Economic crisis fuels political change in the U.S.

December 6, 2008

By Fred Vitale, a correspondent of La Aurora in the U.S.

June 11, 2008

Barack Obama is the candidate of the Democratic Party. As an African-American, has achieved an historic milestone. Even if he does not win the election, his nomination represents another step towards political equality for African-Americans. His selection as a candidate reveals much about the current political situation in the United States. 

The poor and working classes may be able to push back against the capitalists – in the next period — for the first time in decades.

Another speculative bubble bursts

Economic relations are the environment of political developments. The economic crisis is deep, broad and profound.

The Federal Reserve, the quasi-public central bank of the U.S., rescued the 85-year old investment bank Bear Stearns, the 5th largest on Wall Street, arranging an unprecedented “takeover” by JP Morgan. It also established an emergency loan program to lend money to investment banks, as well as commercial banks, a first since the Great Depression. The program allows banks to use credit swaps and other recently invented securities, some based in real estate, as collateral for the loans. The securities have little or no value on the open market. In effect, hundreds of billions of dollars of worthless investments have been resuscitated by the taxpayers of the U.S.  

For the moment, it appears the bailout plan is working. Whatever happens in the immediate future, the long-term prognosis for the U.S. economy is towards deeper crises.

There have been three speculative bubbles — the failure of thousands of savings and loans associations in the late 1980s, Enron and the high-tech stock bubble of 2000, the latest one in residential real estate. Each has been caused by unregulated financial speculation, which has redistributed the national income in favor of a tiny minority and hurt millions of working families.

The fall in housing values has not stopped; it has been deeply unsettling to Americans. Houses are the single greatest asset for the overwhelming majority of people. Housing values, from World War II to 2006 increased, more or less, across the country and usually greater than inflation.  Houses represent $12.4 trillion in value (2005 figures).

Social Security, the government-guaranteed pension, is completely inadequate to support retirees. Selling one’s home and moving into a cheaper place, or paying the mortgage off so that one could live cheaply, were both used to provide comfort to retirees. Today, 1/3 of the homes do not have a mortgage. Using the value of their home as collateral, better off workers and middle class people borrowed money to pay for their children’s education, to pay medical bills, and finally to provide living expenses when they lost their jobs or suffered layoffs, reduced wages, etc. Some cities have already seen drops of 20% in housing value in the last year. The essential, personal safety net which a home represented is gone or greatly weakened.

Many people are losing their place to live. Houses were purchased with the same sub-prime mortgages by landlords to make money through renting. These are being foreclosed; millions of renters who have paid their rent are losing places to stay, as banks take over the properties and evict them. Homelessness is increasing.

The U.S. has lost over 3 million manufacturing jobs since 1995, most occurring between 2000 and 2003. 13.1% of men aged 25-54 are without work. This is higher than any previous recession since World War II, except that of 1981-82, when it climbed to nearly 15%.

The collapse in the value of real estate and, therefore, of some of the assets that give the U.S. dollar its value, has contributed to the soaring cost of fuel. Regular gasoline has gone from $1.51/gallon in September, 2001 to over $4.00/gallon today. Food costs are rising.  Much fresh food in the U.S. is trucked over long distances.

Uncertainty about the future permeates the thinking of the middle and working classes. This uncertainty merges with steady and consistent opposition to the war in Iraq, as well anger and anxiety over increasing medical costs, increasing education costs, and now steeply rising fuel prices.

Political response

The Democratic Party’s nomination of Barack Obama is a very significant event.

The U.S. ruling classes have a very strong racist character that goes back to the founding of the country. The original peoples were almost completely slaughtered to make way for European immigrants. Slaves were counted as 3/5 of a person for purposes of representation by white bourgeois politicians in the founding constitution. Jim Crow, a deeply racially segregated society throughout the South, was supported by all parties and the ruling classes for almost 100 years after the Civil War. The nomination of Barack Obama is a product of the struggles of African-Americans and their supporters for 400 years, especially from the 1930s through today, a struggle for an equal place in the society.  

