SPEAKING at the Nelson Mandela Centenary Lecture yesterday, former US President Barack, put on his customary charm and smile and dared to go into that touchy subject of inequality: “And the result of all these trends has been an explosion in economic inequality. It’s meant that a few dozen individuals control the same amount of wealth as the poorest half of humanity. That’s not an exaggeration, that’s a statistic. Think about that. In many middle-income and developing countries, new wealth has just tracked the old bad deal that people got because it reinforced or even compounded existing patterns of inequality, the only difference is it created even greater opportunities for corruption on an epic scale”. And in what has become customary response to Obama’s speeches, this statement was met with great applause.
This has been the trend in Obama’s reign, which continues unabated; he can say and do all the things that go against humanity, smile through his actions without having to be held to account. On the contrary, he gets an applause for highlighting the injustices and inequality in the world without being asked the simple question: You were in a powerful position to address these issues, what did you do?
For starters, the venue from which he spoke about the rather awkward subject (for him specifically as a man who earns a reportedly $400,000 for each speaking assignment) was held at one of Johannesburg’s affluent suburbs – the Wanderers Stadium. The choice of venue therefore excluded the poor marginalised Blacks who remain trapped in the squalor of SA’s townships.
International advocacy group Oxfam produced a report on global inequality which claimed that “eighty two percent of the wealth generated last year (2017) went to the richest one percent of the global population, while the 3.7 billion people who make up the poorest half of the world saw no increase in their wealth”.
In 2016, which is perhaps the statistic to which Obama refers, Oxfam reported “that the 62 richest billionaires have as much wealth as the bottom 50% of the human race combined: about $1.75 trillion (R28.8 trillion)”.
In the South African context, the figures to which Obama refers relate to two families – the Ruperts and Oppenheimers – not “a few dozen individuals”, have wealth equal to the poorest 50 percent of the country, according to the Oxfam global inequality report. This makes South Africa the most unequal country in the world, it said.
Obama speaks of inequality as if he has never been in the powerful position of making a difference in terms of addressing it. He was president during the the years between 2008 and 2015 which some termed the “Years of Great Fleecing”.
Michael Gray writing in the NewYork Post in 2016, said this was a time when “the greatest transfer of wealth in the history of the world occurred. Some $4.5 trillion was given to Wall Street banks through its Quantitative Easing program, with the American people picking up the IOU”.
“If liberals are angry about inequality, they should look no further than President Obama.”
Gray added: “This is the primary reason the US economy has not been able to recovery from the bank implosion of 2008. Surely if you inject $4.5 trillion into the economy, you will get economic growth. You will get a 4% to 5% increase in Gross Domestic Product for at least a year or two.
Yet the Obama administration is the first two-term presidency that has not posted a 3% GDP growth on an annualized basis for 8 years. Even Franklin Delano Roosevelt posted 3% growth year during the Great Depression.
That’s because the $4.5 trillion was not given to any infrastructure program — it was given to banks, under the misguided notion that they needed the money to remain solvent. The banks promptly invested this money, which kept the stock market humming, but did nothing for jobs, wages or the GDP.
This was by design. The Fed could not allow the bank’s largesse to be circulated into the public for fear of rapid inflation.
The banks also funded company mergers, company debt offerings and stock buybacks. This activity kept the money sequestered and allowed a greater return for the banks. After all, they were getting free money to invest — there was no way to lose.
Who did this help? The 1%, and pretty much only the 1%.
These actions are the reasons the American middle class has been decimated and no longer makes up the majority of the population. If liberals are angry about inequality, they should look no further than President Obama. He has done more to contribute to the gap between rich and poor than anyone”.
And so instead of punishing Wall Street oligarchs and corporate elites for having deliberately crashed the economy, they were rewarded with public funds and instead of helping the poor, they (the poor) are being pushed more-and-more to the margins of society.
Obama, despite the great promises of his election campaign, has aligned himself with the powerful forces which operate in an economic system that has long abandoned the poor – these are the same people who, together with the trade union movement, made major donations towards his election campaign. Yes, he received a lot of money from the big banks and corporations, but there was a belief that he would side with the poor.
In a meeting in March 2009 at which bankers had to explain to the president why they paid themselves and their executives huge salaries, Obama told them: “Be careful how you make those statements, gentlemen. The public isn’t buying that.” He reportedly added: “My administration is the only thing between you and the pitchforks.” The meeting came shortly after the US Treasury announced it would cleanse banks’ balance sheets of upto $1 trillion of distressed loans and securities.
As we now know it was simply a political stagecraft designed to defuse the public’s anger at Wall Street’s excesses. In September last year, Obama reportedly made $1.2m for a series of speeches he made to financial services firms less than a year after leaving office. Hillary Clinton, the candidate Obama backed as his successor, was paid $21.6m for 92 speeches she made to financial institutions over a period of two years https://www.independent.co.uk/news/world/americas/us-politics/barack-obama-speeches-fee-wall-street-latest-a7954156.html
And so Obama’s concerns with inequality is merely paying lip service.
It is simply obscene that the global wealth resides in the hands of so few. Millions of people around the world are trapped in inequality and poverty which in itself undermines democracy. We have seen how the wealthy are able to influence policy. Such inequality is the symbol of a broken economy and the lack of will by governments to do something. It’s about time Obama is asked the tough questions – what will he do to help dismantle an economic system, controlled by his Wall Street friends, and which is so hostile to the poor.