Sunday, October 9, 2011
Obama: Three years later and Indonesia
From the back row: Barack Obama (insert)stands in the back row in this class picture taken in the early 1970s at his Menteng primary school. (JP/courtesy Bandung Winardijanto)
My article, “Obama’s Campaign Promises and Us”, was published in The Jakarta Post on Sept. 17, 2008. I expressed my concerns over Barack Obama’s campaign promises both as a young politician who was a junior senator at the time and as the man who was going to hold the single most powerful position in the United States: the presidency.
Indonesians were so infatuated with his charisma, charming rhetoric and that he once lived in Jakarta for approximately four years during his childhood.
He spoke eloquently at my alma mater University of Indonesia last year and he is coming back in November. He will be warmly welcomed, for sure, but he will likely come with a few items on the agenda.
Obama inherited the country from George W. Bush in 2009, who left the presidency with a 7.8 percent unemployment rate. At that time, we felt sorry for Obama having to take over the country that was in such bad shape. Today, the US national unemployment rate is a whopping 10.1 percent.
We blamed Bush for the US$3–$5 trillion spent on the war in Iraq, a number that Joseph E. Stiglitz and Linda J. Bilmes came up with. We blamed Bush for allowing Wall Street to party with high-risk and ill-designed mortgage-backed securities which had been tainted with subprime prerequisites that blew up the bubble economy with the collapse of Lehman Brothers and AIG in September 2008.
Yet it was Clinton who approved The Gramm-Leach-Bliley Act of 1999 that repealed the Glass-Steagall Act of 1933 to allow commercial and investment banks to consolidate, which had given the green light for creative loans to be cultivated in the first place. So we can’t really blame Bush alone.
Bush was the villain and Obama was the “super hero” we had been waiting for. The whole world was eager when Obama moved into the White House and made his first contact with Muslim leaders. We were hardly breathing when he eloquently made the historical speech in Egypt. Finally, a US president for all of us is here.
We forgot that being skillful with words, both in oration and in writing, and being bright academically didn’t say anything about his actual performance in fixing economic problems.
And we did not and could not see the world from Obama’s eyes. Everyday, he has to face so many political opponents and be surrounded by corporate lobbyists who are willing to go to great lengths to make things happen. A few good teams by his side might not be good enough to deal with the enormous capitalistic powers.
Obama hasn’t stopped trying and has fulfilled many of his campaign promises. He withdrew the troops (though not all) from Iraq and Afghanistan, passed the Obamacare, had bin Laden killed, passed trillions-worth in economic stimulus packages, supported environmentally-focused policies and businesses, and he even passed regulations to restrict Wall Street.
Unfortunately, he did his job; he just didn’t do it well. He underestimated the job.
According to the United States Department of Agriculture (USDA), one in six Americans or 49 million people have lived with food insecurity for three years in a row. Among them, 16 million are children. By “food insecurity,” I am referring to hunger due to the unavailability of food. Usually, these individuals have lost their jobs, have used up unemployment benefits, lost their homes as a result and now drift in the community.
The foreclosure crisis, which was originally caused by the collapse of subprime mortgage-backed securities known as CDOs, has reached its fourth stage (first stage due to subprime loans, second due to unemployment, third due to negative equity, fourth due to prolonged underwater mortgages). In 2010 alone, 2.9 million properties have been foreclosed. Another 2.5 to 3 million homes are expected to be foreclosed this year.
We can expect to see a few million more foreclosures through 2014.
Instead of helping homeowners and the mortgage industry, apparently the $1.25 trillion spent by the Federal Reserve to buy problematic mortgage-backed securities further prolonged the crisis. To make matters worse, many trust deeds kept by banks as lenders in mortgage transactions have lost due to being re-packaged and re-sold many times over (some are up to 32 times) in the investment market.
Of course, Obama fought this corrupt financial system and signed The Dodd-Frank Act on July 21, 2010 that renewed trust in the financial system by subjecting banks to tightened government oversight. In addition, derivative restrictions have been imposed in the Volcker rule.
Yet financial reform may be undone due to criticism that too many regulations simply hamper economic recovery. Obama is, indeed, walking on egg shells.
So when Obama comes to visit next month, make sure Indonesia shows empathy toward the 16 million hungry American children and at least 5 million homeowners who are losing their homes.
We can expect Obama to charm us again. This time, I would expect Indonesia and Indonesians to realize that Americans are hurting considerably and it is better to show some genuine solidarity. By Jennie S. Bev, Northern California author, columnist, and adjunct professor based in Northern California.