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Post-Election Advice For Desperate Dems: Dump Pelosi, Dump Obama, Stop Foreclosures, Tax Wall Street

Webster G. Tarpley
November 9, 2010

The results of last Tuesday’s election must be interpreted as a repudiation of the Obama presidency, and also as a vote in favor of divided government. Voters wanted to end one-party rule in Washington, and this has been accomplished. Voters were more than willing to accept a couple of years of gridlock, since they are not inclined to hand a blank check to the unacceptable and incompetent agendas of either major political party. There certainly was no mandate for the raving reactionary policies put forward by the Republican Party.

A Vote Against Obama and for Divided Government, not in Favor of the GOP

For the first time since World War II, the House of Representatives has changed hands without being accompanied by the Senate. One reason is that the voters have even more contempt for the Republicans than they do for the Democrats, and wanted to do just enough to apply the brakes without allowing the GOP to begin controlling events. The House of Representatives was easy to target because of its foolish vote in favor of cap and trade. The House is also the home of Pelosi, the most demonized figure in the elections. Most important of all may be the fact that House races are the kind of political arena in which massive amounts of outside money injected by reactionary businessmen like the Koch brothers, the US Chamber of Commerce, the Republican Governors’ Association, and other malefactors of great wealth can have the biggest impact. It is much easier for negative advertising paid for by outside interests to determine the outcome in House District than in a state or on a national scale. If this is taken into account, we can explain why the usual 20 to 30 seat loss for the Democrats turned into twice that, with the outside money made possible by the Citizens United Supreme Court decision playing a major role. As for the pluto-candidates, who sought to buy public office outright, they generally fared very poorly. This applies to assorted super-rich reactionaries like Whitman, Fiorina, MacMahon, Raese, and a few others.

Sadly, these events confirm the forecasts made by the present writer in Obama: the Postmodern Coup – the Making of the Manchurian Candidate, published in March 2008 in advance of the Pennsylvania primary, and in Barack H. Obama: The Unauthorized Biography, which appeared in August 2008, well before the Democratic National Convention. Obama has always been a recipe for disaster on the same general lines as Jimmy Carter, but on an incomparably larger scale. Obama is in the process of aborting and wasting the golden opportunity of 2008, which would have been to organize a return to the successful policies of the Franklin D. Roosevelt New Deal, repeating the historical victory of the American people over pro-fascists and reactionaries in 1932. The resulting political coalition and pattern of dominance in the Electoral College could have lasted until the middle of the 21st century, reducing the reactionary Republicans to total impotence in the status of a regional ethno-cultural force favored by xenophobes and low-wage employers in backward rural areas of the Southern states. Instead, these same reactionaries are now resurgent, thanks in large measure to Obama. If Obama is allowed to stay in office for another two years, and especially if he is allowed to secure re-nomination, he will wreck the Democratic Party for a generation, and will doom all progressive causes to utter defeat for the foreseeable historic future. Obama must therefore be dumped.

47% of Democrats want a primary challenge to Obama

Those advocating the ouster of Obama as the Democratic party’s 2012 candidate seemed for a long time like a voice crying in the wilderness. But this is no longer the case. The terrain for various political moves to dispense with Obama’s services has been prepared over the last several months by a series of interviews with the anonymous “Ulsterman,” purportedly a former Obama White House official, at Ulsterman reports that the tenant of the White House is close to a mental breakdown, surrounded by intrigue, disengaged and withdrawn from the daily administrative routine, and stimulated only by the adulation of the masses.1 The main points of the Ulsterman allegations are now finding their way into the larger media platforms, notably the Politico on the Monday after the election.2 The Washington Post has published a catalog of Democrats blaming Obama for the defeat.3 The catalogue of Democrats who are now willing to be quoted by name in public rebuking and criticizing Obama is growing rapidly, and includes Congressman DeFazio, Congressman George Miller, defeated Florida gubernatorial candidate Alex Sink, defeated Rhode Island candidate Frank Caprio, and others. Left-liberal writer Robert Scheer has finally figured out that “Obama betrayed us.” More important, about half of the Democratic Party (47%) now want to see Obama challenged in the primary elections of 2011-2012.4

“Primary Obusha!”

Among the left liberal blogs, Firedoglake, which had been reluctant to jump on the Obama bandwagon in the first place in 2008 but finally gave in, is now hosting articles advancing details and articulated reasons why Obama should be jettisoned now. Unfortunately, some of these are conducted from an ultra-left perspective which has as little comprehension of the predicament of American working families as Obama himself does.5 Lori Price of Citizens for Legitimate Government has raised the slogan of “primary Obusha” on the organization’s website.6 These sites join, which has never capitulated to Obama and has been calling for his ouster all along.

Obama disgust even at MSNBC

Obama fatigue has even set in over at MSNBC, previously the premier tabernacle of the new Messiah. On November 3, 2010, the day after the election, former drooling acolyte Ed Schultz referred to an “undercurrent of distrust and disgust” against the tenant of the White House, and ventured to doubt that Obama had any fighting qualities that he could ever mobilize.7 Later in that evening’s lineup, Keith Olbermann also had some unusually rough words for the anointed one. Was the suspension of Olbermann a few days later a move by General Electric boss Jeff Immelt to discipline his stable of broadcast ranters, making clear that he wants Obama kept in office and blackmailable for the next two years to make sure that GE gets what it wants?

Shultz-Murdoch Reactionary Wing of US Ruling Oligarchy now Ascendant

We also need to pay attention to the shifting power relations inside the US financier ruling class. Since about 2005, we had seen the ascendancy of the center-right group around James Baker III, which includes financier George Soros. Now, power is shifting back to the George Shultz-Rupert Murdoch right wing faction, which has the Koch brothers, Mellon Scaife, and a few others as its ultra-reactionary fringe. We need to recall that George Shultz, former secretary of labor, the treasury, and state, was the ruling class operative most responsible for assembling the administration of Bush and Cheney, whom he had a key role in anointing. Schultz was also instrumental in selecting Condoleezza Rice, Paul Wolfowitz, Douglas Feith, and other members of the so-called “Vulcans” cabal which staffed the administration. Shultz also helped choose Arnold Schwarzenegger to become governor of California. The ascendancy of Shultz-Murdoch is what we would expect under conditions of world economic and financial depression, with high levels of unemployment and belated economic problems.

