Friends in high places: Obama and the American oligarchy

From our overstocked archives

Sam Smith, 2009 -  "An oligarchy," says Wikipedia, "is a form of government in which power effectively rests with a small elite segment of society distinguished by royal, wealth, intellectual, family, military, or religious hegemony. The word oligarchy is from the Greek words for 'few' and 'rule.' Such states are often controlled by politically powerful families whose children are heavily conditioned and mentored to be heirs of the power of the oligarchy."

Go back more than two decades and you find politicians like Nixon, Carter and Reagan who built their own political base; politicians such as Truman, Johnson, and Ford deeply rooted in conventional politics; Kennedy, whose family's oligarchic inclinations were cut brutally short and FDR, who was hated by many of the elites. Beginning in the late 1980s, however, national American politics became almost universally a game of inside ball in which the public had little role.

Those of both parties who get to the top have done so primarily because of their ability to satisfy an elite with the money to overcome the obstacles of traditional politics. Given the huge increase in private campaign financing and consequent mass media manipulation, ordinary democratic politics at the national level has virtually disappeared.

Between Jimmy Carter and Barack Obama, albeit not corrected for inflation, presidential campaign spending increased ten times. Between 2004 and 2008 it almost doubled. Note also the huge increase in the percent of funds raised during primaries, as candidates auditioned for the presidential role.

And the intrinsic ability of the elite to buy politicians has also increased. The top one percent share of the wealth went from 36% to 29% between the 1930s and the 1970s. Since than it has more than reversed, reaching 39% in 2008.

One of the beneficiaries of this shift has been Michael Bloomberg, who spent more of his own money on his past two New York mayoral campaigns than all the presidential candidates did in 1980 and almost as they did in 1984.

Other beneficiaries have been George W. H. Bush, his heir George W, Bill Clinton and Barack Obama. Each one got to the top primarily thanks to an elite that bought and called most of the major political decisions. This was, of course, far easier for the Bushes, born into high places, than it was for a Clinton or Obama who had to audition for the job. But the end result was much the same.

All this has occurred during a period when America was also suffering an unprecedented economic, constitutional, political, cultural, diplomatic and social decline.


Some readers are undoubtedly already mumbling about conspiracy theories. That's not surprising in a country where the educated are taught to believe that history is primarily the work of great and evil individuals. The idea that a culture or constitution can fall apart without a specific plan or plot seems alien, but, in fact, history is far more the result of choices by important subcultures than we generally realize.

Where would religion, sports teams or pop music be without the unprescribed (albeit heavily manipulated) preferences of the many? Why should Yale alumni be exempt from the law of averages any more than Michael Jackson fans or an extended family of Orthodox Jews? If we presume Muslims to hold certain views and behave in certain ways, why not Harvard grads as well?

To be sure there are Ivy Leaguers, myself for one, who become, as Bill Mauldin put it, fugitives from the law of averages, but then you can't have a bell curve without thin edges as well as a big hump.

Each of our four oligarchic presidents attended Harvard or Yale and the least competent, George W, actually went to both. Here's another interesting similarity: George the Elder was head of the CIA with connections far preceding that post, George W was his son, and both Clinton and Obama fell within the CIA penumbra early in their adult life.

Now consider the interconnections of some of the lesser players.

George the Elder named Robert Gates as director of Central Intelligence and George W asked him to be director of national intelligence, a post he declined. He then became Secretary of Defense for both George W and Barack Obama, serving three out of the four oligarchic presidents.

Paul Volker, who chairs Obama's Economic Recovery Advisory Board, was head of the Federal Reserve under Carter and Reagan and under secretary of the Treasury under Nixon.

Tim Geithner worked for Henry Kissinger's consulting firm before joining the Treasury Department under George W Bush. He was under secretary of the Treasury under Clinton. His maternal grandfather worked for Dwight Eisenhower and his father, Peter Geithner, was head of the Ford Foundation's microfinance programs in Indonesia being created by Barack Obama's mother. The Ford Foundation, incidentally, has long had ties to the CIA. Joan Roelofs writes of John McCloy, its chair in the 1950s, as thinking of the foundation as "a quasi-extension of the U.S. government. It was his habit, for instance, to drop by the National Security Council in Washington every couple of months and casually ask whether there were any overseas projects the NSC would like to see funded." Roelofs also writes that the Ford Foundation financed counter-insurgency programs in Indonesia and other countries.

