[Marxism] Obama's Chicago Boys

Dbachmozart at aol.com Dbachmozart at aol.com
Fri Jun 13 22:02:21 MDT 2008


By Naomi  Klein  
13/06/08 "_The  Nation_ (http://www.thenation.com/doc/20080630/klein/print) " 
-- - Barack Obama waited just three days after  Hillary Clinton pulled out of 
the race to declare, on CNBC, "Look. I am a  pro-growth, free-market guy. I 
love the market."  

Demonstrating that this is no  mere spring fling, he has appointed 
37-year-old Jason Furman to head his  economic policy team. Furman is one of Wal-Mart's 
most prominent  defenders, anointing the company a "progressive success 
story." On the  campaign trail, Obama blasted Clinton for sitting on the Wal-Mart 
board  and pledged, "I won't shop there." For Furman, however, it's Wal-Mart's  
critics who are the real threat: the "efforts to get Wal-Mart to raise its  
wages and benefits" are creating "collateral damage" that is "way too  enormous 
and damaging to working people and the economy more broadly for  me to sit by 
idly and sing 'Kum-Ba-Ya' in the interests of progressive  harmony."  
Obama's love of markets and his desire for  "change" are not inherently 
incompatible. "The market has gotten out of  balance," he says, and it most 
certainly has. Many trace this profound  imbalance back to the ideas of Milton 
Friedman, who launched a  counterrevolution against the New Deal from his perch at 
the University of  Chicago economics department. And here there are more 
problems, because  Obama--who taught law at the University of Chicago for a 
decade--is  thoroughly embedded in the mind-set known as the Chicago School.   
He chose as his chief economic adviser  Austan Goolsbee, a University of 
Chicago economist on the left side of a  spectrum that stops at the center-right. 
Goolsbee, unlike his more  Friedmanite colleagues, sees inequality as a 
problem. His primary  solution, however, is more education--a line you can also get 
from Alan  Greenspan. In their hometown, Goolsbee has been eager to link Obama 
to the  Chicago School. "If you look at his platform, at his advisers, at his 
 temperament, the guy's got a healthy respect for markets," he told  Chicago 
magazine. "It's in the ethos of the [University of  Chicago], which is 
something different from saying he is laissez-faire."   
Another of Obama's Chicago fans is  39-year-old billionaire Kenneth Griffin, 
CEO of the hedge fund Citadel  Investment Group. Griffin, who gave the maximum 
allowable donation to  Obama, is something of a poster boy for an unbalanced 
economy. He got  married at Versailles and had the after-party at Marie 
Antoinette's  vacation spot (Cirque du Soleil performed)--and he is one of the  
staunchest opponents of closing the hedge-fund tax loophole. While Obama  talks 
about toughening trade rules with China, Griffin has been bending  the few 
barriers that do exist. Despite sanctions prohibiting the sale of  police equipment 
to China, Citadel has been pouring money into  controversial China-based 
security companies that are putting the local  population under unprecedented 
levels of surveillance.  
Now is the time to worry about Obama's  Chicago Boys and their commitment to 
fending off serious attempts at  regulation. It was in the two and a half 
months between winning the 1992  election and being sworn into office that Bill 
Clinton did a U-turn on the  economy. He had campaigned promising to revise 
NAFTA, adding labor and  environmental provisions and to invest in social 
programs. But two weeks  before his inauguration, he met with then-Goldman Sachs chief 
Robert  Rubin, who convinced him of the urgency of embracing austerity and 
more  liberalization. Rubin told PBS, "President Clinton actually made the  
decision before he stepped into the Oval Office, during the transition, on  what 
was a dramatic change in economic policy."  
Furman, a leading disciple of Rubin, was  chosen to head the Brookings 
Institution's Hamilton Project, the think  tank Rubin helped found to argue for 
reforming, rather than abandoning,  the free-trade agenda. Add to that Goolsbee's 
February meeting with  Canadian consulate officials, who left with the 
distinct impression that  they had been instructed not to take Obama's anti-NAFTA 
campaigning  seriously, and there is every reason for concern about a replay of 
The irony is that there is absolutely no  reason for this backsliding. The 
movement launched by Friedman, introduced  by Ronald Reagan and entrenched under 
Clinton, faces a profound legitimacy  crisis around the world. Nowhere is 
this more evident than at the  University of Chicago itself. In mid-May, when 
university president Robert  Zimmer announced the creation of a $200 million 
Milton Friedman Institute,  an economic research center devoted to continuing and 
augmenting the  Friedman legacy, a controversy erupted. More than 100 faculty 
members  signed a letter of protest. "The effects of the neoliberal global 
order  that has been put in place in recent decades, strongly buttressed by the  
Chicago School of Economics, have by no means been unequivocally  positive," 
the letter states. "Many would argue that they have been  negative for much of 
the world's population."  
When Friedman died in 2006, such bold  critiques of his legacy were largely 
absent. The adoring memorials spoke  only of grand achievement, with one of the 
more prominent appreciations  appearing in the New York Times--written by 
Austan Goolsbee. Yet  now, just two years later, Friedman's name is seen as a 
liability even at  his own alma mater. So why has Obama chosen this moment, when 
all  illusions of a consensus have dropped away, to go Chicago retro?   
The news is not all bad. Furman claims he  will be drawing on the expertise 
of two Keynesian economists: Jared  Bernstein of the Economic Policy Institute 
and James Galbraith, son of  Friedman's nemesis John Kenneth Galbraith. Our 
"current economic crisis,"  Obama recently said, did not come from nowhere. It 
is "the logical  conclusion of a tired and misguided philosophy that has 
dominated  Washington for far too long."  
True enough. But before Obama can purge  Washington of the scourge of 
Friedmanism, he has some ideological  housecleaning of his own to do.  
Naomi Klein is an award-winning  journalist and syndicated columnist and the 
author of the international  and New York Times bestseller The Shock Doctrine: 
The Rise of Disaster  Capitalism (September 2007); an earlier international 
best-seller, No  Logo: Taking Aim at the Brand Bullies; and the collection 
Fences and  Windows: Dispatches from the Front Lines of the Globalization Debate  
Copyright © 2008 The Nation 

"The world is a dangerous place to live, not  because of the people who are 
evil, but because of the people who don't do  anything about it." - Albert  

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