How far are Shultz and Murdoch prepared to go? Normally, this wing of the ruling class would prefer to govern through more or less respectable right-wing politicians claiming to be from the mainstream of US society. But the problem is that normal Republican bureaucratic hack politicians (think of Michael Castle of Delaware, or Bob Bennett of Utah) are having an increasingly difficult time getting traction among masses who are steadily becoming more and more crazed because of persistent high levels of unemployment, foreclosures, and immiseration. When normal semi-respectable hacks such as those furnished by the Bush family can no longer give the financiers what they want, it is then time for the financiers to shift their support to the guttersnipes, rowdies, scoundrels, hooligans, lunatic fringe, and criminal elements which have been prominent among candidates claiming to represent the Tea Party. O’Donnell was a witch, but her current racket was to loot her own campaign treasury to finance her shopping sprees and personal expenses. Miller’s idea of democratic debate was to have his goons slap handcuffs on a reporter who asked inconvenient questions. Angle’s attack ads veered sharply into outright racism. McMahon with her wrestling antics was a grotesque worthy of Ripley’s Believe It Or Not. Ohio GOP congressional candidate Iott likes to get dressed up in the uniform of the Nazi Waffen SS. Many of these candidates clearly crossed the line dividing normal bourgeois respectability from guttersnipe territory.

Scoundrel time in the GOP

Under depression conditions candidates who want to succeed need to offer some kind of populism to distressed voters. Democrats could have offered real economic populism in the form of concrete solutions to the urgent everyday problems of American working people, but that was ruled out by the presence of Wall Street puppet Obama. The Republican answer to situations like this is to reach into the cultural populist grab bag of gyps, dodges, and deals. Scott Brown drove a truck – a stunt he copied from former Senator Fred Thompson. Sarah Palin knows how to field dress a moose, although she is patently an imbecile on other matters more germane to governing. Reagan had jellybeans. Bush the Elder tried to plebeianize himself with pork rinds and a horseshoe pit. Lamar Alexander ran for president based on his plaid shirt. Mitch Daniels is trying to launch himself towards national office based on riding a motorcycle. But there comes a time when these cheap cultural populist tricks are no longer enough. This accounts for guttersnipes like Angle and Arizona Governor Brewer charging headlong into overt racism. We need to remember that racism is an extreme form of cultural populism, and extreme or völkische race theory was the heart of the Nazi ideology. If unemployment remains at 10% or more for the next several years (and really more like 20-25%, depression levels), this is where we will be heading.

Stewart and Colbert; the Orphans of Obama’s Betrayal

Comedians Jon Stewart and Stephen Colbert got a crowd on the Mall in Washington which was clearly bigger than the crazed followers of Glenn Beck. But the Stewart-Colbert assembly were largely the whining orphans of the Obama 2008 hysteria. They represent the left of center petty bourgeoisie still attempting to maintain some semblance of respectability. Two years ago, they chanted for hope and change. Now, in the bitter hangover of their Obama inebriation, they have scaled their slogans down to the level of stability, moderation, sanity, dialogue, and similar impotent gestures. These well-meaning people need to understand that acrimony and partisanship are not simply states of mind, but rather the political reflection of a collapsing economy and a shrinking pie. The contending factions in Washington fight so bitterly because it is clear that not all of them can survive. Some of them will be triaged, and this leads to lifeboat ethics even inside the ruling class itself. There are not enough concessions to go around, and those who are left empty handed dread their fate, so they fight back in any way they can.

Depression, dictatorship, world war: the Weimar Death Spiral

The experience of 1933-1939 in Europe shows us a process with three phases: economic and financial depression, political dictatorship, and then world war. We can call this the Weimar death spiral. The main danger is that if this process is not halted in the depression phase, it can no longer be reversed once a dictatorship has been consolidated. As long as official unemployment remains at or above 10%, there is no point in finding new and better arguments or slogans to discredit Glenn Beck or other demagogues, because these tactics rely implicitly on notions of decency, normalcy, and respectability which cannot survive in the social chaos of the Depression. The only way to neutralize Glenn Beck or even worse demagogues who may soon emerge from the Murdoch stable is to radically lower unemployment by initiating a broad-based economic recovery. Since Obama is the largest single obstacle to even beginning this fight, it is once again clear that Obama must be dumped.

Obama appears frozen in his wounded narcissism and deflated megalomania. His press conference on the day after the election supports the account given by Ulsterman. Obama was muted, somber, pessimistic, and approaching political catatonia. Characteristically, he summed up the previous day’s events by whining, “I took a shellacking.” Note Obama’s constant obsession with himself. Actually, it was the Democratic members of Congress from Obama had betrayed with his crackpot legislative agenda, including the cap and trade horror show and bailouts for insurance companies disguised as a health-care bill, who had gone down to defeat. And it is the American people, not the imposter in the White House, who will suffer all the terrible consequences of the new reactionary wave.

Obama’s incorrigible stupidity on fraudclosures

This disaster is the direct responsibility of Obama, and of Obama personally. He is clearly the most politically incompetent and bumbling president since Jimmy Carter. He blames the malaise or fear of the public for his own failures. Even in the final phase of the election, with defeat staring him squarely in the face, Obama proved unable to embrace a golden opportunity offered by the fraudclosure crisis. With rapacious zombie bankers using clearly illegal means to steal the homes of Americans, Obama’s thoughts were always with his masters in Wall Street. Other Democrats were not as incorrigibly stupid as Obama: Harry Reid, Nancy Pelosi, Debbie Wasserman-Schultz, Chris Van Hollen, Alan Grayson, Governor Martin O’Malley of Maryland, plus virtually the entire Black Caucus were calling for a freeze on foreclosures. Obama could have made a dramatic Oval Office speech demanding an open-ended halt to these illegal seizures, and he could have tasked Elizabeth Warren with finding some technicality in the new Fin Reg law to make this possible. Failing that, he could have used the Trading with the Enemy Act or the Defense Production Act. Instead, the feckless Obama sent out the sleazy and slimy David Axelrod to signal that this was an administration committed to the needs of predatory lenders and zombie bankers, not the American people. Small wonder that many defeated Democrats feel that Obama betrayed them by denying them the political cover which initiatives like this could easily have brought.

