Monday, March 2, 2009

social policy in a financial crisis

Obama's budget is a tour de force, from what I can glean. He redirects massive resources towards health care, education, the environment, and other progressive agendas. He is ready to openly change tax policy, raising the rate on the wealthier, and lowering it on the middle class. He is willing to put all the defence budget on the books, so the country can see the vastness of the defence appropriation, and is looking at actually bringing it under control. All this would be hailed by progressives as a triumph, and as the most significant change of social policy since the New Deal, if not for the financial crisis. The requirement of the new president to try to shore up the world financial system creates tremendous drag on the new vision. The simultaneous effort to put the resources of the federal government on the side of working people is contradicted by the massive transfer of resources to the bankers who have so callously dragged us into this abyss. Our gut says let them fail, close them down, bring these so called financial geniuses to justice. But our most progressive president in 60 years is not willing to let the banks fail. There must be a reason, and the consequences must be very dire because, by attempting to rescue these institutions, Citi, AIG, etc. Obama is liable to fail, and fail big. Without this emergency, even in a slow down, or a normal recession, this new budget, this new agenda would be a clear and breathtaking step forward. But the countervaling attempt to save the very institutions and arrangements that were at the heart of the ruthless, anti labor, expliotation of our wealth for personal gain, creates ideological and political confusion. It is too bad, but as smart as Obama is, and he is very smart, he must believe he cannot let the banks fail. By attempting to save them he is putting his mandate, his progressive support, and his presidency on the line. There is something noble about it.

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