Posts Tagged ‘Republican Party’

The Crisis (Pt 10)

June 21, 2020

The police and the state

On Sunday, June 7, the Minneapolis City Council, by a veto-proof majority, voted to disband its police department over the opposition of the Democratic mayor. This doesn’t mean that Minneapolis police are about to be abolished. To believe this would be naive. For one thing, the abolition of the police would violate the Minneapolis City Character — the equivalent of a city constitution, which mandates the existence of a police department. And even if the Minneapolis Police Department were to be formally abolished, there are many other police agencies such as the Sheriff’s Department and the Minnesota State Patrol that could step into its role.

The significance of the City Council vote lies elsewhere. It represents an attempt by Democratic Party politicians to halt the growing movement in the streets demanding the abolition — not the reform — of the police. Once this is done, the Democrats figure that they can count on the courts to render their vote to “disband the police” harmless. It will then be back to business as usual.

But the real significance of the demand to abolish the police is that, even at this early stage, the incipient U.S. revolution cannot but begin to realize that the state consists of a body of armed men, and now some women, plus material extensions such as prisons. The state exists to defend capitalist private property in the means of production. It cannot be reformed. It must be smashed and replaced by an entirely new system of “public safety.” All this is in line with the writings of Marx, Engels and Lenin on the state.

The demand to abolish or “de-fund” the police is being raised not because the demonstrators have read the Marxist classics — very few have — but because their practical experience in what is, in essence, a class struggle points in the direction of getting rid of — not reforming — the police. Since the May 25 murder of George Floyd by Minneapolis police officers, which was duly recorded on cell phone video, anti-racist demonstrators have put the demand to abolish the police into the mainstream of political discussion in the U.S. for the first time.

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The Crisis (Pt 6)

May 24, 2020

U.S. unemployment hits Depression levels

In April, the U.S. Labor Department U-3 measure of unemployment hit 14.7 percent. The U-3 rate had been used over the last year or so to claim that unemployment was the lowest since 1969. In fact, it is designed to greatly underestimate the real level of unemployment. Even some Federal Reserve Board officials admit that the real rate of unemployment is over 20 percent and fast approaching the all-time quasi-official estimate of 24.9 percent that occurred at the very bottom of the Depression in March 1933. Nobody denies that the number of unemployed in the U.S. is in the tens of millions — around 50 million if you believe AFL-CIO President Richard Trumka.

However, it is claimed by Trump and most economists that the current unemployment crisis is the result of the deliberate shutting down of the economy made necessary by the COVID-19 pandemic. What is occurring, according to this logic, is not the long-feared Depression II but the “Great Suppression.” Though unemployment generally declined after March 1933 — except for the sharp but short-lived Roosevelt recession of 1937-38 — “full employment” did not return until the U.S. had entered World War II in 1941. This time, it is claimed by Trump and many economists, in contrast to 1933 there is no underlying economic crisis. Therefore, “full employment” will return much more quickly. The pandemic will have run its course within months, as Trump claims, or at most within several years, as claimed by more cautious economists.

Therefore, the argument goes, while still a terrible situation it is not quite Depression II. Though unemployment may be as bad as during the Depression, it won’t last nearly as long. Anyway, Depression-level unemployment is the necessary price we have to pay to stave off the much greater evil of millions of deaths in the U.S. alone from COVID-19. Not surprisingly, Donald Trump, who had been planning on running on “prosperity and full employment” as shown by the Labor Department’s U-3 unemployment rate, is leading the charge to “open America for business.”

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The Crisis (Pt 5)

May 17, 2020

U.S. infection rates rise as states move to reopen

More and more U.S. states are moving to reopen non-essential businesses though there is no sign the COVID-19 epidemic is dying down. “Take the New York metropolitan area’s progress against the coronavirus out of the equation, Nicky Forster, Carla K. Johnson, and Mike Stobbe wrote May 4 in an Associated Press article, “and the numbers show the rest of the U.S. is moving in the wrong direction, with the known infection rate rising even as states move to lift their lockdowns. … ”

According to a leaked CDC document that appeared in The New York Times and Washington Post, the government projects that new COVID-19 cases will increase 225,000 a day by June, with deaths climbing to 3,000 per day. In early May, when this is being written, new cases are only 25,000 with deaths a mere 2,000. This despite all the social distancing and stay-at-home orders.

