OBAMA: CHANGE WE CAN BELIEVE IN--NOT, Part One, The Economy

Part 1. The Economy

by Kéllia Ramares

It is often said that you are known by the company you keep. If that is true, then progressive voters should familiarize themselves with at least some of Sen. Barack Obama's advisers and fundraisers, and by this I don't mean Bill Ayers and Rev. Jeremiah Wright. I mean the real movers and shakers who are the answer to the question: "How does a young, black, first term Senator rise so quickly in politics so as to be standing at the threshold of the White House?" You will see that those who made it possible are

not Weather Underground, or vociferous ministers, but are the people who will insure that Barack Obama will not make any fundamental changes to the way the United States does its business - here or abroad.

The Religion of the Free Market

The Democratic presidential candidate's chief economic advisor is Austan Goolsbee of the University of Chicago, an economist described by author Naomi Klein as "on the left side of a spectrum that stops at the center-right."1  Goolsbee is very much a home town pick, and not merely because he and Obama both live in Chicago. Obama taught at the law school of the University of Chicago for a decade, and, as Klein says, "is thoroughly embedded in the mind set known as the Chicago School."2  The Chicago School's long time "Headmaster" was the late Nobel Prize-winning monetarist Milton Friedman, who made a secular religion of "the free market." According to Klein, Goolsbee qualifies as a leftist in this group because he acknowledges inequality as a problem. But his answer to it is more education.3 Sound familiar? During his years in the White House, Bill Clinton emphasized retraining for the people who were losing their manufacturing jobs to "downsizing." But, besides the difficulties inherent in retraining someone who had spent a decade or more on an assembly line to be a computer programmer, (and helping him or her maintain a home and family during the process), there was the not-so-little matter of technical jobs also being outsourced to the other side of the world, a problem that has been growing since the Clinton Administration, as the United States loses the ability to make anything except bombs, debts, and rich executives.

Goolsbee got into a bit of PR trouble earlier this year for comments to officials at the Canadian consulate in Chicago that a President Obama would not be as anxious to renegotiate NAFTA as Candidate Obama appeared to be.4 Naturally, the press was alleged to have gotten it wrong, just as it has gotten the exit polls wrong in the last two elections.

But the Associated Press obtained a memorandum of the meeting written by Joseph De Mora, a political and economic affairs consular officer. Part of it said:

Goolsbee candidly acknowledged the protectionist sentiment that has emerged, particularly in the Midwest, during the primary campaign. [H]e cautioned that this messaging should not be taken out of context and should be viewed as more about  political - positioning than a clear articulation of policy p1ans. He also suggested that of the Democratic candidates, Obama has been the least protectionist (unintelligible).5

On NAFTA, Goolsbee suggested that Obama is less about fundamentally changing the agreement and more in favor of strenghtening/clarifying language on labor mobility and environment, and trying to establish these as more "core" principles of the agreement.6

But the people of Ohio, before whom Obama harshly criticized NAFTA during the primaries7, are not interested in labor mobility. They want good jobs in Ohio. What they are getting is more of the same insensitive and nonsensical message that both Democrats and Republicans gave them in 2004: Outsourcing your job is good for the American economy.

Dr. Francis A. Boyle, Professor of International Law at the University of Illinois - Urbana-Champaign, received his undergraduate education at the University of Chicago, where Obama taught at the law school and Goolsbee is a member of the economics department. Boyle rails against that institution regularly. He managed to stick to his liberal principles there and at Harvard University, where he received a law degree and a PhD. in political science. Boyle had this to say about the University of Chicago's political science and economics departments, and law school in a December, 2005 article:

"The University of Chicago routinely trained me and innumerable other students to become ruthless and unprincipled Machiavellians. That is precisely why so many neophyte Neo-Con students gravitated toward the University of Chicago or towards Chicago Alumni at other universities. ... Integrally related to and overlapping with the Feddies [lawyers who are members of the ultraconservative Federalist Society] are members of the University of Chicago "School" of Law-and-Kick-Them-in-the-Groin Economics, which in turn was founded on the Market Fundamentalism of Milton Friedman....This Chicago gang of academic con-artists and charlatans are proponents of the Nazi Doctrine of "useless eaters."  Pursuant to Friedman's philosophy of Market Fundamentalism, the privatization of Iraq and its oil industry [is] already underway for the primary benefit of the U.S. energy companies...."8

Naomi Klein's description of Obama's economic philosophy bears repeating: he "is thoroughly embedded in the mind set known as the Chicago School."9

Obama: Property of the Billionaires

Anyone still harboring any fantasies at this late date of "Change you can believe in" from an Obama Adminstration needs to understand just how badly compromised he is. And that understanding begins with learning about his national campaign chair, Penny Pritzker.  She's the one behind his raising a record $500 million-that's half a billion-dollars. (My thoughts on what we could do with that kind of money besides spending it on political campaigns will have to wait for another day).

