Despair and Gloom
Paul Krugman’s recent post to his “Conscience of a Liberal” blog concisely summarizes the despair of nearly every economist not completely under the spell of voodoo economics at the grasp of austerity politics (going under the name “political realism”) on the Obama administration.
He quotes fellow Nobel Prize winner Joseph Stiglitz on the essence --- well, we’ll get to that in a moment --- of the matter:
“When the recession began there were many wise words about having learnt the lessons of both the Great Depression and Japan’s long malaise. Now we know we didn’t learn a thing. Our stimulus was too weak, too short and not well designed. The banks weren’t forced to return to lending. Our leaders tried papering over the economy’s weaknesses – perhaps out of fear that if we were honest about them, already fragile confidence would erode. But that was a gamble we have now lost. Now the scale of the problem is apparent, a new confidence has emerged: confidence that matters will get worse, whatever action we take. A long malaise now seems like the optimistic scenario.”
We owe a profound debt to the hardworking liberal economists -- Krugman, Stiglitz, Robert Reich, Mark Thoma, Brad DeLong, Christine Romer, Jared Bernstein and many others for laboring in the ideological vineyards in defense of social progress, reason and sanity: for pointing the programmatic economic compass at the way out of the deep mess our country is in --- Jobs first, Debt second; Green Industrial Policy; Tax the rich; Invest in education; Rollback inequality; Rollback financialization; Increase bargaining power over wages and salaries for working people; Mortgage assistance for underwater homeowners. We salute them for their withering criticism of Economics of Austerity fomented by banks, right - wing Republicans, and the rich; for ridiculing inane ideas to fix unemployment and debt by laying of more people (taxpayers), or by coddling the rich “job creators” with even lower taxes and even greater inequality, or for a hundred other stupidities. We thank them for laying bare the cons crude and subtle wholly designed to enrich themselves at public expense at every turn.
Yet -- the economists are all in despair. They are “driven crazy” at the failure of policy makers to follow the obvious, rational, scientific path to recovery from this great economic crisis.
Class is Relevant
For all the collective brilliance and expertise of my favorite economists, at least from my own reading, none view politics from a class perspective. I submit that is at least one source of their often voiced despair, and a big piece of the explanation of ‘unreason’ apparently infecting the political process. Lets define ‘class’ here simply as social groups classified on the basis of their ways and means of survival, of sustaining themselves in this economy. The premise is: if your income is primarily or completely from wages and salaries you spend your day doing different things (and think different thoughts about society and politics) than if your income is primarily or completely from returns on capital. The problem of how to get your next meal, or mansion, or yacht is solved differently in one class than the other. Your relation to the economy is different. Its more complex than that, obviously, because real people often play more than one class role in economic life. Some have both wealth, and wage or salary income (although there is much less of that duality since the onset of the Lesser Depression). Nonetheless working class is a real and useful role that describes all those whose security depends primarily on collective power -- either through workplace or community organization, or government -- to fairly distribute wealth proportional to the value of work. Capital will always argue that unfettered markets distribute wealth fairly -- but history completely refutes that self-serving hypothesis, by any measure of productivity. The conflict of views is not so surprising -- we all know that ‘reason’ -- even ‘scientific reason’ -- feels quite different when income depends on opposite thinking!
The Lost Continent of Socialism and Social-Democracy
On almost every specific policy issue, the economists are social democratic in the old sense. Social-Democracy has its origins in labor-led political parties in Europe. The movement was always led by ‘socialists’ of various stripes, simply because all agreed that a fair distribution of wealth could only come from working class political empowerment. Coming out of early capitalist and semi-feudal societies, social democracy was -- and at times still is -- often revolutionary since in emerging capitalist civil society working people had little and often no democratic outlet to seek justice. But later, to the extent electoral and social reforms gave more and more workers the right to vote, most social democratic parties adopted the incremental approach to ‘socialism’.
Unfortunately, liberalism in the US helped rob the economists -- and the labor and progressive movements too --- of links to European social - democracy and socialism. Not one, in print at least, connects the historical rise of social democratic policies with the rise of socialism -- and the fact that both socialist and social democratic trends are inseparable from the political and economic empowerment of the working class. Thus the economists write in the 'liberal' tradition. In the United States, however, this tradition walks in chains.
Indulge me with a little trip back in time for a moment.
The Legacy of US Liberalism
The collapse of the USSR in 1990 led also to the collapse of the cold-war framework. Part of that 70-year framework included the legitimacy of anti-communist, anti-socialist liberalism as both a compromise with social democracy (in the US--the New Deal) that, after the McCarthy era, citizens could endorse without ending up in jail or fired. From the standpoint of capital it was the soft defense (right wing reaction being the hard one) against the (to them) 'excessive' advance of progressive wealth distribution apparent in both purely socialist and social-democratic nations across the world. Despite its limitations, liberalism was able to bind itself, haltingly, in steps, with the genuine democratic upsurge of the civil rights movement epitomized in the leadership of Dr Martin Luther King. Perhaps because of this upsurge, along with the vast movements against the war in Vietnam which liberalism almost but never quite embraced (Vietnam was under Communist leadership, after all!), Reaganism marked a sharp turn by capital against liberal legitimacy, and an all-out assault on both social-democracy and socialism worldwide. This assault gathered momentum and came to dominate in varying degrees many if not most of the advanced economies in the 80’s and 90’s. Against this attack liberalism -- because of its anti-communist and anti-socialist premises --- was nearly powerless. It was forced to compromise progressive positions even further under the onslaught. Thus the Clinton administration, despite good intentions on many fronts (health care, education, etc), fully conceded to the financialization of the US economy which helped lay the groundwork for the current disaster.
