Situating Obama’s Response
to the Crisis
FINANCE, REGULATION, AND THE AMERICAN STATE
… Don’t hamper us from getting the banking system back on track.
— PRESIDENT BARACK OBAMA, March 23, 2009 (cited in Ward 2009)
AS RALPH MILIBAND put it in The State in Capitalist Society 1969), “[R] eform always and necessarily falls short of the promise it was proclaimed to hold: the crusades which were to reach ‘new frontiers,’ to create ‘the great society,’ to eliminate poverty, to assure justice for all” (Miliband 2009, 198). Miliband pointed out that, although governments promising such reforms are usually elected at moments of “adverse conditions” economically, the actual reforms they introduce usually fall short of the promise because they aggravate a crisis of capital accumulation. Although he wrote this 40 years ago, it almost seems as if he were speaking directly to those who were initially enthusiastic about Obama and now lament his lack of ambition and commitment to principle. Miliband counsels that elected leaders who take office under adverse conditions should “treat these conditions as a challenge to greater boldness, as an opportunity to greater radicalism, and as a means, rather than an obstacle, to swift and decisive measures of reform. There is, after all, much that a genuinely radical government, firm in purpose and enjoying a substantial measure of popular support, may hope to do on the morrow of its electoral legitimation, not despite crisis conditions but because of them” (Miliband 2009, 73).
This chapter argues that Obama’s response to the crisis that he inherited had less to do with his reluctance to alienate the coalition of corporate and financial elites that helped finance his election campaign, and certainly much