November 27, 2011
by Ronald Radosh
In retrospect, the single most important admission Barack Obama made during the 2008 campaign was when he said that we were moments away "from a fundamental transformation" of the United States. That should have given every American pause, and should have led to the country demanding to know just what he meant by that. Most Americans want a nation that works, an economy that flourishes and provides jobs, and a government whose leaders protect our national security and stand firm against America's enemies.
There were many reasons why Americans voted for Barack Obama, but I doubt one of them was that they wanted a "fundamental transformation" of a constitutional republic: it always needs improvement, but does not need to be made into something very different than our Founders intended.
What our country has become in the few years of the Obama administration was made evident in a few seminal articles appearing this past week. The November 21 issue ofNewsweek performed a very useful service by running a major article about the work of author Peter Schweizer, whose new book Throw Them All Out is making tremendous waves, including a segment on 60 Minutes.
Schweizer, a conservative writer affiliated with the Hoover Institution, has managed to make a major breakthrough into the mainstream media. As Marc Thiessen wrote in his review for the Washington Post (also posted at the book's Amazon page):
On Sunday night, CBS News' 60 Minutes looked into this form of "lawful graft." The 60 Minutes story exposed, among others, then-House Speaker Nancy Pelosi for participating in a lucrative initial public offering from Visa in 2008 that was not available to the general public, just as a troublesome piece of legislation that would have hurt credit card companies began making its way through the House (the bill never made it to the floor). And it showed how during the 2008 financial crisis, Rep. Spencer Bachus (R-AL) — then-ranking Republican on the House Financial Services Committee — aggressively bought stock options based on apocalyptic briefings he had received the day before from Federal Reserve Chairman Ben Bernanke and Treasury Secretary Hank Paulson.
Republicans and Democrats in Congress have finally achieved bipartisan unity, when it comes to making millions through actions that would get average Americans a lengthy jail term. The term for what they are engaging in is "crony capitalism," which conservatives and liberals should both demand be ended immediately.
One of the worst offenders is my own representative in the House, Rep. Shelly Capito (R), who sold between $100,000 and $250,000 in shares of Citigroup after leaving a briefing with Hank Paulson and Ben Bernanke. She and her husband then accrued as much as $50,000 in capital gains from the Citigroup transactions made throughout the financial crisis. When she next appears at a town forum in my community — if she dares to — I intend to publicly confront her about her activity and see how she tries to defend herself. I will tell her that as a conservative and a citizen, I find her actions reprehensible, and a good example of everything that is wrong with our political system.
Newsweek also printed an excerpt from Schweizer's book titled "Obama's Lucky Friends," which presents the details on how the president violated every promise he made after coming into office in 2008. Schweizer notes the following:
It would take an entire book to analyze every single grant and government-backed loan doled out since Barack Obama became president. But an examination of grants and guaranteed loans offered by just one stimulus program run by the Department of Energy, for alternative-energy projects, is stunning. The so-called 1705 Loan Guarantee Program and the 1603 Grant Program channeled billions of dollars to all sorts of energy companies. The grants were earmarked for alternative-fuel and green-power projects, so it would not be a surprise to learn that those industries were led by liberals. Furthermore, these were highly competitive grant and loan programs — not usually a hallmark of cronyism. Often fewer than 10 percent of applicants were deemed worthy.
He goes on to reveal how the Obama grants were a model of what we mean by crony capitalism. A large proportion of the winners had Obama campaign connections; 10 members of his finance committee and a dozen of his campaign bundlers got taxpayer money for their own firms, and some politicians who backed Obama launched alternative-energy firms that got grants. As Schweizer writes:
The grant and guaranteed-loan recipients were early backers of Obama before he ran for president, people who continued to give to his campaigns and exclusively to the Democratic Party in the years leading up to 2008. Their political largesse is probably the best investment they ever made in alternative energy. It brought them returns many times over.
One firm, Kleiner Perkins, that had Obama financier John Doerr and Al Gore as partners, found a $16 million investment worth $69 million. But did it create jobs, as the administration promised? Schweizer's answer:
Meanwhile, the $24 million grant created 40 jobs, according to the government website recovery.gov.
