[Peace-discuss] Populace to left of parties, government [update]

[C. G. Estabrook]

"Never have so many ordinary Americans been nailed to a cross of gold (or 
derivatives), yet Obama is the most mild-mannered William Jennings Bryan 
imaginable. Unlike Sarah Palin who masticates the phrase 'the working class' 
with defiant glee, he hews to a party line that acknowledges only the needs of 
an amorphous 'middle class' living on a largely mythical 'Main Street'"...


[That's a salutary reflection on class from the always-interesting Mike Davis: 
<http://www.commondreams.org/view/2008/10/15-10>.  More follows.  --CGE]


...as an aging socialist, I suddenly find myself like the Jehovah's Witness who 
opens his window to see the stars actually falling out of the sky. Although I've 
been studying Marxist crisis theory for decades, I never believed I'd actually 
live to see financial capitalism commit suicide. Or hear the International 
Monetary Fund warn of imminent "systemic meltdown."

Thus, my initial reaction to Wall Street's infamous 777.7 point plunge a few 
weeks ago was a very sixties retro elation. "Right on, Karl!" I shouted. "Eat 
your derivatives and die, Wall Street swine!" Like the Grand Canyon, the fall of 
the banks can be a terrifying but sublime spectacle.

But the real culprits, of course, are not being trundled off to the guillotine; 
they're gently floating to earth in golden parachutes. The rest of us may be 
trapped on the burning plane without a pilot, but the despicable Richard Fuld, 
who used Lehman Brothers to loot pension funds and retirement accounts, merely 
sulks on his yacht...

Progressives have no time to waste. In the face of a new depression that 
promises folks from Wasilla to Timbuktu an unknown world of pain, how do we 
reconstruct our understanding of the globalized economy? To what extent can we 
look to either Obama or any of the Democrats to help us analyze the crisis and 
then act effectively to resolve it?

Is Obama FDR?

If the Nashville "town hall" debate is any guide, we will soon have another 
blind president. Neither candidate had the guts or information to answer the 
simple questions posed by the anxious audience: What will happen to our jobs? 
How bad will it get? What urgent steps should be taken?

Instead, the candidates stuck like flypaper to their obsolete talking points. 
McCain's only surprise was yet another innovation in deceit: a mortgage relief 
plan that would reward banks and investors without necessarily saving homeowners.

Obama recited his four-point program, infinitely better in principle than his 
opponent's preferential option for the rich, but abstract and lacking in detail. 
It remains more a rhetorical promise than the blueprint for the actual machinery 
of reform. He made only passing reference to the next phase of the crisis: the 
slump of the real economy and likely mass unemployment on a scale not seen for 
70 years.

With baffling courtesy to the Bush administration, he failed to highlight any of 
the other weak links in the economic system: the dangerous overhang of 
credit-default swap obligations left over from the fall of Lehman Brothers; the 
trillion-dollar black hole of consumer credit-card debt that may threaten the 
solvency of JPMorgan Chase and Bank of America; the implacable decline of 
General Motors and the American auto industry; the crumbling foundations of 
municipal and state finance; the massacre of tech equity and venture capital in 
Silicon Valley; and, most unexpectedly, sudden fissures in the financial 
solidity of even General Electric.

In addition, both Obama and his vice presidential partner Joe Biden, in their 
support for Secretary of the Treasury Paulson's plan, avoid any discussion of 
the inevitable result of cataclysmic restructuring and government bailouts: not 
"socialism," but ultra-capitalism -- one that is likely to concentrate control 
of credit in a few leviathan banks, controlled in large part by sovereign wealth 
funds but subsidized by generations of public debt and domestic austerity...

If we are especially concerned about the fate of the poor or unemployed, we are 
left to read between the lines, with no help from his talking points that 
espouse clean coal technology, nuclear power, and a bigger military...