Even ex-Skull & Boner Dana Milbank, in a 2005 Washington Post story, took note of the closed culture at the top: "With at least 18 senators, dozens of House members and several administration officials boosted by family legacies, modern-day Washington sometimes resembles the court of Louis XIV without the powdered wigs. . . At least seven of the 41 new House members are relatives of prominent politicians. These legacies take office along with the newly reelected president, who is the grandson of a senator, son of a president and brother of a governor. . . According to the Center for American Women and Politics, 45 women have been elected to Congress to fill vacancies created by their husbands' death."

None of this comprises a conspiracy, but definitely sketches a culture. Fifteen years ago, in a book on Bill Clinton, "Shadows of Hope," I tried to explain how the system worked in the capital:

How one comes to matter in Washington politics is guided by few precise rules, although in comparison to fifty years ago the views of lobbyists and fundraisers are far more significant than the opinion, say, of the mayor of Chicago or the governor of Pennsylvania. This is a big difference; somewhere behind the old bosses in their smoke-filled rooms were live constituents; behind the political cash lords of today there is mostly just more money and the few who control it.

Thus coming to matter has much less to do with traditional politics, especially local politics, than it once did. Today, other things count: the patronage of those who already matter, a blessing bestowed casually by one right person to another right person over lunch at the Metropolitan Club, a columnist's praise, a well-received speech before a well-placed organization, the assessment of a lobbyist as sure-eyed as a fight manager checking out new fists at the local gym. There are still machines in American politics; they just dress and talk better.

There is another rule. The public plays no part. The public is the audience; the audience does not write or cast the play. In 1988, the 1992 play was already being cast. Conservative Democrats were holding strategy meetings at the home of party fund-raiser Pamela Harriman. The meetings -- eventually nearly a hundred of them -- were aimed at ending years of populist insurrection within the party. They were regularly moderated by Clark Clifford and Robert Strauss, the Mr. Fixits of the Democratic mainstream. Democratic donors paid $1000 to take part in the sessions and by the time it was all over, Mrs. Harriman had raised about $12 million for her kind of Democrats. . .

The appeal of Clinton to these matchmakers went beyond mere political calculations. Clinton was not only politically realistic, he was culturally comfortable. He projected the image of an outsider, yet had adapted to the ways of capital insiders.

Official Washington -- including government, media and the lobbies -- functions in many ways like America's largest and most prestigious club, a sort of indoor, east coast Bohemian Grove in which members engage in endless rites of mutual affirmation combined with an intense but genteel competition that determines the city's tennis ladder of political and social power. What appears to the stranger as a major struggle is often only an intramural game between members of the same club, lending an aura of dynamism to what is in truth deeply stable.

The Yale law degree, the Rhodes scholarship, the familiarity with the rhetoric of the policy pushers all helped Clinton fit into the club. But perhaps most of all, Clinton knew when to stop thinking.

Just as the Soviets tolerated free thought only within the limits of "socialist dialogue," so debate in Washington is circumscribed by the limits of what might be called Beltway discourse. Ideas that adjust or advance the conventional wisdom are valued. Those that challenge it are ignored or treated with contempt.

Obama rose to the top in record speed in no small part because - as with Clinton - it was clear that he would fit into this ecology extremely well and, besides, he was the first charismatic black politician that the elite had come across who lent some shade to white male hegemony without endangering it. Like Bill Clinton, he projected the image of an outsider, yet had adapted to the ways of capital insiders.

And he was willing, in a phrase a Washingtonian once used to describe how ethnic hiring worked at DC law firms, to be "the Negro at the front door."

But while the party elite - led by the smug Democratic Leadership Council - was in a braggadocio mood during the rise of Clinton, things subsequently became more complicated. For example, Ari Berman wrote in the Nation that "Al Gore's promising New Democratic candidacy turned sour for the DLC when Gore, a DLC founder, switched to a populist strategy after trailing in the polls."

