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Now What?

by FRANK J. MENETREZ

Fans of the HBO series The Wire are familiar with the saga of the fictional Tommy Carcetti, a white politician who beats the racial odds and gets elected mayor in majority black Baltimore.  Carcetti is an ambitious and sincerely well-meaning liberal who really wants to create a “new day in Baltimore.”  But once in office, he puts personal ambition, party loyalty, and obedience to the powerful ahead of his ideals, and he consequently never achieves any genuine reform.

As the Obama administration unfolds over the next four years, life will probably imitate art in many ways.  Like Carcetti, Obama beat the racial odds, although unlike Carcetti, Obama comes from a racial group that has endured an appalling history of oppression in this country, which continues to this day.  Obama’s victory is consequently a watershed in American politics, and it should be enthusiastically celebrated for that reason alone.

Also like Carcetti, Obama appears to believe sincerely in some sort of liberal agenda.  But Obama’s legions of passionate supporters (as well as his wild-eyed detractors on the right) expect him to pursue, and not merely pay lip-service to, progressive policies.  That would include, but not be limited to, delivering on big-ticket items like getting US troops out of Iraq, enacting meaningful healthcare reform, pursuing a humane course in the Middle East conflict, and reregulating the financial markets to prevent a replay of this year’s crisis.

The grim reality, however, is that Obama (like Carcetti) will spend his first term campaigning for his second term, a campaign he actually began in his acceptance speech in Chicago on election night.   That means he will be busily cultivating the political “center,” just as he did throughout this year’s campaign when he voted for the FISA bill, voted for continued funding of the occupation of Iraq, voted for the disgraceful bank bailout (which economists from left to right condemned as a largely useless giveaway of taxpayer money), and delivered to AIPAC one of the most obscenely fawning speeches it has ever heard.  If he wins a second term, he’ll spend it shoring up the prospects of both the Democrats in Congress and his aspiring Democratic successor to the throne–again, by cultivating the “center.”

Obama will undoubtedly be better than Bush was and better than McCain would have been, and the differences matter.  But a realistic assessment of the scope of those differences is imperative.  Without it, people who really care about changing this country’s direction will end up counting on one man, Obama, instead of on themselves to bring about the change we need.  Those people will inevitably be disappointed.

The Differences Between Democrats and Republicans:  An Illustration

To appreciate the myriad ways in which the struggles between the haves and the have-nots play out in the workings of the federal government, and to see the limited range of differences between the Democratic and Republican approaches to many of those struggles, one needs to look at the details of federal statutes and regulations.  A single example will suffice.

The Fair Labor Standards Act (FLSA) is the federal law that provides for a minimum wage and a maximum workday and workweek.  As every wage worker knows, the maximum hours limits are enforced by the requirement of overtime pay:  An employer has to pay time-and-a-half for any hours worked beyond 8 per day or 40 per week.

Like most laws, the FLSA contains several exceptions.  In particular, “executive, administrative, and professional” employees are exempt from the wage and hour requirements.  The idea is that some white-collar workers are already sufficiently well-paid and/or sufficiently elevated in management that they don’t need the protection of a federal law.  If the CEO of a corporation ends up working 60-hour weeks, that’s his or her problem.  The federal government is not going to make the corporation pay time-and-a-half for those extra 20 hours.

But whom, exactly, does the exemption cover?  “Executive” (e.g., corporate CEOs and presidents) and “professional” (e.g., doctors and lawyers) are clear enough.  But who are “administrative” employees?  The short answer seems to be that administrative employees are supposed to be people who are relatively high up but aren’t exactly “executives,” such as the assistant to the CEO or maybe the head of human resources.

The longer answer is that “administrative” (like “executive” and “professional”) is defined by a complex set of regulations issued by the Secretary of Labor, who is a presidential appointee.  The relevant regulations were originally issued in the 1940s and remained essentially unchanged until the George W. Bush administration rewrote them.

Here’s how the regulatory definition of “administrative” worked before Bush:  The regulations specified two salary benchmarks, one low and one high, and two different tests, one hard and one easy, for who counts as an administrative employee.  If you were below the low salary benchmark, then you didn’t count as an administrative employee, no matter what kind of work you did.  If you were above the high salary benchmark, then you counted as an administrative employee if you passed the easy test, which consisted of a couple of requirements concerning the kind of work you do (e.g., that your work requires “the exercise of discretion and independent judgment”).  And if you were in between the two salary benchmarks, then you counted as an administrative employee if you passed the hard test, whose requirements were more numerous and demanding than the easy test’s.