A vignette from the foreclosure crisis illustrates the underlying dynamics of this election. On one Sunday in October, Congresswoman Wasserman Schultz was a guest on the same Sunday interview program with Republican minority whip Eric Cantor. Wasserman Shultz voiced support for a freeze on foreclosures. Cantor immediately opposed this, saying that any freeze would remove protections that lenders – again, read zombie bankers – needed, and that America needed to go back to an ethic of individual responsibility.

This exchange was most instructive. It reminds us that whenever Democrats pull themselves together and mount any kind of attack on Wall Street, however weak, the Republicans are obliged to drop all camouflage of Tea Party populism in a microsecond, and rush to line up in defense of their true masters, the Wall Street financial elite. With one month of sustained attacks on Wall Street, the Democrats could easily have stripped away the entire veneer of Tea Party camouflage which the Republicans had laboriously created looking forward to these elections.

If, on the other hand, Democrats assume the role of running dogs for Wall Street, as they have under Obama, the Republicans are free to retire to the sidelines and snipe away, labeling the resulting crimes as socialism and communism. The lesson is that the entire US political system can only work if Democrats assume the role of firm opposition to Wall Street. Otherwise, if there is no visible third party, the doom of this country is sealed, and it will be up to future Chinese anthropologists and historians to write the story of US demise.

Another example of Obama’s overwhelming political stupidity came in the Rhode Island gubernatorial race, where Obama stubbornly refused to endorse the regular Democratic Party candidate, Frank Caprio. This is because the effete snob in the White House wanted to support the blueblood, pro-financier, Rockefeller style Republican nepotist Lincoln Chafee, who eventually won this contest – thanks again in large part to the stunning ineptitude of the erstwhile Messiah. Political professionals on cable television news panels were simply astounded by a Democratic president, with his back to the wall, indulging such a foolish and egotistical preference. Obama is not loyal to Democrats, and they should accordingly feel no compulsion to be loyal to him. Loyalty, after all, is a two-way street, but this is precisely where vapid narcissists like Obama are incapable of delivering.

The present capital strike or capital lockout: The Big business fascism of 1937 revisited

Another little noted aspect of the 2010 election involves the failure of all Democrats, starting from Obama, to seize a very obvious political issue to throw the reactionary Republicans on the defensive. For months, right wing commentators have been blathering about the facts that American corporations have hoarded several trillion dollars of cash which they are refusing to invest, allegedly because of the “uncertainty” about the future tax and regulatory intentions of the Obama regime. This means that, while the average American is struggling, and frequently facing unemployment and foreclosure, corporate fat cats are hoarding cash, usually meaning that they have invested it in emerging market speculative swindles, or else into derivatives courtesy of Goldman Sachs.

This amounts to a capital strike, or, more accurately to a capital lockout, since it is the American people who are being deprived of jobs. It is being done in wartime, as Republicans are fond of reminding us when it suits them in other contexts. One could easily make the case that the businessmen were deliberately refusing to invest are unpatriotic, greedy, economic subversives at minimum, and perhaps even strategic traitors to their country. Could deliberate economic sabotage not be described as subversion?

At the very least, the sight of US corporate executives sitting on huge cash hoards even as unemployment remains very high should totally discredit the standard Republican argument for tax cuts given to the rich. For Congressman Pence of Indiana and other reactionaries, rich parasites have now been redefined as “small-business job creators,” when of course they are usually no such thing. In particular, the Republicans always argue that if their wealthy clients and rent seekers receive more money, they will immediately go out and invest in plant and equipment and create jobs. This is a total mythological fallacy. Wealthy investors simply do not invest in plant, equipment, and jobs in the United States any more, since the profit rates are far too low. They send their cash overseas as hot money to speculate in the most lucrative emerging-market casino of the moment. Otherwise, they go to Goldman Sachs and buy derivatives. In none of these cases is domestic job creation the result. Rather, these same people are avidly exporting jobs to take advantage of sweatshop wages in underdeveloped countries in the biggest “free trade” runaway shop orgy of recent history. Notice that one result of the GOP win is likely to be more free trade sellouts with South Korea and other countries, supported by notorious free traders like Ohio’s new Republican Senator Portman.

When faced by a similar situation in 1937, Franklin D. Roosevelt knew immediately what to do. He mobilized Robert Jackson of the Justice Department and Secretary of the Interior Harold Ickes to thunder against the “Big Business fascists” who were organizing the capital strike, sabotaging the national economy for the sole purpose of making the president look bad. By 1937, we should recall, Hitler had already occupied the Rhineland, and was preparing to seize Austria in the following spring. The Japanese were beginning a six-week genocide spree before the eyes of the world in Nanking. But the malefactors of great wealth didn’t care about that; they wanted to embarrass Roosevelt, even at the cost of a new economic downturn. Roosevelt made them pay the price for their excesses. But Obama is a political imbecile; he is not capable of holding Wall Street accountable for anything whatsoever.

Fire Geithner, Schapiro, Gensler, Bair, and Bernanke!

After taking a thumping in 2006, even George Bush the younger had the political sense to fire Rumsfeld and replace him with Robert Gates, thus doing at least something to cool the rage in the population. So far, Obama has been incapable of responding to the election in any substantive way. The obvious response would be to sack what remains of the worst economic team in decades. Obama needs to fire Treasury Secretary Timothy Geithner immediately. From the point of view of a present-day Democratic president, Geithner could plausibly be replaced by former Labor Secretary Robert Reich, Nobel prize-winning economist Paul Krugman, or by University of Texas economist James Galbraith. The present writer is sharply critical of all these because they are Keynesians, but even a Keynesian would be better than Geithner’s slavish devotion to the Wall Street asset strippers, and better than the policy line coming from Austin Goolsbee of Skull and Bones, who tends to represent the Chicago school lite. Goolsbee is another one who deserves the sack.