With President Trump leading the charge to reopen America for business, state and local governments are competing with one another for which one can lift the social distancing and stay-in-place orders the fastest. So far, these are the only policies that have slowed the pandemic in some areas.

In reality, the pandemic is still gaining momentum nationwide. Thanks to Trump and various state and local governments, the spread of COVID-19 in the U.S. could very well accelerate further in the coming months. A similar pattern is emerging in other capitalist countries. Of course, the growth of the pandemic in one country, particularly one as large as the U.S., is a threat to people of all other countries, since the virus does not respect national boundaries.

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The Crisis (Pt 4)

May 10, 2020

May Day strikes

On May 1, International Workers’ Day, a wave of worker and renter strikes swept the United States. Workers protested the dangerous conditions in which they are forced to work during the COVID-19 pandemic. Among the companies struck were Amazon, Walmart, FedEx, Target, Instacart, Shipt, and Whole Foods. The May Day strikes show the increasing influence the internationalist traditions of the world workers’ movement is having on the U.S. working class, especially among the lowest paid and most exploited workers. The current medical-biological-economic-employment crisis has only deepened this tendency.

Also, and this should be noted, the internationalist implications of the global May Day holiday stand in complete opposition to the traditional AFL-CIO union leaders, Bernie Sanders, and many progressives and newly minted “democratic socialists” going down the disastrous road of economic nationalism and China bashing. Trump and the other economic nationalists, both Democrats and Republicans, are trying to divert attention from the disastrous mishandling of the pandemic by the U.S. government — both federal and state — to China. More on this in the coming weeks.

‘Party of Order’ versus Sanders

As we saw last week, Bernie Sanders has for many years operated well within the limits of capitalist, or — to use traditional Marxist language — bourgeois, politics. He has done nothing to organize an independent workers’ party or an independent workers’ media, either print, radio-TV or Internet. Nor is he internationalist like the working-class leaders of the past, such as Sanders’ personal hero Eugene Debs. Rather, Sanders is an economic nationalist and an imperialist dove.

Why then is the Party of Order so hostile to Sanders? As its leaders know full well, capitalism has in many countries survived presidents and prime ministers far more radical than Bernie Sanders. No knowledgeable person believes that U.S. capitalism would be in danger of being abolished under a Sanders administration.

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The Crisis (Pt 1)

April 19, 2020

A personal note

In February, I was hit by a staph infection that had spread to the blood. This was the first serious illness of my adult life. Before this infection, I had been free of any illness more serious than the occasional cold or seasonal flu. I was really knocked off my feet and had to be hospitalized.

This was no fun. But no evil is without positive features. I got to see the medical system for the first time in my adult life from the inside. At least here on the West Coast, the medical system is staffed by a mix of many nationalities with a bias toward the Far East — the very group that President Trump with his racist attacks on the “Chinese virus” has made a target of his demagoguery. I was served by medical workers from France, the People’s Republic of China, Vietnam, the Philippines, and other nations.

Then as fate would have it in one those bizarre coincidences that life occasionally brings, the whole world was swept by the ghastly COVID-19 pandemic. Financial markets crashed and then much of the global economy was shut down including industrial production and world trade. Most importantly, employment entered a downward spiral. More than 10 million people in the U.S. have been forced to apply for unemployment insurance within two weeks, implying double-digit Depression levels of unemployment.

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Political and Economic Crises (Pt 9)

July 21, 2019

Scandals that rocked the Trump administration this month included sex scandals involving both the current president and former President Bill Clinton. Another scandal involved “detention centers” for immigrants, which are finally being called by their right name — concentration camps. The prisoners held in these camps are desperate people — men, women, children and infants — forced to flee desperate conditions in Central America created by U.S. imperialism under both Republicans and Democrats.

Particularly outrageous is the detention of children and even infants, who are held in cages and go without basic medical care (resulting in some children dying in the camps), toothbrushes, and bathing. The conditions in which these concentration camp victims are held would be scandalous even if they involved adult prisoners convicted after fair trials of terrible crimes. When the victims are children and infants, even the term popularized after the post-WWII Nuremberg Trials of German Nazi leaders for “crimes against humanity” seems somehow trite.

