| Obama's World |
Until recently, Barack Obama's presidential campaign was premised on the future. The senator from Illinois orated floridly about bringing "change" to the country; a New Political Man, he pledged to soothe the feuds of old and usher in a national reconciliation amid troubled times. With the emergence of divisive figures like Rev. Jeremiah Wright, Obama's longtime friend and acerbically Afro-centric pastor, the focus has shifted to the past, and with good reason. As FrontPageMag.com senior editor Jacob Laksin discovered in his recent reporting from Chicago's South Side, the predominantly black community where Obama launched his political career in the eighties and nineties, Wright may be the best known of Obama's friends and allies, but he may not even be the most controversial. In a series that will appear in FrontPage over the next three days, Laksin explores Obama's ties to the South Side personalities who helped propel him to power, but whose continuing – and reciprocated – friendship with the candidate raises troubling questions about his ability to forge a new political consensus, especially on the fractious issue of race. To evaluate Obama's campaign and its grand promises, readers must first come to know the world of Chicago politics from which he emerged. -- The Editors
CHICAGO – Barack Obama’s years as a community organizer in Chicago are at once the most well-known and the least well-understood facet of his biography. It is common knowledge that the Democratic candidate got his start in politics on the city’s predominantly black South Side. Yet the people who surrounded him in those days, and who ultimately would propel him to higher office, remain a mystery.
It follows that to evaluate Obama’s campaign, and particularly its grand promises to transcend racial and partisan divides, it is first necessary to examine the community that Obama cites as his great education on race. And to do that, one must get to know those figures who not only were instrumental in Obama’s rise but who have remained fervent supporters of his campaign and who, in turn, enjoy Obama’s continued support.
One must begin with men like Father Michael Pfleger.
During a Good Friday service this March, Fr. Pfleger, a pastor at St. Sabina’s church on Chicago’s South Side, bounded up to the pulpit and launched into a scathing sermon against “the stupid people.”
Despite the setting, Fr. Pfleger was not talking about those who had strayed from God. The targets of his scorn, rather, were those in the media – Pfleger singled out FOX’s Bill O’Reilly and MSNBC for special opprobrium – who had dared to cast a critical eye on a local prophet, the Reverend Jeremiah Wright.
That Pfleger would commit his church to a full-throated defense of the controversial preacher was no coincidence. For Fr. Pfleger and Rev. Wright share more than a zip code. In the tightly knit world of Chicago’s South Side, where churches dot nearly every street, Pfleger and Wright are close friends and political allies. And while Pfleger is white, he is in every other sense the mirror image of Rev. Wright. “Father Pfleger is the only black man I know in a white man’s body,” observes one Chicago pastor.
But Pfleger is not simply a white man heading a black congregation. He also is a devout preacher of the reigning catechism of the city’s South Side. It is an ethos of perpetual disenfranchisement that surpasses class barriers, and which holds that America, now as in the era of Jim Crow, is a fundamentally oppressive nation, especially toward its black citizens.
The fact that Pfleger also is a longtime friend of Barack Obama underscores just how omnipresent this ethos was in the formative years of Obama’s political career. And it casts fresh doubt on Obama’s assurance that his roots in Chicago’s black community make him the ideal candidate to chart a new course in racial relations.
St. Sabina advertises its politics on its door, literally: A blue poster on the rectory door proclaims, “We oppose war!” Inside St. Sabina’s cathedral, one finds red, green, and black flags – the colors of black nationalism. In this respect the church, the largest black Catholic church and school in the Chicago archdiocese, is very much a vehicle for the political passions of Fr. Pfleger.
Although the idea of a white preacher as an apostle of Afrocentrism seems unusual, it is very much the product of Chicago’s distinctive history. At the beginning of the last century, the city’s South Side was home to European immigrants from Germany, Poland, Italy, and especially Ireland. In the 1930s, nearly a quarter of the Auburn Gresham, the community where St. Sabina’s is located, were Irish. When the descendants of these residents moved out to the suburbs in the 1960s, they took their churches with them. So dramatic was the demographic shift that, by 2000, Auburn Gresham was 98 percent black. Among the few who church leaders who remained were those most active in the civil-rights movement, who stayed behind to minister to the South Side’s new black residents.
