The Good, the Bad and the Ugly: Obama's kinda town?

Almost three weeks after the US presidential election, I'm still looking for one of the pundits to make a fairly obvious point: Obama's from Chicago. He is the first president to emerge from the mid-West since Harry S. Truman, and that was so long ago as not to be relevant anymore.

What difference does it make? Especially in the case of Obama, who seems to hail from anywhere and everywhere simultaneously - Kansas or Kenya, Indonesia or Illinois, Hawaii or Harvard: you name it, he's been there, done that, and probably sent a postcard as well.

But his political roots and his base are in Chicago. Two hundred thousand people didn't turn out for that victory rally because they had nothing better to do that night. When he goes home, he goes to Chicago which, let's face it, is a more important - not to mention far more impressive - place than Little Rock, Arkansas, or that nowhereville in Texas where Dubya has his ranch.

In most respects - size, economic importance, cultural richness and diversity - Chicago ranks above the capital cities of most Western countries. Indeed, it is a capital city, of the region called the mid-West.

However, that region's glory days belong to the industrial era and, since the end of that era and the move to the post-industrial (or technological, or information, or whatever) age, the mid-West has been in decline, taking Chicago reluctantly with it.

Even before the emergence of Obama, the question as to whether this decline could be reversed had arisen. The concept of 'the re-industrialization of America' is a very broad and complex one, and there are those who believe that America's future as an economic super-power is dependent on this happening. That is arguable, but what is not is the clear link between reversing the shrinking role of industry in general and manufacturing in particular within the American economy, on the one hand, and any hope of stemming or reversing the decline of the mid-West on the other. In this context, the fact that the new president is a mid-Westerner whose political power-base is Chicago is not a minor biographical detail, but a potentially critical factor in economic and social policy - the key areas that will determine Obama's success or failure.

Most specifically, he will have to decide - probably well before the Inauguration - whether or not to save the US car industry. General Motors and Ford are not merely the symbols of US industrial might, they are the backbone of the manufacturing sector in the mid-West. Detroit became 'Motown' (Motor Town) because of Ford, and the Motown record label came from that - not the other way round. But the number one hits of Ford and GM are as dated as those of the Tamla Motown label, and the demise of these two iconic companies is now imminent and inevitable - unless Uncle Sam steps in to save them.

And step in it will. That outcome is as inevitable as the economic, business and accounting inevitability of their bankruptcy. It is inevitable politically, because of the number of jobs that will be lost, directly and indirectly, if they go belly-up. That outcome would have been likely in a Republican Administration and almost certain in any Democratic one. But in a Democratic Administration facing the worst recession since the 1930s and headed by an African-American from Illinois, this has got to be as near to a certainty as death and taxes.

There is, however, more to it than the obvious issue of jobs and votes, in other words of politics. There is, for a start, economics. Even in 2008, you can't be an economic heavyweight if you don't have manufacturing capability -- which means, first and foremost, cars, buses, trucks, etc. In fact, davka [especially] in 2008, following the collapse of the UK's attempt to build a post-industrial economy based on financial services, real-estate and entertainment, it is clear that making things is not passé.

But there is also the unspoken but nonetheless critical issue of geo-politics. The USA may be weakened by the financial and economic crisis, but it intends to remain a military superpower. You can't be one without tanks, armoured personnel carriers and jeeps. And you can't be a superpower if the Pentagon's procurement policy requires it to buy APCs from Toyota and tanks from - whom? Volkswagen? Fiat?

Get real, people. What has happened in the last few months is that the capitalist model of profit-based corporations that stand or fall on their merits in the free market, has been shunted aside - mainly at the behest of failed capitalists - and replaced by statist intervention. When the state calls the shots, profit and loss are not the only, or even the main, criterion in the decision-making process.

States have other interests - social, political and geo-political. That's why -- one example amongst many -- successive Israeli governments poured so many billions of shekels into those corrupt, inefficient and hence loss-making entities, Israel Military Industries and Israel Aircraft Industries, between 1987 and 2004. States don't work on the basis of next quarter's P&L, and that's just as well.

So GM and Ford will be saved. The real question relates to the how, not the why. Ideally, they will be put into Chapter 11 and allowed to restructure, under the protection of the courts but with overt government involvement. But that will require bravery and toughness from the President - we know who he is, but not whether he has those qualities - and from the Secretary of the Treasury and other Cabinet members.