Republicans and their friends in the Washington media have attacked President Obama's proposed budget as "trying to do too much at once."
Progressives recognize that this insistence that Obama must concentrate on "fixing the economy" is nothing more than code for using all available funds--meaning whatever money can conceivably be borrowed or printed--to go toward bank bailouts rather than enacting single payer healthcare (or even public option), protecting the environment, saving public education decimated by state funding cuts or preserving what little is left of the social safety net of unemployment compensation and food stamps.
A new voice now appears from a different source, one that should concern us that those well connected to the Obama administration are preparing the ground for these critical budget priorities to be dropped.
More after the break.
Roger Altman provided a very gloomy picture of the future of the American economy in Sunday's Financial Times:
What is unusual is that this is a balance-sheet driven recession, centred on the damaged financial condition of both households and banks. These weaknesses mandate sub-normal levels of consumer spending and overall lending for about three years.
What does this mean for Obama's budget?
This weak outlook is likely to force a second injection of spending rises and tax cuts in 2010 to prod demand. Despite public opposition, substantially more federal capital will be required for banks. The deficit outlook will worsen, perhaps to $1,000bn annually over 10 years. That will force a slowing of Mr Obama’s investment plans. That is a shame, because those investments are needed, but this balance sheet recession will be too deep.
Just to be explicit, what are the investment plans that must be "slowed" according to Altman?
The implications for US policy include a likely second round of stimulus, much more federal capital for the banking system and stunning budget deficits that will slow key initiatives for President Barack Obama, such as healthcare and energy reform.
So who is Mr. Altman? A fellow at the American Enterprise Institute or Cato perhaps? A regular on the pages of the Wall Street Journal editorial page or the National Review?
Right now, he's CEO of Evercore Partners, an investment banking "boutique" founded in 1996.
(Bizarrely, through Evermore Partners, Altman also controls the tabloids you read while standing in the supermarket checkout line: the National Enquirer, the Star, even the Weekly World News.)
Before that, he worked for Lehman Brothers and the Blackstone Group. The former is now best remembered as the one Wall Street firm that Hank Paulson allowed to fail back in September. The latter is one of the primary firms mentioned as a participant in the PPIP program.
Altman has also passed through the revolving Treasury/Wall Street door. He was appointed a Deputy Secretary of the Treasury, having been the President's college buddy.
Which President, you ask? George Bush? Maybe Altman is a S & B man?
Nope. It was Bill Clinton.
On top of that, Altman had to resign as Deputy Secretary because of questionable Congressional testimony about his role in pressuring the Resolution Trust Corporation to back off from suing the Clintons over their involvement in the seized Madison Guaranty savings and loan.
More recently, Altman was a "senior economic adviser" to Hillary Clinton. Once she dropped out of the race, Altman made his move to Obama, and was even mentioned as a possible choice for Treasury Secretary.
He was the co-author in November, 2008 of a Brookings Institution paper, "Path to Prosperity," along with Robert Rubin (Clinton's former SecTreas), Jason Bordoff (still at Brookings), and Jason Furman, appointed by Obama as Deputy Director of the National Economic Council.
In short, there are few people better connected to both Wall Street and Washington. And Altman is very much a Democrat, even if of the corporate, DLC variety.
When Democrats with Altman's clout begin weeping crocodile tears that there won't be enough money for national healthcare, environmental initiatives or saving public education because of the insatiable demands of the banks for more money, it's time to quit trusting that everything is going to work out if we just leave it to the newly elected President and the Democratic Congress.
Remember the theme of the campaign?
YOU are the change you are waiting for.
There are extraordinarily powerful forces arrayed against change in this country. Not all of them come labeled with an "R." Some of the most dangerous have had their way with the Democratic Party for at least 30 years, and they will continue to block real reform while mouthing their regret that things can't be different unless you force them to move away from the levers of power and let the people once again have a say.
Before you sink into the rut of writing and calling Congresspersons and the White House, consider two alternatives with more potential impact:
- Join the April 11 Protest.
Learn more here.
- Stop supporting the oligarchy.
Take your money out of the superbanks like Citibank, Bank of America, JP Morgan Chase and Wells Fargo. Move your accounts to local, responsible banks and credit unions. Help force the Obama Administration to do what nearly all progressive economic experts recommend: put these banks in receivership. That way, there may still be hope for healthcare, saving the environment, preserving public education and keeping the unemployed from starvation and homelessness.
There can never be change initiated by insiders like Roger Altman. They are far too happy with the system as it is. And even Presidents and Congressional majorities are powerless against them UNLESS there is a powerful people's movement to demand change.
Obama is not the change. You are the change. He's said so himself.