ADDRESSING AMERICA’S ECONOMIC WOES, PRESIDENT OBAMA ADMONISHES UNDERACHIEVING STUDENTS, YET CONTINUES TO IGNORE THE REAL CULPRIT.
by Robert Scheer
from HUSTLER Magazine June 2011
There is something perverse about how Presidents, every time they get in trouble over the state of the nation, seize upon education- related scapegoats for all that ails us.
John F. Kennedy did it with his Sputnik speech prompted by the Soviets, who’d managed to launch the first artificial satellite and later put the first man into space—propaganda coups that did nothing to mitigate the USSR’s miserably sagging economy.
George W. Bush devised the “No Child Left Behind” slogan to justify his multitude of screwups, most notably coddling Wall Street while it defrauded American mortgage buyers and incurred the trillions in bad loans that had to be picked up by the taxpayers. Now Barack Obama has seized upon students’ lackluster test scores to explain the miserable state of the U.S. economy, playing the Sputnik card by way of justifying saving Wall Street while ignoring the rest of us.
In his 2011 State of the Union address, Obama—who moved sharply to the right after the Democrats’ setback in the midterm elections— fully embraced the Wall Street bandits, whose unfettered greed sucked us into this mess. Nevertheless, Obama blamed American students’ subpar test scores for our economic woes. What the hell did Sputnik or low aptitude have to do with the Made-in-America financial meltdown that Wall Street bankers inflicted on the entire world?
It is they, the best and the brightest graduates of our business and law schools—not kids struggling at public high schools and community colleges—who designed the toxic derivatives that almost destroyed the world economy. Obama’s focus on education in his State of the Union speech is a deliberate diversion from what seriously ails and afflicts us: an unabated mortgage crisis, stubbornly high unemployment and a debt that spiraled out of control while the government wasted trillions of tax dollars making the bankers whole.
What nonsense to insist that low test scores of students at public schools hobbled our economy when it was the highest-achieving graduates of our elite colleges who designed and sold the financial gimmicks that created the Great Recession. Indeed, some of the folks who once designed the phony mathematical formulas underwriting subprime mortgage-based derivatives won Nobel Prizes for their effort. A pioneer in securitizing mortgage debt, as well as in exporting jobs abroad, was one Jeffrey Immelt, the CEO of General Electric, whom Obama appointed to head his new job-creation panel.
That the financial meltdown at the heart of our economic crisis was “avoidable” and not the result of long-run economic problems related to education and foreign competition is detailed in a sweeping report by the Democratic majority on the Financial Crisis Inquiry Commission. In a 576-page book the commission concluded: “The greatest tragedy would be to accept the refrain that no one could have seen this coming and thus nothing could have been done. If we accept this notion, it will happen again.”
That is just the warning that Obama has ignored by continually appointing the very people who engineered this crisis, mostly Clinton alums, to reverse its ongoing dire consequences. The commission noted that the decision made in 2000 in the closing days of the Clinton Administration to exempt the complex financial instruments known as over-thecounter derivatives from regulation was “a key turning point in the march toward the financial crisis.”
Obama appointed as his top economic adviser Lawrence Summers—who, as Clinton’s Treasury secretary, was the key architect of that “turning point”—and Summers’s protégé Timothy Geithner as his own Treasury secretary. The finding of the ten members—six Democrats and four Republicans—on the Financial Crisis Inquiry Commission was that Geithner, who had been president of the New York Fed before Obama appointed him, “could have clamped down” on excesses by Citigroup, the subprime mortgage leader that Geithner and the Fed bailed out along with other unworthy banking supplicants.
That profligate behavior of Wall Street crippled the economy and ran up an enormous debt, which Obama now uses as an excuse for a five-year freeze on discretionary domestic spending, the small part of the budget that might actually help ordinary people. Speaking of our legacy of deficit spending, Obama stated, “…in the wake of the financial crisis, some of that was necessary to keep credit flowing, save jobs and put money in people’s pockets. But now that the worst of the recession is over, we have to confront the fact that our government spends more than it takes in.”
Why now? It is an absurd demarcation to freeze spending when so many remain unemployed just because corporate profits, and therefore stock market valuations, seem firm. Wall Street profits are booming, but the price has been—as the Financial Crisis Inquiry Commission reported—26 million Americans out of work, more than 8 million families that have lost their homes and “nearly $11 trillion in household wealth [that] has vanished, with retirement accounts and life savings swept away.” America is a union divided between those who agree with Obama that “the worst of the recession is over” and the far larger number in deep pain that this President, like his Republican predecessor, is bent on ignoring.
Before serving 30 years as a columnist for the Los Angeles Times, Robert Scheer spent the late 1960s as Vietnam correspondent, managing editor and editor in chief of Ramparts magazine. Now editor of TruthDig.com, Scheer has written such hard-hitting books as The Pornography of Power: How Defense Hawks Hijacked 9/11 and Weakened America and his latest, The Great American Stick-Up: Greedy Bankers and the Politicians Who Love Them.