Sunny Post-Partisanship Sounds Nice, but What's Obama's Larger Vision?

By David Morris, AlterNet. Posted December 15, 2008.

In the early 1980s, Reagan negotiated a free trade agreement that changed the 150-year-old definition of free trade. For the first time, free trade focused on "nontariff trade barriers," which meant virtually any government policies that favored its citizens. Reagan negotiated the U.S.-Canadian Free Trade Agreement. Six years later, Clinton pushed through an expansion of that agreement, the North American Free Trade Agreement. Later, he signed on to a new global free trade agreement establishing the World Trade Organization. In doing so, he codified Reagan's philosophy that government power was to be curbed, while corporate power was to be unrestrained.

In the early 1980s, Reagan pushed through a law that untethered the nation's savings and loans from their communities and their original mission of encouraging savings and home ownership. Six years later, thousands of S&Ls closed their doors as the nation experienced its first post-1933 financial meltdown. Ten years later, Clinton pushed through a law that overturned a key part of the New Deal, the Glass-Steagall Act, which kept banking and speculation separate. The current financial meltdown has already surpassed that of 1988.

Under Reagan, to use a term coined by Gerald Epstein, the financialization of economies began. Looking back from 1994, economist Paul Sweezy noted, "In the old days, finance was treated as a modest helper of production. ... By the end of the decade (1980s), the old structure of the economy, consisting of a production system serving a modest financial adjunct, had given way to a new structure in which a greatly expanded financial sector had achieved a high degree of independence and sat on top of the underlying production system."  

As Robert Weissman succinctly observes, "As Big Finance mutated and escaped from the modest public controls to which it had been subjected, it demanded that the economy serve the financial sector."  

Clinton aided and abetted this process. Indeed, as Bob Woodward reports in his book on the Clinton years, The Agenda, at one point Robert Rubin explained to Clinton who the real boss of the economy was: bond traders.

"Look, they're running the economy, and they make the decisions about the economy. And so if you attack them, you wind up hurting the economy and wind up hurting the president."

By 1997, James Carville was uttering his famous quote about being reincarnated as the bond market, because then "you can intimidate everyone."

So here we are. As Obama himself has conceded, Democrats -- including many of his new cabinet officers -- did not stop the new trajectory of America launched under Reagan. As William Greider rightly points out, " For the last generation, Democrats have colluded with conservatives in the destruction of New Deal law and principle."   

If Obama wants to set America on a new path, he needs to make clear what that path is. He needs to offer a new and compelling narrative that helps Americans understand what went wrong over the last generation and what we need to do to make it right.

This won't be easy. More than a third of his audience has never known anything other than Reaganism. But then, when Reagan delivered his inaugural address, more than two-thirds of his audience had never known any other philosophy than that spawned by the New Deal, and yet he still changed the trajectory of America. 

If Obama wants to do the same, there's no better place to deliver that message than in his inaugural address.

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David Morris is co-founder and vice president of the Institute for Local Self Reliance in Minneapolis, and is director of its New Rules project.

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