Fr. Pfleger is very much a throwback to that time. One can hear it in the stridency of his sermons, which he delivers with a barking staccato that makes him sound like a prize-fight announcer. One can see it, as well, in the appeals he sometimes writes to his parishioners, which he signs with the now-quaint idiom of a New Left activist (“In the Pursuit of Justice”) and in the fire-and-brimstone zeal that sometimes crosses the line from provocation into outright belligerence. Even some of Fr. Pfleger’s supporters were discomfited when, during a May 2007 anti-gun rally at Chuck’s Gun Shop in Riverdale, Illinois, Pfleger issued the following threat to the store’s owner, John Riggio: “We’re gonna find you and snuff youth out.” Characteristic of his no-holds-barred style, Pfleger remains unapologetic about the incident.
Above all, Fr. Pfleger’s radicalism is evident in the people that he has welcomed at St. Sabina. Prominent among them is Pfleger's friend – and Barack Obama’s spiritual advisor – Rev. Jeremiah Wright. Outside of Chicago’s South Side, Wright, now notorious for his “God damn America” sermon, is an embarrassment and a race-baiting demagogue. But for Pfleger, as for much of Chicago’s South Side, he remains a revered icon.
“The idea that this preaching is divisive is absolutely ridiculous,” Pfleger has said of the controversy around Wright. For most, Wright’s claim that the U.S. government invented the “HIV virus as a means of genocide against people of color” is a loathsome calumny. For Pfleger, such racially fraught rhetorical warfare is all part of the job. As he has put it: “The job of pastor is to shepherd his or her congregation, and that requires speaking to your congregants in the language and context they understand.”
Unsurprisingly, Pfleger often invokes similar themes. Echoing Wright, he calls racism “America’s addiction.” Taking a cue from racial huckster Al Sharpton, a former guest at St. Sabina, Pfleger has waged campaigns against everyone from elementary school sports leagues to the Chicago Fire Academy, charging that these institutions are racist.
Efforts like these have won Pfleger high praise from Chicago’s black community. “Father Mike is a man with a message for this messed-up age,” says Sandra Riley, an evangelist at Chicago’s Just For U Ministries. And if that message – of pervasive racism, of unending discrimination, of a national conspiracy to marginalize black Americans – sounds antithetical to the hopeful, post-racial tenor of Obama’s presidential campaign, it is nonetheless the case that it is broadly appreciated by the thousands of parishioners, whether from solidly middle-class Auburn Gresham or from more humble parts like crime-ridden Englewood, who attend the South Side’s countless churches.
It is a reflection of the corrosive political climate on Chicago’s South Side, and of the unlikely alliances that local racial pathologies have helped forge, that Rev. Wright is not even the most extreme of Pfleger’s allies. That dubious distinction better fits Nation of Islam leader Louis Farrakhan.
Like Wright, Farrakhan has been a frequent guest to St. Sabina. He has preached there on three different occasions. Loathed in the rest of the country, the minister has a friend in Fr. Pfleger. As for complaints that Farrakhan, who once called Hitler “a very Great man,” is a bigot and an anti-Semite, Pfleger will not hear of it.
“Minister Farrakhan is probably one of the most misunderstood and mis-defined leaders of our day,” Pfleger has said. “When you don’t want to deal with someone’s truth, you try to destroy their character or redefine them …His truth causes America to face its racism and its hypocrisy.” That Farrakhan’s “truth” includes a belief in black supremacism to rival the worst Ku Klux Klan propaganda is to Pfleger, and to much of the South Side’s black community, insignificant.
To understand Farrakhan’s prominence here – Rev. Wright is another supporter of the minister, and his Trinity United Church of Christ recently honored him with a lifetime achievement award – it helps to walk around the community.
Just around the corner from St. Sabina’s, on 79th street, stands Salaam Restaurant. An immaculate white structure, it is identifiable by a decorative tower, bearing the Islamic star and crescent, which towers above a neighborhood of faded store-fronts, weather-beaten row houses, “Soul Food” eateries and hair salons. Built for $5 million in 1995, the restaurant is an advertisement for the influence of its famous owner: Louis Farrakhan. (Farrakhan’s daughter, Maria Farrakhan Muhammad, is said to have designed the pricey interior décor.)
