Was President Obama “Cognitively Captured” by Wealthy Donors?

Economist Joseph Stigliz sat down for a chat with Bill Maher Friday night.

His contention that President Obama has been “cognitively captured” by big donors is something that is occasionally heard from liberals who don’t agree with the President’s policies. We’re hearing it a lot more during the debate about trade agreements. So let’s take a closer look.

First of all, in both of his presidential campaigns (2012 even more so that 2008), Barack Obama revolutionized fundraising by relying on small donations. That is simply a fact. It is also true that in 2008 many employees at Wall Street firms donated to his campaign. But in 2012 after he signed Dodd/Frank, a lot of them abandoned him. The idea that he was somehow “captured” by his wealthy donors is absurd.

When it comes to campaign finance, it’s also helpful to remember that the President spoke so forcefully against Citizens United in his 2010 State of the Union speech that Justice Alito responded by nodding in dissent.

Secondly, during President Obama’s first two years in office, while Democrats controlled both houses of Congress, he fought hard for 3 big pieces of legislation: the stimulus bill, Obamacare, and Wall Street reform. Simply on it’s face, those are three progressive pieces of legislation. But let’s look a little more closely at them.

When it comes to the stimulus bill, I would suggest that there was a sense of urgency. At the time, we were loosing 700,000-800,000 jobs per month and so something needed to be done fast. In the Senate, Al Franken’s election was being contested and Sen. Spector hadn’t switched parties yet. As a result of GOP obstruction requiring 60 votes for passage, the Democrats were required to negotiate in order to get a few Republicans to support the bill. They were able to do that and get it to the President’s desk 28 days after he was inaugurated. Mission accomplished. I’ll leave it to Michael Grunwald’s book The New New Deal to tell the rest of the story about how well it worked.

Next up came health care reform. There are surely books that could be written about that one. But when it comes to Stigliz’s critique, all one needs to do is google “Obamacare redistribution.” Conservatives hate it because it redistributes wealth from upper incomes to lower. Jonathan Cohn does a good job of explaining all that.

Finally came Wall Street reform with Dodd/Frank. Someone will have to explain to me how the Consumer Financial Protection Bureau’s inclusion in that bill demonstrates “Obama’s cognitive capture” by wealthy donors. Beyond that, the whole reform process is working better than most liberals assumed it would and, as I’ve pointed out recently, the “too big to fail” financial institutions are shrinking because of it’s regulations.

Since then, Democrats haven’t been able to get much through Congress. But President Obama’s proposals to deal with income inequality have included things like: raising the minimum wage, investment in infrastructure, universal pre-K, and free community college.

If one wants to critique President Obama’s policies, it is entirely reasonable to do what Paul Krugman did in his article in Rolling Stone where he suggested that, while the 3 big pieces of legislation that have been passed are successful, they didn’t go far enough. It is possible to have a reasoned debate about that. But that’s not what Stigliz did. He avoided all the arguments about the issues and attempted to go behind the curtain to suggest what he thinks is wrong with the President’s motivations. That’s a cheap shot.

Nancy LeTourneau

Nancy LeTourneau is a contributing writer for the Washington Monthly.