Obama’s Re-election and the ‘Fiscal Cliff’ Fraud

Despite polls that showed the U.S. presidential election very close, President Obama was re-elected, though by a narrower margin in the “popular vote” than in the 2008 election. Obama won 50.6 percent of the popular vote, while Mitt Romney obtained 47.8 percent.

Obama’s record

In foreign policy, Obama for the most part continued the polices of George W. Bush. This is not surprising. U.S. foreign policy reflects not the personality of the current occupant of the White House but the needs of the giant monopoly banks and corporations that form the core of U.S. imperialism. The interests of these monopolies are ultimately rooted in the very nature and contradictions of monopoly capitalism and do not change when a new occupant moves into the White House.

In addition, every U.S. president is surrounded by “advisors” who have dedicated their lives to increasing the power of “the Empire.” Then, there are the vast bureaucracies of the “national security state”—the Pentagon, CIA, FBI, NSA and numerous other “intelligence” agencies, whose personnel remain as presidents come and go.

In the unlikely event that a U.S. president ever attempted to buck the interests of U.S. imperialism, the market for government bonds would bring him or her back into line. In any event, there have been no such “problems” with the Obama administration, which has presided over the strongest government bond market in decades.

If the above were not enough, all serious candidates for president from the ranks of either the Democratic or Republican parties are individuals who have shown in practice that they are devoted to the interests of the U.S. world empire. Notwithstanding his African heritage on his father’s side—his mother was white—Obama is no exception to this rule.

The administration claims that it has withdrawn all U.S. troops from Iraq—which no doubt played a significant role in Obama’s re-election. However, there are still U.S. mercenaries and possibly CIA troops operating in Iraq. Most importantly, the U.S. is still very far from recognizing the right of Iraq to self-determination, not to speak of agreeing to pay reparations for the tremendous damage done to that country not only since it was invaded by the U.S. in 2003 but since 1990 through air strikes and sanctions.

In mineral-rich Afghanistan (1), Obama has actually escalated the war through a Bush-style “troop surge,” though he promises to withdraw “most” U.S. troops by 2014 and end the direct involvement of the U.S. in combat by that date. Obama also launched an air war against Libya in support of a U.S.-inspired rebel movement that in an attempt to win a mass base resorted to racism aimed at Libyans and immigrants of sub-Saharan African descent—a fine role for the first African American U.S. president.

War issue worked in Obama’s favor

In this election, however, the war issue generally worked in Obama’s favor, and the Republicans did not help their cause when they demanded a still more aggressive policy. Even the U.S. media admitted that the American people are weary of the wars that have been raging since the Bush administration. At least, according to the media, U.S. solders are no longer dying in Iraq—an important plus for Obama—even as U.S. troops are still fighting and dying in Afghanistan. The air war against Libya did not involve a single U.S. casualty, as far as is known, and therefore never became unpopular. Sections of the “left” even supported this war.

Along with a handful of only the most principled U.S. socialist groups, opposition to the Libyan war was largely limited to vanguard layers of the African American community who were shocked by Obama’s intervention on the side of a racist movement. These included the well-known former Georgia congressperson Cynthia McKinney.

Romney and his Republicans tried to take advantage of the death of the U.S. “ambassador”—really governor-general—and other U.S. personnel in Benghazi. But this had limited impact on U.S. pubic opinion because it involved members of the diplomatic corps—including quite likely CIA agents (2)—not regular U.S. soldiers.

Under President Obama, the U.S. carried out so-called “low intensity warfare”—“low intensity” for the U.S. world empire, not for the people of the countries targeted—most notably in Yemen and Somalia, but it was far from limited to those countries.

Going beyond Bush, President Obama had declared the right—and exercised it—of killing anybody deemed a “terrorist,” including U.S. citizens, without the pretext of any legal process or trial at all. There are chilling reports of Obama sitting in the White House and personally picking actual victims of these state murders. Since his re-election, only a few weeks ago as this is being written, Obama has authorized new threats of intervention against Syria and then authorized the latest Israeli attack on Gaza.

The trade unions, the left and the elections

The AFL-CIO trade unions went all out in support of Democratic Party candidates as they have done in virtually all the U.S. elections since 1936. The one exception was in 1972, when the AFL-CIO refused to support the late George McGovern because he was considered “soft on Communism.” On the left, the policy of the AFL-CIO trade union movement of backing Obama and the Democrats was most strongly and consistently supported by the U.S. Communist Party, which comes out of the Third International tradition.

Today, the parties of the former Third International are split between those on the left, such as the Greek Communist Party, and those to the right. The more left of these parties are even considering ways to formally revive the Third International in some form.

The U.S. Communist Party is on the extreme right wing of the parties of the old Third International. Under their current leader Sam Webb, the U.S. CP has pretty much repudiated the entire tradition of the Russian Revolution and the Third International, though there is an opposition to the Webb leadership inside the party that would like to see a return to the polices of previous leader Gus Hall.

Unlike Webb, the Gus Hall leadership defended the Russian Revolution and the Soviet Union, though the party under Hall also strongly backed the Democrats against the Republicans. However, the Webb leadership is even more consistent in its support of Democrats, no matter how conservative, anti-labor and corrupt, against Republican candidates. The Webb leadership believes that socialism will evolve out of capitalism through a gradual accumulation of “socialist” New Deal-like reforms not unlike what the Eduard Bernstein wing of the old German Social Democratic Party believed a century ago.

