Against the Current, No. 150, January/
Let Them Eat Cuts
— The Editors
Prospects for African Americans
— Malik Miah
Murfreesboro vs. Islamophobia
— Jase Short and Andy Woloszyn
A Primer on Immigrant Rights
— Zaragosa Vargas
DREAM Deferred, Fight Continues
— Isaac Steiner
The Buckeye Socialist Alternative
— Micah O'Canain
How Smart Are the "Smart" Meters?
— Barri Boone
Living and Working Uncovered
— an interview with Sonya Huber
Detroit: Disappearing City?
— Dianne Feeley
Detroit Symphony Musicians on Strike
— Dianne Feeley
Police Violence, Resistance and The Crisis of Legitimacy
— Kristian Williams
A Strategy for Antiwar Organizing
— David Grosser
The Debate Around Liu Xiaobo
— Au Loong-Yu
Political Repression in Russia
— Vladislav Bugera, Vladimir Sirotin and Peter Khrustalev
- Feature Essays for ATC 150
Inside the Global Crisis
— Tony Smith
Party and Class in Revolutionary Crises
— Charlie Post
THE GOOD TIMES are flowing again for Wall Street and bank executives, and U.S. corporate profits have rarely if ever looked so lush. But it’s a brutal moment for working people, with much worse possibly to come. These twin realities set the economic and political agenda heading into 2011-12. Everyone knows the Republicans are hell-bent on “making Obama a one-term president,” but few expected that they’d capture the White House in 2010. If that’s an exaggeration, it’s a mild one.
President Obama’s “compromise” on extending tax cuts for the rich announces that he is the Republicans’ captive for the next two years. To accomplish this victory, the Republicans were willing to hold millions of human hostages. The failure of Congress to pass the desperately necessary continuation of extended federal unemployment benefits would have meant incredible misery for hundreds of thousands of families heading into 2011, and an “anti-stimulus” with ripple effects that could stunt or even abort a still-weak U.S. recovery.
The agreement, including cuts in social security payroll taxes, “would cost about $900 billion over the next two years, to be financed entirely by adding to the national debt,” reported The New York Times (December 7, 2010). So much for the fraudulent pretense of budgetary discipline.
For the right wing, serving corporate America and the super-rich trumps all other considerations, but make no mistake — they intend that the working class will foot the entire bill. This generation of working people and the next are expected to work harder for longer hours, at lower pay, for more years and with fewer retirement benefits.
It may be that the most sinister piece of the tax deal turns out not to be the extended giveaway to the rich and the super-rich, outrageous as that is, but the supposedly temporary “break to the middle class” of cutting the Social Security tax by two percentage points (to 4.2%). Will the rate be allowed to return to its customary level a year from now — let alone imposed, as it should be, on all salary income, not just the first $106,000? Fat chance.
The effect — quite possibly a deliberate one — will be to hasten the depletion of Social Security trust funds and the alleged “necessity” of slashing benefits as insisted by the president’s “bipartisan” Deficit Reduction Commission.
President Obama, however, isn’t simply being held hostage — he’s also taken some of his own. His presidential decree of a two-year pay freeze for federal workers, many of whom (e.g. postal employees) had previously accepted concessions, is one more stomp on the face of Obama’s and the Democrats’ loyal base.
Recovery Stalling Out
The Republicans can celebrate the latest victory of their ruin-to-rule strategy. But the profit orgy, and capital’s massive victories in its raw class and race war against workers and the poor, disguise the fact that capitalism itself remains in rather poor shape. For the health of the system, profound economic uncertainty is not a fortunate moment to have an American president severely weakened at home and suffering greatly diminished prestige globally, and the aggressive cockiness of the Republicans’ Tea Party tail getting ready to wag the party dog in the new Congress.
Look at some numbers. “Blow to Obama as jobless rate rises/U.S. unemployment reaches 9.8%/Market hopes of a stronger recovery dashed,” stated the headline of the Financial Times weekend edition (December 4-5, 2010). A feeble 50,000 jobs created in the private sector was undercut by the loss of 11,000 government jobs due to state and city budget crises.
Given the statistical uncertainties of any given month’s job creation figures, “(t)he best guide, therefore, is the average growth in jobs over the past three months: 62,000.” Even more revealing, “(T)he broad unemployment rate — including people forced to work part-time or who have given up looking for jobs — also remained at a shocking 17 per cent…meanwhile, the percentage of adults with jobs fell to 58.2 per cent, compared with pre-recession levels of about 63 per cent.” (Financial Times, ibid., Robin Harding, “Poor payroll figures back Fed’s gambit”)
Given that African-American unemployment consistently runs at double the national rate, that 17% “broad unemployment” in the U.S. economy translates into Depression-level catastrophe for the Black community. (Malik Miah’s column as well as Dianne Feeley’s report from Detroit in this issue of Against the Current provide some stark details of this reality.)
Public sector employment is facing the front edge of a tsunami of cuts that will hit full force with aid to state governments from the stimulus drying up. The pay freeze for federal workers gives state governments an example to emulate in tearing up public employees’ union contracts. It is also possible, as emboldened hard-right ideologues demand, that “right-to-work” laws (outlawing compulsory union membership in union-organized shops) could be enacted in some northern industrial states.
We already see enormous assaults on the union contracts of public sector workers, driven equally by budget concerns and ideology. In any case, again, while drastically increasing the level of human misery in our society, these measures will not stimulate a recovery of investment anytime soon. Among other problems, working people who (for example, taking the auto industry’s old and new norms) used to make $28-30 an hour and now make around $15 are not going to be buying new cars and homes — especially when the banks, stuffed with bailout cash, aren’t lending to them.
