In the face of a severe economic crisis, the Obama administration is seeking to reverse many of the tenets of the previous era. The budget outline proposed by the White House would raise taxes on the rich, place greater restrictions on corporate power, increase spending on social programs and set a goal of "universal" health care coverage.
"The notion that taxes can go up as well as down, that the government has the ability and duty to do good, and that tackling inequality has moral values challenge the core assumptions that have dominated political culture in London and Washington for almost three decades," wrote Guardian columnist Gary Younge.
For anyone who hated 30 years of Republican ascendance in Washington--and the retreat of liberalism at every turn--this is a breath of fresh air.
But with the government's own statistics showing the economy lurching deeper into crisis by the week, the question isn't whether Obama is too radical, but not radical enough. Is the new administration's ties to the policies of the past stopping it from taking the kind of aggressive action that desperately needed?
For one, despite the $787 billion price tag, the administration's stimulus package, signed into law last month, is already looking inadequate. As New York Times columnist Paul Krugman wrote:
Mr. Obama's promise that his plan will create or save 3.5 million jobs by the end of 2010 looks underwhelming, to say the least. It's a credible promise...But 3.5 million jobs almost two years from now isn't enough in the face of an economy that has already lost 4.4 million jobs, and is losing 600,000 more each month...
[E]conomic policy is falling behind the curve, and there's a real, growing danger that it will never catch up.
What's more, even Obama's most dramatic proposals are marked by concessions to past doctrines that enshrine the role of the free market. As former Republican-turned-critic of the right Michael Lind wrote of Obama's proposals to open up access to higher education:
The problem with higher education is that it costs way too much. Tuition costs at private universities and some state universities have been growing far more rapidly than inflation.
A crude, old-fashioned, old-thinking New Deal liberal would see the problem as one of excessive prices demanded by universities, not insufficient funds on the part of the students whom the universities gouge. The hypothetical New Deal liberal would threaten to deny universities their privileged tax-exempt status unless they spend more of their endowments on tuition and keep their prices affordable.
The neoliberal alternative is to avoid impolite and divisive inquiries into the reasons for skyrocketing tuition costs...Instead, the taxpayer will be forced to cough up money to help students meet the exorbitant fees.
Thus, Obama's first budget calls for maintaining the $2,500 New American Opportunity Tax Credit for middle-class students, while converting Pell Grants up to $5,550 into a permanent government entitlement. If I were a university, I'd raise my tuition by...oh...let's say, $5,550 a year.
The same problem can be seen on other issues. Like health care--where the administration explicitly rejects government controls on rapidly rising health care costs or putting the parasitical insurance companies out of business.
At a March 5 White House summit to discuss health care policy, advocates of a single-payer system to eliminate private insurers in favor of the government covering everyone only got an invitation at the last minute--and their ideas didn't even get a hearing.
The administration's proposal to devote $636 billion to reforming health care may open up access somewhat. But most of the money will likely go to massive subsidies for employers and private insurers--which is why big business and the health care industry are reportedly supportive of Obama's "reform."
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