In contrast, the Party for Socialism and Liberation, one of two parties associated with the traditions of the late American Marxist Sam Marcy (1911-1998), supported no Democratic candidates and fielded its own candidates for president, Peta Lindsay, and vice president, Yari Osorio. The PSL was on the ballot in 13 states, the most of any socialist party in the 2012 elections. The other party associated with the Marcy tradition, Workers World Party, indicated that it opposed all the bourgeois presidential candidates but did not field a ticket of its own.

Other socialist candidates

The Socialist Workers Party also fielded a ticket of its own, running James Harris for president and Maura DeLuca for vice president. The SWP was once considered the leading U.S. Trotskyist party but has since repudiated Trotsky’s theory of “permanent revolution” and broken with the Fourth International, founded by Trotsky. The SWP was on the ballot in six states.

The U.S. Socialist Party also opposed both the Democrats and the Republicans, running Stewart Alexander for president and Alejandrio Mendoza for vice president. The Socialist Party was on the ballot in three states.

Also on the ballot in three states was the left-wing Peace and Freedom Party, which describes itself as a socialist party and ran Rosanne Barr for president and Cindy Sheehan for vice president.

In addition to the socialist campaigns of Lindsay and Osorio, Harris and DeLuca, Alexander and Mendoza and Barr and Sheehan, the middle-class U.S. liberal-radical Green Party also ran presidential and vice presidential candidates Jill Stein and Cheri Honkala against both Obama and Romney. There were a few other “minor” bourgeois presidential candidates both on the left and on the right, but the Green Party ticket of Stein and Honkala was the most important one.

Obama and the trade unions

Though the AFL-CIO trade unions went all out for Obama, the trade union movement did not thrive during his first term. For example, during the struggle against Republican Governor Scott Walker’s move to take away elementary labor rights from state government employees in Wisconsin, the Democratic president maintained his silence. The Obama administration also failed to push the “card check” reform of the National Labor Relations Board system, which would have made it easier for workers to obtain union representation. (3)

The U.S. Marxist Michael Yates wrote:”[T]he labor movement has continued its march to economic and political irrelevance during the president’s initial term, faring slightly worse than during a similar period under George W. Bush. During the first three years of the Obama administration (2009, 2010, 2011), union density fell from 12.3% to 11.8%, a decline of 4.1%. For the first three years of the George W. Bush presidency (2001, 2002, 2003), density went from 13.3% to 12.9%, a drop of 3%. Union membership declined by 563,000 during the Obama years, and 520,000 for Bush. So all of those wonderful things Obama did for workers didn’t translate into more union members or higher union density.”

Peculiarities of the U.S. political system

Unlike almost every other country with a presidential system—those with executive power concentrated in the hands of a president rather than a prime minister elected by parliament—U.S. presidents are not directly elected by the people but rather elected through an “electoral college.” The U.S. president is very powerful, serving not only as head of state but also in effect as prime minister or head of government as well as commander-in-chief of the armed forces. He or she (4) is also considered the leader of his or her political party. Unlike in the British parliamentary system, U.S. cabinet members have no binding vote in the cabinet. That is, their votes are merely consultative. The only member who has a binding vote is the president.

The other two official branches of the U.S. “government” are, for historical reasons, called “branches of government,” but in Marxist terms we should say branches of the state power. The legislative and judicial branches plus the fourth, unofficial, branch, the Federal Reserve System, which was added in the last century, are collectively organized and led. However, the most powerful branch of the state power—the executive branch—is organized on the principle of autocracy, around the person of the president.

The Electoral College is actually a vestige of the compromise between the slave owners based in the South and the pro-free labor capitalists of the North. In the era following the American War of Independence of 1775-1783, the Northern states gradually made the transition from a mode of production based on independent commodity owners—who were exploited by merchant capital—to the mode of production based on wage labor—capitalist production proper. There were African slaves in the North, though this was gradually dying out since direct slavery was less profitable to the rising capitalist class than was wage labor.

A form of semi-slavery, indentured labor involving white workers, also existed in the North. Under this system, for a specific period of time—for example, seven years—the workers could not quit, after which they were free to engage in the various forms of free labor. But this system, too, went into decline after the revolutionary war. The only form of legal forced labor that survived in the North and is expanding today is prison labor.

In contrast, in the U.S. South, the system of African slavery, far from dying out became the basis for a full-fledged slave society. Fearful for their slave economy, the Southern-based slave owners insisted on special guarantees to prevent political power from falling into the hands of champions of the capitalist “free labor system” that dominated the Northern states and the new states of the “northwest”—what are now called Midwestern states such as Minnesota. Though the slave economy of the old South is long gone, the electoral system it helped breed remains.

Another vestige of the slavery era is the U.S. Senate. In most countries, the upper house has only limited power. But in the U.S. system, the upper house, or Senate, has as much power as the lower house, the House of Representatives. Unlike in the House, each state is represented by exactly two senators regardless of the state’s population. Highly conservative, overwhelmingly white states with small populations get exactly as much representation as the large coastal states with nationally diverse populations like California and New York.

The U.S. Senate is not only racist, since whites on average have more votes per senator then people of color, it is not democratic even in theory. The authors of the U.S. Constitution lived in an era where even the most radical forces among the rising bourgeoisie had not yet embraced what was then viewed as the “extremist” idea of (bourgeois) democracy. The Senate was created by the writers of the U.S. Constitution as a non-democratic institution that would hold in check the “excessively” democratic tendencies of the House of Representatives.

