CEO-in-Chief

A lot of ink (bytes?) have been spilled in the last few days about the Obama administration’s capitulation to the petro-chemical industry on offshore drilling.  Obama has been governing for the last year many have described as moderate or centrist: his support for the continued occupation of Afghanistan and Iraq, pushing a health insurance bill seemingly written by the insurance industry itself, appointment of Wall Street insiders like Timothy Geithner to oversee the non-reform of the finance sector after its implosion of 2008 allow us, amongst other things, to point to this conclusion.

It’s too easy, though, to point to Obama as a classic triangulator like Bill Clinton.  Unlike Bill, Barack Obama came into power with a clear majority of the vote, a heavily Democratic Congress, and a country disgusted with the Bush administration.  In the heady days just prior to the inauguration many on the Democratic left dared to dream of the populist potential waiting in the wings.  What then, of this, and the real character of the Obama presidency?

Barack himself likes to blame the schizoid character of the Democratic Party: urban vs. suburban, liberal vs. centrist, safe vs. swing-districts.  There is some truth to this; the Democrats have become a big-tent party as much as the Republicans have whittled away their moderate membership in the last decade.  A president like FDR, however, had to deal with his own version of moderate and conservative Dems, and still managed to get much of the New Deal passed.  How inconceivable is it that an Obama administration that took more definitive stances on public health care, the war, and the economy might have produced a different outcome?

Still, governing as Barack does has not made his administration popular with nearly half of the electorate, nor does it make overtly good conventional political sense.  In the current climate (a Democratic majority) even a realist shouldn’t buy the argument that his equivocation is simply that of a centrist.

I’d like to proffer, instead, that Obama’s position is logical and consistent if we view it, not from that of centrist/triangulator, but rather that of the power elite in the United States joined with Tom Ferguson’s investor-model of party behavior.

Who Really Rules

C. Wright Mills’ classic Marxoid formulation of the ruling class, updated via Domhoff, can help us understand more about Obama than the media story of mid-term worries in a schizoid party.   There are four key areas of the American power elite:

1. Corporate Community

2. Social Upper Class

3.  Policy-Planning Network

4.  Military leadership

These can and do overlap: Mills famously discussed the interlocking directorates between corporate boards and CEOs;  military leaders, think tank researchers, and the very wealthy walk between these worlds with some ease.  A president is one of the primary focus points for these groups given the influence and persuasive power of that officeholder.  Nearly $1 billion was spent in 2008 between Obama and McCain, mostly collected from big bundlers and wealthy donors.  Within this power elite there are clearly divisions: for instance two large groups, the FIRE sector (Finance, Insurance, Real Estate) and the manufacturing and petrochemical industries are, at times, at odds with each other.  Dems tend to receive more money from the former and Republicans the latter (but this is only a tendency, as many corporations split donations evenly across party lines).

Instead of the tired trope of worry about the voters in November, we rely on the power-elite model’s neat fit with Thomas Ferguson’s investment theory of party competition.  Obama and the Democrats aren’t bounded in the positions they take and offer by voters, but by investors.  I agree with Ferguson that

“the fundamental market for political parties usually is not voters…most of these possess desperately limited resources and – especially in the United States – exiguous information and interest in politics. The real market for political parties is defined by major investors, who generally have good and clear reason for investing to control the state…Blocs of major investors define the core of political parties and are responsible for most of the signals the party sends to the electorate.”

Obama is bound by the limits of what the party investors, the power elite, demand from the American state apparatus.  So while majorities of voters support single-payer universal health care, ending the wars in Afghanistan and Iraq, and living wage jobs, the administration began from what seemed a confusing stance of continuing Bush’s wars, compromising immediately on health care, and bailing out Wall Street instead of the American worker.

It’s not confusing at all though: Obama is the CEO of the “executive committee of the ruling class” and there is no constituency in the elite that support him going forward with policies that seem potentially popular with the masses.  So, as a matter of course, we don’t even hear them spoken except in derogatory fashion by Obama and his press flacks.  Ferguson presents a useful explanation :

“Consider a world in which labor-intensive textile (3 percent of the voting population) command virtually all pecuniary resources beyond those necessary for ordinary wage earner to live. Suppose, further, that an election is being staged in which everyone recognized that the only issue is passage of a law that is likely to lead to 100 percent unionization of the work force. All wage earners agree that the law is desirable. All textile magnates vehemently disagree. What stance do the political parties adopt? If money matters importantly to the campaign, no party can afford to take up the median voter’s position – a 100% unionization, indicated by the vast majority, 97% – even though no one is being fooled about anything. Because all parties depend on textiles for funding, they must comply with the industry’s demand for a union-free environment, or else they cannot afford to compete at all. Conversely, if a second party dependent on capital-intensive industries that do not object to, say, a scheme for 20 percent unionization can raise enough funds to offer another deal – a New Deal, that is – then the populace may get a chance to vote for the latter; still, the median position is never attained.”

Obama’s position, which he claims is one of compromise to get what we can “really achieve,” is nothing of the sort.  Rather, it is clear that some very powerful interests are quite happy with how he has approached health care, the wars, military spending, the bank bailouts, his agency and Supreme Court appointments.  Whether or not Obama himself is more radical than his choices (and I highly doubt it), he can afford to annoy a sizable chunk of the electorate as long as he retains the support of a majority of the investor class.  Once we understand this, the consistency of our CEO-in-chief’s policies should become clear.

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