Detroit labor and community people jammed the King Solomon Church on the westside for a rally sponsored by Good Jobs Now, an initiative of the Service Employees International Union (SEIU). The event was held on June 27, 2011. (Photo: Abayomi Azikiwe), a photo by Pan-African News Wire File Photos on Flickr.
Dems cave to right in debt-ceiling clash
Workers must fight for jobs, human needs
By Fred Goldstein
Published Aug 3, 2011 8:38 PM
The resolution of the debt-ceiling crisis shows the growing strength of the right wing in capitalist politics and the bankruptcy of President Barack Obama and the Democratic Party leadership. It also guarantees that the economic crisis of the workers and the people in general will get worse at a time when capitalism is sliding toward a new crisis.
With a jobs crisis raging and the rich piling up more wealth than ever, the settlement projects cutting up to $2.4 trillion in government spending over the next 10 years, yet does not take one more penny from the millionaires and billionaires in taxes.
The announced highlights of the complicated, two-stage deal are very vague:
• $917 billion of cuts in government spending over 10 years, beginning Oct. 1. What those cuts are has not been revealed, except for reports that the Pentagon will be cut. But immediate Pentagon cuts will be minimal. What is not reported is that the Pentagon was already planning $400 billion in cuts.
• Social Security, Medicaid and Medicare are temporarily exempted from this phase of the cuts.
• There are no increases in taxes on the rich and no closing of corporate or individual tax loopholes.
• In return, the debt ceiling will be raised by $900 billion — $400 billion now and $500 billion in September.
• By Nov. 23 a special 12-member commission of six Democrats and six Republicans will recommend up to $1.5 trillion more in cuts to be made over the next 10 years. If the commission comes up with a plan, it will be voted up or down in Congress, and there will be a $1.5 trillion increase in the debt ceiling. If it is not passed, there will be only a $1.2 trillion addition to the debt ceiling.
• Failure to agree triggers automatic spending cuts of $1.2 trillion, half in military spending, half in domestic spending. Social Security and Medicaid have been exempted but not Medicare.
So far the details of the deal have not been disclosed. Many of the specifics probably have to be worked out. This is ominous because of the present political situation.
Sharp shift to right in capitalist politics
This struggle has revealed that the relationship of forces in capitalist politics has shifted further to the right. The more mainstream reactionary forces in the ruling class, who have been pushing for cuts in spending on the people, have been in a bloc with the ultra-right Tea Party forces during most of the debt-ceiling struggle.
Wall Street broke with the extremist ideologues of the Tea Party after Obama made huge concessions on cuts in entitlements. However, the Tea Party ideologues refused to accept victory. Instead, they pressed toward default. After the lobbyists of the financial industry were rejected by the extremist forces, the bankers, including JPMorgan Chase CEO James Dimon, went personally to Capitol Hill to talk directly to the politicians.
In the end, Wall Street got its way. The Tea Party forces split in the final vote, with only 66 Republicans holding out against the deal out of 140 or so Tea Party-associated or Tea Party-endorsed members.
The U.S. ruling class suffered a considerable setback over its financial dealings with the world by this display of political instability. Nevertheless, the financiers won tactically in several ways. They avoided default. They got cuts in spending for the masses and the promise of even more spending cuts. And they stopped any new taxes on the rich and the corporations.
There were sharp differences in the Democratic Party during this struggle. President Obama was ready to put Social Security, Medicaid and Medicare on the table during negotiations with Republican House Speaker John Boehner. In the final settlement, House Minority leader Nancy Pelosi, the Congressional Black Caucus, Latino/a members and the Progressive Caucus held out to keep Social Security, Medicaid and Medicare exempt from cuts at the early stage.
But the entire Democratic Party leadership and most of the rank and file accepted the debt-ceiling frenzy and the deficit-cutting fever generated by not only the Republicans but the ruling class as a whole.
The Democratic Party leadership did not demand the hundreds of billions needed for a government jobs program. They did not demand funds to stop hunger in this country, although 50 million people struggle with so-called “food insufficiency.” The Democrats did not demand money to put the millions back in their homes who have been fleeced by mortgage bankers, brokers and wheeling-and-dealing lenders. They did not even demand the extension of emergency unemployment insurance, which is slated to expire this year.
In short, the Democratic Party has promoted the line that the deficit “must be brought under control.”
Banks are full of money
But how do you bring the deficit under control?