This feature of the U.S. Constitution was inspired by Britain’s House of Lords, which checked the relatively democratic tendencies of the House of Commons, with the difference that U.S. senators were elected to six-year terms by state legislatures rather than inheriting their seats for life, which was the case in the British House of Lords. Only in the 20th century was the election of U.S. senators by state legislatures replaced by election by popular vote.

In the original U.S. Constitution, the House of Representative was not so democratic either, since all African slaves, “free” African Americans, women, as well as white men who did not meet the property requirements could not vote. The accepted view among even the radical bourgeoisie in the late 18th century when the U.S. Constitution was written was that only those men who paid taxes had a right to have a voice in the government, since they were the ones who paid for it after all. To allow the “propertyless mob” to vote, it was believed, would undermine the protection of private property, the main role of government.

Therefore, if you did not have enough property to pay taxes, the affairs of the government were simply none of your business, even if you were white and male. While the U.S. Constitution has been “democratized” over the decades, when U.S. voters “vote for president,” they still don’t actually vote for the president but rather for a group of electors—apportioned to each state according to the the total members of Congress sent by the state to Congress—congresspeople plus two senators, which depends on the number of citizens—not residents. The electors some weeks later then formally elect the president.

It is possible for the winner in the Electoral College to diverge from the winner of the popular vote. This actually happened in the notorious 2000 presidential election, where Democrat Al Gore won the popular vote but still lost the vote in the Electoral College to Republican George W. Bush.

The 2000 ‘election’ of Bush

The 2000 presidential election provided an extreme example of how undemocratic the U.S. electoral system actually is. The U.S. Congress could have, and if it had taken the formalities of bourgeois democracy that the U.S. claims to uphold around the world seriously would have, refused to recognize the fraudulently elected Florida electors pledged to Bush. They have that power under the U.S. Constitution. (5)

But over the protest of the Congressional Black Caucus, the Democrats and Republicans insisted on recognizing Bush’s fraudulently elected Florida delegation. Bush was then elected president by the Electoral College. Over the next four years, Bush was allowed to act as U.S. president in defiance of the most elementary principles of (bourgeois) democracy and even the formalities of the U.S. Constitution. During these years, among other things he launched the invasions of Afghanistan and Iraq in the name of defending democracy!

The U.S. falls short of the norms of modern bourgeois democracy in a far more fundamental way. Frederick Engels observed that the bourgeois democratic electoral system, while it cannot be the means by which political power will be transferred from the capitalist class to the working class, can measure the political maturity of the working class. The percentage of the working class that votes for the workers’ party as opposed to one of the bourgeois parties reflects this maturity and therefore the extent to which the working class is ready to assume political power.

In the U.S., however, there are no working-class parties that are capable of electing candidates, certainly not at the national level. For one thing, electoral laws are statewide, not national. The individual states put many, if varying, barriers in the way of “third-party” candidates, especially socialist candidates. This in effect establishes the Democrats and the Republicans as the two official state parties in defiance of the principles of bourgeois democracy. These principles require a multiparty system, with at least one of the parties based on the working class—with no official state party or parties.

In the early 20th century, a few members of the U.S. Socialist Party were actually elected to Congress. But since the Russian Revolution, changes in the laws in the various states have given the Democratic and Republican parties the status of official state parties. These laws are in defiance of the principles of (bourgeois) democracy and for that matter of the original written U.S. Constitution, which says nothing about political parties at all.

Under this highly undemocratic electoral system, it is very difficult if not impossible for small socialist parties to even get on the ballot, and in many states it is virtually impossible. Even where by way of exception socialist candidates do get on the ballot, the media simply ignores them, claiming that there are only two candidates the voters can consider—the Democrat and the Republican.

For example, the partially government-funded Public Broadcasting System every presidential election year airs a special series called “The Choice.” The Choice features only the Democrat and Republican candidates—this year Obama and Romney. Even the candidates of the “minor” bourgeois parties other than the Democrats and Republicans are ignored. The situation is even worse with the corporate-owned NBC-ABC-CBS, not to speak of Fox, which is owned by the rabidly right-wing Rupert Murdoch and acts the voice of the Republican Party. Therefore, if we apply Frederick Engels’ criteria, there is little to no bourgeois democracy in the U.S. as far as the electoral system is concerned.

What can we make of the U.S. elections?

The fact that Obama as the first African American president won a second term is significant. This is especially true, since as a general rule racism increases during periods of economic depression and its associated higher-than-average unemployment. In the economic depression that followed the 2008 panic, racism has increased both in the U.S. and Europe. However, the increased racism was not enough to deny Obama a second term.

The 2008 election was in many ways unique in the history of the U.S. For the first time, one of the “major candidates” was an African American, and he was victorious. This would have been unthinkable even a few years earlier. In the history of U.S. financial panics, the panic of 2008 was the only one—with the exceptions of the 1932 election held during the 1929-33 super-crisis and the relatively minor panic of 1884—where a presidential election occurred at the very height of the panic. If the panic of 2008 had been staved off for just a few more weeks, it seems highly unlikely that Obama would have won the election, since the polls were pointing toward a victory for Republican candidate John McCain.

