President Obama’s recent remark that “the private sector is doing fine” has been cast by the mainstream media as a faux pas of epic proportions, a spectacularly mistimed own-goal that has injected new vigor into the campaign of Mitt Romney just as leading economic indicators make it easy for the reliably cynical GOP to portray the president as a failure. Such an analysis, however, doesn’t even begin to do justice to the complexity of the contemporary American scene. It is far more useful to think of the president’s comment as a Freudian slip – an unintentional disclosure that, far from showing the president as being out-of-touch, revealed his closeness to elements of the economy that are quite different from unemployment statistics. No doubt many readers of the Leesburg Daily Commercial, their neural pathways molded by right-wing propaganda, would seize upon such a conjecture as evidence that Obama was really bemoaning the stresses and strains being borne by the public sector, ruing his inability to foist his gargantuan socialist dreams upon the last bastion of freedom. (Give it a few days, and Sonny Henninger will be all over that – if Fox News leads him in that direction.) But that, of course, would be the wrong interpretation.
Which Private Sector Are We Talking About?
As the now-disgraced John Edwards attempted to explain during his abortive run for the job now held by Barack Obama, there are two very different worlds in the United States. One world has been doing incredibly well for the last thirty years, albeit enduring a couple of (self-inflicted) bumps in the road, while the other is in (causally related) secular decline. Thanks to a combination of public policy, technological innovations, and the financialization of the economy, the United States has become a system that funnels increasing amounts of wealth and income to the very top of society. While macroeconomic theory long taught us that productivity gains would lead to higher wages for workers and better living standards, the reality has been far different, with most of the gains now accruing to the owners of capital and many of those gains being achieved by laying off workers or working them harder. For our present purposes, however, the key point is that this group of winners (referred to by the brilliant George Carlin as owners) do not just own the means of production; they also own both political parties.
This fact presents the two parties with a marketing problem in our putative democracy. For Republicans, the task is somewhat easier. Everybody knows who they represent, and they’ve essentially stopped trying to pretend otherwise. Wrapping themselves ever-more tightly in the American flag, covering the prominent bulge of their wallet with the Bible, and appealing to racism with carefully chosen code words, they have taken cynicism to extraordinary new depths, ruthlessly exploiting the fears and delusions of just enough people to be politically viable. Even though, in a logical world, no American not enjoying at least decamillionaire status should touch the GOP with a bargepole, P.T. Barnum’s immortal observation about suckers enables a blatantly predatory capitalist like Mitt Romney to have a decent chance of winning the presidency.
For Democrats, the task is more complex and, ultimately, even more shameful. Portraying themselves as the party of the common man, they have sidled up to the financial sector and numerous corporate titans in order to secure their position where it really counts. As noted elsewhere on this website, Bill Clinton deserves particular condemnation for pioneering this unholy alliance, bending over backwards to please Wall Street and pushing globalization despite its massive impacts on manufacturing employment. And Clinton, the economic and social carnage of the collapse notwithstanding, is clearly unrepentant, as revealed by his scolding of Obama’s campaign focus on Mitt Romney’s activities at Bain Capital. Although Slick Willy had to publicly modify what he meant (a well-trodden path if ever there was one) the message to the less-experienced Obama was clear: don’t bite the hand that feeds you. Given that Wall Street is now being wooed by one of its own, and George Soros is apparently not forking out so much this time, Obama risks losing the support that was so important (and so under-reported) last time around. After all that quiet work on their behalf, he’s going to be dumped for a more attractive date. How ironic – and how richly deserved – that the politician who duped the middle class into trusting him with their hopes and dreams could now end up as a one-term president, just as he probably would have been had he seized the unique opportunity to break the banks up and destroy the heart of the beast that is sucking the lifeblood out of the nation. Instead of going down in glory, guns blazing against a bone fide enemy, he’s staring at the prospect of being this generation’s Jimmy Carter.
When Barack Obama thinks about the private sector, he’s thinking about the private sector that matters to him and to every other politician with genuine ambition. He’s not thinking about how the official rate of unemployment understates the situation by ignoring discouraged workers who have dropped out of the labor force altogether; he’s not angry that good jobs in manufacturing are never coming back because they’ve been outsourced or replaced by machines; and he’s not lying awake at night wondering how to revive median family incomes that have flat-lined. No, he – just like Mitt Romney – knows that Wall Street’s profitability has recovered remarkably quickly from the most serious crash since 1929. And he knows that big corporations are sitting on a vast pile of profits, much of it safely tucked away offshore, ready to deliver huge windfalls to the owners of capital. While countless ordinary Americans lost their homes to foreclosure, corporate profits rebounded with alacrity, surpassing 2007 levels as early as 2010. Sitting on two trillion dollars of profit, this part of the private sector could quite fairly be said to be doing fine.
Cowardice, Deceit, and Theatrics
Even at this late stage of the game, it is theoretically not too late for Obama to finally display some true political courage, but the signs are not encouraging. In responding to the “private sector is fine” snafu, he could have gone on the offensive and argued exactly the point made above, highlighting the extraordinary disparity between the vast accumulation of riches at the top and the plight of ordinary citizens. Similarly, and particularly if he feels any resentment towards Wall Street for using him and then throwing him away, he could also have focused on the renewed health of their bonuses. In both cases, the private sector could have been castigated for failing to display sufficient social responsibility. One can’t imagine FDR missing such an opportunity or allowing himself to be painted into such a corner. But Obama, as Lloyd Bentsen might have said in an alternate universe, is no FDR. Obama has never been anything more than an ambitious pol, willing to sell any principle down the river in his quest for power, and mastering the art of centrist positioning in an age of celebrity over substance.
It is a devastatingly depressing testament to our national cognitive deficit that, even in the face of massive inequality between two worlds, our presidential “choice” is between a candidate who will govern overtly in the interests of the corporate oligarchy and one who has been governing covertly in their interests. When Mitt Romney, the very personification of the elevation of profit over people, can successfully portray the president as “out of touch” while his surrogates deploy the ‘s-word’ (socialism) without being laughed out of court, the political process has been bought lock, stock, and barrel. And it is in this, most fundamental – and most damaging – sense that the private sector is doing fine and dandy.