Obama should also fire Mary Schapiro of the Securities and Exchange Commission, who has treated Goldman Sachs with kid gloves. Gary Gensler over at the Commodity Futures Trading Commission should also be ousted for malfeasance and nonfeasance. Sheila Bair at the Federal Deposit Insurance Corporation stubbornly refuses to apply the obvious laws to shut down and liquidate the bankrupt zombie banks of Wall Street, even as she routinely shuts down half a dozen small local and regional banks every Friday. Sheila Bair’s devotion to the illegal principle of Too Big to Fail has lost to the confidence of the American people, and she cannot remain in office. Most important, Obama should send a letter to Helicopter Ben Bernanke of the Federal Reserve informing him that his further tenure in office is incompatible with the overriding national interest of the United States in an economic recovery. Bernanke’s QEII will shortly be revealed as the new Titanic, a hyperinflationary disaster in the making, sure to sink the dollar, and capable of multiplying the chaos in the world financial system. If Obama were to announce that he expected Bernanke’s resignation of his desk within 24 hours, the bungling and discredited Fed head would soon be on the train back to Princeton. But Obama is incorrigible, and will clearly do none of these things.

Congressman Peter DeFazio: Dump Pelosi

Pelosi had amply documented her absolute contempt for the needs and concerns of American working families by passing a cap and trade bill full of warmed-over elements inherited from George Bush the elder, as well as from the lobbyists of the defunct Enron looting enterprise. The goal of this monstrosity was to pay derivatives speculators to raise the price of gasoline, heating oil, and electricity paid by American families, making ”green job” boondoggles profitable in such backward technologies as solar cells and windmills. At the same time, Pelosi did nothing whatever to pass the card check legislation which would simply represent a small step towards redressing the overwhelming advantages enjoyed by reactionary, union busting employers in their struggle to deny American workers their inherent right to collective bargaining. Pelosi’s priorities are those of cliques of rich, decadent, Malthusianism elitists on Nob Hill in San Francisco. As Democratic Congressman Peter DeFazio of Oregon said in demanding Pelosi’s ouster back in October, it is impossible for someone coming from Pelosi’s ZIP code to understand the concerns of working people. Pelosi as minority leader will be a permanent albatross around the neck of the Democratic Party. Dump her now.

The Tea Party does not exist

Television commentators have been babbling for months about the purported existence of something called a “Tea Party.” The Washington Post recently reported that a survey of the principal Tea Party astroturfing operations (some of them until only yesterday standard Republican political action committees, think tanks, public relations, or lobbying firms which had supported Bush the younger and McCain) had yielded a claim from the astroturfers that they could mobilize a grassroots base of 2,300 local Tea Party groups.8 The Washington Post was able to find some evidence that about 1,400 of these local groups existed or had existed in some form. But they were only able to make contact with about 650 of them. The ones they were able to contact reported a very low level of political activity, with almost no candidates supported, no political actions undertaken, and very little public activity of any kind. Instead, they had reverted to the status of local social clubs or coffee klatches, with occasional meetings devoted to skits, entertainment, and fellowship. This means that the alleged mass base of the Tea Party has atrophied to a very large extent, and that the Wall Street-funded astroturfing operations are continuing to conduct their political swindles on the basis of a social phenomenon which has largely ceased to exist. The Republican Party and its flanking organizations have been able to absorb, neutralize, and otherwise obviate whatever authentic mass ferment it existed in the first half of 2009. The new incumbents who claim to represent the Tea Party are in reality beholden to the astroturfing money men, and they undoubtedly know it. So get set for the residual Tea Party sympathizers to be systematically betrayed by these new elected officials, in the same way that Obama has stiffed his own lemming legions at the Daily Kos and elsewhere left over from 2008.

The tea party is as unreal as the crowds of young dupes festooned with orange bunting who crowded into the central square of Kiev in November 2004 to demand the seizure of power by a pack of IMF and NATO agents. They are as unreal as the useful idiots mobilized by mass manipulation to install the fascist madman Saakashvili into power in Tiflis, Georgia in the so-called Roses Revolution. Or, they are as unreal as the antiwar left liberals here in the United States who, blinded by their hatred for Bush and Cheney, abandoned all political criteria and rallied behind the purely synthetic candidacy of Wall Street puppet and foundation spook Obama. The Tea Party and its exploitation by the media reflect precisely the same methods of mass manipulation as these notorious color revolutions or CIA people power coups. My Obama: The Postmodern Coup has in-depth analysis of these methods.

The Tea Party: stock brokers, real estate brokers – appendages of Wall Street

And what was the tea party in the first place? The slogan was first called forth by Rick Santelli of CNBC, a pro-Wall Street ideologue whose specialty is keeping up with the doings in the trading floors in Chicago where derivatives, among other contracts, are traded. The initial supporters represented social strata who are appendages of Wall Street and its bubbles, and who feel that their interests are directly tied to the money center institutions with which they imagine themselves to be in symbiosis. The Tea Party was initially full of stockbrokers and real estate brokers who had profited from the bubbles and wanted the bubbles to resume and continue. These were the typical petty-bourgeois Ross Perot voters of 1992, obsessed by spending and deficits because this is what Wall Street thinks – for there where thy treasure is, there shall thy heart be also. There were also many retired military, who had been ideologized as reactionaries by their service in the aggressive wars of the last several decades. These military enjoy Pentagon pensions and medical care which are significantly better than the levels provided by Social Security and Medicare, and they are determined not to see any largesse to underprivileged groups interfere with their collecting what they want from the federal government. Other languages have names for such people: in France they would be neo-Pouijadistes; in Italy, they would be neo-qualunquisti.