The Obama administration reflects a continuation of this liberal tradition. It was elected on a wave of revulsion at both the economic and military horrors perpetrated by Bush -- who claimed the mantle of Reagan. But without the rise of working class led political organization (including both the social-democratic or socialist varieties), political history is proving that the liberal framework remains increasingly compromised and powerless to resist private capital prerogatives -- especially now that a fundamental structural crisis in has arisen for the first time since the 1930's requiring a new balance between capital and labor. The restructuring required looks like more socialism to capital. And it is "more socialism". Public wealth in various forms (infrastructure, redistribution, more public goods, etc) must increase relative to private wealth. Private capital clearly sees the advance of the public sector as a potential death sentence.It is true that, willy-nilly, public goods must inevitably increase with the advancing socialization and interdependence of economic life. Both technology and the threats of environmental catastrophe mandate it.
At the same time, in many ways, capital is indulging in a paranoid and even psychotic reaction (take the rebellion against climate change science, for example). A little more socialism is not going to be a death sentence for useful markets and commodities. On the contrary, an appropriate dose of socialism would restore vitality to many sections of the market economy that are not a failure. But nevermind science and rationality. Capital’s resistance is also complicated and made nearly schizophrenic by the rise of services and intangible products in a high tech economy. Intangibles (software, for example) require ever more tedious and irrational legal protections -- copyrights, patents, confidentiality, etc --- to survive as commodities and remain marketable despite being very poor commodities in the economic sense. After all, they are easily copied.
Thus, the economists’ "dismal thoughts" on the prospects for progress going forward from here. They predict decades of stagnation or worse as a cycle of debt---austerity---layoffs---debt---austerity feeds upon it self with no self-correcting mechanism in sight, and policy remains trapped in a vise imposed by the corrupting and paralyzing grip of the financial oligarchy on democratic institutions.
The economists are “stunned” that so-called “political realists” like William Daley and David Plouff have overtaken more rational and scientific advisers to President Obama. They are “shocked” that rather than turning toward “progressives” in his re-election bid, since the Republican counter-attack in November 2010 Obama has steadily tacked “pragmatically” toward Wall Street.
But these steps are not really “new”. They are signature weaknesses of liberalism:
a) to collapse when red-baited; and
b) retreat from reliance on the working people in favor of capital when push comes to shove.
Begging for Crumbs
Firing Van Jones as his environmental adviser less than a year into his presidency after Jones was called a ‘communist’ by the fascist creep Glen Beck, Obama made his first “I am not a communist” pledge, at the same time removing the strongest environmental voice from his ears.
When Obama took single-payer or Medicare-for-all off the health care reform table -- before the negotiations even began-- he took the “I am not a socialist” pledge and virtually condemned health care reform to be the budget buster the Right wants it to be.
When Obama retreats from the stimulus all “rational” economists recommend in favor of the debt--austerity box, he takes the “I am not a big-spending liberal” pledge and hopes the unemployed and all their hurting families will still give him their vote as the lesser evil -- while the slightest shock from Europe, or oil, or weather, or wherever will send the entire economy into a new definition of ‘depression’. If Obama is not careful -- he will end up like Romney, who has now taken the “I am not even a moderate” pledge, damning even his own health care reform record in Massachusetts.
The "political realist's" philosophy of "half-a-loaf-is-better-than-none" degenerating into "begging for crumbs" is a well known tale in the trade union movement. And its worst aspect is not actually the crumbs. Sometimes crumbs are all you have the power to win. But declaring 'crumbs' to be 'jewels', and then extolling the virtues --- on the golf course --- of 'crumb' bargaining, or the patriotism of the scoundrels pursuing "the people are entitled to nothing" agendas---- is about as appealing as a plate of vomit for dinner.
The rise of the working class is the "mechanism" -- and the only one -- that can change this game. Contending for power within the Democratic Party is the most immediate battle ground in which working people must focus their self-organizing efforts. The working class came close to this contention in the 30's under Roosevelt. WWII -- and the post-war anti-communist and anti-labor explosion of US imperial expansion -- steadily returned leadership of the Democratic Party to corporate forces. Yet the Democratic Party's survival depends today as much as in 1932 on a coalition with working class forces. It cannot do anything without us. Its time for us to abandon the subordinate role. Cold-war liberalism will not get it done. A return to the original spirit and base of democratic and social-democratic politics will.
The tactics of building the left opposition to austerity and corporate control of the Democratic Party are not trivial. It won’t work for Left organizations to liquidate themselves or surrender an inch ideologically to austerity politics. Participation most decidedly must move toward the consolidation of coherent progressive factions with the express purpose of challenging corporate leadership -- both within the party organization and wherever possible or practical in primaries. Learning to operate as socialists within the 21st century electoral arena -- including within the Democratic Party -- is an art we are all learning, but that cannot be ignored or put off.
No doubt its possible for a small number of Green Party, or other Independent candidates, to eventually get elected (look at Bernie Sanders). But the 2-party system in dynamics in most states will make this a rare exception rather than a rule or trend, thus too marginal from a strategic point of view. The problem is ironically further exemplified by Sanders own success. He has called for a challenge in some primaries against Obama on anti-austerity grounds. He would be among the most credible candidates for that --- but -- he can't because he is not a Democrat.
Ironically, Van Jones Rebuild the Dream campaign contains all the elements that save the Obama presidency that discarded him, and the party that failed to come to his defense.
Some may say this is impossible; that the wealthy and dominant faction in the party cannot be overthrown. Perhaps so -- maybe this will be a new version of the Republican split from the Whigs in 1854 -- but that will only be determined by the contest now underway. The fullest mobilization of working people is the key -- once in motion they will send the message: yield power or fade away!