An Awkward Situation
Published in Vzglyad
(Russia) on 22 October 2011
by Vasily Koltashov (link to original)
(Russia) on 22 October 2011
by Vasily Koltashov (link to original)
Translated from
by G. Rudik.
Edited by Gillian Palmer.
Mass demonstrations in New York against the privileges of bankers have put the U.S. president in an awkward situation. Barack Obama has already endured criticism from the right, but has also been unable to turn the leftist movement in his favor. His authority has suffered on the grounds of a foolish recovery plan and his promises to create jobs, which sounds like a joke in light of recent events. It’s not a secret to anyone in the United States that Obama is Wall Street’s best friend.
Obama won the elections as a candidate of hope for millions of people in transition. In the years 2008-2011, however, he has provided support for banking groups instead of saving the economy. His governance (amid left and right opponents alike) made a name for huge spending, though the expenses did not benefit ordinary Americans. Even in the supposedly successful year of 2010, consumer spending went above 2005 levels by only 5.7 percent, while spending on gas decreased, totaling 93.3 percent of 2005 levels. Meanwhile, the price of gas grew significantly in 2010. Exports grew and industrial production rose. Yet the construction sector, which fueled the last economic recovery, has floundered. This data was all compiled by the U.S. Economic Analysis Bureau.
Although in 2010 the White House administration succeeded with great effort in achieving signs of improvement, by the beginning of 2011 its course began to elicit some criticism. Obama decisively stood behind increased government spending in a fight with Congress. In elections, most voters preferred lending their voice to the Republicans, not the Democrats. That alone speaks against the “economic victory” of the American government. In effect, the U.S. closed the 2011 fiscal year with a budget deficit of $1.299 trillion, which equals 8.7 percent of GDP. For the 2010 fiscal year, the deficit consisted of $1.294 trillion (8.9 percent of GDP), and for the 2009 fiscal year, $1.416 trillion (10 percent of GDP).
Without a doubt, the panic at the stock market that lasted from August to October was partly the result of shortfalls in the Democratic plan for the budget deficit: It was expected to amount to $1.65 trillion, but without even considering the necessary transition to a hard economy, September saw government spending exceed earnings by $64.6 billion. Just one year earlier this number was $34.6 billion. In August, Obama offered Congress a plan to decrease the budget deficit by $3.6 trillion over 10 years. Nearly simultaneously, he promised potential voters that he would allocate substantial resources to the realization of a stimulus package for the national economy.
It is doubtful that Americans will believe Obama after so many years of procrastination. The Democratic voter will ask himself: Why didn’t the president use the congressional majority when he had the chance? Why did he wait for the Republicans’ victory to suggest taxing $1.5 billion from the wealthy? To whom are these suggestions addressed and how realistic are they? Which members of Congress will vote for them now? Obama is being criticized for the ineffectiveness of his government spending, but to whose advantage is this ineffectiveness? Hasn’t it proved to be a mechanism of support for financial institutions at the expense of workers who voted for a colored Democrat? It is difficult to answer this question objectively with official statistics; the truth can only be found in the lives of real Americans. Only this can explain the popular anger with Wall Street tycoons —whom the U.S. president helped more than anyone over the last few years — and the fall in approval ratings that the president has experienced since his incredibly fortuitous election.
After two years of reassurance about a slow recovery of the American economy, the head of the White House was forced to admit that it needs a serious shake-up. Describing the protests on the streets of America’s financial capital, however, Obama noted, “This movement is a reflection of American fear in front of the financial crisis. Protesters voice the opinions of those Americans who are disappointed with the financial system.” That is all false. Mass demonstrations are triggered not by fear of a crisis, but the effects of a crisis. And it is not the workings of financial corporations that trouble the population, but that the U.S. government — formally democratic — acts in their favor first. “Quit saving banks!” is not a random slogan; it is addressed to the U.S. president, for whom bankers’ benefits come first.
Bloomberg informs us that the number of Americans living below the poverty line in 2010 has increased to 15.1 percent (46.2 million people). That is the highest number recorded in the agency’s 52-year history. The mean income for households has sunk from $50,600 in 2010 to $49,400 in 2011. This is the lowest indictor since 1996. Yet nominal decreases do not paint the whole picture. In the past 10 years, the dollar has fallen in price four times as much as gold (since the beginning of 2008 it has fallen twice as much gold). In the 1990s, U.S. currency was stable in comparison to gold. The 2011 dollar does not at all have the same value as it did prior to the crisis.
Data is frightening regarding the number of Americans who were not even employed for one week out of the year, a figure which rose from 83 million in 2009 to 86 million in 2011. The official unemployment rate in the country has remained at 9 percent. It is clear that no less than a third of all workers had a problem with work: A permanent position is harder to find, and those who occasionally secure contract work are not counted among the unemployed. Even nominally, according to Bloomberg, household incomes in 2010 appeared to be at their lowest in a decade. The average poverty threshold for a four-person family in 2010, adjusted for inflation, was equal to $22,314 in annual income.