The Tea Party Cut and Gut program is identical to the reactionary financier program

On September 16, 2010, George P. Shultz, Michael J. Boskin, John F. Cogan, Allan Meltzer, and John B. Taylor co-authored an article in the Wall Street Journal entitled “Principles for Economic Revival.” Most of these authors are former officials in recent Republican administrations. As if in response to the five-point recovery program prominently displayed on this website, these Republican ideologues proposed five points of their own. These, translated into plain English, were the following:

1. Tax cuts for the rich.

2. Cut and gut domestic discretionary federal spending, including such items as Medicaid and unemployment insurance, to pursue the Heinrich Brüning, Andrew Mellon, or Herbert Hoover deflationary chimera of balancing the federal budget in the midst of a world depression.

3. Loot Social Security and Medicare, thus making sick people and old people pay for the crisis Wall Street has created.

4. Stop all federal regulations, including mine safety, offshore drilling, and all others.

5. Stop the Fed’s quantitative easing, and move back towards policies which are likely to make deflation more likely.

Surprise! Surprise! The Tea Party program is virtually identical to the announced program of the most reactionary faction of the financier elite! These measures would take the US economy out of the frying pan and into the fire, but they do reflect the interests of the top 1% or 2%, that is to say of people who have money now and who believe that they will continue to have money. For the rest of us, including the initial Tea Party dupes of early 2009, these would represent an unmitigated disaster.

Of course, there may be one or two positive aspects to the GOP influx. If cap and trade is truly dead, that is a good thing, although we can rely on the Republicans to come up with new forms of corporate welfare to serve their own clients and rent seekers.

The Cartel to Blackmail Obama: what will Issa do?

The other question involves representative Darrell Issa of California, the incoming chairman of the House Government Operations Committee. With a simple subpoena, Issa could easily resolve the question of Obama’s birthplace, and thus begin to clarify his qualifications to serve as president. The Secretary of State of Hawaii has claimed she has seen the document in question. Great – subpoena her to come to Washington, bring the birth certificate with her, and show it to Issa’s committee. Case closed one way or the other. The wager here is that Issa will do nothing of the kind. There is evidently a large and growing cartel of powerful economic, political, and military interests who are blackmailing Obama on the Larry Sinclair dossier, on the Rezko-Blagojevich dossier, and on the birth certificate-Indonesia dossier. These forces want to keep blackmailing Obama for one or two more years, and the Republicans among them certainly want to keep Obama in office so that he will cripple the Democratic Party and give them a failed president in the tradition of Jimmy Carter to run against in 2012. Calling for the birth certificate to be produced might lead to Obama’s rapid ouster from office, thus upsetting the elaborate racket of blackmail and extortion which has grown up around the current White House. This, by the way, may be why Rupert Murdoch’s own Glenn Beck, who is more than willing to attack Osama under the flimsiest pretext, steadfastly refuses to raise the issue of his birth certificate.

Conspiring to Force US default and bankruptcy is high treason: you were warned

The greatest danger embodied by the new Republican members of Congress is that a will attempt to repeat the Gingrich-Armey-Dominici government shutdown of October-December 1995. in those days, the Gingrich “Contract on America” fanatics wanted to force drastic, brutal cuts in Medicare, Medicaid, farm subsidies, student loans, and other programs. In October 1995, Gingrich delivered an ultimatum to President Clinton saying that if Clinton did not sign a bill embodying these genocidal cuts, the Republicans would refuse to approve an increase in the debt ceiling on US Treasury borrowing. The impact of this would have been to force the United States in to default for the first time in American history, creating a de facto national bankruptcy of this country with disastrous consequences for the average working American.

On the day that Gingrich made this announcement, the US dollar lost about 5% in the international markets. In those days, there was no world economic depression. If the new GOP House in particular attempts to repeat the ideological fanaticism of 1995, the result might be a fall in the US dollar which is not 5% but perhaps 25%, 50%, or 75%, in very short order. Given the fact that the dollar is still the world reserve currency in which the reserves of most central banks are held, this would cause absolute chaos and disintegration around the world – all courtesy of the Tea Party GOP.

This, of course, is over and above the inconveniences experienced by millions of Medicare and Social Security recipients who did not get their checks on time. There were also 2 million visitors to national parks who were turned away.

In the campaign just ended come of the Republicans were fond of saying that businessmen wanted to end uncertainty and increase the predictability of economic policy. Did they know they might be getting a gang of fanatics who consider the default and national bankruptcy of the United States acceptable political tactic? What kind of certainty will that bring?

In 1995, Senator Pete Dominici confessed to a reporter in an unguarded moment that he had been meeting with a room full of hedge fund operators, including Soros’s right-hand man Stanley Druckenmiller. Soros had in September 1992 helped to wreck the European Exchange Rate Mechanism and helped force the devaluation of the British pound, so he had a clear track record in this regard. These hedge fund hyenas, Dominici assured the public, had advised him that although default and bankruptcy for the United States could be seen as excessively strong medicine, they would be far superior to an endless future of deficits and a growing national debt. Based on this, Dominici was supporting the Gingrich budget brinkmanship approach:

‘In September of 1995, Senator Pete Domenici (R-NM), the chairman of the Senate Budget Committee, flew to New York for a dinner at Seagram House with a dozen contributors, mostly large fund managers. Druckenmiller was among them. He told Domenici that the market would trade around a default if there were a balanced budget agreement. Domenici carried that message back to Capitol Hill. Newt Gingrich began broadcasting the same message, telling a meeting of the Public Securities Association – the bond industry trade group – that a balanced budget would be worth the price of a default. Druckenmiller and another big investor also bought a full page ad in The Washington Post that said, “let’s not allow fears of temporary `market instability’ to serve as an excuse for equivocating on spending cuts … If the markets believe the chaos will finally lead to decisive action, they will rise. If the markets believe decisive action will not be forthcoming, they will decline” In November, Druckenmiller took the same message to an ad hoc Republican hearing, where he testified. To Congress, Druckenmiller was not just another private citizen giving his opinion: He became “the voice of the market” – so much so that when Alice Rivlin, then the director of the Office of Management and Budget, warned Congress of the devastating effects a default could have on the bond market, Domenici, fresh off the New York shuttle, publicly disputed her, authoritatively citing his contacts on Wall Street. It apparently didn’t trouble Domenici or Gingrich that Druckenmiller was hardly an objective sage offering wisdom; he was an investor who had bet gargantuan sums….’ Amy Waldman, “Of inhuman bondage: the bond market has policymakers in its grip,” — Washington Monthly, January-February 1997.9

