming him and Geithner) have been talking to CEO’s constantly (and don’t we all feel good about that?) – and that next week in Asia, his whole focus is how to open up markets, so “we can prosper, sell more goods and create more jobs in the United States” (that playbook is from Bush’s Treasury Secretary, Hank Paulson, because that policy works so well). He pointed out that a whole bunch of corporate executives will join “us”.

And that, is the second reason he will not be re-elected, businesses won’t need to fund him, when they can fund the Republicans, now that they are back in vogue, they will just extract what they can meanwhile, and Obama will see this in 2012, if he doesn’t now. He could go all out and ignore those CEOs and focus on the general populace, but it doesn't seem like it. Whether he has learned something or not from this election about loyalties to his votes, he isn’t showing it. So maybe progressives should stop defending him and start yelling at him. Or seriously look for another 2012 candidate to run against Sarah Palin.