Posts Tagged ‘obama speech’

Japan Is Sinking; Obama Looks Inward

February 26th, 2009 Comments off

President Barack Obama may have the worst job in the world. He has inherited the mantles of power in what is still the world’s largest economy, at least on paper. Yet, that status has become largely irrelevant in the context of the raging Global Economic Crisis, which has crippled the economies of virtually every nation on the planet. The supposed “sole superpower” is mired in a severe recession that has all the characteristics of an emerging economic depression. In addition, the United States that Barack Obama now leads is fiscally insolvent, both in the public and private spheres. For that reason, perhaps the world expected too much when Obama addressed a joint session of Congress on the sole topic of the nation’s economic crisis on the evening of February 24.

To Obama’s credit, the speech he delivered at his presidential nomination on January 20 was sober and solemn, reflecting a touch of honesty that is atypical of American politicians. For that expression of intellectual integrity, President Obama was roundly criticized by the American media and political establishment for being too focussed on gloom and doom surrounding America’s economic predicament. What the establishment wanted was a message to the public that was more reassuring and expressive of hope for the future. For that reason, the Obama speech to Congress was designed for a strictly domestic audience, being a weave between recognition of the dire economic realities while offering enough Americana in the form of platitudes and expressions of optimism to satisfy the critics. For that reason, Obama’s speech was a disappointment, for it abdicated a unique opportunity to inform the American public that the emerging economic disaster is no longer an American crisis, but one that is truly global, requiring synchronized responses that are unprecedented.

A sign of how irrelevant the cheering in the halls of Congress was on the night of the Obama speech is reflected in the news that emerged almost simultaneously from Japan. The world’s second largest economy, which had recently reported that its GDP has contracted at an annual rate of 12.7 %, revealed that in January its exports had declined by 45.7 % from a year ago. As exports are the center of gravity in the multi-trillion dollar Japanese economy, the revelation that this most important indicator of Japanese economic activity had fallen by nearly half is further confirmation that this national economy is in free fall collapse. Yet, no mention was made by Obama of the catastrophic economic news emerging from Japan, or the U.K., or Eurozone, or China where in the last few months 20 million migrant workers have lost their jobs.

For better or worse, the United States bought into the globalization of the world’s economy. What this means in practical terms is that the U.S. is deprived of the option of a national answer to its grave economic crisis. It exported its financial crisis to the world through the engineering of securitized mortgages that were transformed into toxic assets on the balance sheets of banks and financial institutions across the globe. And the world is now subjecting the United States to blowback; the rampant demand destruction throughout the world is creating its own negative feedback loop that is buzz-sawing the American economy and its narrowing opportunities for recovery. Yet, President Obama and the Congressional Democrats are talking about this crisis as though it is exclusively American. The Republicans are even more insular and dichotomized from reality, advocating more deficit-driven tax cuts for those Americans still in the ranks of the wealthy, while ignoring all the evidence that proclaims this disaster as being a global financial and economic crisis that is inoculated against recovery attempts that are strictly national in character.

While Barack Obama talked about America’s love affair with the automobile to demonstrate his bonifides as the protector of U.S. jobs affiliated with the Detroit manufacturers, he ignored completely the fact that a growing proportion of automotive jobs in America are found in factories and assembly plants owned by Toyota, Honda, Nissan and Subaru. If Japanese exports, of which automobiles constitute a significant proportion, are cut almost in half, what incentive do the Japanese car producers have to retain their manufacturing presence in the United States, when they are under pressure to preserve jobs in Japan? It may be that Tokyo is a more important center than Detroit in determining if the car building business will survive in the U.S., but one would not realize that from Obama’s discourse on the automotive problem in America.

Amid all the positive polling data and glowing reviews that were celebrated in the American media after President Obama’s speech before Congress, more enlightened observers will recognize that this is just another demonstration that the political establishment in the United States is disconnected from the brutal reality of the Global Economic Crisis. As the rhetoric is made sweeter and the public debt grows exponentially, the race towards a synchronized global depression continues unimpeded.