Of course, a properly instructed federal prosecutor looking at a senator taking advice from hedge fund operators might have a few questions to ask. Did any of these hedge fund operator is taken up short positions against the dollar, against US government securities, or made other speculative bets which might be enhanced by a US bankruptcy? Had they disclosed those facts to Dominici? Were any of them managing Dominici’s personal wealth? Did the Senator stand to benefit from risk of US bankruptcy which he was urging as a national policy? It’s easy enough to see the glaring problems of conflict of interest, insider trading, political corruption, and perhaps even high treason which are implicit in a situation like this. A real president could scare off legions of speculators with just a few hints in this direction. But Obama will not do it, since he is a feckless coward.

Unlike 1995, the United States is now at war on multiple fronts – Iraq, Afghanistan, Pakistan, Yemen, Somalia, and virtually every country sharing a border with Iran. The inability of the federal government to borrow money would be a colossal betrayal of our troops in the field, perhaps leaving them without the means to purchase vital logistics which are currently procured in theater from the local economies. This country is also operating under multiple states of emergency public and secret, which were declared after September 11. We repeat: public officials deliberately courting the default and bankruptcy of the United States under wartime conditions will be guilty of high treason.

Today’s tea party Republicans are certainly far more fanatical than their predecessors of 15 years ago. The reactionary Republican of 2010 shares the Grover Norquist philosophy of “Starve the Beast.” This means that any means fair or foul of forcing draconian and genocidal austerity through the US federal budget is desirable. Default now becomes a positive goal, since a bankrupt US government would no longer be able to borrow from the international banking cartel, and would have to cut federal spending to the level of current revenues, thus establishing a balanced budget in one catastrophic stroke. The New Deal entitlements and the social safety net would presumably vanish overnight, and reactionaries and proto-fascists would rejoice in the carnage. Bill Clinton had the political skills to fight off the 1995 Gingrich-Armey assault. Obama clearly lacks these skills, and this is another urgent reason why he must be dumped.

Strong animosity of GOP demagogues against Constitution they claim to cherish

The U.S. Constitution, Article 1, Section 8 prescribes that “The Congress shall have the power … To borrow money on the credit of the United States.” This is one of many indispensable constitutional provisions which the modern reactionaries hate and are determined to destroy, for the reasons given. Some of them want to do this by means of a balanced budget amendment, but that would take a long time and would be very unlikely to pass. Instead, the militant reactionaries calling themselves the Tea Party want to deprive the Congress of this power by actions which are extra-constitutional and subversive, and which smack of economic insurrection – that is to say, by forcing the country into bankruptcy. This is not patriotic.

The very existence and independence of the United States as a sovereign country bring with them the inherent powers, powers which any sovereign state automatically has. These include self defense, and specifically economic self defense, which can and must be invoked against conspiracies by rich predators and foreign enemies to force the nation into default, bankruptcy, immiseration, and collapse.

Today’s supposedly new breed of reactionary Republicans has many common features with the Roosevelt haters of the 1930s, many of whom were also pro-fascist. Today’s reactionaries often portray themselves as constitutional fetishists, but in the process our founding document undergoes a process of wanton distortion and perversion. There are some parts of the Constitution which the reactionaries like very much, and their obsession with these passages is expressed in an extremely narrow, literal, and textual reading, stressing what are often wild and partisan guesses about original intent. At the same time, there are other parts of the Constitution which the reactionaries clearly do not like, and these they tend either to ignore completely, or to attack as subject to repeal at the earliest possible moment. We can call this reading a fundamentalist reading, which has for the reactionaries the advantage of eliminating more than 200 years of US history. The reactionary reading of the Constitution, like the 18th-century costumes affected in the Tea Party parades, would not just turn back the clock to before the civil rights era and the New Deal. This approach would also seek to wipe out the useful regulations achieved as a result of the influence of the Populist Party via progressive reformers during the early decades of the 20th century. The reactionaries would most emphatically go back to before the Civil War. Their true home seems to be the facile propaganda of the irresponsible and erratic Thomas Jefferson in his polemical combat with the great nation-builder Alexander Hamilton and thus with George Washington, before Jefferson had been exposed to the actual needs of the country during his abortive presidency.

Taking the country back – way, way back

The Tea Party is known for saying that they want to “take the country back.” Indeed – they want to take the concrete way, way back – all the way to the 18th century.

One of the time-tested tactics left over from the FDR-haters of 75 years ago is the argument that any federal powers which are not included on the list of Congressional purviews in Article 1, Section 8 of the Constitution are unconstitutional and inadmissible. This was an argument used by Thomas Jefferson before his presidency. But, when Jefferson got into the White House, he found himself confronted with an eventuality about which the Constitution is silent – this was the question of the Louisiana Purchase of 1803. It is clear that the Constitution says nothing specific about buying territory from a foreign state by way of the treaty, paying federal money in the process. Jefferson apparently went through a moment of crisis because of the obvious conflict between his own demagogic propaganda and the imperative national interest of acquiring the land. Fortunately, Jefferson was not so stupid as to believe his own primitive propaganda: he put the overriding national interest of the United States first, and proceeded to carry out the Louisiana purchase. Unfortunately, the reactionary Republicans of today are more prisoners of their own idiotic slogans than Jefferson was.