That influence is everywhere to be seen. A fading white painted sign on the side of a brick building advertises Farrakhan’s radio show. (“Hear Minister Louis Farrakhan.”) An awning plugs lectures by the minister. To most Americans, Farrakhan is a racist. Here he is a pillar of the community, a man you would not wish to cross.
Fr. Pfleger, in any case, has no wish to do so. On the contrary, he cannot praise enough the man he unabashedly calls his “mentor.” As he told The Trumpet, the newsmagazine of Rev. Wright’s Trinity United Church: “Contrary to those who want to make him anti-white and anti-Semitic, I believe Minister Farrakhan is presently building the umbrella for people of conscience to come together no matter the race or creed. I am honored to call him my brother.” It was surely the first time that the man who seethes at Jewish “bloodsuckers” was hailed as an agent of interfaith harmony.
Pfleger’s political activism and his relationship with figures like Wright and Farrakhan might be of merely parochial interest, a curious glimpse into the troubling ties that run through Chicago’s South Side, were it not for the fact that Fr. Pfleger also is close to the most famous politician to pass through the community.
Pfleger says that he has known Obama for over twenty years. And while Obama worshipped at Wright’s Trinity Church, he is known to have made frequent visits to St. Sabina. Indeed, in one of the promotional videos for St. Sabina‘s, the Democratic candidate can be conspicuously seen in the congregation.
Obama, to be sure, does not seem to share the racial hang-ups of his South Side supporters. In his often-insightful autobiography, Dreams From My Father (1995), he dismisses the black-power movement as a “corrosive force” that denies individual identity in its vision of blacks as constant victims. But if Obama is unwilling to accept all the convictions of the black community, neither is he prepared to sever his ties with those who, like Fr. Pfleger, shamelessly stoke racial tensions and undermine Obama’s sincere efforts to move past the struggles of old.
This reluctance may explain why the Obama campaign seems strangely unembarrassed by the candidate’s association with Fr. Pfleger. On the campaign website, Pfleger is touted as one of the “people of faith for Obama,” and the site features a testimonial from Pfleger likening Obama to Robert F. Kennedy.
Yet, the relationship raises troubling questions about Obama’s judgment. After all, the racially charged, Afro-centric sermons that have forced Obama to distance himself publicly from Rev. Wright are no different than those that can be heard weekly at Pfleger’s St. Sabina’s church. Sometimes it can be difficult to tell the two institutions apart. On a recent evening, for instance, St. Sabina’s played host to a sermon by the Reverend Otis Moss, a protégé of Rev. Wrights who is currently the main pastor at his Trinity United Church. (Making clear his debt to Wright, Moss in his sermon likened media criticism of the reverend to the crucifixion of Christ.) Whatever criticism can be leveled at Wright can be directed, with equal justice, at Fr. Pfleger.
And there may be more at issue than the company Obama keeps. For instance, while Obama has promised to follow a new political model, one above the partisan jousting of Washington, his connection to Pfleger suggests that Obama is a practitioner of that oldest brand of partisanship: patronage politics. Thus, the Chicago Tribunequid pro quo, Obama later would pad the state budget with earmarks to favored constituents, steering some $225,000 in grants to St. Sabina. Despite condemning “business-as-usual in Washington,” Obama now stood revealed as a veteran of the traditional approach. has reported that between 1995 and 2001, when Obama was a state senator, Pfleger contributed some $1,500 to the young politician’s campaign. In what seems suspiciously like a
Michael Pfleger is not easily confused with Barack Obama. To Obama’s smooth, calming approach, he is gruff and outraged. Listen more closely, however, and it’s hard not to discern some similarities. When, in one recent sermon, Fr. Pfleger preached to his congregation -- “We can recover!” “We can recover!” -- it was impossible to miss the echo of Obama’s stump slogan, “Yes we can.”
Now, as Obama seeks to distinguish himself from the likes of Rev. Wright, he must show that such echoes are only that. And he must explain, more adequately than he has to date, why voters should bet on him to achieve the racial reconciliation that his close friends and advisors, including Fr. Pfleger, have only served to delay.