Trump supporters claim it is outrageous to call the detention centers concentration camps, pointing out there are no gas chambers or crematoria in these camps. This much is true. However, there were no gas chambers or crematoria in the Nazi concentration camps of the 1930s. There were also no children in the 1930s-era Nazi concentration camps. That did not prevent the Nazi government, which originally held “only” adult Communists, trade unionists, and some Social Democrats in “protective custody,” from calling them concentration camps. It was only during World War II that non-political women, children and infants — most Jews and Roma people — were taken to concentration camps equipped with gas chambers and crematoria.

As these revelations became known, a growing movement has emerged demanding that the concentration camps be shut down. On July 12, reports circulated that ICE, the U.S. federal secret police agency in charge of enforcing immigration laws, were planning massive raids on Sunday, July 14. In response, a series of demonstrations swept the U.S. demanding that the concentration camps be shut down and immigrants be allowed to stay.

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Political and Economic Crises (Pt 6)

April 21, 2019

Storm over the Federal Reserve System

U.S. President Donald Trump has indicated that he will nominate right-wing economic commentator Stephen Moore and businessman Herman Cain to fill two vacancies on the
Federal Reserve System’s Board of Governors – called the Federal Reserve Board for short. If confirmed, both Moore and Cain would serve for 14 years. While Trump’s other nominees to the “Fed” have been conventional conservative Republicans, Moore and especially Cain have been strongly attacked in the media and by economists and some Republicans for being completely unqualified.

Of the two, Cain has drawn the most opposition from within the Republican Party. As of this writing, his confirmation by the U.S. Senate looks unlikely. Republican Senators Mitt Romney (who ran against Obama for president in 2012), Lisa Murkowski, Cory Gardner, and Kevin Cramer have all indicated that they are leaning against voting to confirm Cain. If all them vote no, Cain’s nomination will fail unless he can win over some Democratic senators.

Cain – one of the few African-Americans Trump has nominated for high office – throughout his business career has expressed opposition to even elementary labor rights. In 2016, he briefly ran for president as a Republican on a platform of reforming the federal tax system in an extremely regressive way going beyond Trump’s own tax cut for the rich. Cain was then forced to withdraw from the presidential campaign when several women came forward alleging that he had sexually assaulted them. For Donald Trump, this was not a disqualification but it might be for some U.S. senators who have to face re-election.

Cain has not indicated that he supports inflationary monetary policies. On the contrary, he has said that he would like to see a return to the gold standard. For taking this stand, he has been ridiculed by liberals and progressives as well as mainstream economists. However, Cain does have actual central bank experience having served as head of the Federal Reserve Bank of Kansas City, one of 12 regional banks that make up the Federal Reserve System.

Capitalist opponents of Cain’s nomination – Cain has been a strong supporter of Trump – fear that Cain would do Donald Trump’s bidding on the Fed’s Open Market Committee (1). With the 2020 presidential election approaching, it is widely suspected that Cain would push for an “easy” monetary policy and cuts to the Fed’s target for the federal funds rate in a bid to stave off the looming recession until after the November 2020 election. Not only would such a policy put the dollar-centered international monetary system in danger in the short run, it would also erode the Federal Reserve System’s independence over the long run.

Trump’s other prospective nominee, Stephen Moore, has drawn much criticism from mainstream media and professional economists but so far less from Senate Republicans. Like most of Trump’s nominees for high positions, Moore is white. He is not even a professional economist. Although majoring in economics in college, he does not hold a PhD. Unlike Cain, Moore has never directed either a business enterprise – Cain in addition to serving as head the Federal Reserve Bank of Kansas City was also head of the Godfather Pizza Chain. However, like Cain, Moore has been accused of mistreating women. This raises the question whether Cain’s race could be a factor in the apparent lack of opposition to Moore on the part of Senate Republicans.

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The Current U.S. Economic Boom in Historical Perspective (Pt 2)

May 6, 2018

Trump’s attempts to reverse the decline of U.S. capitalism

In April 2018, the U.S. political world was shaken by the news that Paul Ryan, the Ayn Rand/Austrian school-inspired Republican speaker of the U.S. House of Representatives, would not be running for re-election in this year’s mid-term race. Ryan claimed he was retiring at the age of 48 from politics “to spend more time with my family.”

