Obama: economy is in a state of emergency

The movement against right-wing extremism rose to a new level yesterday as Barack Obama held an economic summit in Washington DC, attended by two former Republican officials including former Treasury Secretary Paul O’Neal and Securities and Exchange Commissioner William Donaldson. The meeting was entitled “Economic Security for American Families” and was held against a backdrop of the IMF’s accesment that the US economic crisis is ongoing with inflation at its highest level in 17 years, a record deficit along with a loss of 62,000 jobs in June according to the BBC.

O’Neal, who angrily broke with Bush over the Iraq war and other issues was present to give advise on how to handle the country’s cascading economic woes. Known to be close to none other than Dick Cheney and Alan Greenspan, his presence while not an endorsement, nonetheless marked a significant departure from tradtional practice. The gathering was also attended by AFL-CIO and Change to Win officials John Sweeny and Anna Burger, along with a number of business and government figures.

Obama at the meeting pointed to the outbreak of an economic “emergency.” Managing this emergency and crafting a plan to rescue the economy was high on the meeting agenda. With home foreclosures at record levels and a series of bank failures, worries about the future seem to be growing.

In fact there appears to have arisen a triple crisis of capitalist system according to Jose Ignacio Ramone editor of Le Monde Diplomatic. In a recent article he argues that the world is experiencing the coming together of three crises, food, energy, and finances – an event that in Ignacio’s opinion has never occurred before. “As much as the authorities” he writes, “ try to minimize the seriousness of the moment, the truth is that we’re facing an economic cataclysm of unprecedented magnitude, whose social effects are just beginning to be felt and will explode with total brutality in the next several months.”

People are starting to worry. Bob Herbert writes in the New York Times that a majority believe something is terribly wrong:

“A recent survey found that an overwhelming majority of Americans believe that the social contract of the 20th century – in which the government, employers and the society as a whole pulled together to see that those who worked hard and played by the rules were afforded the basic necessities of daily life and a shot at the American dream – “appears to be unraveling.”

The Democrats, according to Herbert seem to be looking for answers. He quotes Anna Burger of SEIU. who remarked after the meeting that “Obama has very serious policies, not sound bites, for addressing the long-term and short-term issues that are having such a dramatic effect on people who are working and trying to make ends meet,” she said.

There were various views put forward according to press reports. The BBC suggested that former Treasury Secretary and Harvard President Larry Summers favors nationalization of some banks to deal with the problem. “Mr Summers argues that the US government should nationalize Fannie Mae and Freddie Mac, assuming their $6 trillion debt and begin a rapid programme of aid for households facing foreclosure.”

Labor, was against new trade deals than don’t include union rights, while big capital is resisting, the BBC reports: “Trade unions argue that the US should not sign any new trade deals that do not have clauses protecting workers’ rights, while Mr Rubin believes that a descent into protectionism would exacerbate the world economic slowdown.”