And after journalists Bruce Dixon and Glen Ford revealed in 2003 that Illinois Senate candidate Barack Obama had been named by the DLC as one of its "100 to Watch" that year, Obama asked to be taken off the list.

As Dixon noted, "DLC endorsement is the gold standard of political reliability for Wall Street, Big Energy, Big Pharma, insurance, the airlines and more. Though candidates normally undergo extensive questioning and interviews before DLC endorsement, Obama insisted the blessing of these corporate special interests had been bestowed on him without these formalities and without his advance knowledge, and formally disassociated himself from the DLC. But like Hillary Clinton, and every front running Democrat since Michael Dukakis in 1988, Barack Obama's campaign has adopted the classic right wing DLC strategy."

In other words, whether Obama had asked to be vetted by the DLC or not, he was acting as though he had. He simply understood that the DLC's image conflicted with his own myth-making and didn't want to bear the burden of its logo.

Bits and pieces of the truth would come through, however. Paul Street of Z Magazine wrote: "Obama has lent his support to the aptly named Hamilton Project, formed by corporate-neoliberal Citigroup chair Robert Rubin and other Wall Street Democrats to counter populist rebellion against corporatist tendencies within the Democratic Party. . . Obama was recently hailed as a Hamiltonian believer in limited government and free trade by Republican New York Times columnist David Brooks, who praises Obama for having 'a mentality formed by globalization, not the SDS.'"

Even after disassociating himself publicly from the Democratic Leadership Council, Obama still had as his major economic advisor, Austan Goolsbee, who was also chief economist of the conservative organization. Noted Doug Henwood of the Left Business Observer, "Goolsbee has written gushingly about Milton Friedman and denounced the idea of a moratorium on mortgage foreclosures."

Henwood also reported during the presidential campaign, "Top hedge fund honcho Paul Tudor Jones threw a fundraiser for [Obama] at his Greenwich house last spring, 'The whole of Greenwich is backing Obama,' one source said of the posh headquarters of the hedge fund industry. They like him because they're socially liberal, up to a point, and probably eager for a little less war, and think he's the man to do their work. They're also confident he wouldn't undertake any renovations to the distribution of wealth."

And then there were the numbers. Obama raised substantially more funds from the financial and health industries than did John McCain. And his top ten campaign fund sources included those working for Goldman Sachs, Citigroup and JP Morgan Chase & Co. All of this, of course, was hardly mentioned by the larger media.

The most fascinating thing about Obama's rise was that it involved moving from a state senate seat to the White House in just four years. Other than a military hero soaring on public enthusiasm, the most logical explanation for such a rapid elevation was that the candidate had been chosen by those able to make it happen. After all, Obama was not only no hero, he had been an undistinguished state senator and an equally uninteresting member of the US Senate. If you go back and read his vaunted 2004 convention address, you'll find nothing exceptional about it, provided you want something more than safe cliches from a safe black candidate. Obama's campaign addresses would be similarly unimpressive, yet hailed in the elite media for their rhetoric despite the fact that if you asked anyone to quote Obama, the best they could come up with was "hope" and "change."

What really mattered was described by Ken Silverstein of Harper's in 2006, "If the [convention] speech was his debut to the wider American public, he had already undergone an equally successful but much quieter audition with Democratic Party leaders and fund-raisers, without whose support he would surely never have been chosen for such a prominent role at the convention."

In October 2003, five years before Obama's presidential election, "Vernon Jordan, the well-known power broker and corporate board-member who chaired Bill Clinton's presidential transition team after the 1992 election, placed calls to roughly twenty of his friends and invited them to a fund-raiser at his home. That event marked [Obama's] entry into a well-established Washington ritual-the gauntlet of fund-raising parties and meet-and-greets through which potential stars are vetted by fixers, donors, and lobbyists."

Jordan had also been among those - including Robert Rubin and Katherine Graham, who were called to Washington's F Street Club in 1991 as part of a similar effort by Pamela Harriman on behalf of Bill Clinton. C. David Heyman in the 'Georgetown Ladies' Social Club,' writes that Harriman was seeking to get Rubin's Goldman Sachs involved. She succeeded: Goldman Sachs became Clinton's largest source of funding. (It was only in second place for Obama but brought in nearly twice as much money).

