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OpEdNews Op Eds    H3'ed 1/20/10

How Obama Lost His Way

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From Consortium News

President Barack Obama spent his first year in office trying to reassure the Washington/New York establishments that he was not going to upset their apple carts too much, that they shouldn't panic, that he would despite all the speeches be more about continuity than change.

And he succeeded. The big banks were pulled back from the brink; the auto industry survived; the stock markets rebounded; a new Great Depression was averted; the national security elites praised Obama's more nuanced rhetoric as he continued many of George W. Bush's war policies; even the Washington Post's neoconservative editorial page editor Fred Hiatt gave Obama mostly high marks for his first year.

"I'd like to interrupt the anniversary-bash-Obama-fest with a simple proposition: Obama has done a good job so far," Hiatt wrote in a Jan. 19 column entitled "Obama's first-year success."

Yet the first major political judgment on Obama's "responsible" behavior came later that same day in Massachusetts when a little-known right-wing Republican state senator, Scott Brown, defeated Attorney General Martha Coakley by five percentage points to fill Ted Kennedy's Senate seat.

It turned out that what Obama had accomplished politically in his first year was to associate himself and the Democratic Party with the widely despised national establishments.

For instance, Obama staffed his economic team with Wall Street friendlies, like Timothy Geithner who got promoted from head of the New York Federal Reserve to Treasury Secretary despite failing to have stopped the reckless bank gambles that caused the 2008 financial collapse. Geithner's appointment calendar showed that his time as the chief regulator of Wall Street banks had included cozy lunches with bank CEOs at New York's swanky Four Seasons.

And, whether the huge bank bailouts were necessary or not, Geithner annoyed the public because he seemed to view the crisis through the eyes of the bankers. He opposed any harsh medicine, like temporarily nationalizing some of the banks or at least demanding that they accept tough new rules on their behavior before they were nursed back to health with trillions of dollars in public monies.

So, by selecting Geithner along with a number of ex-Wall Streeters who had gotten rich giving advice to banks and hedge funds, Obama positioned himself as the protector-in-chief of a corrupt financial elite albeit with a few finger-wagging lectures tossed in. And, despite Obama's explanation about Wall Street being saved so it could help out Main Street, the struggling American people saw little in the bank bailouts for themselves.

Simply put, Obama failed to persuade the American people that he would deploy a reenergized federal government to fight their battles against well-entrenched financial interests. Instead, he was viewed as helping the elites shore up their comfortable trenches.

Similarly, on foreign policy, Obama moved quickly to quiet the fears of the national security establishment. He pleased neocon and mainstream opinion leaders by keeping on one of their favorites, Republican Robert Gates, as Defense Secretary. The move was hailed as a wise gesture of bipartisanship.

Obama did make some cosmetic changes, such as dumping the phrase "war on terror" and vowing not to waterboard prisoners, but he embraced Bush's gradual withdrawal from Iraq and escalated the war in Afghanistan.

Obama also rebuffed demands that he hold the Bush administration accountable for its approval of torture and other war crimes. That won him plaudits from Washington pundits but it antagonized his own "base."

Tactical Errors

Obama made a number of tactical errors, too, particularly around his top domestic priority: health-care reform. He needed to move the legislation quickly through Congress, as he initially understood when he set an August 2009 deadline for the two houses to pass legislation.

Even though he knew that the Republicans were determined to defeat any significant reform early on Sen. Jim DeMint of South Carolina had explained that stopping the health-care bill would be the political "Waterloo" that would "break" Obama the President still allowed the process to bog down.

Pursuing the phantom of bipartisanship, Obama let Senate Finance Committee Chairman Max Baucus enter into desultory negotiations with three Republicans including Maine's Olympia Snowe and Iowa's Chuck Grassley who slow-walked the bill past the August deadline and into the fall.

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Robert Parry broke many of the Iran-Contra stories in the 1980s for the Associated Press and Newsweek. His latest book, Secrecy & Privilege: Rise of the Bush Dynasty from Watergate to Iraq, can be ordered at secrecyandprivilege.com. It's also available at

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