It is widely believed, however, that Ryan is retiring from Congress because he fears a humiliating defeat at the hands of his Democratic Party opponent, the construction worker, trade unionist, and “Berniecrat” Randy Bryce. Over the last year, many of Ryan’s constituents were no doubt shocked to learn that their handsome, genial congressperson wanted to take away their health insurance.

It seems likely that Ryan, who is believed to harbor presidential ambitions, plans to lie low, make lots of money in the private sector, and count on the public forgetting (with the assistance of the mass media) about his attempt to throw tens of millions of people off their health insurance. At a later day, Ryan will be poised to reenter electoral politics and ride a new Republican wave, perhaps all the way to the White House.

But how could there be another Republican wave in the aftermath of the ever-growing debacle of the Trump presidency and the self-exposure of the Republican Party on the health insurance issue? To assume that a Republican comeback is impossible, would be to ignore the lessons of the last great “progressive” victory in U.S. politics—the election in November 2008 that brought into the White House the first African-American president, combined with solid Democratic majorities in both houses of Congress. However, at the end of Obama’s triumph lurked the racist Donald Trump, backed by Republican majorities in both the Senate and the House.

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Prospects for the Economy Under Trump

January 1, 2017

This article will come in two parts. This month, I examine policies of the Federal Reserve and Trump’s domestic policies. Next month, I will end this series with an examination of Trump’s global economic policies.

The Federal Reserve and Donald Trump

On December 14, 2016, the Federal Reserve Open Market Committee announced that it had finally decided to raise the federal funds rate—the rate that commercial banks, not the Fed itself, charge each other for overnight loans—by a quarter of one percent. Instead of targeting a rate of 0.25 to 0.50 percent like it did between December 2015 and December 2016, its new target is 0.50 to 0.75 percent.

Since Trump’s victory on November 8, long-term interest rates have risen sharply. This combined with the decision of the Fed to finally nudge up the fed funds rate indicates that the money market has tightened since Trump’s election. In the course of the industrial cycle, once the money market starts to tighten it is only a matter of time before recession arrives. The recession marks the end of one industrial cycle and the beginning of the next.

As it became increasingly likely that Trump could actually win the Republican nomination, the Fed put on hold its earlier plans to raise the fed funds rate multiple times in the course of 2016. The normal practice is for the Federal Reserve System to raise the fed funds rate repeatedly in the later stages of the industrial cycle. Indeed, this is central banking 101. These policies are designed to hold in check credit-fueled “over-trading” (overproduction), as well as stock market, land and primary-commodity speculation that can end in a crash with nasty consequences.

If the central bank resists raising interest rates too long by flooding the banking system with newly created currency, this leads sooner or later to a run on the currency, which is what happened in the 1970s. The result back then was stagflation and deep recessions with interest rates eventually rising into the double digits, which effectively wiped out the profit of enterprise—defined as the difference between the total profit and the rate of interest. At the end of the stagflation in the early 1980s came the explosion of credit, sometimes called “financialization,” the aftereffects of which are still with us today.

Under the present dollar-centered international monetary system, the repeated failure of the Federal Reserve System to push up interest rates would lead to the collapse of the U.S. dollar and the dollar system. The inevitable result would be a financial crash and thus the military and political crash of the U.S. world empire, which has held the capitalist world together since 1945.

In this cycle, however, the Federal Reserve waited more than eight years after the outbreak of the crisis in August 2007 before it began to push up the federal funds rate. The reason for the prolonged delay is that the current U.S. economic expansion, which began in 2009—representing the rising phase of the current industrial cycle—has been the slowest on record.

During this extraordinarily feeble expansion, the U.S. GDP has grown, with some fluctuations, at a rate of only about 2 percent a year. This performance contrasts sharply with the double-digit U.S. GDP rates of growth that occurred during the expansion of 1933-1937 and again after the severe but brief recession of 1937-1938 during the Great Depression. Far more than in the 1930s, the current era has been marked by “secular stagnation” in the U.S. as well as Europe and Japan.