Penny Pritzker runs Classic Residence by Hyatt, a chain of retirement homes, and The Parking Spot, an airport shuttle service. She's president of Pritzker Realty Group and chairwoman of TransUnion LLC, a credit checking company. She's a director of Global Hyatt Corp., which owns or operates more than 365 hotels in 44 countries.10

All told, the Pritzker empire is worth as much as $40 billion, a person familiar with the situation estimates.11

Much has been revealed by the KPFA-FM's investigative news magazine Flashpoints. (Flashpoints in the the public affairs department. This author works for KPFA's news department). On programs on February 20, 2008 and September 30, 2008,12 Flashpoints focused on Pritzker's role in the the sub-prime crisis that has triggered this nation's and now the world's financial industry meltdown. Bank fraud whistleblower Timothy J. Anderson appeared on both shows to give details of Pritzker's schemes.

Pritzker, through Superior Bank FSB of Hinsdale Illinois, of which she was owner and chair of the board, was among the first to securitize sub-prime mortgages. Superior was closed by the Office of Thrift Supervision (OTS) in late 2001and the Federal Deposit Insurance Corporation (FDIC) was named Receiver in early 2002. Flashpoints host Dennis Bernstein relayed what Anderson told him in February in an article for Consortium News:

"The [sub-prime] financial engineering that created the Wall Street meltdown was developed by the Pritzkers and Ernst and Young, working with Merrill Lynch to sell bonds securitized by sub-prime mortgages.

"The sub-prime mortgages, were provided to Merrill Lynch, by a nation-wide Pritzker origination system, using Superior as the cash cow, with many millions in FDIC insured deposits. Superior's owners were to sub-prime lending, what Michael Milken was to junk bonds."13

Also in February, Earl Offari Hutchinson described the conflict between Obama's speeches against subprime profiteers and his campaign's association with Pritzker in an article for the Huffington Post:

"Democratic presidential contender Barack Obama says he'll crack down on fraudulent sub-prime lenders. If he really means it he can start by firing his campaign finance chair, Penny Pritzker. Before taking over Obama's campaign finances, she headed up the borderline shady and failed Superior Bank. It collapsed in 2002. The bank's sordid story and its abominable role in fueling the sub-prime crisis are well known and documented. It engaged in deceptive and faulty lending, questionable accounting practices, and charged hidden fees. It did it with the sleepy-eyed see-no-evil oversight of federal. It made thousands of dubious loans to mostly poor, strapped homeowners. A disproportionate number of them were minority.

"Obama's home state, Illinois, ranked near the top of thee states in the percentage of sub-prime mortgages. Nearly 15 percent of home loans were sub-prime according to the Mortgage Bankers Association. But that only tells part of the tale. According to the Woodstock Institute, a Chicago non-profit that studies housing issues, the sub-prime fall-out was far higher in the predominantly black and Latino neighborhoods of South and Southwest Chicago.

"The predictable happened when many of those lost their homes. When the bank collapsed Pritzker and bank officials skipped away with their profits and reputations intact."14

On September 30th, Tim Anderson opined to Flashpoints that Pritzker raised the half a billion dollars for Obama because she "wants a seat at the table. She doesn't want to be just a fundraiser."15

She got it. When Obama met with his economic advisers on July 28 in Washington, Pritzker participated along with Warren Buffett, Robert Rubin, chairman of Citigroup Inc.'s executive committee, and Paul Volcker, 80, former chairman of the Federal Reserve.16

Speaking of seats, the Obama family lives on the southside of Chicago. So they have had a ringside seat to the devastation caused by the subprime mortgage debacle. Yet Obama says of Pritzker: "She and I share certain core values about how to run organizations, and hopefully that will inform how we manage the government.''17

How "we" manage the government? Will this subprime queen become the next Secretary of the Treasury?

That ain't all...

Pritzker is not the only ultra-rich Obama backer. Another is George Soros, the wallet behind the faux-progressive MoveOn.org, which called for the censure, but not impeachment, of George W. Bush. Obama has been the beneficiary of Soro's soft money since his days in the Illinois state senate.18

The billionaire currency speculator's  hedge fund may have lost at least $120 million on its stake in Lehman Brothers Holdings Inc., mostly acquired in the second quarter, as the investment bank suffered its worst financial result. Soros Fund Management LLC, which manages $20 billion, purchased 9.47 million shares, or about 1.4% of New York-based Lehman, between March 31 and June 30, according to a filing with the Securities and Exchange Commission.19

Do you think that maybe Sen. Obama might have an interest in seeing that Mr. Soros can recoup those losses?