Weak recovery works against Obama

The failure of the current cyclical economic recovery to gain the usual post-panic momentum over the last four years worked very strongly against the president. The Republican campaign and its candidate Mitt Romney tried to take advantage of this situation, claiming that Romney and the Republican Party could solve the crisis of mass unemployment. However, the Republicans’ idea of fighting unemployment amounted to more cutbacks in social spending, backed by increased military spending and more tax cuts for the rich—in other words, an even greater dose of “neo-liberalism.”

This would, according to Romney and his Republicans, increase the after-tax rate of profit for the capitalists—they didn’t put in those exact words, but this is what Republicans were in effect saying—and would finally give the corporations the incentive to spend the huge amount of cash that they have been accumulating in their bank accounts since the crisis began almost five years ago. The ensuing economic boom would then supposedly solve the unemployment crisis.

Did Obama manipulate the unemployment rate?

Last month in a footnote to my article on the suspicious drop in the U.S. Labor Department’s estimate of the rate of unemployment for September—the official rate of unemployment fell below 8 percent for the first time in 44 months—I speculated that the Obama administration might have increased government spending just before the election in order to stimulate the pace of business and make government economic statistics look better just before the election.

There is now concrete evidence that this was indeed the case. “[T]he government,” the AP’s Martin Crutsinger wrote in an article speculating that the growth in the fourth quarter GDP will be less than the third-quarter GDP, “likely spent less on defense after a sharp rise in the third quarter [emphasis added—SW].” This doesn’t prove that Obama ordered a bunching up of “defense” spending in the third quarter in order to give a deceptive impression of an improving economy just before the election, but it is also true that there isn’t any other obvious explanation for this sudden rise in “defense” spending.

Despite the drop in official unemployment, with the official rate of unemployment of 7.9 percent and a rate of unemployment well into the double digits by any realistic estimate, the Republicans figured that Obama could simply not be re-elected. No doubt they were also well aware that many white voters were still not reconciled to the idea of an African American in the White House. They therefore figured they would be able to defeat Obama on a purely neo-liberal economic program combined with the customary racist code words, opposition to a women’s right to choose—packaged as the “pro-life” position—and appeals to still widespread anti-LGBT prejudices, all business as usual for the “modern” Republican Party.

Romney’s honesty about capitalism hurt him in the election

A few weeks before the election, it was revealed that Romney had told a group of wealthy capitalist supporters that he was writing off 47 percent of the population who had the idea that, among other things, they had the “right to eat.” Liberals expressed outrage at these remarks.

What the liberals missed, however, is that Romney was simply pointing out a basic fact about the capitalist system well understood by his capitalist backers. Capitalist wage slavery is indeed based on the fact that the workers have no right to food, housing and so on. This is exactly why they are forced to sell their labor power to the capitalists—assuming that they can find a capitalist who is willing to purchase their labor power.

Any concessions that the capitalists have been obliged to make on this point under the pressure of the working-class movement has tended to lower the rate of profit. Romney was warning his rich backers that while he favored withdrawing these concessions made in the past to the working class as much as possible in order to boost the rate of profit and improve the competitive position of U.S. industry, it would not be possible to convince more then 53 percent of the disproportionately conservative U.S. electorate (6) to support him. He was warning his wealthy backers—who are so isolated from the great mass of people that they often imagine that most think just like they do—not to expect the Republican “landslide” that so many Republicans were foolishly expecting.

Romney a weak candidate

In reality, though Romney was considered completely qualified to be president by Wall Street, he was an extraordinarily weak candidate, particularly for these times. First, Romney was not only a representative of finance capital—all Democratic and Republican presidential candidates have been for more than a century—he was a finance capitalist in his own right. As head of Bain Capital—a private equity firm, or merchant bank—he bought companies, made them more profitable by laying off workers, and then sold them at a profit. In the words of the Occupy Movement, he is the very personification of the 1 percent.

As a finance capitalist just four years after one of the worst financial panics and subsequent depressions in the history of the U.S.—the Depression of the 1930s aside—Romney was actually unpopular even among the Republican Party far-right-wing “Tea Party” base. Though clearly the pick of the 1 percent—actually more like the .01 percent—he only made it through the Republican primaries because big money campaigns were mounted against every candidate who challenged him. Rank-and-file Republicans searched desperately for an alternative to Romney in the primaries, but in the end the big money prevailed.


Despite his great weakness as a candidate, Romney was still able to build on John McCain’s overwhelming majority among the white voters but was massively rejected by the non-white voters—not only African American voters as would be expected, but also the rapidly growing number of Latino voters as well as Asian voters. The last is especially interesting.

Many immigrants from Asia tend to be middle-class professionals and small business people, a part of the population that tends to vote Republican. However, the stench of racism about the Republican Party and the Romney campaign was so strong that Asians voted overwhelmingly Democratic as did the far more working-class Latino voters—though here we do have to take into account the qualification that the Latino vote includes emigrants from Cuba who, historically at least, are strongly Republican.

In addition, Romney’s stand against the right of women to choose cost him votes among many white women who would otherwise have voted Republican, which reduced his majority among white voters sufficiently to allow Obama’s narrow victory in the popular vote and his victory in the Electoral College.