The Death of Keynesianism

First, we can't rely on the Great Depression as analog to the current crisis, 
nor upon the New Deal as the template for its solution. Certainly, there is a 
great deal of déjà vu in the frantic attempts to quiet panic and reassure the 
public that the worst has passed. Many of Paulson's statements, indeed, could 
have been directly plagiarized from Herbert Hoover's Secretary of the Treasury 
Andrew Mellon, and both presidential campaigns are frantically cribbing heroic 
rhetoric from the early New Deal. But just as the business press has been 
insisting for years, this is not the Old American Economy, but an entirely 
new-fangled contraption built from outsourced parts and supercharged by 
instantaneous world markets in everything from dollars and defaults to hog 
bellies and disaster futures.

We are seeing the consequences of a perverse restructuring that began with the 
presidency of Ronald Reagan and which has inverted the national income shares of 
manufacturing (21% in 1980; 12% in 2005) and those of financial services (15% in 
1980; 21% in 2005). In 1930, the factories may have been shuttered but the 
machinery was still intact; it hadn't been auctioned off at five cents on the 
dollar to China.

On the other hand, we shouldn't disparage the miracles of contemporary market 
technology. Casino capitalism has proven its mettle by transmitting the deadly 
virus of Wall Street at unprecedented velocity to every financial center on the 
planet. What took three years at the beginning of the 1930s -- that is, the full 
globalization of the crisis -- has taken only three weeks this time around. God 
help us, if, as seems to be happening, unemployment tops the levees at anything 
like the same speed.

Second, Obama won't inherit Roosevelt's ultimate situational advantage -- having 
emergent tools of state intervention and demand management (later to be called 
"Keynesianism") empowered by an epochal uprising of industrial workers in the 
world's most productive factories.

If you've been watching the sad parade of economic gurus on McNeil-Lehrer, you 
know that the intellectual shelves in Washington are now almost bare. Neither 
major party retains more than a few enigmatic shards of policy traditions 
different from the neo-liberal consensus on trade and privatization. Indeed, 
posturing pseudo-populists aside, it is unclear whether anyone inside the 
Beltway, including Obama's economic advisors, can think clearly beyond the 
indoctrinated mindset of Goldman Sachs, the source of the two most prominent 
secretaries of the treasury over the last decade.

Keynes, now suddenly mourned, is actually quite dead. More importantly, the New 
Deal did not arise spontaneously from the goodwill or imagination of the White 
House. On the contrary, the social contract for the post-1935 Second New Deal 
was a complex, adaptive response to the greatest working-class movement in our 
history, in a period when powerful third parties still roamed the political 
landscape and Marxism exercised extraordinary influence on American intellectual 
life.

Even with the greatest optimism of the will, it is difficult to imagine the 
American labor movement recovering from defeat as dramatically as it did in 
1934-1937. The decisive difference is structural rather than ideological. 
(Indeed, today's union movement is much more progressive than the decrepit, 
nativist American Federation of Labor in 1930.) The power of labor within a 
Walmart-ized service economy is simply more dispersed and difficult to mobilize 
than in the era of giant urban-industrial concentrations and ubiquitous factory 
neighborhoods.

Is War the Answer?

The third problem with the New Deal analogy is perhaps the most important. 
Military Keynesianism is no longer an available deus ex machina. Let me explain.

In 1933, when FDR was inaugurated, the United States was in full retreat from 
foreign entanglements, and there was little controversy about bringing a few 
hundred Marines home from the occupations of Haiti and Nicaragua. It took two 
years of world war, the defeat of France, and the near collapse of England to 
finally win a majority in Congress for rearmament, but when war production 
finally started up in late 1940 it became a huge engine for the reemployment of 
the American work force, the real cure for the depressed job markets of the 
1930s. Subsequently, American world power and full employment would align in a 
way that won the loyalty of several generations of working-class voters.

Today, of course, the situation is radically different. A bigger Pentagon budget 
no longer creates hundreds of thousands of stable factory jobs, since 
significant parts of its weapons production is now actually outsourced, and the 
ideological link between high-wage employment and intervention -- good jobs and 
Old Glory on a foreign shore -- while hardly extinct is structurally weaker than 
at any time since the early 1940s. Even in the new military (largely a 
hereditary caste of poor whites, blacks, and Latinos) demoralization is reaching 
the stage of active discontent and opening up new spaces for alternative ideas.

