Once an Egyptian pharaoh had a dream which caused him great anxiety. With the advice of an orphaned Hebrew, the mighty king’s trepidation was alleviated, a prudent path of economic restoration was devised, and his kingdom was saved. But who will advise Barack Obama? Certainly not the Chinese government, on whom the American president has relied for the last seven years. Yes, America has relied on China to spur the growth in a world economy awash in a sea of debt. The total global debt balloon now hovers above us all, to the tune of around 200 trillion dollars. But who’s counting? At these levels, what’s a trillion more or less?
Remember, the American president was elected in the fall of 2008. As stock markets around the world crashed back then, Obama had promised the American people an end to politics as usual. After seven years, the American political process remains as partisan and paralyzed as ever, and once again, another colossal debt bubble appears about to burst. This time the impetus is in China, but the ramifications are, of course, global. China has so ramped up global debt through its own domestic housing boom, that the prospect of finding customers for its many “ghost cities” has collapsed, and with it the world’s commodity markets. As countries as far flung as Brazil, Mexico, Chile, Colombia, Turkey, Australia, Canada and South Africa suffer the fate of the commodity crisis, US investors look on in shock as the dollar’s rise causes American exports to shrink.
The US economy is as shaky as the Middle East, and that’s saying a lot. Stock market valuations have approached levels not seen since the crash years of 2001 and 2008. So now another seven years later, the US stock and bond markets are either treading water (stocks) or hemorrhaging value (junk bonds). But as corporate profits decline slowly, the heights achieved through the stock market boom are increasingly being perceived as manipulated. And this so-called financial manipulation is not without cause. The US central bank, the Federal Reserve, has been buying US government bonds and bills at record amounts. This has kept US interest rates at near zero for years at a time. Without a true barometer for the cost of money, speculation has gone rampant in the US and throughout the world. If investors know that the cost of borrowing cannot go up, then why not borrow to your heart’s content? And so they have.
Any IOU with a rate of return above the cost of borrowing became fair game for safe speculation (an oxymoron). But this is the oxymoron that has so captured a society of fast-buck operators in search of the financial profit that productive enterprise could not satisfy. In America, the Main St. economy of production suffers, while the Wall St. finance economy is awash in cash. But all good things must come to an end. And after seven years of another tepid recovery for US workers, the financial balloon is now once again poised to burst. Is it any wonder the US socialist, Bernie Sanders, is drawing record crowds to his campaign rallies? Or that the reality television host and billionaire, Donald Trump, is talking in extreme nationalist terms, all the while searching out Hispanic scapegoats for his “make America great again” machinations? Sanders is a complete left-wing isolationist, while Trump fluctuates between his extremes.
But what about Obama? He’s still the president, and will be so for the next seventeen months. Press reports have it that he’s totally enraptured with the issues of his legacy. Those include first and foremost the Iran nuclear deal, then the Trans-Pacific Partnership, and also the Affordable Care Act. But US politics is essentially only about one thing, the health and well-being of the economy. It’s the economy which towers over all else, including wars of choice. And with the exception of Japan in 1941, America only fights wars of choice. Unlike Israel, who is surrounded by enemies, the US is protected by two oceans and over half of Europe. Americans blame the Iraq and Afghanistan wars for all their economic troubles. Obama won two elections blaming the tepid economy on America’s overseas adventures. But if the stock market is about to crash again, these excuses won’t hold water. Obama can’t blame George W. Bush for the last seven years. To paraphrase President Truman, the buck stops at the desk of the president, period.
It’s the economy that will be Obama’s legacy. Certainly, Iran as a hegemonic power and a nuclear threshold state will serve this president poorly in the future. Even his veto-proof minority in Congress will be quickly forgotten. Iran will either cheat or double-down on Syria, or just simply wait until its secret breakout time is legal and a matter of a few days. But most Americans don’t care, because these concerns are not considered existential, and the US has thousands of nuclear warheads. America is not Israel, and American Jews are not Israelis.
But everyone in this country is as anxious about the economy and its giant debt-overload as if lions stalked the land and tigers roamed the cities. Because the next crisis will be without historic parallel. Solutions existed for the Great Depression of the 1930s. Deficit spending became the orthodoxy as World War II became the hideous answer to capitalist deflation. In the crisis of the 1970s, globalization cured stagflation, but the American working people and the poor were the primary victims. This globalization boosted China, which in turn has led US policy toward cheap money and a series of serial bubbles characteristic of the past three decades. This debt bubble has now become unprecedented in world history. Obama, who ran with the support of the underclass and the working poor, has never even addressed this issue. Now, seven years into his presidency, he is unpopular and his political party has swung much farther to the left.
The income of the working people of America has declined precipitously under the administration of Barack Obama. Meanwhile, the millionaire and billionaire class has feasted on low interest rates and corporate buy-backs of company stock, thereby manipulating upward the market price and valuation. But this is the same billionaire class that Obama has relied on for the financial support, which best defines the true parameters of his presidency. Forget Tikun Olam, the phrase Obama uses to mesmerize the American Reform Jewish community, this is merely a hollow incantation. Nothing over the last seven years has remotely changed a thing when it comes to the overt finance-driven US economy. The stock and bond market bubble of today is bigger than the housing bubble of 2008. The global productive economy is in China, and as China goes, so goes the world. America under Obama remains a debt-ridden, post-industrial skeleton of its former self.
If Obama wanted to repair the world, he wouldn’t be spending upwards of a billion dollars on his presidential library legacy monument and hosting numerous billionaire donors, to scrape together the money needed to build it. Obama hasn’t repaired a thing when it comes to the health and well-being of the vast majority of the American people; he has simply been a status-quo president, and the status-quo in the US is wealth and the power wealth buys. Donald Trump, the billionaire, has been saying on the campaign trail that he has been buying US politicians for decades. He’s not lying. Politicians in the US are for sale. Everyone agrees on this. The question is: What happens next? What happens when another billionaire bubble bursts, and who will be the scapegoat? Maybe then Israel’s liberal American Jewish critics will once again relish its existence and fight a lot harder for its survival. How will they repair the world when Obama’s seven lean cows come home to seek shelter? And what kind of Middle East will we find in ten years, when Iran is days from a nuclear bomb? Unlike the pharaoh of old, Obama has done next to nothing to prepare the US and the world for the certainty of hard times ahead.