| Can Obama See the Grand Canyon?
On Presidential Blindness and Economic Catastrophe
By Mike Davis
LET ME BEGIN, VERY obliquely, with the Grand Canyon and the paradox
of trying to see beyond cultural or historical precedent.
The first European to look into the depths of the great gorge was
the conquistador Garcia Lopez de Cardenas in 1540. He was horrified by
the sight and quickly retreated from the South Rim. More than three
centuries passed before Lieutenant Joseph Christmas Ives of the U.S.
Army Corps of Topographical Engineers led the second major expedition
to the rim. Like Garcia Lopez, he recorded an "awe that was almost
painful to behold." Ives's expedition included a well-known German
artist, but his sketch of the Canyon was wildly distorted, almost
Neither the conquistadors nor the Army engineers, in other words,
could make sense of what they saw; they were simply overwhelmed by
unexpected revelation. In a fundamental sense, they were blind because
they lacked the concepts necessary to organize a coherent vision of an
utterly new landscape.
Accurate portrayal of the Canyon only arrived a generation later
when the Colorado River became the obsession of the one-armed Civil
War hero John Wesley Powell and his celebrated teams of geologists and
artists. They were like Victorian astronauts reconnoitering another
planet. It took years of brilliant fieldwork to construct a conceptual
framework for taking in the canyon. With "deep time" added as the
critical dimension, it was finally possible for raw perception to be
transformed into consistent vision.
The result of their work, The Tertiary History of the Grand Canyon
District, published in 1882, is illustrated by masterpieces of
draftsmanship that, as Powell's biographer Wallace Stegner once
pointed out, "are more accurate than any photograph." That is because
they reproduce details of stratigraphy usually obscured in camera
images. When we visit one of the famous viewpoints today, most of us
are oblivious to how profoundly our eyes have been trained by these
iconic images or how much we have been influenced by the idea,
popularized by Powell, of the Canyon as a museum of geological time.
But why am I talking about geology? Because, like the Grand
Canyon's first explorers, we are looking into an unprecedented abyss
of economic and social turmoil that confounds our previous perceptions
of historical risk. Our vertigo is intensified by our ignorance of the
depth of the crisis or any sense of how far we might ultimately fall.
Weimar Returns in Limbaughland
Let me confess that, as an aging socialist, I suddenly find myself
like the Jehovah's Witness who opens his window to see the stars
actually falling out of the sky. Although I've been studying Marxist
crisis theory for decades, I never believed I'd actually live to see
financial capitalism commit suicide. Or hear the International
Monetary Fund warn of imminent "systemic meltdown."
Thus, my initial reaction to Wall Street's infamous 777.7 point
plunge a few weeks ago was a very sixties retro elation. "Right on,
Karl!" I shouted. "Eat your derivatives and die, Wall Street swine!"
Like the Grand Canyon, the fall of the banks can be a terrifying but
But the real culprits, of course, are not being trundled off to the
guillotine; they're gently floating to earth in golden parachutes. The
rest of us may be trapped on the burning plane without a pilot, but
the despicable Richard Fuld, who used Lehman Brothers to loot pension
funds and retirement accounts, merely sulks on his yacht.
Out in the stucco deserts of Limbaughland, moreover, fear is
already being distilled into a good ol' boy version of the "stab in
the back" myth that rallied the ruined German petite bourgeoisie to
the swastika. If you listen to the rage on commute AM, you'll know
that 'socialism' has already taken a lien on America, Barack Hussein
Obama is terrorism's Manchurian candidate, the collapse of Wall Street
was caused by elderly black people with Fannie Mae loans, and ACORN in
its voter registration drives has long been padding the voting rolls
with illegal brown hordes.
In other times, Sarah Palin's imitation of Father Charles Coughlin
-- the priest who preached an American Reich in the 1930s -- in drag
might be hilarious camp, but with the American way of life in sudden
freefall, the specter of star-spangled fascism doesn't seem quite so
far-fetched. The Right may lose the election, but it already possesses
a sinister, historically-proven blueprint for rapid recovery.
Progressives have no time to waste. In the face of a new depression
that promises folks from Wasilla to Timbuktu an unknown world of pain,
how do we reconstruct our understanding of the globalized economy? To
what extent can we look to either Obama or any of the Democrats to
help us analyze the crisis and then act effectively to resolve it?
Is Obama FDR?
If the Nashville "town hall" debate is any guide, we will soon have
another blind president. Neither candidate had the guts or information
to answer the simple questions posed by the anxious audience: What
will happen to our jobs? How bad will it get? What urgent steps should
Instead, the candidates stuck like flypaper to their obsolete
talking points. McCain's only surprise was yet another innovation in
deceit: a mortgage relief plan that would reward banks and investors
without necessarily saving homeowners.