Another account of Obama's vetting came from Paul Street in 2008:

[][][] Drawing on his undoubted charm, wit, intelligence, and Harvard credentials, Obama passed this trial with shining colors. At a series of social meetings with assorted big 'players' from the financial, legal and lobbyist sectors, Obama impressed key establishment figures like Gregory Craig (a longtime leading attorney and former special counsel to the White House), Mike Williams (the legislative director of the Bond Market Association), Tom Quinn (a partner at the top corporate law firm Venable and a leading Democratic Party "power broker"), and Robert Harmala, another Venable partner and "a big player in Democratic circles."

Craig liked the fact that Obama was not a racial "polarizer" on the model of past African-American leaders like Jesse Jackson and Al Sharpton.

Williams was soothed by Obama's reassurances that he was not "anti-business" and became "convinced. . . that the two could work together."

"There's a reasonableness about him," Harmala told Silverstein. "I don't see him as being on the liberal fringe."

By Silverstein's account, the good "word about Obama spread through Washington's blue-chip law firms, lobby shops, and political offices, and this accelerated after his win in the March [2004] Democratic primary." Elite financial, legal, and lobbyists contributions came into Obama's coffers at a rapid and accelerating pace.

The "good news" for Washington and Wall Street insiders was that Obama's "star quality" would not be directed against the elite segments of the business class. The interesting black legislator from the South Side of Chicago was "someone the rich and powerful could work with."

According to Obama biographer and Chicago Tribune reporter David Mendell, in late 2003 and early 2004:

"Word of Obama's rising star was now spreading beyond Illinois, especially through influential Washington political circles like blue chip law firms, party insiders, lobbying houses. They were all hearing about this rare, exciting, charismatic, up-and-coming African American who unbelievably could win votes across color lines. . . [His handlers and] influential Chicago supporters and fund-raisers all vigorously worked their D.C. contacts to help Obama make the rounds with the Democrats' set of power brokers. . .

According to Mendell, Obama now cultivated the support of the privileged few by "advocat[ing] fiscal restraint" and "calling for pay-as-you-go government" and "extol[ling] the merits of free trade and charter schools." He "moved beyond being an obscure good-government reformer to being a candidate more than palatable to the moneyed and political establishment.

"On condition of anonymity," Silverstein reported two years ago, "one Washington lobbyist I spoke with was willing to point out the obvious: that big donors would not be helping out Obama if they didn't see him as a 'player.'

Early in life, Obama had hints that he was among the chosen. David Mendell recounts that "His mother really built up his ego when he was a child. I think she felt like, here's this African American child, growing up in a white family, whose father has left him. He may suffer from some self-esteem issues. So she built his character up from the very beginning. She told him he was from almost a superior race of people and that he had this extraordinary intellect, that he was someone very special. And he was taught from the time he was a small child that he was a special person, to the point that he seems to still believe that today. He would tell people, 'I'm descended from kings,' and stuff when he was a kid."

Yet one of the interesting things about Obama is the number of times the carefully prepared fairy tale goes astray.

For example, Bill Blum recounted, "In his autobiography, 'Dreams From My Fathers', Barack Obama writes of taking a job at some point after graduating from Columbia University in 1983. He describes his employer as 'a consulting house to multinational corporations' in New York City, and his functions as a 'research assistant' and 'financial writer.' The odd part of Obama's story is that he doesn't mention the name of his employer.

"However, a New York Times story of 2007 identifies the company as Business International Corporation. Equally odd is that the Times did not remind its readers that the newspaper itself had disclosed in 1977 that Business International had provided cover for four CIA employees in various countries between 1955 and 1960. . . .

"In his book, not only doesn't Obama mention his employer's name; he fails to say when he worked there, or why he left the job. There may well be no significance to these omissions, but inasmuch as Business International has a long association with the world of intelligence, covert actions, and attempts to penetrate the radical left -- including Students for a Democratic Society -- it's valid to wonder if the inscrutable Mr. Obama is concealing something about his own association with this world."

