FRFI 207 February / March 2009
The United States has a new President, the 44th. Undeniably the election of a black citizen to the most powerful job in the world is a major landmark and welcome signal of change. Equally undeniable is the vast, palpable feeling of excitement amongst working-class and middle-class citizens about the possibilities for change and of goodwill toward the new President. Indeed, it is not only US citizens who have welcomed Obama’s election. But we have to look beyond these surface impressions to establish what this development means for US imperialism. US correspondent STEVE PALMER reports.
One of the consistent themes of our coverage of the Bush administration has been that many of its policies have been controversial amongst the ruling class: the Iraq war was clearly unnecessary, badly executed and rife with corruption; the war in Afghanistan has failed to strengthen the local puppet regime or to undermine support for the Taliban; the contempt for science manifest in pretending away global warming, impeding stem-cell research and in industry-manipulated drug approval; the bungled handling of natural disasters, such as Hurricane Katrina; needless alienation of foreign allies, such as France; the insistence on legalising torture; Guantanamo; the imposition of the Global Gag Rule linking aid to the ban on abortion and family planning advice anywhere in the world, and so on.
At the same time, the core mission of the imperialist state, the protection and advancement of US economic dominance, was handled miserably as far as the ruling class is concerned. The financial crisis has staggered from ‘solution’ to ‘solution’, without any end in sight. Budget deficits have steadily increased. The entire imperialist relationship with Latin America has been left to rot. While the US has been overstretched in Iraq and Afghanistan, it has been unable to hold back or destroy popular anti-imperialist movements in Latin America and has allowed imperialist rivals from Europe to strengthen their position. Mexico, which borders the US, is rife with internal insurrections and widespread vicious gang warfare, exacerbated by free-market policies there and by the crackdown in the US on undocumented migrant workers who are now no longer able to support their families.
While it is difficult to know the thinking of the ruling class, an interesting insight was given by Washington Post writer Kathleen Parker:
‘I keep having this experience over and over and over again. I cannot count the number of times people have come up to me and said, or rather whispered, “I have voted for a Democrat for the first time in my entire life”. This includes even people who served in, for example, the Reagan administration – over and over: “I voted for a Democrat for the very first time”.’
Finally, there was growing dissatisfaction amongst the working class, including massive political mobilisations of undocumented workers, sections of the middle class and of the ruling class. Clearly, as far as the ruling class is concerned, they need someone intelligent, competent, pragmatic and non-partisan in charge who will serve the interests of imperialism as a whole, not a narrow and conflicting ideological agenda.
The task
The US is in a very bad way, quite apart from the financial crisis.
The social infrastructure is in a terrible state: 30% of school students fail to graduate from high-school, school spending has fallen by two-fifths since 2001 and, in 43% of schools, the poor state of facilities interferes with delivering instruction. Internationally, in tests in 2006, the US was beaten in reading by 10 other countries, in scientific literacy by 22, and in mathematical literacy by 31. States’ expenditure on higher education has grown by 21% over the last 20 years – but on prisons by 127%. The US has 5% of the world’s population and 25% of its prisoners: 1 in every 100 of its citizens are currently in jail.
When it comes to health, life expectancy is lower than in 41 other countries; infant mortality is higher than in 29 – and has actually increased under Bush – and maternal mortality rates are higher than in 35 other countries. Some 45m people have no health insurance coverage. Annually, more than 3.5m people suffer homelessness, 1.35m of them children. Some 35m people, about 10% of the population, suffer from hunger.
Employment has been falling absolutely for the last year and at an accelerating rate. In 2008, 2.6m people lost their jobs, 1.9m in just the last four months of 2008. The official unemployment rate is now 7.2%, but in some localities it is more than twice that. Unofficial calculations show the rate to be considerably higher. Unlike in other imperialist countries, those who lose their jobs lose health benefits. The share of employees with a work-related pension fell from 50.6% in 1979 to 42.8% in 2006. 60% of male workers have a real hourly wage that is absolutely lower than it was in 1979.
Physically, the United States itself is literally on the verge of collapsing and crumbling: of almost 600,000 bridges, more than 25% are structurally deficient or functionally obsolete; half the locks on 12,000 miles of inland waterways are functionally obsolete; more than 3,300 dams are unsafe or deficient, many of them susceptible to large flooding events or earthquakes; the highways need more than $150bn annually spent to maintain and improve them, but receive less than half that; people in the US spend the equivalent of 2.5m working days every year stuck in traffic; commercial airline delays and cancellations have been increasing every year. Altogether there is about $1.6 trillion of infrastructure work needed. Although money has been allocated for some of this capital infrastructure spending, much of it has been raided to finance current spending and enable tax reductions for the wealthy.
The key question, as Fidel Castro has remarked about Obama, is not whether he is sincere, but ‘What will he do when the immense power in his hands proves absolutely useless for overcoming the system’s insoluble antagonistic contradictions?’ He has already shown his support for imperialist foreign policy by approving airstrikes in Pakistan, which killed 22 civilians.
At home, in the face of steady economic decline and the acute financial crisis, President Obama is proposing an $825bn ‘stimulus package’. The crucial question is: how will this be financed? Obviously it has to be by borrowing. But from whom, and how will it be paid back? It is not at all clear that the foreign lenders who have kept the US afloat for decades will be either able (since their economies are going into recession too) or willing. Their willingness depends on their expectation of their loans being financed and paid off in the future. For that to happen, the US economy has to return to some form of strong and autonomous capitalist growth. To do that requires a massive increase in the profitability of US capital and therefore a massive destruction of the standard of living of the middle and working classes.
More important to US finance capital than the stimulus package is a plan to get the banks out of crisis. Estimates of total potential losses by banks reach as high as $3.2 trillion – about a quarter of US annual production. Politically, it’s going to be harder to simply throw more truckloads of free money at them. Obama’s team are exploring other ways to do this, including buying the almost worthless garbage assets from the banks at inflated prices and dumping them in the laps of ‘taxpayers’ – ie of working people – using a so-called ‘Bad bank’ whose assets are junk.
Whatever they decide to do, this crisis is going to intensify, and attacks on the middle and working classes will increase, whatever Obama’s inclinations. In the forthcoming death match between the US economy and the law of value, Obama is going to be little more than a spectator.