In spite of the deeply ingrained racism, initially a few members of the ruling class supported Obama, a relative newcomer, first elected to federal office in 2004. As he gained support, including thousands of small contributions from ordinary people, he began to get support and develop the ties with the rest of the capitalist interests and the Democratic Party political machine dominated by the Clintons. Though he continues to get support from ordinary people, he is firmly rooted in the imperialist camp.

The living conditions for African-Americans have been deteriorating for 40 years.  The Kerner Commission first issued a report in 1968 with the famous warning, “Our nation is moving towards two societies — one white, one black — separate and unequal.”  It reconvened this year and found that little had changed in the disparities between the living conditions of Black and white people over the past 40 years.

There has been an increase in police killings of African-Americans.  The poverty rates among African-Americans are double and triple that of other sections of the population.  Only 12.5% of the population, African-Americans make up nearly 50% of the people in prison.

In this context, the nomination of a Black man by the Democratic Party fuels enormous hope in the African-American population. But it also fuels hope in broad sections of the working and middle classes.  Most Americans know that if a Black man is president, he will be more sensitive to basic problems of Black people which are now spreading to the rest of the population: insecurity about your life in all its aspects, poverty, the loss of good paying job or your home, suffering among extended family members, the need for more government help, the deterioration of communities and their tax bases.

The Obama campaign, and to some extent the Clinton campaign, tapped into the fears and insecurities of Americans. They both offered vague promises of change. The rallies for Clinton and Obama, especially Obama, have been huge by any recent standard. Tens of thousands of people came, some paying $10 to attend. These numbers rival those of sporting events. And in the longest political campaign in history, Americans continue to attend rallies and vote in numbers which, although they are low by other countries’ standards, break from the past trends of decreasing political involvement. The corporate media have purposely fueled this interest, with relatively favorable coverage of the candidates, their campaigns, but with virtually no serious investigation on program, where the money comes from, etc. But still, there is no question that millions of Americans became more politically interested in this campaign than in decades.

Hillary Clinton was the all but inevitable nominee of the Democrats before the primaries began. But the continued war in Iraq and, above all, the growing economic crisis, impelled people toward the more radical, less tarnished candidate, Barack Obama.

Support for Obama by tens of millions who identify as white is significant. At the same time, outside of young people and African-Americans, his support is likely fragile.   

Obama’s program is no different, even in much of its details, from Clinton’s. His chief advisers are key people from the Bill Clinton presidency. Both Obama and Clinton, along with the Republican nominee John McCain, support the “war on terror” and much of what Bush did with it. All three candidates are solid supporters of Israel. In a troubling but all too inevitable sign, the first place that Obama spoke after winning the nomination was the Israeli lobbyist group, AIPAC [American Israeli Public Affairs Committee), declaring he spoke as a “true friend of Israel.”

Both Obama and McCain support revisions to health care policy which leave intact control by, and big profits for, the insurance industry. They all rely on capitalists and “market forces” to provide high paying jobs and to resolve important social issues of food, water and affordable housing.

In the early election primaries, which are organized on the state not the federal level, there was a more programmatically left-wing candidate, Democrat Dennis Kucinich, from the U.S. House of Representatives. He really does oppose the war and support single, payer health insurance. On the Republican side there was Ron Paul, a former House member, who previously ran for president on the Libertarian Party ticket (the largest third party in the U.S.). He ran a surprisingly successful campaign that was very sharply anti-war (although he supports many right-wing anti-social policies). He regularly polled 5% or more, raised millions of dollars and drew support from overwhelmingly white, discontented working and middle class people who oppose the war, oppose the attacks on civil liberties, but also fear immigrants, the poor, and “terrorists,” etc.

Much of the increased political attention should have gone, and should go, to left-wing organizations, parties, and independent candidates. It has been our anti-war, anti-corporate program which people support in public opinion polls. But because the corporate media refuses to give any coverage to our organizations, parties and candidates, the only choices available to the broad masses of people have been Obama, Clinton, and McCain. Even when a few people learn about progressive alternatives, the American political system of winner-take-all often drives people to vote for the “lesser of two evils.”  Small parties have a great deal of difficulty winning any political seats of importance. The Libertarian and the Green Party do not have any members in Congress, in state legislatures and hold very few local offices.