Beginning with the panic that broke out with the failure of the giant Lehman Brothers investment bank in September 2008, the Federal Reserve engineered an explosion in the dollar-denominated monetary base designed to stave off a new super-crisis that could have been much worse than the one in 1929-1933. This effort succeeded in preventing the crisis from reaching the extremes the earlier super-crisis did in most countries—but not all. For example, the crisis/depression that began in the U.S. in 2007 has been far worse in Greece than the crisis of the 1930s was in that country. But even in countries where a full-scale repeat of the 1930s Depression was avoided, the post-crisis stagnation has been far more stubborn than anything seen in the 1930s.

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Donald Trump, the New Political Chief of Capitalist Society

December 4, 2016

Donald J. Trump, the 70-year-old New York billionaire, real-estate magnate, owner of casinos and golf courses, and former clownish reality star, is the new political chief of the United States and leader of the “free world” (as the U.S. world empire likes to call itself).

Trump was actually defeated by a margin of 2.3 million votes in the election by Hillary Clinton. However, he won an overwhelming victory in the electoral college. The electoral college is itself an undemocratic hangover from when the plantation economy dependent on the slave labor of kidnapped Africans and their descendants dominated the southern U.S. This would be as though the Labour Party in Britain won a small but definite majority in the House of Commons but the House of Lords and the Crown—both survivors of the time when a feudal economy dominated what is now Great Britain—combined to install a prime minister from the Tory Party.

Hail to the Chief!

The big capitalists know full well that, whether or not they like a particular “leader of the free world,” they have only one such leader at a time. Immediately after the proclamation of Trump as “president-elect,” outgoing President Barack Obama wished Trump success. He explained that, whatever differences there might be between the first African American to be elected to the presidency and his right-wing racist successor, “we”—the ruling capitalist class—are “playing on the same team.”

Obama is correct. Hillary Clinton after a lag of a few hours—reports said that she had not even considered the possibility that she would lose and had not prepared a concession speech—delivered a meek statement along the same lines.

Ironically, Trump had declared in the weeks leading up to the election that “the system is rigged” and he might not accept the results. This indicated that Trump himself did not actually expect to win. Whether Trump would have recognized a Clinton victory as legitimate and indicated his support of a President Hillary Clinton will never be known.

The selection of Senator Jeff Sessions of Alabama for U.S. attorney-general indicates that the Trump administration will be the most racist administration since at least the days of Woodrow Wilson. Ronald Reagan nominated Sessions for a federal judgeship, but his racism was too obvious and he was rejected by the Senate. Sessions called African American employees of the Justice Department “boy”—the term of address used by white slaveholders when addressing their African male slaves. Later, in the Jim Crow era, white bosses, officialdom and racist whites would address African American men as “boy.”

Sessions once joked that he had no arguments with the Ku Klux Klan until he found out that Klan members used marijuana. The point of this joke is that Sessions, though he disapproves of weed, has no disagreements with the Klan on the question of race. This joke is beyond offensive and in a decent society would disqualify him for any public office, let alone the position as chief law-enforcement officer. The Sessions nomination gives the lie to any claim that the president-elect is not a racist.

Trump appointed Steve Bannon as White House chief advisor and strategist. Bannon, the former chief executive officer of Breitbart “News,” a far-right website that has provided a platform for the neo-Nazi-ridden alt-right movement, has sent chills down the spines of all American who do not fit the white-nationalist definition of European Americans. As defined by neo-Nazis—or white nationalists, as they like to call themselves today—non-European Americans include the African American community; Latinos, especially but not only the Mexican community; Native Americans; the entire Muslim community and, yes, that other group not considered to be European American, the Jewish community.

Not so long ago, the complacent mainstream leaders of the U.S. Jewish community, who are all Zionists, claimed that anti-Semitism today came from the left. According to these misleaders, anti-Semitism showed itself in the form of the Boycott and Divestment and Black Lives Matter movements because the leaders of these movements expressed solidarity with the struggle of the Palestinian people against Israeli apartheid.

But then a funny thing happened. The old anti-Semitism of “the right”—that is, the real thing—is now raising its ugly head not only in far-off Poland, Hungary and Hitler’s homeland of Austria but right here in the U.S. Recently, the Anti-Defamation League denounced the attacks on Muslims. This is a welcome development though it would be nice if they extended their defense of Muslims to Arab Muslims who are native to Palestine. This illustrates the fact that the state of Israel and the entire Zionist movement are actually barriers in the struggle against fascism and the real anti-Semitism that inevitably accompanies it.

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