Yves Smith is highly critical of the Obama Administration; disappointed in his establishment tilt and ineffective leadership.

Obama Plans to Talk Even Tougher

The seemingly-certain loss of a Democratic Senate in Massachusetts today, that formerly held by Ted Kennedy, and with it, a filibuster-proof majority, is purported by Politico to be rousing Obama to a new “combative” stance.

But combative is so far from what helped Obama get where he is that his reflexes will be, as they have been to date, to undershoot what is really needed. We’ve been told, for instance, that in law school it became a standing joke that Obama would inevitably give an impressively articulate statement of the most unthreatening, conventional position. It is revealing that in a 60 minutes interview when he was trying to signal a new, hardened stance against the banksters, the toughest criticism he could come up with was to call them “fat cats” and claim he had not run for office to further their agenda. Anyone looking at White House proposals (even the tame proposed TARP fees) would have trouble with that notion.

Similarly, the planned positioning is that voters are sending a message that Obama needs to more to effect change, which one would think means move to the left:

But the president’s advisers plan to spin it as a validation of the underdog arguments that fueled Obama’s insurgent candidacy.

“The painstaking campaign for change over two years in 2007 and 2008 has become a painstaking effort in the White House, too,” the official said. “The old habits of Washington aren’t going away easy.”

But the problem isn’t Washington, or at least not in the way his loyalists think. Obama engaged in a classic marketing error, that of misrepresenting the product in a fundamental way. The “change” label appears now a way of turning what in many circles would be negatives, his lack of experience and his race, into positive attributes. But despite the talk of health care reform as a major goal, Obama never resorted to populist rhetoric. It was easy to rationalize it at the time (populism had been the death of Howard Dean’s presidential candidacy), but Obama’s reflexes are center-right, not center left. His appointments (and most important, who really has influence over him) reflects that, which will also make changing gears even harder.

All of this is beside the point; Obama is not capable of what is not in him. The same is true for the rest of the establishment that cannot imagine anything but machine- world running on rivers of cheap oil. Arguments center on population control, but the population of what, exactly?

The given in the establishment’s argument is continually expanding demand and consumption. With demand expanding, prices of available fuel – and marketable reserves – are bid up. The current problem, not tomorrow’s, is the expanding population of machines built to consume energy and the platform that supports this machine ‘population explosion’.

For example, having tens of thousands of miles of new Chinese freeways creates more demand, even if the consumption isn’t keeping up at the moment, the desire to use the new freeways increases with each destination created. Desire translates into car and house purchases, store and other destination ‘development’. This ‘waste gatekeeping’ is only profitable in the sense that cars, roads and destinations can be sold, but there is no energy (or efficiency) returns on the sales. Increasing demand that bids up oil prices simultaneously decreases the profit potential of the goods in question. Adding demand is simple economic suicide.

The economy of scale that manufacturing allows is an outcome of cheap energy inputs; rising costs makes the scale economy too expensive and unprofitable. Our US economy is living this experiment of decreasing energy price efficiency which is proving to be – uh – unpleasant. Am I missing something/wrong?

Stringent energy conservation – to one/third of current levels in the US – would have the same effect as a population decline. Machines consume more calories than do humans while enabling at the same time direct human consumption in the form of food and other basic inputs. Conservation would force a population- reduction of oil- consuming machines. Unlike HUMAN population control, which requires a high and sophisticated level of coercion, machine- energy conservation is simple: it has been done, it is being done in an ad- hoc manner in the US and in other developed countries right now and the means are simple and at hand.

Let slip the taxman; let him tax and tax some more.

A retail energy tax of $300/barrel or an equivalent import duty plus a $100/ton carbon tax and energy use will melt away wasteful consumption. A Twenty- five dollar tax on each gallon of gasoline would cut gas use in half at least. Such taxes would be a cheap price to pay for putting the economy back into some semi- functioning balance. If $25/gallon is insufficient, make it $45 a gallon. Consider the tax then consider the alternatives.

Such levies would be be simple to enact but unpopular. So damned what!? At some point the government(s) must start taking steps as the future of governments themselves is in the balance. Energy is a part of climate discussions: replace coal fired power generation with natural gas, institute odd- even and ‘letter’ rationing systems (as in World War Two), enforce LOW mandatory speed limits (with engine speed governors); initiate feed- in tariffs, medallion systems for autos and trucks (which would raise tens of billions of dollars in additional fees), automation taxes, stringent import duties on energy embedded in cheap manufactured imports, ‘no fly’ periods (and reining in military aviation), increase levies on maritime and agricultural fuel/chemical use … and so on. 

There are 20 million unemployed who can be turned to labor plus another 30 million idling away at ‘retirement’ that can also be turned to labor. There is no end to the tasks in this country that need to be done! The country could find and put to the plow one million new farmers (and their families) as well as subsidize craft work, artisan shops and a whole range of local revival initiatives. Building new railroads and rail transit systems nationwide and electrifying them – and doing so by craft methods – would employ hundreds of thousands and build a skill base that does not exist in the country currently.

The establishment ‘solution’ to unemployment is ‘stimulus’ to big business; then, the dole, ‘benefits’, welfare … until such initiatives funded by debt become unaffordable … then general poverty. What a choice the establishment offers!

Get the cars off the roads, get asses off couches and out of front seats, get rid of televisions, get rid of fast food and take direct aim to destroy the so- called ‘modern (machine) culture’ that has made lazy, stupid bastards out of so many of us. 

Conserve energy and the problems of today that are founded in energy depletion – and the accompanying climate issues – will start to take giant steps backward.