Both Obama and Sen. John "Keating Five" McCain, the nominal opponent in this fake two-headed corporate party "election," enjoy huge financial support from Wall Street. Obama has received at least $1.5 million collected by three senior executives at Lehman Brothers.20 

With support of the ultra rich such as Pritzker and Soros  as well as others at the top of the investor class, is it any wonder Obama and McCain, were joined at the hip on the necessity of a Wall Street bailout? They even issued a joint statement as Congress negotiated the first version of the bailout.

"Now is a time to come together - Democrats and Republicans - in a spirit of cooperation for the sake of the American people. The plan that has been submitted to Congress by the Bush Administration is flawed, but the effort to protect the American economy must not fail."21

After the bailout finally passed ($150 billion more costly and about 300 pages more complicated than the original bill), Rep. Dennis Kucinich (D-OH) told writer Chris Hedges in a phone interview:

"We face a perfect financial storm. The elements are the deficit spending for the war of 3 to 4 trillion dollars, the trillion and more tax cuts, the war itself and the lack of serious investment in the country. We are being hollowed out.  We are going to see more unemployment and more people losing their homes. With $700 billion we could have made a real investment in the country, in jobs, in infrastructure and in homes. Instead, we got robbed."22

Apparently, the American economy Obama wants to protect is the financial interests of the Wall Streeters who bankroll his presidential campaign.

Kéllia Ramares is a journalist living in Oakland, CA. She aggregates news stories and commentaries at a channel called freedomnews at Livevideo.com. Her email address is ByrnesBlogger1@gmail.com This e-mail address is being protected from spam bots, you need JavaScript enabled to view it

1   Naomi Klein, "Obama's Chicago Boys," The Nation, June 12, 2008. http://thenation.com/doc/20080630/klein/    This article appeared in print in the June 30, 2008 edition of the nation.

2   http://thenation.com/doc/20080630/klein/

3  http://thenation.com/doc/20080630/klein/

4    Michael Luo, "Memo Gives Canada's Account of Obama Campaign's Meetings on NAFTA," New York Times, March 4, 2008, http://www.nytimes.com/2008/03/04/us/politics/04nafta.html

5    http://www.nytimes.com/images/promos/politics/blog/20070303canmemo.pdf

6    http://www.nytimes.com/images/promos/politics/blog/20070303canmemo.pdf

7    http://www.nytimes.com/2008/03/04/us/politics/04nafta.html

8   Francis A. Boyle, Neo-Cons, Fundies, Feddies and Con-Artists, December 17, 2005.

     http:// www.globalresearch.ca/index.php?context=viewArticle&code=BOY20051217&articleId=1493

9   http://thenation.com/doc/20080630/klein/

10 John Lippert, "The Power of Penny Pritzker," Bloomberg Markets, October 2008.

    http://www.bloomberg.com/news/marketsmag/mm_1008_story1.html

11         http://www.bloomberg.com/news/marketsmag/mm_1008_story1.html

12 Podcasts of these shows may be obtained at http://kpfa.org or http://flashpoints.net

13 Dennis Bernstein, "Obama's Sub-prime conflict," Consortium News, February 28, 2008, 

    http://www.consortiumnews.com/2008/022708a.html

14 Earl Offari Hutchinson, "If Obama's For Real on the Sub-Prime Crisis, He'll Dump His Campaign

              Finance Chair," Huffington Post, February 29, 2008.

            http://www.huffingtonpost.com/earl-ofari-hutchinson/if-obamas-for-real-on-th_b_89159.html

15 Flashpoints, KPFA-FM, September 30, 2008. Podcast is available at http://kpfa.org/

16 http://www.bloomberg.com/news/marketsmag/mm_1008_story1.html

17 http://www.bloomberg.com/news/marketsmag/mm_1008_story1.html

18 Ed Hamler, "George Soros buys the Democratic Nomination; Obama Borrows It," EIR, July 4, 2008.  

    http://www.larouchepub.com/eiw/public/2008/2008_20-29/2008-27/pdf/78-79_3526.pdf

19 Bloomberg News, "Soros Fund Loss on Lehman May be $120M," Sept 11, 2008, as reprinted in the NY Sun   

    http://www.nysun.com/business/soros-fund-loss-on-lehman-may-be-120m/85619/

20 Peter Yost, Associated Press, "Wall Street among biggest donors to McCain, Obama," Sept. 18, 2008 as         reprinted in SunSentinel.com, Nation/World section on Oct 5, 2008.

            http://www.sun-sentinel.com/news/nationworld/sfl-flacandidates0918sbsep18,0,7899171.story