Obama would not have been the first or last young Ivy League type seconded to the agency. As Lyndon Johnson said to an aide, "Just remember, the CIA is filled with Yale and Princeton graduates whose daddies wouldn't let them into their brokerage firm." Some of these relationships would turn into a career, some were only a passing experience - but even the latter added to one's credibility in dealing with those in high places.

And once again Obama had a good precedent. Bill Clinton, according to several agency sources interviewed by biographer Roger Morris, worked as a CIA informer while briefly and erratically a Rhodes Scholar in England. Although without visible means of support, he traveled around Europe and the Soviet Union, staying at the ritziest hotel in Moscow. During this period the US government was using well educated assets such as Clinton as part of Operation Chaos, a major attempt to break student resistance to the war and the draft.

While Clinton got a free trip to Moscow complete with an expensive hotel room, the similarly fiscally strapped Obama - shortly before working for BIC - took a three week jaunt to Pakistan, again a fact almost totally obscured during his campaign. As ABC's Jake Tapper remarked in April 2008, late into the campaign, Obama's sudden incidental reference to the trip to Pakistan "was news to many of us who have been following the race closely. And it was odd that we hadn't hear about it before, given all the talk of Pakistan during this campaign."

Questions have been raised about Obama's time at Columbia as well. Politico noted that "There's not a whole lot of information available about Obama's time at Columbia University in New York, which he attended for three years after attending Occidental College in Los Angeles for one year and from which he graduated in 1983."

Fox News contacted 400 Columbia University students from the time Obama was there and none could recall him. Wayne Allyn Root, who ran for vice president on the Libertarian ticket, also graduated in 1983 and says, "I don't know a single person at Columbia that knew him, and they all know me. . . The guy who writes the class notes, who's kind of the, as we say in New York, the macha who knows everybody, has yet to find a person, a human who ever met him. Is that not strange?" Root added that, like Obama, he was "Class of '83 political science, pre-law. . . You don't get more exact or closer than that. Never met him in my life, don't know anyone who ever met him."

The NY Sun noted another anomaly: "Contributing to the mystery is the fact that nobody knows just how well Mr. Obama, unlike Senator McCain and most other major candidates for the past two elections, performed as a student.

"The Obama campaign has refused to release his college transcript, despite an academic career that led him to Harvard Law School and, later, to a lecturing position at the University of Chicago. The shroud surrounding his experience at Columbia contrasts with that of other major party nominees since 2000, all whom have eventually released information about their college performance or seen it leaked to the public. . .

"In contrast with the rest of Mr. Obama's life story, little is known about his college experience. He attended Occidental College in Los Angeles for two years before transferring to Columbia in 1981. The move receives only a mention in Mr. Obama's 1995 memoir, 'Dreams from My Father,' which instead devotes that chapter to his impressions of race and class struggles in New York."

In any case, Obama moved on to Harvard Law School.

Ryan Lizza of the New Yorker described the Obama of the time: "Before [Obama] went off [to Harvard], he said to some of his community-organizing buddies he needed that credential, that Harvard Law degree, to access the corridors of power and to have that credential because he wasn't going to get that as a community organizer in Chicago."

He had already made some headway along those lines, as Mendell told PBS: "Folks like [former judge, U.S. representative and University of Chicago professor] Abner Mikva and [lawyer and former Federal Communications Commission chairman] Newton Minow had taken him under their wing and really thought a lot of this guy. They saw the potential that he had. . .

"Harvard Law, I think in his own mind, really helped him establish himself as an elite person in our society. It taught him that he could manage various worlds. . . "

And Obama played the card well. Professors and fellow students at the time he was at Harvard Law remember Obama rising above mere human conflict to a purportedly higher level of bipartisanship and avoidance of cultural conflict.

Keith Boykin recalled, "Barack was always supportive and sympathetic to our campaign for faculty diversity. He spoke about it at one of our rallies. But he was not actively involved in the protest movement. Nor did he need to be. His presence alone made the case. And even if he agreed with the cause of the movement, he didn't need to be involved in the more radical protests we launched because our tactics were controversial on campus."

A Boston Globe article in 2007 reported:

"While other students were determined to prove the merits of their beliefs through logic and determination, Obama preferred to listen, seek others' views, and find a middle way.