I’ll volunteer to be President for 48 hours and I will show the current crew how it is done. First thing I will do is fire the Secretary of Energy Department. Then I’ll fire the Treasury Secretary, then the Secretary of State and Attorney General, the DOD chief, all the Joint Chiefs, the FBI chief, the Transportation chief, the head of the CIA, the head of the Department of Homeland Security; I would give Ben Bernanke 24 hours to clean out his desk or I will, “make your life so miserable that out of despair … you will hang yourself with an electric cord, in your living room in front of your wife!”

When I fire these jackasses on television, the public will perk up … and pay attention!

I would suspend all bailouts and demand an account of all taxpayer funds distributed within the context of a seven- day bank holiday. I would close the airports and other points of entry to prevent any ‘persons of interest’ from leaving the country as well as freeze all dollar assets both domestic and overseas that is relevant to the bailouts and Federal Reserve liquidity operations. I suspect there are hundreds of billions of dollars sloshing away in tax haven banks in places such as Monaco, Zürich, Liechtenstein and Curacao.

I’d hire Ed Gray as Treasury Secretary, Andrew Cuomo as Attorney General and Elliot Spitzer as Special Prosecutor charged with cleaning house on Wall Street. Can he do what I should expect him to do, I’ll drive the hookers over to his house, myself. I’d hire 25,000 new Assistant US Attorneys and double the size of the FBI. I’d have said FBI raid the Federal Reserve and collect all documents relating to ‘lending facilities’ and ‘non- recourse loans’. I’d empty the prisons and refill them with crooked bankers, swindlers, real estate touts, Ponzi operators, derivatives and mortgage fraudsters, laundered dollar- traffickers, looters of the Treasury and the Federal Reserve, I’d spare no one, including ex- President(s), ex- Treasury Secretaries, members of Congress and the Senate. State and local governments would get assistance to prosecute ‘official’ thieves at those levels of government. Unrecoverable looted funds overseas would be repudiated. 

Long prison terms would serve to warn others.

I’d put troops around the Capital and the Supreme Court – to keep the inmates in and the lobbyists out – and put the (corrupt) politicians’ noses to the grindstone. I wouldn’t care if they were Democrats or Republicans: the peoples’ business would be done … or else! I’d have a caterer bring in bottled water and tuna- fish sandwiches and allow escorted trips to the toilet. Congress would do their job or never leave the grounds; the members could die of old age and untreated disease in the Capital and I would not care!

If the Supremes give me any problem, I’ll cut the power and air conditioning and heat. Staffers and Justices can work in discomfort in the dark. The heating plant is a separate building and the task is simple.

A lot of people would be arrested, a huge number would be picked up at airports fleeing the country; business big shots, bankers, ex- Presidents, currency speculators, agency racketeers; many more would be detained, have assets frozen, would be investigated, suffer sanctions and otherwise be called to account. I could do more in 48 lousy, stinking hours than that useless Wall Street piece of crap/lackey Obama has done in his entire career.

I would cut the salaries of all government officials and workers. I would serve for a dollar plus (vegetarian) meals and a place to sleep in that big white building. I would get rid of all the limos, helicopters, giant airplanes and other useless perks.

They … the establishment … would fear me. The people cry out for justice. Better me than them. The people will burn the members of the establishment at the stake, whoever they get their hands on.

Obama is useless, he’s worse than Bush; I would open eligibility to Medicare – with cost controls -to all citizens for 180 days by executive order under the Patriot Act. In 180 days the insurance and medical ‘industries’ would either be bankrupt or close and begging for relief. (If lobbyists approached Congress, they would be detained on terrorism grounds and sent to Guantanamo.) Congress could go home after its work is done; a 100 days should do the trick and get government out of the pockets of the business and banker cartels.

I’d declare OPEC a criminal organization, freeze its assets and have Interpol arrest its officials on sight.

I would end the US wars in the Middle East in 90 days (we won, already), close the Mexican border, deport all without papers (or charge them to stay), end income/labor taxation, close about half the government agencies, cut the budget. I’m a ‘localist’; I’d end NAFTA and exit NATO and the WTO, add energy/carbon duties to imports (and repudiate overseas dollar holdings if anyone give me a hard time about it). I’d reform/simplify the military, ban private armies, initiate conscription (and end residual unemployment at the same time), fund a Thorium power initiative, fund a nationwide watershed repair project, fund solar and wind projects, end discrimination against homosexuals and decriminalize all recreational drugs. I would sell excess oil production overseas for hard currency (rare earths and metals) depending on eliminating car use in the importing countries, open relations with Cuba, start a nuclear arms reduction initiative, cut all funding to Israel until satisfactory agreements are reached with ALL its neighbors.

I would be brutally honest with the public from the get- go about oil, climate and credit. I don’t think there would be a public issue with the honesty. The public would cheer as I rounded up the criminal class that has taken over this country.

Leadership is hard, you have to (a) piss people off and (b) throw the absolute fucking fear of God into them. Otherwise, nobody will do anything but sit on their asses and complain which is what people are doing now. 

When the US finally embraces a stringent conservation program, the rest of the world will instantly stand up and take notice. The US will lead again! A lot of the imbalances that are currently amplifying toward the ‘breakdown mode’ will begin to rebalance. The US moving to take its energy and climate situation seriously would also begin to gain some leeway on resolving its credit ‘issues’. These left to current inertia and inaction will cause either a worldwide currency crisis or debt service crisis shortly. This will in turn cause the needed conservation and do so in the most painful way possible.

Our problems are energy and waste. Time for something … different!

Time for real tough.