Although both candidates have endorsed programs, including expansion of Army and 
Marine combat strength, missile defense (aka "Star Wars"), and an intensified 
war in Afghanistan, that will enlarge the military-industrial complex, none of 
this will replenish the supply of decent jobs nor prime a broken national pump. 
However, in the midst of a deep slump, what a huge military budget can do is 
obliterate the modest but essential reforms that make up Obama's plans for 
healthcare, alternative energy, and education.

In other words, Rooseveltian guns and butter have become a contradiction in 
terms, which means that the Obama campaign is engineering a catastrophic 
collision between its national security priorities and its domestic policy goals.

The Fate of Obama-ism

...It's worth asking, for instance, what in the actual substance of his foreign 
policy agenda differentiates the Democratic candidate from the radioactive 
legacy of the Bush Doctrine? Yes, he would close Guantanamo, talk to the 
Iranians, and thrill hearts in Europe. He also promises to renew the Global War 
on Terror (in much the same way that Bush senior and Clinton sustained the core 
policies of Reaganism, albeit with a "more human face").

In case anyone has missed the debates, let me remind you that the Democratic 
candidate has chained himself, come hell or high water, to a global strategy in 
which "victory" in the Middle East (and Central Asia) remains the chief premise 
of foreign policy, with the Iraqi-style nation-building hubris of Dick Cheney 
and Paul Wolfowitz repackaged as a "realist" faith in global "stabilization."

True, the enormity of the economic crisis may compel President Obama to renege 
on some of candidate Obama's ringing promises to support an idiotic missile 
defense system or provocative NATO memberships for Georgia and Ukraine. 
Nonetheless, as he emphasizes in almost every speech and in each debate, 
defeating the Taliban and Al-Qaeda, together with a robust defense of Israel, 
constitute the keystone of his national security agenda.

...More than likely comprehensive health-care will be whittled down to a 
barebones plan, "alternative energy" will simply mean the fraud of "clean coal," 
and anything that remains in the Treasury, after Wall Street's finished its 
looting spree, will buy bombs to pulverize more Pashtun villages, ensuring yet 
more generations of embittered mujahideen and jihadis.

Am I unduly cynical? Perhaps, but I lived through the Lyndon Johnson years and 
watched the War on Poverty, the last true New Deal program, destroyed to pay for 
slaughter in Vietnam.

It is bitterly ironic, but, I suppose, historically predictable that a 
presidential campaign millions of voters have supported for its promise to end 
the war in Iraq has now mortgaged itself to a "tougher than McCain" escalation 
of a hopeless conflict in Afghanistan and the Pakistani tribal frontier...

LAURIE SOLOMON wrote:
> Being the cynic and skeptic that I am, I have to wonder if one were to screen
> out the current economic situation (i.e., crisis) how much higher would the
> percentage of Amerikans who say they are otherwise satisfied with the way
> things are going (notice we are talking about being satisfied with it not
> necessarily liking it).  The economic crises obviously effects the middle
> classes directly and in their pocketbooks more than it does the poor, so the
> middle classes would find it not in their vested interests to accept the way
> things are going economically and would complain about it more than they
> would about events, policies, or crises that only indirectly impact on their
> life styles in immediate and significant ways.  Of course, we do have to
> acknowledge that we have no real operational definition of the range of 
> things that define "middle class" and who belongs to it as distinct from 
> other classes - especially "working class."  Most people defined as being 
> working class or who identify themselves as being such often desire to be 
> middle class, promote and value middle class norms, values, goals, and 
> ideological socio-cultural mores and beliefs, including some of the biases 
> and discriminatory behaviors and reactions to the underclasses and poor, 
> immigrants and minorities who they may see themselves in competition with in 
> the quest for middle class life styles and upward mobility into secure 
> middle-middle class statuses.
>