Racism and the crisis of the two-party system

As is the case with right-wing parties in other imperialist countries, the U.S. Republican Party depends on racism, as well as opposition to women’s right to choose and to LGBT rights, in order to elect its candidates. The reason is that the right-wing parties cannot win elections on the basis of their neo-liberal economic program. Only business entrepreneurs and wealthy money capitalists as a rule actually support economic neo-liberalism. In order to add to their narrow base, right-wing capitalist parties have to raise other issues like racism, opposition to religious minority communities—traditionally Jews but now Muslims—opposition to immigrants, fear of the changing role of women in society, and anti-LGBT bigotry.

A note on the U.S. Republican Party and fascism

I should point out here an important difference between traditional right-wing parties like the U.S. Republican Party and truly fascist movements like Greece’s Golden Dawn party. The real fascists, of course, are racist, attack minority religious communities such as Muslims, and are against immigrants. The German Nazis did all these things in their time—with the exception that they attacked Jews rather than Muslims, since in their time there were few Muslims in Germany—just like Golden Dawn does today.

But the fascists, unlike the traditional right-wing parties, also claim to oppose economic liberalism. They often assert that they “combine” the ideas of right-wing national chauvinism, racism, scapegoating of religious minority communities and so on with the ideas of the left. For example, the Nazis called themselves National Socialists.

In contrast, the U.S. Republican Party makes little effort to hide its support for unrestrained capitalism. However, to the extent that the Republicans make racism, Islamophobia, and anti-LGBT hatred “respectable” and “mainstream,” they make the work of the real fascists, who are always lurking in the gutter of capitalist society, easier.

Republican collapse in California

It is estimated that by the middle of this century the U.S. will no longer be a predominately white country. This historic transformation has already occurred in California, the most populous U.S. state. Twenty years ago California was a largely Republican state, regularly electing Republican governors and sending Republican delegations to the Electoral College. Both Richard Nixon and Ronald Reagan got their political starts in California.

But today the growth of the Latino vote, assisted by the growing Asian vote as well, has made Republicans unelectable on a statewide basis. Not a single Republican was elected to a statewide office in California in the 2012 elections, and the Democrats won more than two-thirds of the seats in the California legislature as well. This despite the Depression-like official double-digit unemployment rate in the “golden state.”

If current trends continue, California’s present will be the future of the United States. Unless the Republicans can somehow build a base of support among some “non-white” group—presumably Latinos as well as Asians—they will cease to be a viable national party by the middle of this century.

A favorite subject of columnists and “opinion makers” in the capitalist media is to discover a “promising” trend toward the Republican Party among some non-white group. But in reality, the trend keeps going in the other direction. A new “realignment” of the two official parties of the state will have to occur if the two-party system is to continue. But nobody in the ruling U.S. capitalist class knows exactly how this realignment can be achieved. (7)

Voters tend to think in terms of personalities

The Republicans had been expected to make gains in the U.S. Senate and quite possibly win a majority in the upper house, but instead they actually lost ground. Much to their own surprise, the Democrats actually increased their majority in the Senate.

For our European readers accustomed to the parliamentary form of government, it probably seems odd that the Republicans managed to retain their majority in the House of Representatives even though the overall trend of the election was so clearly against them. This is another illustration of the lack of bourgeois democracy in the U.S. electoral system.

Since there is no mass working-class party in the U.S., voters tend to think in terms of the personalities of the individual candidates rather than parties, something which is strongly encouraged in the capitalist media. Many voters have no idea who their congressperson is or even to what party he or she belongs. As a result, many people who do vote for president will not bother to vote for a congressional candidate unless special circumstances stir their interest.

On the other hand, the local “movers and shakers” in any given district are not only inclined toward the Republicans. They as a rule favor the reelection of the incumbent congressperson regardless of party, because the more seniority a congressperson has the more influence they gain in Congress and the more likely they are to be able to kick lucrative government contracts toward business in their district.

On top of this, the rigid racial voting patterns in the U.S. South—ultimately the heritage of slavery—means that the white majority now votes blindly for the Republicans just like their grandparents used to vote blindly for Jim Crow Democrats and Black voters answer the racism of the whites by almost always voting for the Democratic candidate. This ensures that the Southern delegations to Congress are solidly Republican, since there are far more white voters than African American voters. The gradually growing percentage of Latinos in the Southern states combined with the African American vote could undermine Republican domination of the U.S. South as well in the future, but this hasn’t happened yet.

Republicans maintain veto power in the Senate

An unusual institution in the U.S. political system is the so-called filibuster in the Senate. The Democrats and Republicans have imposed a rule—it is not in the U.S. Constitution—that debate in the Senate can only be shut down if there is a two-thirds majority in favor. This is yet another example of the lack of democracy in the U.S. electoral system. It means that as long as the Republicans retain as few as one-third of the seats, they are in a position to veto anything the Democrats propose.

This is not all bad for the Democratic majority, however, which is why they have usually supported the rule. It enables them to pretend to be for progressive legislation—which they and their wealthy backers may actually oppose—and be assured that the progressive proposals will never actually pass.

Recession threat and the ‘fiscal cliff’ fraud

Will there be a new recession? As regular readers of this blog should know, the question should be rephrased: When will the next recession occur? Normally, the bourgeois economists are optimistic and confidently predict continued prosperity and no recession in sight, until a recession “unexpectedly” hits. This time, however, the bourgeois economists see a grave danger of recession as early as 2013 due to the so-called “fiscal cliff.”

