The Dragon We Must Slay

Obama as Lincoln. Obama as FDR. The instantly classic image of Obama, sticking his jaw defiantly into the pouring rain in Chester, Pa., during a campaign rally, as if he had just come down from Mount Olympus. He was not even sworn into office, and yet all this hagiography cast him, already, as a god.

Which standards will the news media use to judge Obama? Will the benchmark be FDR, circa 1944, having revolutionized the government, the economy and on the brink of winning WWII? Or will the benchmark be Bush, despoiler of the economy, of civil liberties and human rights, and of our image worldwide?

By the latter standard, if the Obama administration simply shuts down Gitmo, denounces torture as an element of U.S. foreign policy, ends illegal wiretaps, acknowledges there is such a thing as global warming, and launches its ambitious rebuild-the-infrastructure stimulus package, he’ll be an unqualified success. By the former standard, all of these things are mere prelude: necessary but hardly sufficient.

I don’t think the FDR standard is fair to impose on Obama–but what if we did? Just as FDR had to slay, once and for all, the key elements of laissez-faire capitalism, in which people were left unprotected from its vagaries and excesses, Obama and the congressional Democrats now have to slay the giant that academics refer to as neoliberalism.

Even with the meltdown of an unregulated Wall Street–Securities and Exchange Commission Chairman Christopher Cox admitting his agency was asleep at the wheel, especially with the Bernard Madoff scandal, and former Fed Chairman Alan Greenspan also acknowledging that deregulation of the financial sector was probably a mistake–neoliberalism remains a formidable colossus.

Neoliberalism was the new “common sense” about the government and “free-market” economics that took hold under Ronald Reagan and Margaret Thatcher. (For you nerdy types who want more than my Classic Comics summary, see David Harvey’s superb A Brief History of Neoliberalism.)

The project of neoliberalism was simple: to repudiate the notion that the government should provide support for its everyday citizens; to attack all forms of social solidarity (as Thatcher famously quipped, there is “no such thing as society, only individual men and women”); and to elevate the sanctity of private property, private ownership and “the market.”

Neoliberalism demanded that government regulations and social programs be dismantled so that “the market” (which was constantly personified as having the omniscience of Yahweh) could more justly determine the flow of social services and wealth. The reason we didn’t need a safety net for poor people, or government programs to support families was that we have to take individual responsibility for ourselves; that old-fashioned notion of “the public good” just makes people lazy parasites dependent on government handouts. Structural barriers, say, based on where you were born, your race, your class position, don’t exist; they were a thing of the past or a figment of people’s imaginations.

Neoliberalism, as a philosophy, was hugely successful for nearly a quarter of a century. Reagan, Thatcher and especially Bush II successfully demonized government as wasteful, inefficient, irrelevant or all of the above, so institutions it used to manage like schools, prisons, hospitals, even the military, should be turned over to private investors (or, in the case of FEMA, to former managers of Arabian horses). It was only in the wake of Katrina and, now, with what many are belatedly acknowledging may be the worst financial crisis since the Great Depression, that the previously unchallengeable common sense of neoliberalism has hit some shoals.

Nonetheless, the news media have, over the past 25 years, repeatedly naturalized neoliberalism as an over-arching worldview. But now, a more holistic look at its dire consequences is hard to find anywhere in the news. The multiple and often impossible-to-understand elements of the current financial catastrophe–subprime mortgages, the reliance on unregulated financial packages called derivatives, the Madoff Ponzi scheme–all must be bundled into one complete indictment of the abject failure of neoliberalism.

This is one of Obama’s biggest challenges. If he’s really going to don the mantle of FDR, he must go big, philosophically. He must denounce neoliberalism for the fraud it has been exposed to be and enliven the commonsense of yore: Government oversight and regulation aren’t necessary evils; they are crucial to our political, economic and social survival. Period.