Obama recited his four-point program, infinitely better in
principle than his opponent's preferential option for the rich, but
abstract and lacking in detail. It remains more a rhetorical promise
than the blueprint for the actual machinery of reform. He made only
passing reference to the next phase of the crisis: the slump of the
real economy and likely mass unemployment on a scale not seen for 70
With baffling courtesy to the Bush administration, he failed to
highlight any of the other weak links in the economic system: the
dangerous overhang of credit-default swap obligations left over from
the fall of Lehman Brothers; the trillion-dollar black hole of
consumer credit-card debt that may threaten the solvency of JPMorgan
Chase and Bank of America; the implacable decline of General Motors
and the American auto industry; the crumbling foundations of municipal
and state finance; the massacre of tech equity and venture capital in
Silicon Valley; and, most unexpectedly, sudden fissures in the
financial solidity of even General Electric.
In addition, both Obama and his vice presidential partner Joe
Biden, in their support for Secretary of the Treasury Paulson's plan,
avoid any discussion of the inevitable result of cataclysmic
restructuring and government bailouts: not "socialism," but
ultra-capitalism -- one that is likely to concentrate control of
credit in a few leviathan banks, controlled in large part by sovereign
wealth funds but subsidized by generations of public debt and domestic
Never have so many ordinary Americans been nailed to a cross of
gold (or derivatives), yet Obama is the most mild-mannered William
Jennings Bryan imaginable. Unlike Sarah Palin who masticates the
phrase "the working class" with defiant glee, he hews to a party line
that acknowledges only the needs of an amorphous "middle class" living
on a largely mythical "Main Street."
If we are especially concerned about the fate of the poor or
unemployed, we are left to read between the lines, with no help from
his talking points that espouse clean coal technology, nuclear power,
and a bigger military, but elide the urgency of a renewed war on
poverty as championed by John Edwards in his tragically
self-destructed primary campaign. But perhaps inside the cautious
candidate is a man whose humane passions transcend his own nearsighted
centrist campaign. As a close friend, exasperated by my chronic
pessimism, chided me the other day, "don't be so unfair. FDR didn't
have a nuts and bolts program either in 1933. Nobody did."
What Franklin D. Roosevelt did possess in that year of breadlines
and bank failures, according to my friend, was enormous empathy for
the common people and a willingness to experiment with government
intervention, even in the face of the monolithic hostility of the
wealthy classes. In this view, Obama is MoveOn.org's re-imagining of
our 32nd president: calm, strong, deeply in touch with ordinary needs,
and willing to accept the advice of the country's best and brightest.
The Death of Keynesianism
But even if we concede to the Illinois senator a truly Rooseveltian
or, even better, Lincolnian strength of character, this hopeful
analogy is flawed in at least three principal ways:
First, we can't rely on the Great Depression as analog to the
current crisis, nor upon the New Deal as the template for its
solution. Certainly, there is a great deal of déjà vu in the frantic
attempts to quiet panic and reassure the public that the worst has
passed. Many of Paulson's statements, indeed, could have been directly
plagiarized from Herbert Hoover's Secretary of the Treasury Andrew
Mellon, and both presidential campaigns are frantically cribbing
heroic rhetoric from the early New Deal. But just as the business
press has been insisting for years, this is not the Old American
Economy, but an entirely new-fangled contraption built from outsourced
parts and supercharged by instantaneous world markets in everything
from dollars and defaults to hog bellies and disaster futures.
We are seeing the consequences of a perverse restructuring that
began with the presidency of Ronald Reagan and which has inverted the
national income shares of manufacturing (21% in 1980; 12% in 2005) and
those of financial services (15% in 1980; 21% in 2005). In 1930, the
factories may have been shuttered but the machinery was still intact;
it hadn't been auctioned off at five cents on the dollar to China.
On the other hand, we shouldn't disparage the miracles of
contemporary market technology. Casino capitalism has proven its
mettle by transmitting the deadly virus of Wall Street at
unprecedented velocity to every financial center on the planet. What
took three years at the beginning of the 1930s -- that is, the full
globalization of the crisis -- has taken only three weeks this time
around. God help us, if, as seems to be happening, unemployment tops
the levees at anything like the same speed.
Second, Obama won't inherit Roosevelt's ultimate situational
advantage -- having emergent tools of state intervention and demand
management (later to be called "Keynesianism") empowered by an epochal
uprising of industrial workers in the world's most productive
If you've been watching the sad parade of economic gurus on
McNeil-Lehrer, you know that the intellectual shelves in Washington
are now almost bare. Neither major party retains more than a few
enigmatic shards of policy traditions different from the neo-liberal
consensus on trade and privatization. Indeed, posturing
pseudo-populists aside, it is unclear whether anyone inside the
Beltway, including Obama's economic advisors, can think clearly beyond
the indoctrinated mindset of Goldman Sachs, the source of the two most
prominent secretaries of the treasury over the last decade.
Keynes, now suddenly mourned, is actually quite dead. More
importantly, the New Deal did not arise spontaneously from the
goodwill or imagination of the White House. On the contrary, the
social contract for the post-1935 Second New Deal was a complex,
adaptive response to the greatest working-class movement in our
history, in a period when powerful third parties still roamed the
political landscape and Marxism exercised extraordinary influence on
American intellectual life.