The Limits of Monetary Policy
by James A. Dorn
A central banker must know the limits of monetary policy. Pumping up the supply of fiat money cannot generate real economic growth, but it can ignite inflation. Just look at Zimbabwe, where Robert Mugabe's policies have destroyed the currency, which even has an expiration date, and created economic chaos. Although China is thankfully not following Zimbabwe's lead, creeping inflation and price controls are a threat to social harmony and stability.
In a world of mobile capital, using monetary policy to peg exchange rates makes it more difficult to control inflation. Real economic development requires stable money and economic freedom, which expands the range of choices open to individuals. China's phenomenal rise since 1978 has resulted from economic liberalization, not monetary ease.
China needs a more transparent monetary policy aimed at achieving long-run price stability.
But China is still not a full-fledged market economy, and monetary policy is compromised by Beijing's reluctance to let market forces determine the interest and exchange rates. Excessive monetary growth in 1985, 1988, and 1993–95 led to rapid inflation. Since that time, the People's Bank of China has slowed the growth of the monetary base (currency in circulation plus bank reserves), and inflation has become less onerous.
Nevertheless, inflation is now at a 12-year high. The consumer price index increased by 8.7 percent in February, from a year ago, due primarily to higher food prices. But unless the PBC steps on the accelerator and allows much faster growth in money and credit, which is unlikely, China's CPI inflation should return to about 3 percent by year end.
The real threat to China's long-run price stability is not from the risk of higher food prices or other increases in relative prices but from excessive growth of money and credit—due to an undervalued exchange rate and artificially low real interest rates on loans at state-owned banks. Meanwhile, price controls designed to suppress inflation distort relative prices and breed corruption as shortages spread and black markets appear—just as in Zimbabwe.
Although China announced a major change in its exchange-rate regime in July 2005, and told the world it would henceforth manage its currency by pegging to a currency basket as opposed to the U.S. dollar, Congress has been impatient. Bipartisan legislation threatens to penalize China for "currency manipulation." Presidential hopefuls Hillary Clinton and Barack Obama have joined the anti-China chorus and said they would co-sponsor a bill to treat the undervalued yuan as an actionable subsidy.
Congress should recognize that it is in China's own interest to let the yuan appreciate at a faster rate in order to avoid inflation. When the yuan's value in dollar terms increases, it means that the PBC does not have to create as much base money to buy dollars. In this way, money and credit growth can be tamed without administrative controls, and without risking further inflation.
Even though the yuan has been allowed to appreciate by 18 percent against the dollar since 2005, China's foreign exchange reserves have more than doubled from $819 billion to $1.8 trillion today. The PBC has successfully "sterilized" capital inflows and kept the monetary base from explosive growth. In particular, the PBC has been able to restrict the growth of money and credit by selling bills to state-owned banks, increasing reserve requirements, rising loan rates, and enforcing credit quotas. Meanwhile, Beijing has supplemented those forms of financial repression with price controls on foodstuffs and energy.
Using sterilization and administrative measures to implement monetary policy is far from optimal. China's reluctance to let the yuan float means that monetary policy cannot be devoted solely to the task of preventing domestic price inflation. Indeed, that task becomes even more difficult as capital controls are relaxed or evaded, and as China's trade sector grows and financial innovation occurs.
China needs a more transparent monetary policy aimed at achieving long-run price stability. The stop-go monetary policy of the 1980s and 90s is less severe today because the PBC has been able to slow the growth of money and credit, but only by flooding the balance sheets of state-owned banks with PBC bills, crowding out alternative investments, and imposing credit quotas.
Financial repression and price controls are denying China the opportunity to increase economic freedom and prosperity. Interfering with market prices—whether in the form of undervaluing the exchange rate, capping interest rates, or controlling the relative prices of products, services, and resources—weakens property rights, politicizes economic decisions, and leads to corruption. Those in government who administer the controls gain power, while the people lose wealth and freedom.