That sounds like a mess, and it is, but the basic idea is:  If you’re on the low end of the pay scale, you’re definitely not an administrative employee (and you are entitled to overtime pay).  If you’re in the middle of the pay scale, you’re sort of presumed not to be an administrative employee (so you still get overtime pay); you’ll only be considered an administrative employee if your work meets all of the requirements of a very demanding test.  But if you’re on the high end of the pay scale, then you’re sort of presumed to be an administrative employee (and you don’t get overtime pay); you’ll be considered an administrative employee as long as your work meets a small number of more easily satisfied requirements.

The catch in this convoluted system is that the salary benchmarks must be updated periodically to account for inflation.  Otherwise, eventually every office worker will be above the high benchmark and will be presumptively treated as an administrative employee, not entitled to overtime pay.  Of course, not every white-collar employee will pass the easy test–someone who does nothing but word processing or filing, for example, will not.  But the big picture is that if more people are subject to the easy test instead of the hard test, then more people will lose their right to overtime pay.

When George W. Bush took office in January 2001, the salary benchmarks had not been updated since the early 1970s, before the Carter presidency.  In eight years in the White House, Bill Clinton never touched them.  So when Clinton left office, the “high” benchmark that triggered the easy test was still $250 per week, just slightly above minimum wage.  ($250 per week is $6.25 per hour for 40 hours.  Minimum wage was $5.15 per hour at the end of Clinton’s second term.)  Again, what this means is that thanks to Clinton’s inaction, at the end of his presidency any white-collar worker making a little over minimum wage was treated, under the regulations, as the kind of big-shot administrator who is presumptively not entitled to overtime pay.

What did Bush do with all of this?  Made it worse, of course.  He eliminated the hard test altogether, but he kept the two-benchmark, two-test system.  The way it works now is:  Anyone below the low benchmark is not an administrative employee (same as before).  Anyone between the low benchmark and the high benchmark is subject to the easy test (this is new; the easy test used to apply only to people above the high benchmark).  And anyone above the high benchmark is subject to a new ultra-easy test.  Those are the basics, but Bush also threw in some other new regulations that look suspiciously like giveaways to his friends (e.g., special rules that make it easier for financial services and insurance companies to classify their employees as administrative, and thus to stiff them for overtime).

To show that he’s not completely insensitive to the plight of the working class, Bush also updated the salary benchmarks.  The new low benchmark is $455 per week, a huge jump from the Clinton-era low benchmark of $155 per week, and considerably higher than even the high benchmark under Clinton, which was $250 per week.  But just to put that in perspective:  At 50 weeks per year, the new low benchmark works out to $22,750 annually.  The official poverty line in the US for a family of four is $21,200.  So, putting it all together:  Under Bush, if you make a hair above poverty wages, then you’re subject to the easy test that was designed for (and 60 years ago was reserved for) the well-paid employees who presumptively don’t need the protection of federal wage and hour laws.

Was Bush worse than Clinton on this issue?  Yes–he eliminated the hard test altogether and devised a super-easy test for those above the high benchmark.  As inflation erodes those benchmarks over time, everyone will end up worse off.  But was Clinton good on this issue?  No, he was terrible.  He positively harmed workers by failing to update the benchmarks to keep pace with inflation.  In fact, under Clinton more workers were subjected to the easy test than under Bush, because Clinton’s high benchmark was lower the Bush’s low benchmark.

Finally, this is not an area in which Clinton’s defenders can argue that he failed to act because he was hamstrung by a Republican Congress.  The modification of the regulations is purely an executive matter; Congress isn’t involved.  In addition, no one can say this is just some arcane regulatory issue that wasn’t even on the Clinton administration’s radar, because it actually was.  When Clinton entered the White House, it had long been known that these regulations needed work.  The General Accounting Office prepared a report on the regulations, which was submitted to the Department of Labor in plenty of time for Clinton to act before leaving office.  Instead, he did nothing.

What Next?

Can we reasonably expect Obama to be better than Clinton was, on this or any other issue?  Probably not.

Will Obama get tough with Wall Street and reregulate the financial markets in the public interest?  Not likely.  Obama’s campaign got more money from banking and financial services than McCain’s (which ought to give those who call Obama a “socialist” something to think about).  And one of Obama’s chief economic advisers during the campaign was Robert Rubin, who as treasury secretary under Clinton was a key supporter of financial market deregulation, including Clinton’s repeal of the Glass-Steagall Act.  Post-election reports indicate that Lawrence Summers, Rubin’s successor at treasury under Clinton, is a frontrunner for the same position under Obama.  A campaign bankrolled by Wall Street and advised by Rubin, and a Treasury Department headed by Summers, do not look like a promising recipe for “change we need.”