There’s not only a morally repulsive situation here, but also a massive contradiction. If the U.S. economy is so shaky, how can corporate and financial profits be so healthy? When corporations and banks are filled with cash, why does so little if any of it “trickle down” to working people? Is the profit surge based solely on shoving austerity down workers’ throats and slashing the social wage, and on transferring capital investment and industrial production overseas to the low-wage Global South?
The current malfunctions of the U.S. economy and political system tend to magnify each other. The right wing’s program, while certainly a disaster for the working class and especially for the unemployed and the poor, doesn’t amount to a coherent policy package.
It’s no secret that the Republicans are taking their midterm victories as a mandate for everything from “repealing Obamacare” to reversing the regulation of the financial industry, freezing whatever stimulus money hasn’t been spent, and making permanent tax cuts for the wealthiest people in America. Such measures would stuff billions of additional dollars into the pockets of the rich and the corporations — but wouldn’t create conditions or incentives for expanding investment or employment.
Nor would they address the serious issues of the U.S. budget deficit, which are mostly a false alarm in the short-term but quite real further down the road. A rapid-fire collapse in international confidence in the longterm solvency of the United States is even conceivable — although that won’t happen right now because (as we’ll discuss below) the situation in Europe looks even worse.
In the United States, people on the right, center and left are all rightfully angry — with plenty of reason. The November midterm election seemed to show, however, that a great many Americans — especially white folks, even those at the sharp end of the capitalist crisis — have too little clarity on what to be angry about. That creates the conditions where they can be convinced to vote the very opposite of their own interests — putting in power the forces most directly responsible for stealing their rights and their futures. In Europe, folks at least are fighting back even if they haven’t won victories yet.
The Eurozone Crisis
Around the world, fears persist that budget deficits in the United States and the weaker European countries might lead to a bond market collapse, that the “euro” currency zone may melt down, and that global currency devaluations could destabilize world trade and finance. A succession of European states — Greece, France, Ireland, Spain, Portugal and Britain — have been rocked by a variety of mass strikes, student rebellions and other protests against austerity programs ranging from raising retirement ages and cutting benefits to public sector layoffs to huge increases in university tuition and fees.
On the one hand, the level of resistance to the budget savagery has been incomparably greater in Europe than in the United States. On the other, these militant struggles haven’t yet turned back the attacks — and in truth, the scale of the crisis in Europe is greater. Its contours vary among countries — a massive bank-lending bubble followed by a crash in Ireland, the collapse of the housing market in Spain, the inability of the state to collect taxes in Greece, and so forth. But these circumstances are aggravated by the partial and contradiction-riddled characteristics of “European economic integration.”
The countries of the European Union have a common currency, which means (for example) that they can’t devalue their national currencies to benefit their export industries. Their economies are sufficiently linked that there’s no real alternative except for the stronger — above all, Germany — to bail out the weaker ones. Otherwise, Germany’s own high-powered exports would lose their best markets.
At the same time, there is no common fiscal (tax and budget) structure to put the respective banks and governments under a common discipline. Proposals are now emerging to float some kind of “Euro-bonds” to supplant those issued by individual governments. That requires a substantially higher level of financial and ultimately political integration, but the alternative might be a chaotic breakup of the common currency.
The immediate consequences of the crisis for the working class are as acute in Europe as in the United States, if not more so. A devastating example: Only a few years removed from its “Celtic Tiger” status, Ireland has seen the collapse of its housing bubble and the government’s decision to guarantee in full not only the deposits but also the bonds in the country’s failed banks. Conn Hallinan (“Ireland: The Great Hunger Returns”) describes the consequences
“While the banks got a bailout, the Irish got savage austerity. Joblessness is at 14.5 percent, 24 percent for young people. Personal income has declined more than 20 percent. Welfare benefits are due to shrink between 4 and 10 percent, and public sector wages from 5 to 15 percent. The Irish will be looking at a decade of lower wages, fewer services, regressive taxes, and record joblessness in an economy burdened with repaying an 85 billion Euro ($113 billion) IMF/European Union ‘bailout’ at an onerous 5.83 percent interest rate. Of course ‘bailout’ is a misnomer: The package is little more than a slight of hand that shifts private debt onto the shoulders of the public.”
Not only Ireland, Greece and other weaker Eurozone partners but also Britain may sink into years of deep recession as a result of similar budget cuts.
Deeper Issues and the Crisis
Back in the United States as well as globally, there are deeper issues involved than pure greed and the “blind partisanship” that Barack Obama promised to overcome and that’s now sucking the life from his reform programs, modest as those were to begin with.
To be sure, there is plenty of greed. Just as one example, Bloomberg News reported that the health insurance lobby poured $86 million in secret to fund the U.S. Chamber of Commerce 2009 campaign against the health reform law, and it’s quite likely that the $33 million secretly donated for the chamber’s attack ads in the 2010 midterm elections came from the same sources. (New York Times editorial, “What the Secret Donors Want,” 11/22/10)
More broadly, however, the global system is snared in contradictions that won’t be untangled any time soon. Capitalism itself is in a period of global turmoil that tends to defy “solutions” other than savage assaults on working people across the board, especially on the “social wage” of pensions, health benefits and the right to affordable education. Tony Smith’s review essay in this issue looks at some of the factors in the global crisis. That partly explains why standard modes of organizing and protest in the United States — union bargaining, defensive strikes, demonstrations, even mass marches — to say nothing of mass strikes in Europe — aren’t achieving their traditional measures of public attention and concessions from the establishment.
The coming political period is going to be a volatile and vicious one, particularly because of the weakness of social movements in a time of profound insecurity. The revival of those movements, and the emergence of new creative methods of resistance and struggle, will be the critical link for turning consciousness right-side-up once again.
ATC 150, January-February 2011