Any negative statistic about the quality of life in the U.S. pales in comparison to the data on the life of students. Research by non-profit organizations has shown that teachers consider the third most significant problem in schools to be that children show up hungry. In February, it was revealed that for 65 percent of school-aged children, school lunches were their primary source of nutrition. Other sources confirm that hunger is a real threat to millions of families in the U.S. In these circumstances — which were achieved in no small part thanks to Obama’s “victories” over the crisis — it is unlikely that people are still concerned about how to save banks. And the U.S. president’s attempts to write off all these troubles on the debt crisis in Western Europe sound false.
Obama won the elections as a candidate of hope for millions of people in transition. In the years 2008-2011, however, he has provided support for banking groups instead of saving the economy. His governance (amid left and right opponents alike) made a name for huge spending, though the expenses did not benefit ordinary Americans. Even in the supposedly successful year of 2010, consumer spending went above 2005 levels by only 5.7 percent, while spending on gas decreased, totaling 93.3 percent of 2005 levels. Meanwhile, the price of gas grew significantly in 2010. Exports grew and industrial production rose. Yet the construction sector, which fueled the last economic recovery, has floundered. This data was all compiled by the U.S. Economic Analysis Bureau.
Although in 2010 the White House administration succeeded with great effort in achieving signs of improvement, by the beginning of 2011 its course began to elicit some criticism. Obama decisively stood behind increased government spending in a fight with Congress. In elections, most voters preferred lending their voice to the Republicans, not the Democrats. That alone speaks against the “economic victory” of the American government. In effect, the U.S. closed the 2011 fiscal year with a budget deficit of $1.299 trillion, which equals 8.7 percent of GDP. For the 2010 fiscal year, the deficit consisted of $1.294 trillion (8.9 percent of GDP), and for the 2009 fiscal year, $1.416 trillion (10 percent of GDP).
Without a doubt, the panic at the stock market that lasted from August to October was partly the result of shortfalls in the Democratic plan for the budget deficit: It was expected to amount to $1.65 trillion, but without even considering the necessary transition to a hard economy, September saw government spending exceed earnings by $64.6 billion. Just one year earlier this number was $34.6 billion. In August, Obama offered Congress a plan to decrease the budget deficit by $3.6 trillion over 10 years. Nearly simultaneously, he promised potential voters that he would allocate substantial resources to the realization of a stimulus package for the national economy.
It is doubtful that Americans will believe Obama after so many years of procrastination. The Democratic voter will ask himself: Why didn’t the president use the congressional majority when he had the chance? Why did he wait for the Republicans’ victory to suggest taxing $1.5 billion from the wealthy? To whom are these suggestions addressed and how realistic are they? Which members of Congress will vote for them now? Obama is being criticized for the ineffectiveness of his government spending, but to whose advantage is this ineffectiveness? Hasn’t it proved to be a mechanism of support for financial institutions at the expense of workers who voted for a colored Democrat? It is difficult to answer this question objectively with official statistics; the truth can only be found in the lives of real Americans. Only this can explain the popular anger with Wall Street tycoons —whom the U.S. president helped more than anyone over the last few years — and the fall in approval ratings that the president has experienced since his incredibly fortuitous election.
After two years of reassurance about a slow recovery of the American economy, the head of the White House was forced to admit that it needs a serious shake-up. Describing the protests on the streets of America’s financial capital, however, Obama noted, “This movement is a reflection of American fear in front of the financial crisis. Protesters voice the opinions of those Americans who are disappointed with the financial system.” That is all false. Mass demonstrations are triggered not by fear of a crisis, but the effects of a crisis. And it is not the workings of financial corporations that trouble the population, but that the U.S. government — formally democratic — acts in their favor first. “Quit saving banks!” is not a random slogan; it is addressed to the U.S. president, for whom bankers’ benefits come first.
Bloomberg informs us that the number of Americans living below the poverty line in 2010 has increased to 15.1 percent (46.2 million people). That is the highest number recorded in the agency’s 52-year history. The mean income for households has sunk from $50,600 in 2010 to $49,400 in 2011. This is the lowest indictor since 1996. Yet nominal decreases do not paint the whole picture. In the past 10 years, the dollar has fallen in price four times as much as gold (since the beginning of 2008 it has fallen twice as much gold). In the 1990s, U.S. currency was stable in comparison to gold. The 2011 dollar does not at all have the same value as it did prior to the crisis.
Data is frightening regarding the number of Americans who were not even employed for one week out of the year, a figure which rose from 83 million in 2009 to 86 million in 2011. The official unemployment rate in the country has remained at 9 percent. It is clear that no less than a third of all workers had a problem with work: A permanent position is harder to find, and those who occasionally secure contract work are not counted among the unemployed. Even nominally, according to Bloomberg, household incomes in 2010 appeared to be at their lowest in a decade. The average poverty threshold for a four-person family in 2010, adjusted for inflation, was equal to $22,314 in annual income.
Any negative statistic about the quality of life in the U.S. pales in comparison to the data on the life of students. Research by non-profit organizations has shown that teachers consider the third most significant problem in schools to be that children show up hungry. In February, it was revealed that for 65 percent of school-aged children, school lunches were their primary source of nutrition. Other sources confirm that hunger is a real threat to millions of families in the U.S. In these circumstances — which were achieved in no small part thanks to Obama’s “victories” over the crisis — it is unlikely that people are still concerned about how to save banks. And the U.S. president’s attempts to write off all these troubles on the debt crisis in Western Europe sound false.