Will Obama give us real healthcare reform?  Not likely.  Any meaningful reform of our healthcare system will require standing up to the insurance companies and other powerful industry players.  But Obama’s campaign got nearly twice as much money from the healthcare industry as McCain’s.  It is consequently unsurprising that Obama’s healthcare plan leaves our private health insurance system largely untouched, as analyses by organizations like Physicians for a National Health Program have shown.  Our private system costs far more and delivers far less than the public systems used in every other industrialized country, so the only reform that makes sense is to replace our private system with a public one.  Obama’s proposals don’t do that, and they don’t even constitute a significant step in that direction.  The best that can be said for Obama’s plan is that, unlike McCain’s, it probably won’t make things worse than they already are.  And here too, post-election reports are already saying that Obama’s purportedly ambitious healthcare agenda is “likely to be downsized or delayed.”

Will Obama get US troops out of Iraq?  Not likely.  A lot of ink was spilled during the campaign analyzing Obama’s various pronouncements on this issue, and I have little to add except to highlight two of the more telling passages in the voluminous public record.  First, Samantha Power, who was one of Obama’s foreign policy advisers until she resigned for having called Hillary Clinton a “monster,” stated in an interview with the BBC that Obama’s highly touted withdrawal plans were nothing more than a “best-case scenario.”  She added that once in the White House, Obama “will, of course, not rely on some plan that he’s crafted as a presidential candidate or a U.S. Senator.”

Second, in an interview last summer with Stars & Stripes, Obama was asked, “You’ve talked about a drawdown.  I don’t know how you envision the long-term presence in Iraq.  When you talk drawdown, are you talking eventually no troops in Iraq, or are you thinking something like Germany and Korea?”  Obama’s answer is worth quoting in full:

“What I’ve said is that we need a residual force to start with.  So, without putting a precise number or a precise time frame, I’ve set a series of missions that we’re going to have to continue to perform for a decent stretch of time.  We’re going to have to continue to provide logistical and intelligence support to the Iraqi military.  We’re going to have to continue to provide training to the Iraqi military.  We are going to have to continue to protect our diplomatic forces, our civilians on the ground in Iraq.  Our embassy, we’ve got to protect.  And, I believe we’re going to have to continue to have a counter-terrorism strike force, if not directly inside of Iraq then certainly in the region, that can provide insurance against any resurgence of either Al Qaida activity inside of Iraq or serious, destabilizing violence inside of Iraq.  Those are all tasks that we’re still going to have to perform, and that means a certain number of troops.  What those troops would be to accomplish those missions, I would leave up to the commanders, or I would at least consult closely with commanders in order to achieve the goals.”

I realize that statements like these should not be taken too seriously.  Like any politician in the middle of a hard-fought campaign, Obama may have just been saying what he felt he needed to say to a particular constituency to pick up a few more votes, and it might prove nothing about what he will actually do in office.  But it does display the kind of rhetoric he knows is available to justify continuing the occupation under another name (“training,” “logistical and intelligence support,” “counter-terrorism strike force,” etc.).  It’s not clear from his answer that he’s committed to bringing a single US soldier home from Iraq.

Will Obama follow a humane course in the Middle East conflict?  Again, not likely.  Putting aside the AIPAC speech, all indications are that Obama’s Middle East policy will be more of the same.  Bill Clinton was the most pro-Israel president in history until Bush Jr. outdid him, and Obama’s foreign policy team includes Clinton’s secretary of state Madeleine Albright and Clinton’s top Middle East negotiator Dennis Ross.  During Israel’s massive assault on the civilian population of southern Lebanon in the summer of 2006, Obama was one of 61 cosponsors (including Joe Biden, Hillary Clinton, and liberal icons like Barbara Boxer and Ted Kennedy) of a Senate resolution expressing “steadfast support for the State of Israel” and supporting “Israel’s right of self-defense.”  Moreover, as a black man, an alleged Muslim, a known associate of former terrorists, and so on, Obama will presumably feel more than the average amount of political pressure to demonstrate unequivocally that he is a good “friend of Israel,” just as Democratic politicians like Bill Clinton have so often supported reactionary “law and order” policies (like Clinton’s so-called Antiterrorism and Effective Death Penalty Act) to try to prove they’re not “soft on crime.”

All told, the outlook for a new day in America is poor.  The bottom line is this:  When you think Barack Obama, think Tommy Carcetti.  He probably has a good heart, but he is confronting a vast array of institutional forces aimed at preventing him or anyone else in power from doing the right thing.  To have any chance of getting the results we want out of his administration, we cannot just sit back and expect him to work his magic.  We must organize, agitate, and pursue independent initiatives (like ballot measures) to get what we want (like single-payer healthcare) at the state level.  And we must carefully scrutinize Obama’s every move and harass and harangue him relentlessly just as if he were John McCain or George Bush.  From the point of view of every American left of center, the principal advantage of Obama over McCain is that it is at least possible that he will listen to us.  We cannot let that advantage go to waste.

FRANK J. MENETREZ received his PhD in philosophy and JD from UCLA.

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