The General Welfare stressed not once, but twice

Even within Article 1, Section 8, the enumerated powers approach is left without a leg to stand on. At the beginning of this section, we see that “Congress shall have the power to … provide for the common defense and general welfare of the United States.” These are the two principal tasks of the legislative branch. The latter clause in this provision is worthy of special note today, because it reminds us that in the preamble the instruction to “promote the general welfare” has already been established as one of the principal purposes of the United States government as a whole. The general welfare thus gets into the Constitution not once, but twice. What do the reactionaries have to say about this? They mock and dismiss this provision, sometimes scornfully adding that not everybody can be on the dole. But the two mentions of the general welfare mean simply that the United States government has a specific obligation to promote the economic progress of the entire American population – and not just the exorbitant wealth of certain sectors.

Characteristically, the 1861 Constitution of the secessionist and slaveocrat Confederate States of America excludes the general welfare close from its preamble. The modern reactionary Republicans thus often look like they are referring not to the U.S. Constitution, but to the Confederate parody thereof.

The elastic clause: “all law…necessary and proper”

At the end of Article 1, Section 8, we find the famous elastic clause which is designed to accommodate precisely those problems faced by Jefferson around the Louisiana purchase. Here we read that’s “the Congress shall have power … To make all laws which shall be necessary and proper for carrying into execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.” Here we can see that the Congress has been given ample scope for the infinite range of contingencies which the founders in their wisdom realized could not be covered by the enumerated powers.

George Washington rightly sided with Alexander Hamilton and against the foolish Thomas Jefferson in the creation of the First Bank of the United States, without which it would have been an easy matter for the London financial center to strangle the new country in its cradle. Later on, the state of Maryland attempted to tax a branch of the Second Bank of the United States out of existence, resulting in the court case of McCulloch v. Maryland (1819). This case was decided in favor of the Second Bank of the United States in a masterful opinion written by Chief Justice John Marshall of Virginia, one of the great nationalists of the age. Marshall’s opinion represents the best short summary of the American nationalist doctrine of implied powers, which had originally been advanced by Hamilton:

“[A] criterion of what is constitutional, and of what is not so … is the end, to which the measure relates as a mean. If the end be clearly comprehended within any of the specified powers, and if the measure have an obvious relation to that end, and is not forbidden by any particular provision of the Constitution, it may safely be deemed to come within the compass of the national authority. There is also this further criterion which may materially assist the decision: Does the proposed measure abridge a pre-existing right of any State, or of any individual? If it does not, there is a strong presumption in favor of its constitutionality….” 10

The survival and success of the United States has been predicated upon the Hamilton-Marshall expansive and nationalist reading of the Constitution, while rejecting the narrow and distorting Jeffersonian interpretation. In any case, misguided notions of state supremacy, secessionism, nullification, and interposition were finally buried once and for all at Appomattox Courthouse, Virginia in April 1865. These delusions, like the ghouls in the famous horror movies, and now experiencing a kind of night of the living dead in the feverish brains of modern right wing anarchists.

The reactionary Republicans also seek to instruct us that the notion of a free market is built into the American constitutional order. Again, nothing could be farther from the truth. Alexander Hamilton was the first Secretary of the Treasury, appointed by George Washington and enjoying his confidence. Hamilton’s concepts of the National Bank, a funded national debt, and the promotion of science and invention, were all essential ingredients in American survival. Hamilton was a protectionist, and more specifically a dirigist in the tradition of Jean-Baptiste Colbert of France. The Republican Party was the party of a protective tariff from the 1850s until the final decades of the twentieth century, and this country benefited as a result. The Confederates, by contrast, preached free trade..

Congress, not “free market” cartels, must regulate the value of US money

In the Constitution itself, we can also see that the hegemony of the free market is expressly denied. In the famous Article 1, Section 8, we read that “the Congress shall have power … To coin money, [and] regulate the value thereof….” Regulate means regulate, and thus determine. In other words, the US government, and not the dark forces of an oligopolistic marketplace are to set the value of US currency. This is a provision which was fully realized only in the Bretton Woods system established by Franklin D. Roosevelt in 1944, and which functioned better then any world monetary arrangement in human history before or since until it was wantonly destroyed by Nixon and Kissinger on August 15, 1971. The Constitution provides for government regulation of international and domestic interstate commerce, but says nothing whatsoever about free markets or free trade.

Otherwise, the Tea Party attack on the Constitution tends to concentrate on the series of amendments which the reactionaries find unpalatable. They want to abolish the Fourteenth Amendment because of their xenophobic obsession with “anchor babies.” National cemeteries around the country are filled with the Union dead who fought to make the Fourteenth Amendment protections a reality, and their sacrifice must not be retroactively nullified by the Lilliputians of today. We would remind the critics of the Fourteenth Amendment that they risk throwing out the baby with the bathwater. Many of the everyday rights which we enjoy today depend directly on the Fourteenth Amendment, Article 1 provision which establishes that:

‘No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.’

The one thing that does need to be addressed here is of course the outrageous and oppressive obiter dictum of a reactionary Supreme Court that corporations qualify as persons. But that is a precedent which can be reversed through the courts, and does not require any tampering with the Constitution to overturn, since it was never there in the first place. Other parts of the 14th amendment are critical in defending the right to vote. Those who are blinded by xenophobia may soon find themselves shorn of their own fundamental rights

The reactionaries are also targeting the Seventeenth Amendment, which provides for the direct election of Senators. They say they want to exalt states rights by returning the power of electing Senators to the various state legislatures. The problem with this is that such a change would make the United States Senate even more oligarchical and even more a captive of narrow plutocratic interests than it already is. The undifferentiated slogan of states’ rights has always represented the reactionary interest in American political history, mainly for the reason that it is easier for powerful oligarchs to control a state than it is for them to control the federal government, where they have to face the opposition of other contending and opposing interests, many of these latter also oligarchical and plutocratic to be sure. It is ironic to hear Senate candidates demanding that citizens vote for them so that in the future these same citizens will not be able to vote them out in similar elections.

