Dissecting Obama’s New Economic Team & Stimulus Plan

Naomi Klein, Robert Kuttner and Michael Hudson Dissect Obama’s New Economic Team & Stimulus Plan

On Monday Obama named New York Federal Reserve Bank President Timothy Geithner to the post of the Treasury Secretary. Former Treasury Secretary under Clinton Lawrence Summers was named the Director of the National Economic Council in the White House. Obama also called for a stimulus plan that will “give a jolt to the economy.” [DemocracyNow! hosts] a roundtable discussion about Obama’s latest economic moves...the state of the economy and what to expect in the coming months [with Robert Kuttner, Naomi Klein, and Michael Hudson].

“Summers was one of the key architects of our financial crisis. Hiring him to fix the economy makes as much sense as appointing Paul Wolfowitz to oversee the Iraq withdrawal.”

...I think the deal that Obama has made is that when he talked about change, he was not talking about the vested interest, he wasn’t talking about finance or real estate, or the fire sector. He is going to leave Wall Street and vested interest in the hands of the people who have been continuity from the Bush administration through the Clinton administration, and he is going to concentrate on infrastructure, and highering work place conditions, the environment, but he is not going to change the debt position. And the most worrisome aspect of the appointment of Summers is...what he did in Russia, under privatization that will be ruling Russia for the next hundred years. The key was to use public expenditure that would increase private wealth...

...The tax system, leaves these in private hands. I think all of the tax proposals that Mr. Obama have spoken about, have to do with income tax primarily. The rich people prefer not to earn income. They prefer to make capital gains. So the intention...is really to create a huge capital gains economy. Even more disparity of wealth while leaving...the enormous debt overhead...He is adding to debt, not reducing it.

...One question being asked about Tim Geithner is that if the Federal Reserve is the agency charged with examining bank holding companies...Where was Tim Geithner at the Federal Reserve of New York which has the examiners that are supposed to be examining the bank at the holding company level? Why didn’t they get a look at the book?

...When Alan Greenspan reputation was raked over the coals, it should have Rubin and Summers along side him.

...And I think we have nobody to blame but ourselves for that failure...it was an electoral strategy that relied on intellectual dishonesty and now to continue to make excuses for Obama is a real mistake, because he is not running for election anymore. He has already won, so there is no reason to be pandering in this way...

...the point is will they just just rack up huge debt and deficits or will they actually pay for this with taxes on the wealthy, which is what they promised to do and what we’re seeing Gordon Brown begin to do in Britain. Because if they do not pay for this an equitable way, in a progressive way, then what will happen is this huge investment in infrastructure will create huge economic crisis down the road. It will be blamed on Obama. And then, there will be a wave of privatizations, these new investments in public spending. There will be a whole new bubble.

...The key issue here I think coming back—the issue is Obama is coming to these decisions because he is under enormous pressure from above, Wall Street, how do you transition from a pro Obama campaign movement to an independent social movement that puts will counter-pressure on him from below? Those are the conditions under which Roosevelt sold the new deal as a compromise to elite. We do not have those dynamics right now. We have a situation where we have super-fans for Obama, constantly apologizing for every decision that he makes versus a gloves-off elite who are putting real pressure on him behind the scenes. And we are seeing the result.


November 25, 2008

http://www.democracynow.org/2008/11/25/naomi_klein_robert_kuttner_and_michael