Politics in the New Depression

Submitted by Anon on 16 June, 2009 - 9:05 Author: Barry Finger

America is a centre-right nation. Or so the pundit class in America tirelessly insists. The Obama administration is ubiquitously warned, from quarters both friendly and hostile, that failure to adhere to this truism augers political calamity. At first glance it might seem very curious that a President, who ran as a moderate and who made no secret of his desire to reach across the political aisle to create a new political center, should require such constant and persistent admonishments.

The problem is that not only did the Democrats win in the last election, they won big. They control both houses of Congress as well as the Presidency. This simply should not be. Americans are famously celebrated for favouring divided government, the better to paralyse the bureaucracy so that markets can be given free sway. Yet fueled by an economic debacle unseen since the Great Depression, the electorate soundly repudiated two and half decades of Republican political and free-market ideological domination and the idiotic nostrums that rationalise this.

Their experiences with massive layoffs, housing foreclosures, declining living standards and lack of access to medical coverage rendered the electorate no longer able to swallow the belief that capitalism suffers from too much regulation. The American cultural drama —in which the universal “acquisitiveness” overpowers “class envy” — seemed to suddenly play itself out. No longer were Wall Street’s masters of the universe acclaimed as America’s “most productive class” entitled to every last nickel they could squeeze from the system. Overnight, as it were, the problem of successful governance could no longer be defined — as the Reaganites long had it — as one of getting government off “our” backs.

Rather the electorate clearly sought a government to “watch” our backs against a privileged class increasingly regarded as both insatiably predatory and monumentally inept. The electorate began to see itself as an “us” — not yet a fully distinct class perhaps, but as an entity separate from “them,” with divergent, if not opposed, interests and aspirations.

Suddenly “socialism”, a term typically invoked to scare American children and adults with weak constitutions, began to creep into respectable political discourse.

Of course, John McCain and his everyman nitwit, “Joe the Plumber,” were quick to denounce Obama and the Democrats during the campaign as socialists, conveniently ignoring the fact that the Bush administration had not only vastly expanded the federal government’s economic footprint, but effectively nationalised the banking and mortgage industries as well. This continuing trend led the middle of the road Newsweek to proclaim in February that “we are all socialists now,” before reassuring its readership that “our instincts” will “naturally” redirect the economy towards a more free market style capitalism once the crisis passes. Before that occurs however, the federal government will have added 60% of General Motors and 80% of AIG to its expanding portfolio.

Forget for the moment that what the establishment means by “socialism” is the placing of large swaths of the economy under the temporary trusteeship of a state wholly beholden to elite interests. Or that the terms of these receiverships are exclusively determined by the same rolodex of financial wizards that just yesterday were champions of deregulation, strikebreaking, outsourcing and downsizing; that this entire process is the antithesis of socialism insofar as all decisions are made outside the arena of democracy with no meaningful input, let alone control, from below.

Forget too, that far from empowering working people and the oppressed, the recovery program will effectively burden them with the cost of the crisis in the form of future tax obligations required to indemnify the state’s creditors — America’s own economic royalists and Chinese Stalinists.

For all this, the shifting loyalties of the white working class away from the party of outright reaction to the Democrats is, from a subjective viewpoint, a progressive development. This underlying trend is further affirmed by polling data regarding a wide range of issues — including the role of big business, health care reform, gay marriage, stimulus spending, international trade, Social Security and military intervention — all of which tentatively indicate that working class Americans as a whole are increasingly receptive to and may even be comfortable with a liberal agenda considerably to the left of what the Obama administration actually has to offer.

republican agenda

But if the liberals, intoxicated by Obama’s current popularity, are heralding him as the second coming of Franklin Roosevelt, they are blinded to an obvious distinction. Roosevelt was seen, and demanded to be seen, as having saved capitalism from the financiers, whereas Obama runs the risk of being seen as saving capitalism for the financiers.

