Obama Loves the So-Called "Free Market": Oh, Dear...

by Deb Cupples |   I get nervous when politicians lead cheers for the so-called "Free Market," because the phrase is nothing more than a euphemistic slogan which actually means "government should let big corporate players do whatever they want."

Naiomi Klein at The Nation wrote this last week:

"Barack Obama waited just three days after Hillary Clinton pulled out of the race to declare, on CNBC, "Look. I am a pro-growth, free-market guy. I love the market."

Oh, dear.  President Bush and Vice President Cheney love the "free market," too: so much so that after Enron's Ken Lay (may he rest in peace) begged the Bush Administration to let "free market" forces resolve California's energy crisis, the Administration refused to intervene at a crucial time.  This inaction left Californians paying triple what they had been paying for electricity, while companies like Enron and Dynegy cashed in.

Given some of Sen. Obama's campaign statements -- and some of the advisers he has surrounded himself with -- I'm not surprised that he loves the so-called "Free Market."

Neither is economist Paul Krugman, who commented:

"Look, Obama didn’t pose as a Nation-type progressive, then turn on his allies after the race was won. Throughout the campaign he was slightly less progressive than Hillary Clinton on domestic issues — and more than slightly on health care. If people like Ms. Klein are shocked, shocked that he isn’t the candidate of their fantasies, they have nobody but themselves to blame."

Super-blogger Anglachel concurred but put it differently:

"Hundreds of bloggers typed their fingers to the bone explaining that you [progressive Obama supporters] were projecting your fantasies onto this cypher, pointing out his economic team is not very progressive, that his major donors are all Wall Street financial people, and that he never met an economic measure favorable to the middle class that he didn't want to compromise on. You got snookered by your own irrational fantasies."

Back in December, democrats marveled over how lucky they were to have two great candidates (Hillary and Barack), either of whom they could vote for while sporting a big smile. 

Now, Sen. Obama is unequivocally praising the so-called "Free Market"?  Talk about smiles turning upside down.

I can hear the defense already: "Obama is just playing to Independents and Republicans, so he can get elected -- he doesn't really mean it. And McCain praised Bush's corporate tax cuts a few months ago."

Anyone using that logic should be able to similarly apply it to McCain.  It would go something like this:

"McCain was just playing to the Republican base during the primaries: he didn't really mean it.  He did, after all, raise hell and vote against Bush's corporate tax cuts when it mattered -- knowing he would take political heat."

The upshot: both candidates have either flip-flopped or misrepresented themselves at some point regarding the "Free Market" love fest.

Frankly, I don't support McCain, but I'm also having trouble supporting Obama.  That's Obama's fault. 

I wouldn't have trouble supporting Obama if he had consistently (and sincerely) taken stands against those Republican ideas (like so-called "Free Market" theories) that have wreaked such havoc on our nation.

Given the strikes against him from a progressive point of view (like his fighting to cut Florida's primary vote in half and his back-door taking of cash from lobbyists and corporations), Obama needs to do better if he wants to maintain progressive support.

I shouldn't have to hold my nose when I vote in November.  I need both hands free to bubble in the circles on my ballot.

Comments

[Adam]

Well, *I* was never snookered. I agree with Krugman that this is hardly a 180 for senator Obama. Like Mr. Obama, I have a healthy respect for free markets. That's not incompatible with a strong belief in social justice and/or a healthy distaste for many corporate practices.

Obama has shown that he's very comfortable having dissenting voices around him. I don't see this as a bad thing. Rather than judge him by views or actions of his advisors, I'll judge him by his own statements and the policies he has outlined. For instance, I thought his speech in New York on proposed reforms in the financial markets was an absolute home run.

As an aside, I don't think you remember the California power crisis correctly. My understanding was that individual Californians never paid the inflated prices. The price charged to CONSUMERS was capped, but the wholesale price bought by the utilities was not. This half-deregulation was what opened the door to wild market speculation. It was this disconnect, between prices paid and charged by the power company, that led to the power shortages and the rolling blackouts.

[jo6pac]

The state used tax money to pay the overcost, so we paid just not in the monthly bill.
O being from the house that Uncle Milton built could be the final blow to the American worker.
jo6pac
Everything is on schedule, please move along.

[Adam]

jo6pac,

You're quite right of course; Californian citizens ended up paying the price in the end. But it was the wholesale/consumer price disconnect that turned a classic supply-and-demand situation into a tragedy of the commons. In stead of paying that extra premium if you used more power, you paid a fraction of a penny in extra taxes. Of course, millions of people were behaving that same way, so those slivers of pennies added up.

If people had paid higher rates on their BILLS, then the rising prices would have led to reduced consumption, and the price would have stabilized. But since the utilities were legally required to charge a fixed rate, the only way they were able to control the wholesale price was by limiting supply - ergo, rolling blackouts.

A few unscrupulous people realized that the Californian energy plan was a ticking time bomb which could be set off by a moderate price shock. When real-world situations led to a rise in demand, those folks were able to exploit the wholesale/consumer price disconnect to run up the wholesale price and make a lot of money speculating.

I've always felt that California's crisis was not a failure of deregulation in principle, but a great example of how not to deregulate.

[Adam]

Here's an interesting analysis of "Obamanomics", from an outstanding blog I discovered about a month ago:

http://xpostfactoid.blogspot.com/2008/06/obamanomics-ii-corporate-tax-cut.html

[Deb]

Adam,

How are you?

There are degrees of "free market" theology that certainly are averse to social justice. The Chicago School (and I knew about it from having read up on the field called "Law and Economics" some years ago) is notorious for seeking the degree that doesn't include social justice.

As for Obama, I can't tell where he is exactly. My gut says that he's saying one thing to secure one group of votes and a different thing to secure another. I don't know what he really thinks.

I read the article that you linked for Joe6pack. The writer's opinions/interps haven't cleared up anything for me.