What is the fiscal cliff? Remember, back in 2011 the Republican Party threatened to refuse a routine request from the Obama administration to raise the national debt ceiling unless the administration agreed to drastic cuts in social spending and moves to slash Social Security and Medicare and an extension of Bush’s tax cuts. If this occurred, the media claimed, financial markets would crash and the economy would plunge back into deep recession.

I explained at the time that this “crisis” was fraudulent. It was simply an attempt to force people to accept moves to dismantle social insurance and swallow the extension of Bush’s regressive tax cuts and even more regressive tax cuts to come. But in reality, there was no real chance that there would be a default on the interest or debt repayments that the U.S. federal government owes its capitalist creditors. As was inevitable from the start, when the “crisis” came to a head, the Obama administration, the Democrats and the Republicans agreed to make drastic cuts, but they couldn’t agree on the details.

Instead, it was decided to create another fake crisis that would occur after the the 2012 election was out of the way. This was done through an agreement to make massive across-the-board cuts in spending, including “defense” and increases in taxes unless the Democrats and Republicans agreed to a more realistic program of spending cuts and possible tax increases. By the end of 2012, when the phony crisis was scheduled to come to a head, it was expected that the industrial cycle would be well into its upward phase and that housing prices would finally be rising.

As a rule, it is easier to attack social spending during the upward phase of the industrial cycle. When employment is rising, the employed workers are less worried about layoffs and therefore feel less need for social insurance. To encourage these attitudes, the media is always filled with articles quoting professional economists who explain that in the “new era” the U.S. economy will never again experience another serious downturn.

This is exactly what happened in a big way during the Clinton boom of the late 1990s. At that time, it was claimed that the Internet revolution in computerized communications, combined with the “excellent monetary policies” of the Federal Reserve System inspired by the work of Milton Friedman, made economic prosperity without serious inflation virtually permanent. The professional economists—with a few individual exceptions—were predicting virtually endless prosperity in the “New Economy.”

Clinton, sounding just like a Republican, announced that the “era of big government” was over. By “big government,” U.S. politicians and the mass media mean social insurance and welfare—or the dole in English terms—not the ever-growing military, police, prison and “intelligence” apparatus. In that sphere, government was and is only getting bigger.

Democrats and Republicans alike claimed that with virtually “full employment” now guaranteed to continue as far as the eye could see, anybody who really wanted a job could and would in the future be able to quickly find one. Therefore, there was no longer any need for welfare, not in this “new era” with its amazing Internet-centered “New Economy.” This was—surprise, surprise—on the very eve of the “dot.com” crash—the little “crash” of 2001 that preceded the much bigger crash of 2008.

The next ‘new era’

In the current situation, there is an added factor—home prices. For decades, Americans were told that they didn’t need “West European-style socialism”—or a real welfare state—because in the U.S. home prices—actually the price of land on which the homes are built—were sure to keep rising. If people bought a home when they were young and held on to it throughout their working lives, gradually paying down the mortgage debt, the growth in their “equity” would guarantee a retirement in comfort when they finally reached their “golden years.” They could then sell their home and live off the proceeds, perhaps renting an apartment or smaller house in some warm part of the United States such as south Florida or southern California. This was the American “individualistic” answer to West European “socialism.”

As we know, the last crisis featured not only a massive contraction of employment but a massive drop in home prices that wiped out the “equity”—the part of the property value not owned by a bank or other mortgage holder—of many highly indebted home owners, pushing many “under water,” owing more than the property could be sold for.

When agreement on the date January 1, 2013, was reached by the Democrats and Republicans, it was assumed that with the upward phase of the industrial cycle by then gaining momentum, combined with extremely low interest rates encouraged by the Federal Reserve System, housing prices would be in a strong upward trend. The Democratic and Republican politicians, along with the professional economists, would then explain that the lessons from 2007-09 had been fully learned, and that “full employment” combined with ever-rising home prices would this time be really guaranteed from now on.

It now seems that home prices are indeed beginning to rise a bit, and the U.S. media is full of stories about rising home prices as well as falling unemployment. Any reports of even a slight rise in home prices—or modest rise in jobs—is often headlined on the front page.

What the media does not explain is that the rising home prices are heavily dependent on the extraordinarily low long-term interest rates. While these low interest rates reflect the still very depressed state of the economy, they are also influenced by the Federal Reserve’s policy of “quantitative easing,” now in it third phase, QE3.

The continuation of these quantitative easing policies—printing money in order to “force” an upswing in the industrial cycle—risks a massive selloff of the U.S. dollar at some point in the future. If—or more realistically when—this occurs, it will inevitably lead to a sharp rise in U.S. interest rates, which will likely trigger a new decline in home prices.

The next ‘new era’ arrives—conditionally

The bourgeois media and economists are now rapidly falling back into their “new era” mode. Monstrously exaggerating the extremely modest and purely cyclical improvements in the U.S. economy and home prices, they are now once again predicting prosperity as far the eye can see, but with one proviso. The new era will occur only if the Democrats and Republicans can reach a “grand compromise” agreement to avoid the “fiscal cliff.”

The AP’s Martin Crutsinger writes: “The U.S. economy appears to have grown over the summer faster than first thought.” He further reports: “U.S. companies sold more goods overseas in September, helping narrow the nation’s trade gap substantially. And wholesale companies boosted their stockpiles after reporting their best sales in 18 months.”