Antiwar actions have been blacked out by the corporate media for years. Local protests of all types are ignored. The May 1 anti-war action by dockworkers which shutdown all the West Coast docks, including 5 of the busiest ports in the US, was not mentioned at all in major newspapers or any national TV news.

In the absence of our campaigns, people invest the Democratic and Republican campaigns, especially Obama’s, with their own content. People say he is anti-war and will bring the troops home. People say he wants to substantially change the healthcare system in the people’s favor. And so on. Studying his website and reading his detailed position papers carefully show that Obama will not end the war or change health care to really help people. By using some of the slogans of progressives and lots of inspirational talk, Obama contributes to this purposeful deception.

The unions

The unions have sat out much of the primaries. Support was split between Obama and Clinton. Now they will all back Obama. More importantly though, the recent strike by 3,500 workers at American Axle, the longest strike among auto workers since the 1970 strike at GM, resulted in a very bad contract. The strike was initiated when the union leadership’s offer to cut wages by 1/3 and allow two plant to close were not accepted. The final approved contract has workers’ pay cut in 1/2; medical insurance payments increased; three plants closed. The workers, members of the strongest manufacturing union, the UAW, were unable to stop this unprecedented attack on high seniority, unionized workers.

Without a significant change in union leadership and direction, strikes which are led controlled by the top union leadership, will not be effective. This contract means that unionized workers will look even more for political solutions to their problems, placing hope in Obama and the Democrats.

What to do

There is no substitute, in the long run, for a robust, independent working class movement of strikes, demonstrations, direct actions. But, given the inability of the antiwar movement to mobilize significant sectors for public demonstrations, and given the inability of the unions to stave off attacks, an anti-corporate electoral campaign may help create more political space, attract new forces and lay the basis for a more successful offensive against the capitalists in the future.

An anti-corporate program today means: end the war in Iraq, bring the troops home now, spend the money here; universal, government paid (single payer) healthcare; a living wage of at least $15/hr; repeal of NAFTA and other “free” trade agreements; an immediate moratorium on home foreclosures and utility shutoffs. 

The Cynthia McKinney and Ralph Nader campaigns have very similar anti-corporate programs. A measure of success for an anti-corporate program will be the efforts of both these campaigns in raising money, forcing media coverage, recruiting new people, and finally votes. 

Just as there is no real solution inside the capitalist system to stop the cycle of speculation in finance capital, there is no real solution to the political crisis inside the framework of elections and inside the Democratic Party. Independent candidates with independent programs linked to struggles in the streets of workers, poor people and immigrants have arrived and there will be more.

Cynthia McKinney, a six-term African-American Congressperson, is the likely nominee of the Green Party. To unseat her in an overwhelmingly Democratic district in 2006, the Democrats and Republicans worked together in the primary elections to deprive her of the nomination. She was solidly against the war and raised profound questions about support to Israel. She has a strong anti-corporate program in this election (see www.runcynthiarun.org).  Also, her campaign offers possibilities of linking communities and constituencies who support an anti-corporate program and who stand to gain the most by inroads into the corporate power – African-Americans and poor people. She appeared at an Al-Nakba commemoration rally; she demonstrated with striking dock workers on May 1. Ralph Nader (www.votenader.org) puts forward a strong anti-corporate message and specifically attacks the programs of Obama and McCain. He now polls 6%.

In an election campaign that has already been unprecedented in length and in results, and in a year which has already seen unprecedented economic problems and responses by the bourgeoisie, almost anything is possible. But the goals of both these progressive campaigns – getting on the ballot in all 50 states and getting 5% of the popular vote – are realizable, if unlikely.  In any case, a broader fight for a real anti-corporate alternative may turn out to be the best surprise event of this election campaign.

The era of the dollar empire has ended. We are seeing a new period of instability, with wild and uncontrolled convulsions in economic and political life. New movements are emerging. Revolutionary socialists, who have remained true to the cause, will find new hope and draw energy from the furor.

Fred Vitale is also the state chairman of the Green Party of Michigan and the Michigan coordinator of the Cynthia McKinney Campaign for President.

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