As the famous bank robber Willie Sutton supposedly said, when asked why he robbed banks: “That’s where the money is.”
It is in the banks, the hedge funds, the private equity funds, the military-industrial complex, the Pentagon, Big Oil with its tens of billions in profits, and the manufacturing corporations that are sitting on $2 trillion in cash but won’t create jobs. That’s where the money is. It is money that belongs to the workers who created all the wealth in the first place. And it should be used for workers’ needs.
The Democrats are a capitalist party. That means that at the top they are tied to big capital. It is not for nothing that Obama’s chief of staff, William Daley, is from JPMorgan Chase, or that the head of Obama’s jobs creation panel is Jeffrey Imelt, CEO of General Electric, which has laid off hundreds of thousands of workers in recent decades and pays no taxes.
The deficit that the bosses and their mouthpieces are crying about is the deficit of the ruling class.
The bankers fear for their interest payments. The military contractors worry about the flow of their profits. The Pentagon worries about keeping its war machine up to date in order to bring death and occupation around the globe. The corporations worry about staying on the government gravy train.
To the ruling class, the Treasury is a source of enrichment for millionaires and billionaires. They want the debt ceiling lifted so that the government can keep handing money out to the wealthy.
Not one word has been said in this entire debate over the debt ceiling regarding the great deficit of the broad masses of people. The workers’ deficit is in the day-to-day struggle to survive. The workers and the oppressed have a jobs deficit, a housing deficit, a health care deficit, an education deficit and, for the tens of millions getting low wages, a paycheck deficit.
The debt-ceiling sellout of the interests of the workers comes at a very dangerous time. Cutting government spending — except for the $200 billion in annual interest to the bondholders — means more government workers and others who depend upon government spending are bound to be laid off. Government services are bound to be cut back.
So the argument between the Republicans and Democrats was really over just how much suffering to inflict on the people.
Capitalist economy sliding toward crisis
The deal came at the very moment that the government announced a rise in unemployment, a slowdown in economic growth and a drop in manufacturing. Economic growth was up only 1.3 percent in the second quarter, according to the government’s Bureau of Economic Analysis. Revised figures also brought first-quarter growth down from 1.8 percent to 0.4 percent.
Furthermore, this capitalist economic slowdown is spreading to Germany, Italy and the entire eurozone.
In other words, the two big-business parties made a deal to cut back spending at precisely the moment when capitalism is sliding toward a deeper crisis and the prospect is for more suffering.
Move to right after collapse of USSR
This lurch to the right by Obama, leading the Democrats, is a continuation of a trend that began with Ronald Reagan in the 1980s but accelerated after the collapse of the Soviet Union and Eastern Europe. In the absence of a militant working-class movement in the U.S., once the capitalist class in the U.S. did not have to compete with a rival socialist system, the bosses and bankers began to shed all restraints.
This was reflected in the destruction of welfare by President Bill Clinton, who also instituted NAFTA, stepped up the death penalty, authorized the first so-called “anti-terrorism” laws and signed other reactionary measures. Eight years of George W. Bush pushed everything further to the right, with two wars, domestic spying, huge tax cuts for the rich and so on.
The rise of the Tea Party, with tens of millions of dollars in funding and endless publicity in the capitalist media, is a further reflection of this trend. Obama and the Democrats are floating along on this right-wing tide dictated by the giant capitalists who rule this country.
Workers must organize independently as a class
If this debt-ceiling struggle proves anything, it is that the working class must organize independently, as a class fighting for its own interests. The labor leadership has tied organized labor to the capitalist Democratic Party, and the results have been disastrous: 30 million unemployed or underemployed, millions homeless and hungry, with things getting worse by the week.
This is no time for gloom and doom. This is the time for independent working-class political and economic organization. The time for mass mobilization in the streets, for struggle in the workplaces, and for the workers to speak in their own name is now.
We must speak boldly as an exploited and dispossessed class, with our own political program that reflects our own needs as a class in opposition to the greedy, exploiting, profit-seeking capitalist class that lives off our labor.
The struggle must be against the huge deficits caused when capitalists lay us off, kick us out of our homes, lower our wages, and divide us with racism, sexism, homophobia and anti-immigrant prejudice.
We are told we must follow the Democrats; otherwise we will get the Republicans and the right wing. Well, the workers have followed the Democrats and got — the Republicans and the right wing.
No capitalist party will fight our battles for us. We must organize and fight on our own.
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