Crutsinger informs us that unnamed “economists at Barclays”—the huge British bank that was implicated in the LIBOR interest-fixing scandal—are predicting even faster U.S. economic growth next year after the expected fourth-quarter slowdown due to an expected drop in U.S. “defense” spending in reaction to the suspicious GDP-boosting increase in defense sending that occurred in the third quarter.

Crutsinger quotes one Ben Herzon, an economist who works for Macroeconomic Advisers, that the economy would grow even better next year. “In our forecast,” Herzon explains, “conditions in Europe gradually improve, and the fiscal cliff is largely avoided [emphasis added].”

So it looks as though the “new era” of crisis-free prosperity is already at hand—if we are to believe Macroeconomic Advisers—but only if the “fiscal cliff” crisis is resolved. But what happens if the fiscal cliff is not avoided?

The economists explain that a failure to reach agreement would mean $800 billion of purchasing power will be pulled directly out of the economy, and the indirect impact through the multiplier and accelerator effects will then throw the U.S. economy into full-scale recession with soaring unemployment. In that case, sorry—the “new era” will then be canceled.

And thats only the half of it, if we believe the media of our class enemy. The other half involves “national security.” For example, Syrian President Assad is “killing his own people”—with the encouragement of the Russians and Chinese refusing to make Syria a “democracy.” Iran is pressing ahead with its “plans to develop nuclear weapons” and the terrorist threat from “al Qaeda” remains—despite “our great gains in the war on terror”—as the recent events in Benghazi show.

China’s military might is rising under its new leadership. Could this new Chinese leadership be the “next Hitler”? Stay tuned. And now we have the “brazen attack” by Hamas on Israel! Yes, this is the kind of trash that is being delivered up by the monopoly-controlled U.S. “free press.” With all these dangers, this is most certainly not the time, the monopoly media explain, to reduce “our” military.

The script of the horror movie brought to you courtesy of the Democrats and Republicans

As we saw above, the Republicans still have a majority in the House of Representatives and have more than enough votes to filibuster in the Senate—despite their surprisingly poor showing in the 2012 election. The GOP will use its veto power to insist on massive cuts in “entitlement programs” in the light of “looming national bankruptcy” combined with the “insolvency of Social security and Medicare trust funds” along with the need to maintain high military spending in the face of the ever-rising “threats to national security.”

President Obama and the Democrats will propose more “reasonable” cuts in “entitlement programs” of their own, along with a modest rise in tax revenues. But the Republicans will hold tough. In the face of the desperate need to “create jobs”—translation: increase the rate of profit and improve the competitive position of U.S. business—the Republicans will explain that this is no time to raise taxes on the “job creators”—translation: the capitalists. Obama and the Democrats will say that with the Republicans being so “unreasonable,” what choice do they have but to forge a “Grand Bargain” that largely grants the Republican demands.

If we don’t compromise, Obama and his Democratic supporters will explain, the “tremendously encouraging” growth in jobs and the promising news on home prices that confirm a “new era” of prosperity will give way to a “new recession” and with it a renewed drop in home prices. This is not to mention all those “new Hitlers,” whether in Tehran, Damascus, Beijing, Moscow, Gaza City or the shadowy hideouts of al Qaeda, that Obama as the “commander-in-chief” cannot ignore.

As I was writing this, I was thinking about how I would end this piece. Something about the need of the workers to struggle in the streets, but how would I put it? But just as I am writing these lines, the workers of Europe—especially but not only southern Europe—have themselves provided the ending. They are launching the first international general strike in history! The U.S. monopoly press has barely reported the historic European strike, and if they mention it at all, it is on the back pages. The reason for this is not hard to find. The monopoly capitalists who own the media are afraid of the example that the European strikes will have on U.S. workers!

Yet the European workers are providing the answer to the “fiscal cliff” horror show. If such a struggle were to erupt in the United States in the coming weeks, it would throw a monkey wrench into the the plans Democrats and the Republicans are both working on for the the 1 percent to announce a Grand Bargain at the expense of the workers and even the middle class.

Victory to the European workers, who are showing the way not only for themselves but for the workers of the U.S. as well!


1 The June 13, 2010, edition of the New York Times reported that vast mineral wealth “essential to modern industry” has been found in Afghanistan, “including huge veins of iron, copper, cobalt, gold and critical industrial metals like lithium.” Lithium is particularly important in light of the transition from the internal combustion engine to the electrical motor as the main source of motive power in automobiles. Lithium is used in the batteries that are expected to power the electric motors in future cars. The Obama administration went to great lengths to save the U.S. auto industry during the last crisis and is obviously making great efforts to control the world’s supply of lithium in order to well position Detroit in the coming age of electric cars.

A “little problem” that U.S. imperialism is facing is that the U.S. is not exactly popular among the Afghan people. This is not surprising in light of its more than 10-year war—actually more than 30-year war if we count the U.S. war against the 1979 Afghani revolution—that the U.S. has been waging against the Afghan people. U.S. imperialism faces a similar problem in the other country that is a source of lithium—Bolivia. This is the problem with running a world empire, the people of more and more countries come to hate you.

2 It is well known that a certain percentage of U.S. Embassy personal are actually agents of the U.S. Central Intelligence Agency.