The other favorite target of the modern reactionaries is the Sixteenth Amendment, which permits a federal income tax. There is no doubt that the current federal income tax law is too regressive, and not sufficiently progressive, and thus constitutes an unacceptable burden on working families, and re-distributing wealth from the middle class to the super-rich. But this is largely a matter of how the tax laws are written. We need to remember that the idea of the peacetime federal income tax was advanced, not by J.P. Morgan, but by the Populist Party in its convention in Omaha, Nebraska in 1890, and was meant to force Wall Street billionaires to contribute more towards maintaining the national government whose benefits they so massively enjoyed. The demand for the abolition of the federal income tax today, when it comes from reactionary Republicans, is overwhelmingly a demand for more tax cuts for fabulously wealthy plutocrats who already pay very little corporate income tax and absolutely nothing on their constant speculative trading of derivatives and securities.

Most new GOP reps are knee-jerk warmongers

To the extent that they have any ideas at all about foreign policy, the vast majority of the new Republican levies are knee-jerk warmongers in regard to Iraq, Afghanistan, Pakistan, Yemen, Somalia, and Iran. They have learned absolutely nothing from the history of the Bush-Cheney adventures and their aftermath. More than a few neocons have also found their way into the House and Senate this time around. To the extent that the warmonger interest is now stronger in the Congress, the danger that the Iraq, Afghanistan, Pakistan, Yemen, Somalia, and Iran conflicts will be infinitely perpetuated has no become greater.

Regroup around immediate class defense demands

During the lame-duck congressional session of November-December 2010, it is likely that Obama, joined by many of the 60-70 soon-to-be unemployed Democratic members of Congress, will attempt to further shift the cost of the world economic depression away from the Wall Street interests who are culpable, and onto the backs of the middle class and working families in general. A key part of this exercise will be the recommendations of the Bowles-Simpson Commission (BS or cat food commission), which was originally designed by Obama personally to take aim at Social Security, now in its 75th successful year. The dominant force of this BS commission is Peter Peterson, a former Wall Street speculator and head of the infamous Lehman Brothers investment bank, who has been demanding the demolition of the New Deal entitlement system for decades. There are now rumors that the BS group will propose the elimination of the home mortgage interest deduction of the federal income tax, patently a direct attack on the US middle class. Another gaggle of pro-financier ideologues, including the failed ex-Senators Bill Bradley, Gary Hart, and the blueblood John Danforth of the Ralston Purina fortune, prefer to gouge the middle class through the stratagem of raising the gasoline tax, another step towards regressive taxation.

In the face of this new attack, it is imperative that we have a program of demands addressing immediate popular concerns, and showing their solution by shifting the cost of the Depression back onto the Wall Street perpetrators. The following minimum programmatic points are proposed as a draft basis for regrouping popular forces against the impending reactionary assault, which will be aided and abetted by Obama:

Minimum Program for the Defense of the US Middle Class and Working Families

1. Stop all fraudclosures on primary residences of American families. Because of their felonious use of illegal paperwork, the zombie bankers who owe their existence to public money granted them under the various federal bailouts must now make restitution to the American people by eating any losses associated with this permanent freeze. Ban all adjustable rate mortgages (ARMs) , which only create more fraudclosures in the near future.

2. Wall Street financiers must pay for the financial crisis which they have created with their irresponsible speculation – Not American working families. There must be no cuts in Social Security, Medicare, Medicaid, unemployment insurance, WIC, Head Start, or any other components in the existing social safety net or entitlement programs. Benefits must be extended to the 99ers and to other long-term unemployed. Stop the layoffs of public employees by states and by the federal government.

3. The maintenance of the social safety net, entitlements, and the necessary programs must be financed by a 1% Wall Street sales tax (or Tobin tax) to be imposed on all transactions involving the change of ownership in stocks, bonds, options, futures, indices, and over-the-counter derivatives.

4. Use emergency powers under the Defense Production Act and existing states of emergency as necessary to create a new Works Progress Administration (WPA) to break the back of mass unemployment by immediately hiring 10 million unemployed workers to carry out essential infrastructure projects in fast rail, highway and airport modernization, water system reconstruction, public buildings, and related projects – all covered by the Davis-Bacon Act. Pass card check to being redressing the exorbitant advantages enjoyed by union-busting employers. Finance these projects by forcing the Fed to cough up 0% financing for infrastructure and related productive activity, not just for Too Big to Fail zombie bankers. Repeat this process until 30 million new jobs have been created and full employment reached.

Time to Break out of the Weimar Death Spiral

The lesson of the 1930s, once again, is that democratic institutions cannot be expected to survive prolonged periods of mass unemployment of the kind Paul Adolf Volcker has now announced that we are facing. The only rational conclusion which can be drawn from the Democratic defeat in the recent elections is that Democrats lost because the tenant of the White House insisted on positioning the party as the defenders and enablers of Wall Street. If this posture is not changed, then all cosmetic improvements being proposed by such figures as the anonymous Ulsterman and other Clintonian New Democrats will be futile. If the Democrats continue to represent Wall Street interests, they will inevitably be on the receiving end of the populist pitchforks whipped up by demagogic, cultural populist Republicans. Only by acting against Wall Street can the Democrats hope to survive. But since Wall Street control of the Democratic Party is pervasive, it should also be clear that some version of the minimum program just given could also become the basis of a third or fourth party in the months and years ahead. Whatever the political vehicles that are chosen, the overarching task is to break out of the Weimar death spiral into which the United States is now slipping. The first step is to dump Obama.


1 “The Ulsterman Report: White House Insider Review,”

2 Mike Allen & Jim Vandehei, Obama Primary Challenge? Nearly Half Of Dems Want 2012 Fight, Politico, November 8, 2010,

3 Karen Tumulty and Dan Balz, “Democrats pin losses on Obama’s disconnect,” Washington Post, November 7, 2010,

4 Alan Fram, Obama Primary Challenge? Nearly Half Of Dems Want 2012 Fight, Huffington Post, October 10, 2010,

5 “Time for a Dump Obama movement,” Firedoglake, Sept. 11, 2010,

6 Lori Price, “Primary Obusha in 2012,” and

7 MSNBC – The Ed Show – November 3, 2010 – President Obama Stop Compromising!,

8 Amy Gardner, “Gauging the scope of the tea party movement in America,” Washington Post, October 24, 2010,



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