"Classmates recall an especially emotional debate in the spring of 1990 over affirmative action, which conservative students wanted to abolish. Presiding over an assembly of 60 mostly white editors in a law school classroom, Obama listened to impassioned pleas and pressed conservatives to explain their reasoning and liberals to sharpen their thinking. But he never spoke about his own point of view or mentioned that he believed he had benefit ed from affirmative action.

"Obama was so evenhanded and solicitous in his interactions that fellow students would do impressions of his Socratic chin-stroking approach to everything, even seeking a consensus on popcorn preferences at the movies. 'Do you want salt on your popcorn?' one classmate, Nancy L. McCullough, recalled, mimicking his sensitive bass voice. 'Do you even want popcorn?'"

But what works for the editor of a university law review impressing a bunch of powerful professors and fellow future lawyers seldom adds up to leadership in politics. It's a style that has been called OTOH BOTOH - on-the-one-hand-but-on-the-other-hand. It is a politics of endless safety valves and of constantly adjusting to the crowd. But OTOH BOTOH Obama wasn't elected president to represent both sides of an argument, especially not by those of his black and white liberal constituency that worked so hard on his behalf. If his campaign rhetoric had been a label on a food package, the product would have been removed from the shelves by the FDA.

The remembrances of Harvard Law School days seem a perfect prelude to Obama's handling of the healthcare legislation, one of the worst examples of leadership on behalf of a major positive issue of any president in the past 50 years.

And here is one of the big problems with the elite club approach to selecting future leaders. The insiders pick people who won't cause any trouble and can be counted to find positions where nothing much happens so the pickers can continue with their game. But because truth and wisdom are rarely to be found in the mushy middle, you often end up with one more seemingly competent chosen one actually botching things up. And the public, having been sold a bill of goods, ends up wondering what the hell happened, with some of them getting quite mad.

Some will deny that an oligarchy exists. But consider a few more examples. The Vietnam war was escalated and mangled with an extraordinary degree of help from members of the Harvard faculty. The current fiscal crisis and subsequent sweetheart deal with the banks owes much to people like Robert Rubin, who went to Harvard and Yale; Ben Bernanke, who went to Harvard; Larry Summers who not only went to Harvard grad school but became president of the university; Austan Goolsbee who went to Yale and was a member of Skull & Bones; Peter Orzag, ex of Princeton; and Paul Volker who went to Harvard grad school.

And once again, Clinton provides a model. Parked at Little Rock's Central Flying Service during Clinton's first big economic meeting had been more than 50 corporate jets. This amounted to about one corporate jet for every seven participants, not including those company planes waiting at other airports around town. It would also turn out that Clinton's cabinet, while diverse in color and sex, was remarkably uniform in other respects. In the fall of 1993, Knight-Ridder published an analysis that found that 80% of Clinton's first 518 appointees were from the Washington-Boston corridor or the west coast. More than half came from DC or its suburbs.

In my book on Clinton I wrote

Politics used to be about remembrance. The best politicians were those who remembered and were remembered the most -- the most people, the littlest favors, the smallest slights, the best anecdotes tying one's politics to the common memory of the constituency.

Politics was also about gratitude. Politicians were always thanking people, "without whom" whatever under discussion could not have happened. . .

Above all, politics was about relationships. The politician grew organically out of a constituency and remained rooted to it as long as incumbency lasted.

Today, we increasingly elect people about whom we have little to remember, to whom we owe no gratitude and with whom we have no relationship except that formed during the great carnie show we call a campaign.

We could change all this if we got mad enough. We could demand public campaign financing. We treat any contributions over a certain amount as the criminal bribe that they are. We could favor candidates with histories we know and who have actually helped us rather than those who just suddenly appear in our lives like a new American Idol contestant. We could do things to strengthen third parties and make major parties more responsive - such as instant runoff voting. We could emphasize - as the right has done - issue politics, forcing pols to pay attention to things they would rather ignore. We could help Congress become an equal member of government again and give more power to state and local government where the influence of ordinary citizens is far greater.

But as long as we submit willingly to the icon con - tying our future to a fantasy candidate instead of engaging in a real politics of issues and ideas - the oligarchs will keep arranging political marriages between the public and candidates about whom we know little and to whom we owe nothing, and we will keep on losing every major election