Even with the greatest optimism of the will, it is difficult to
imagine the American labor movement recovering from defeat as
dramatically as it did in 1934-1937. The decisive difference is
structural rather than ideological. (Indeed, today's union movement is
much more progressive than the decrepit, nativist American Federation
of Labor in 1930.) The power of labor within a Walmart-ized service
economy is simply more dispersed and difficult to mobilize than in the
era of giant urban-industrial concentrations and ubiquitous factory
Is War the Answer?
The third problem with the New Deal analogy is perhaps the most
important. Military Keynesianism is no longer an available deus ex
machina. Let me explain.
In 1933, when FDR was inaugurated, the United States was in full
retreat from foreign entanglements, and there was little controversy
about bringing a few hundred Marines home from the occupations of
Haiti and Nicaragua. It took two years of world war, the defeat of
France, and the near collapse of England to finally win a majority in
Congress for rearmament, but when war production finally started up in
late 1940 it became a huge engine for the reemployment of the American
work force, the real cure for the depressed job markets of the 1930s.
Subsequently, American world power and full employment would align in
a way that won the loyalty of several generations of working-class
Today, of course, the situation is radically different. A bigger
Pentagon budget no longer creates hundreds of thousands of stable
factory jobs, since significant parts of its weapons production is now
actually outsourced, and the ideological link between high-wage
employment and intervention -- good jobs and Old Glory on a foreign
shore -- while hardly extinct is structurally weaker than at any time
since the early 1940s. Even in the new military (largely a hereditary
caste of poor whites, blacks, and Latinos) demoralization is reaching
the stage of active discontent and opening up new spaces for
Although both candidates have endorsed programs, including
expansion of Army and Marine combat strength, missile defense (aka
"Star Wars"), and an intensified war in Afghanistan, that will enlarge
the military-industrial complex, none of this will replenish the
supply of decent jobs nor prime a broken national pump. However, in
the midst of a deep slump, what a huge military budget can do is
obliterate the modest but essential reforms that make up Obama's plans
for healthcare, alternative energy, and education.
In other words, Rooseveltian guns and butter have become a
contradiction in terms, which means that the Obama campaign is
engineering a catastrophic collision between its national security
priorities and its domestic policy goals.
The Fate of Obama-ism
Why don't such smart people see the Grand Canyon?
Maybe they do, in which case deception is truly the mother's milk
of American politics; or perhaps Obama has become the reluctant
prisoner, intellectually as well as politically, of Clintonism: that
is say, of a culturally permissive neo-liberalism whose New Deal
rhetoric masks the policy spirit of Richard Nixon.
It's worth asking, for instance, what in the actual substance of
his foreign policy agenda differentiates the Democratic candidate from
the radioactive legacy of the Bush Doctrine? Yes, he would close
Guantanamo, talk to the Iranians, and thrill hearts in Europe. He also
promises to renew the Global War on Terror (in much the same way that
Bush senior and Clinton sustained the core policies of Reaganism,
albeit with a "more human face").
In case anyone has missed the debates, let me remind you that the
Democratic candidate has chained himself, come hell or high water, to
a global strategy in which "victory" in the Middle East (and Central
Asia) remains the chief premise of foreign policy, with the
Iraqi-style nation-building hubris of Dick Cheney and Paul Wolfowitz
repackaged as a "realist" faith in global "stabilization."
True, the enormity of the economic crisis may compel President
Obama to renege on some of candidate Obama's ringing promises to
support an idiotic missile defense system or provocative NATO
memberships for Georgia and Ukraine. Nonetheless, as he emphasizes in
almost every speech and in each debate, defeating the Taliban and
Al-Qaeda, together with a robust defense of Israel, constitute the
keystone of his national security agenda.
Under huge pressure from Republicans and Blue Dog Democrats alike
to cut the budget and reduce the exponential increase in the national
debt, what choices would President Obama be forced to make early in
his administration? More than likely comprehensive health-care will be
whittled down to a barebones plan, "alternative energy" will simply
mean the fraud of "clean coal," and anything that remains in the
Treasury, after Wall Street's finished its looting spree, will buy
bombs to pulverize more Pashtun villages, ensuring yet more
generations of embittered mujahideen and jihadis.
Am I unduly cynical? Perhaps, but I lived through the Lyndon
Johnson years and watched the War on Poverty, the last true New Deal
program, destroyed to pay for slaughter in Vietnam.
It is bitterly ironic, but, I suppose, historically predictable
that a presidential campaign millions of voters have supported for its
promise to end the war in Iraq has now mortgaged itself to a "tougher
than McCain" escalation of a hopeless conflict in Afghanistan and the
Pakistani tribal frontier. In the best of outcomes, the Democrats will
merely trade one brutal, losing war for another. In the worst case,
their failed policies may set the stage for the return of Cheney and
Rove, or their even more sinister avatars.
Mike Davis is the author of In Praise of Barbarians: Essays Against
Empire (Haymarket Books, 2008) and Buda's Wagon: A Brief History of
the Car Bomb (Verso, 2007). He is currently working on a book about
cities, poverty, and global change. You can listen to a podcast of
Davis discussing why the New Deal isn't relevant as a solution today
by clicking here.
Copyright 2008 Mike Davis