3 Faced by the great strike waves of the 1930s, the Roosevelt administration was eager to find a way to defuse the upsurge without resorting to the extreme repression and violence that had been used by the U.S. government against earlier labor upsurges. Roosevelt set up the National Labor Relations Board. If a certain number of workers want the union, the NLRB is supposed to organize an election among the workers, much like an election for Congress is organized among the voters in a given congressional district. If the majority of the workers vote in favor of the union, the workers will be represented by the union. At least that is the theory.

Though they are not supposed to fire pro-union workers during the period leading up to an election, or hire scabs for the sole purpose of voting against the union, the bosses in practice often do exactly that. Why shouldn’t they, since the light fines they face are made up many times in terms of the savings in “labor costs” if the union organizing drive is defeated.

What all too often tends to happen is that the union complains to the NLRB and often the NLRB indeed finds in favor of the union. But by then the process has dragged on for years, almost all the pro-union workers have been fired, given up and found work elsewhere, and the organizing drive ends in defeat. Today a smaller percentage of workers, especially in the private sector, enjoy union protection than they did before Roosevelt’s so-called “Magna Carta” supposedly granted the workers the right to organize.

What is really necessary is to recognize that the U.S. federal government as well as state and local governments are violating an elementary right that is a basic part of bourgeois democracy, the right of workers to union protection. The unions must demand that all federal, state and local anti-labor laws passed by Democratic and Republican politicians alike over the years have to go. After all, in the past, didn’t workers have to face anti-democratic governments, including the Russian Czar, who also denied the workers’ basic rights, including the right to organize? A similar struggle for the elementary democratic right of the workers for union protection is needed in the U.S. today.

However, such a struggle will have to be a mass political struggle targeting the government that is guilty of repressing basic labor rights, and not simply individual bosses. Struggles of small groups of workers against a particular boss simply lack the power to break the government’s anti-union policies.

The AFl-CIO leadership, however, believes that it can win the government over to its side and limits itself to trying to “reform” the anti-democratic body of U.S. labor legislation to make it somewhat easier to organize unions under the current NLRB system. One such reform is called card check. Under this reform, if a majority of workers check a card that indicates that they desire to be represented by a union, the union would be recognized.

Decades ago, the Democrats promised to repeal the Taft-Hartley Law, which was passed by the then Republican-dominated U.S. Congress over Democratic President Truman’s veto. The Taft-Hartley Law prohibits so-called secondary boycotts, prevents the election of “Communists” to union offices of NLRB-certified unions, and ties the hands of the unions in many other ways.

Today the Democrats’ promise to repeal the Taft-Hartley Law is no longer even talked about. The proposed card check reform is going the way of the now long-forgotten Democratic promises to repeal Taft-Hartley. It seems it will take a very different kind of leadership than the current leadership of the AFL-CIO to win the elementary democratic right of U.S. workers to union representation and protection.

4 So far, all U.S. presidents have been men. However, the election and then re-election of an African American president and the election of female presidents and prime ministers in other countries make it increasingly likely that the U.S., too, will have a female president in the not-too-distant future.

5 We might ask, where was the U.N. during the 2000 U.S. electoral travesty? Why didn’t the international body demand that the U.S. authorities recognize President Al Gore’s victory? Where were the U.N. sanctions? Why wasn’t there at least consideration of a no-fly zone—to prevent possible air attacks by the powerful U.S. Air Force on demonstrations protesting against Bush’s illegal move into the White House. Perhaps even the sending of United Nations soldiers should have been considered to see to it that President Gore was allowed to assume office. After all, the principles of democracy demanded nothing less!

Come to think of it, why doesn’t the United Nations consider at least some of the above actions if the U.S. continues to refuse to curtail the power of the U.S. Senate, refuses to allow a genuine multiparty system to form in the U.S. with at least one party representing the working class, or grant the rights of U.S. workers to form unions of their own choice!

6 The U.S. electorate—the people who vote in U.S. elections is far more conservative than the residents of the U.S. taken as a whole. I say residents rather then citizens, because not all people who live in the U.S. are citizens—though logically since the U.S. insists on its right to determine what form of government other countries should have, it could be argued people from all these countries should have the right to vote in U.S. elections.

Not only non-citizens but many U.S. citizens are also denied the right to vote. This includes not only all citizens under 18 but also citizens that have been convicted of felonies and have not yet paid their “full debt to society” as determined by the “criminal justice system.” In addition, in some states—particularly former slave states—any person who has ever been convicted of a felony is permanently denied the right to vote. A significant number of African Americans are denied the franchise through this provision.

Even among those U.S. citizens who have the right to vote, many in fact don’t exercise it. For example, in the presidential election held this year at least 40 percent of those legally eligible to cast a ballot in presidential elections declined to do so. Why should they bother to vote when the choice is only between capitalist parties that represent the rich? Only a minority of U.S. eligible voters actually vote in non-presidential elections.

On the other hand, the wealthy and their upper-middle-class allies do tend to vote. The result is that the U.S. electorate is far more conservative and very far from representative of the residents—citizens and non-citizens alike—of the country as a whole.

7 The one way this might actually happen is if Latin America is swept by a wave of socialist revolutions that U.S. imperialism is unable to stop. If that were to occur, the emigration of the oligarchy of big capitalists and landlords, joined by the conservative upper middle class, to the United States would provide a solid base for the Republicans among Latino voters. But from the viewpoint of the U.S. ruling class, this cure for the problems of the current two-party setup would be a great deal worse than the disease!

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.