The danger China faces from accelerating inflation is that the march toward the market will be reversed by the unintended consequences of state control over financial transactions and private exchanges. History has shown, and the current situation in Zimbabwe confirms, that whenever government fiat money is in excess supply and inflation results, those in power blame private entrepreneurs ("capitalists") for the higher prices and attack them by imposing price and profit controls. If monetary stability is not restored, hyperinflation will destroy both economic and personal freedom.
Using capital and exchange controls, credit quotas, and price ceilings to substitute for a transparent monetary policy aimed at price stability is becoming more costly, as China's economy grows and becomes more integrated with the global economy. The challenge for Chinese leaders will be to let go of the legacy of central planning and adhere to a market-based monetary policy that allows price flexibility while maintaining sound money and economic freedom.
Traders
by Daniel J. Ikenson
Daniel J. Ikenson is associate director of the Cato Institute's Center for Trade Policy Studies.
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Despite Democrats' rhetoric, Americans embrace trade.
Whatever Hillary Clinton and Barack Obama say about the fallout from free trade, producers in Indiana and North Carolina are enjoying a golden age of exports.
Both Clinton and Obama promise to halt new trade agreements and force our trading partners to renegotiate their existing deals. Both candidates support actions that would ultimately hurt American producers, consumers, and investors. And both insinuate that our trade partners are actually adversaries.
But Indianans should recognize those trade partners as their fastest-growing customers. According to the U.S. Department of Commerce, Indiana's producers shipped $26 billion worth of goods to foreign customers in 2007 — 14 percent more than the year before, and 80 percent more than in 2001. In fact, since 2001, the state's exports have grown at a rate one-third faster than U.S. exports overall. In North Carolina, producers shipped $23 billion worth of goods to foreign customers in 2007 — 10 percent more than the year before, and 59 percent more than five years ago.
Blaming trade for all that ails us is a time-honored political tradition.
In 2007, exports accounted for 20 percent of U.S. manufacturers' total sales revenues — the highest percentage in modern history. And nowhere in America is manufacturing more important to the economy than in Indiana, where the sector accounts for over 30 percent of the state's gross domestic product. Manufacturing is also more important to North Carolina's economy than it is to most other states, accounting for 22 percent of the state's gross domestic product, ranking it fifth among states in that measure.
In China, Canada, and Mexico — the primary villains in the candidates' anti-trade narratives — Indiana's producers are building relationships that are yielding extraordinary returns. Exports from Indiana to China increased by a whopping 36 percent between 2006 and 2007 — twice the rate of total U.S. export growth to China, and nearly four times Indiana's exports to China in 2001.
Likewise, Indiana's exports to Canada and Mexico have grown 9 percent from 2006 and 67 percent from 2001, eclipsing overall U.S. export growth to the NAFTA countries in both periods. North Carolina's exports to NAFTA have grown 46 percent over the past five years — to $7.4 billion.
Export growth is not concentrated is one or two industries either. It is economy-wide and the numbers are staggering. Of 32 broad industry groupings, 28 in Indiana experienced export growth between 2006 and 2007, and 30 experienced growth between 2001 and 2007. Of the 28 industries showing export growth between 2006 and 2007, 23 experienced double- or triple-digit percentage growth. From Indiana's largest goods-producing industries to its smallest, strong export growth is evident.
The fact is that U.S. manufacturing is thriving. But Clinton and Obama never mention that U.S. factories account for 21 percent of the world's manufacturing output, while China's account for just 8 percent. Instead, at the behest of the steel industry, unions, and other protectionist lobbies, the Democratic candidates are threatening to take harsh actions against China and other American trading partners.
Blaming trade for all that ails us is a time-honored political tradition. Acting on that impulse by imposing trade barriers or otherwise retreating from the global economy is never the proper course, but it would be particularly foolish now, with industry after industry experiencing an export boom.
That boom couldn't be happening at a better time. In the past, whenever the U.S. economy slowed, the world economy slowed along with it. But with the awakening of demand in developing economies, growth remains strong in many parts of the world. The U.S. slowdown might therefore be short-lived, as export growth keeps the economy moving ahead. That is, unless policymakers do something to jeopardize America's access to foreign markets.
As the residents of Indiana and North Carolina understand, and Senators Clinton and Obama must realize, our trading partners are our customers. We don't want them to take their business elsewhere.
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