Isn't it amazing how the taxpayer dollar works? I guess they weren't shovel-ready jobs for the calling. As for why it is crony capitalism, heed Schweizer's explanation:
The[Energy] department's loan and grant programs are run by partisans who were responsible for raising money during the Obama campaign from the same people who later came to seek government loans and grants. Steve Spinner, who served on the Obama campaign's National Finance Committee and was a bundler himself, was the campaign's "liaison to Silicon Valley." His responsibilities included fundraising, recruiting more bundlers, and managing Obama's relationship with a cadre of very wealthy donors. After the 2008 campaign, Spinner joined the Department of Energy as the "chief strategic operations officer" for the loan programs. A lot of the money he helped hand out went to that same cadre of wealthy Silicon Valley campaign donors. He also sat on the White House Business Council, which is made up of Obama-supporting corporate executives.
The above leads me to cite a second important article, which appeared in this weekend's edition of the Wall Street Journal. It is a remarkable interview with conservative analyst and historian Fred Siegel, perhaps the scholar most familiar with the plight of our cities and of how the fiscal crisis has led to collapse for both state and city economies. Siegel says in the very first sentence:
What has the country so angry is the sense that crony capitalism has produced a population that lives off the rest of us without contributing. They're right. It's not paranoid.
Again, Siegel notes that we are in this situation as the result of both policies taken during both the Bush administration and the Obama administration. Both bailed out large banks and industries, and the near-zero interest rates worked to keep the economy flush. Siegel points out:
Wall Street makes money off the bonds that have to be floated to pay the public sector workers in New York.
Spending is not connected to productivity, and all city workers outgain the private sector in our sluggish economy. Siegel praises the much despised (by liberals) Gov. Scott Walker of Wisconsin, whom he argues pushed "straight up, unambiguous structural reform," the most important being ending the requirement that state workers pay union dues automatically. Gov. Mitch Daniels did the same in Indiana. Not surprisingly, once policy was changed, most state workers opted not to pay union dues.
But, say the pro-union activists and the OWS crowd, unions helped move people into the middle-class in the 1940s and 50s, and today they continue to defend this large middle class. Siegel has an answer, as he notes that it is true that they defend their interests:
That's because the costs that they've imposed have driven out the private-sector middle class. They are the disease of which they proclaim themselves the cure.
Today in New York City, a little known party named the Working Families Party — in essence the political arm of ACORN and the government unions — has gained a large influence in terms of local political power. It's easier for a mayor to give into their demands, as Mayor Bloomberg has consistently done, rather than to confront the teacher unions head on.
New York, says Siegel, has become "what the tea party fears for the rest of the country. Crony capitalism, and low-end work, and the loss of mobility, and no place to do business if you're a small business."
On the national scene, what the Obama administration has produced is not the social-democracy or socialism it might have meant to move the nation towards, but rather a state-employment dependency sector that now dominates the economic structure of the nation. A nation in which 17 percent of the employed work force depends on direct government employment — state and national — or government contracts, and entitlements ranging from retirement to housing allowances, education loans, welfare programs, food stamps, and the like.
A great summation of what Obama wrought has been mailed to me by my historian friend Martin J. Sklar, who is writing a book about the Obama administration. Sklar puts it this way:
In place of the basic principles of the constitutional-republic, viz the sovereignty of the people, the supremacy of society over the state, the state the servant of society, the Obama politics and policies are installing, and seeking to institutionalize, the sovereignty of the state. … The party is the effective state-power, standing over the people (society) and over the government itself … in asserting the supremacy of the "public sector" over the "private sector," and of the state over the people and society represents a fundamental departure from the American constitutional-republic order … moving toward a lst State-Comand order … Obama's "transformation." Van Jones' "Top Down, Bottom Up, Inside out." Valerie Jarrett's "we love Van Jones."
Hence Sklar, who considers himself on the Left, concludes that the Republican Party and the tea party represent a movement against "reactionary anti-constitutional rupture," and hence Republicans, not Democrats and liberals, serve "the cause of development, progress and freedom."
So, as we again ponder what our president meant about seeking a "fundamental transformation" of our country, we can look and find evidence — as the authors I discussed have — that gives us a clue as to what the current administration seeks to accomplish.
The issue is clear. Americans who care about liberty and freedom must do everything possible to prevent Barack Obama from having a second term in office. Without having to worry about obtaining another third term in office, the damage another four years of Obama could do to our nation might be irreparable. That is not an outcome we can afford.
Ronald Radosh is an adjunct fellow at the Hudson Institute; Prof. Emeritus of History at the City University of New York, and the author of many books, including "The Rosenberg File;" "Divided They Fell: The Demise of the Democratic Party, 1964-1996," and most recently, "Commies: A Journey Through the Old Left, the New Left and the Leftover Left."
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