And it is this distinction that provides the potential opening for the flagging Republican Party to redefine the class struggle between the haves and have-nots in populist terms as one between Wall Street and Main Street, with all the reactionary social wedge implications that struggle along such lines would entail.

The so-called “teabag” protests, orchestrated by the right (and corporately underwritten) against the banking bailout must be seen as the opening salvo in the Republican offensive. Should the midterm elections be held under circumstances in which the banking sector seems to be revived with its outrageous bonus system again revving shamelessly out of control — with a new credit bubble in the offing — while employment, housing foreclosures, health care coverage and pension security continue to deteriorate, the Republican message may will begin to resonate.

The Republican slime machine, after all, has had ample opportunity to perfect its message. Let’s not forget their thinly veiled racist explanation for the collapse of the housing market — coercion by the “liberal federal bureaucracy” to encourage banks to extend loans to unqualified Blacks and Hispanics. This supposedly required the use of new and ultimately unsecurable financial instruments that were then diffused throughout the system to minimise risk to individual lenders unintentionally shifting the risk upwards to imperil the system as a whole.

Never mind that fully qualified Blacks and Hispanics were offered sub prime mortgages with the promise that they could refinance to their advantage as the housing market bubble continued to inflate. Never mind that white people of every economic class took the same bait and accounted for a much larger share of the problematic assets. Never mind that deregulation — which the Republicans long championed — created the business context for this toxic bubble by freeing the system to generate a host of novel, untested lending products which the banking sector then marketed with gleeful abandon. It is simply enough for the Republicans to resort to their familiar trope and “expose” how hard working — read “white” — people of every stratum suffer at the expense of a triumvirate of liberals, acquiescent bankers and blacks.

This continuous assault against rationality is magnified by the unending rightwing characterisation of the Administration as “radical”, “Marxist,” “racist,” most of which has little traction at this time. Worse, it is being summarily — and all too prematurely — dismissed by liberals and the labour movement as the shill screeches of Republican desperation rather than as the preparatory ideological groundwork for the midterm elections that it actually is.

The labour movement has invested an inordinate amount of political capital in the Employee Free Choice Act, believing it to be the key to its future (it will make union recognition easier). This has had the effect of tying the labor movement ever more securely to the Democratic line, lest any criticism undermine the Administration and cause it to waver in its “shared” devotion to this pro-labour legislation. Meanwhile, the Democrats — an uneasy coalition of mildly working class oriented progressives and pro-business centrists — is stringing the labour movement along either to bury the bill entirely or to water it down to the point where it is acceptable to both wings, thereby rendering it of minimal use for trade union organising.

As this transpires, the United Auto Workers have been decimated by the GM bankruptcy, with its once vaunted pension and health care benefit system in shambles, its contracts ripped up, huge swathes of its membership without realistic prospects for reemployment and its future tethered to being a team player in corporate restructuring. Another Democratic victory no doubt: reducing the UAW, once the labour movement’s vanguard, into a company union of a new type.

The Achilles heel of the labour movement is the frailty of the entire progressive movement. It remains self-disciplined in its quiescence on a multiplicity of issues of concern to it: the deepening of the conflict in Afghanistan, the abandonment of single payer as the preferred medical insurance option, the rewriting of trade legislation to include trade union and ecological standards all for fear of fracturing the Democratic coalition. This continued method of deriving a political orientation from the tactical opportunity offered by a Democratic victory has long exhausted itself.

Should the anaemic stimulus package prove a failure, the Republican right will come roaring back by channeling social resentments straight down the road to reaction. Standing with the Democrats presents a risky gambit. Even if the Democratic program is temporarily successful, the problem is just kicked down the line. A Democratic victory in the context of economic collapse is just a softer defeat for working class prospects.

It is the duty of radicals and socialists to marshal their forces in the labour, peace, ecological and civil rights movements to explain unequivocally what is at stake with continued adherence to the Democrats and to make our case for a class struggle program with class struggle candidates.

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