By JEFF MACKLER
In today’s era of U.S. and worldwide capitalist austerity, not a day or month passes when the corporate media do not inform us that the nation faces yet another economic crisis.
From the deficit crisis, in which the U.S. budget falls short $1 trillion yearly; to the “fiscal cliff” crisis, wherein “across-the-board” cuts in hundreds of social programs and the military are now set to begin; to the upcoming budget crisis, wherein draconian social cuts are in the bipartisan congressional hopper; to the multi-trillion dollar bank and corporate bailout that “saved the nation from economic catastrophe,” the end result is the same—working people pay, and the rich get richer.
The daily orchestrated maneuvers and shifting the blame by the Democrats and Republicans reflect the hype generated by their corporate masters, and parroted in the media, to convince a wary public that serious differences are at stake.
In late February, the week before the sky was set to fall with regard to the latest crisis, President Obama toured the nation, Chicken Little style, to chastise his Republican partners in corporate crime for the mandated $83 billion “across-the-board” cuts in social and military spending.
And the sky did fall. The cuts are in progress. The best that President Obama could say was that the cuts were “stupid”—such a gentle word in this context in which millions of workers are to be laid off or furloughed—yet he and his party signed onto them months before. To be sure, plans are in progress to mitigate or eliminate the scheduled cuts to the military, the sector of the economy that generates the greatest profits for the super-rich.
In the next 10 years the total set for the chopping block, supposedly to reduce the government’s budget deficit, is $1.3 trillion. No one mentions that last month’s “deal” increased the deficit by $3 trillion! But that’s just in the beginning chapters in the ever-unfolding story of capitalist intentions.
January’s 11th-hour financial “compromise” increased payroll taxes on working people an average of $1000 each, while the richest one percent were charged a pittance, undoubtedly to be offset by present or future loopholes that none but the elite corporate accountants, who write the tax codes, will ever see. Meanwhile, the ruling-class parties were sure to include a broad range of “tax extenders” that would once again gift billions to the few who own the most.
The March 5 New York Times reported that state and local governments issued federal tax-exempt bonds worth $65 billion over the past decade to the richest few. The largest recipient was the Chevron Corporation, which, according to The Times, reported profits of $26 billion last year alone. The Times headline properly read, “A Stealthy Subsidy Aiding Big Business Is Growing.” But the billions so reported pale before the over $20 trillion dollars granted by Congress to the largest corporations and banks under the twisted logic that they were “too big to fail.”
Similarly, a March 4 lead sentence from the British press agency Reuters stated, “President Barack Obama raised anew the issue of cutting entitlements such as Medicare and Social Security as a way out of damaging budget cuts, a White House official said on Sunday, as both sides in Washington tried to limit a fiscal crisis that may soon hit millions of Americans.”
The Reuters article continued, “Signaling he might be ready to explore a compromise to end automatic spending cuts that began late Friday [March 1, 2013], Obama mentioned reforming these entitlement programs in calls with lawmakers from both parties on Saturday afternoon.
Reuters reported, “‘He’s reaching out to Democrats who understand we have to make serious progress on long-term entitlement reform and Republicans who realize that if we had that type of entitlement reform, they’d be willing to have tax reform that raises revenues to lower the deficit,’ White House senior economic official Gene Sperling said on Sunday on the CNN program ‘State of the Union.”
The grotesque logic of this now open Obama administration focus on slashing Social Security and Medicare in order to supposedly reduce the already approved mandatory cuts on a variety of other social problems is proof positive that capitalism’s only solution to its crisis is to implement never-ending attacks on every gain that working people have made over a period of multiple decades.
And they are not embarrassed. A March 4 New York Times front-page headline read, “Recovery in U.S. Lifting Profits, Not Aiding Jobs.” The Times article began, “With the Dow Jones Industrial average flirting with a nominal record high, the split between American workers and the companies that employ them is widening and could worsen in the next few months as federal budget cuts take hold.”
The article continued, “With millions still out of work, companies face little pressure to raise salaries, while productivity gains allow them to increase sales without adding workers.” The Times referred to a “golden age for corporate profits,” especially for “multi-national” corporations that have shifted production to low-wage nations like China, India, Vietnam and Bangladesh.
This situation is expected to continue, noted The Times, until there is a “full recovery in the labor market.” “Full recovery,” in today’s economic terminology, means the time when U.S. wages are equivalent to those of the poorest nations.
In truth, the present worldwide economic crisis has no prospect of resolution unless the world’s working classes are reduced to near Third World standards, or until a massive challenge is mounted that shakes the foundations of the system. No nation has escaped the economic terror unleashed by the corporate state powers, as austerity is today the universal standard imposed by never-ending wars, destruction of workers’ organizations, massive encroachments on civil and democratic rights, and the impoverishment of workers everywhere, especially women and oppressed nationalities.
Part of the U.S. crisis can be explained by massive and unprecedented waste, including $1 trillion each year on the military. But the source of the world crisis goes much deeper, to the core of the system itself.
Faced with ever-increasing competition among ever-consolidating and merging corporate entities around the world, and with the ceaseless replacement of workers by robots and other technological advances, capitalism, appearances aside, faces a crisis in the rate of profit—a critical factor that lies hidden but is at the core of the financial crisis that hit with hurricane force in late 2007.
With overall profit rates constantly on the decline, as with the bankruptcy of the once most powerful world corporation, General Motors, the ruling rich much prefer to invest their ever-declining profits in speculative financial instruments of myriad types. These range from home mortgages to privately owned and unregulated investment houses, to all the devices that essentially collapsed like a house of cards when it became obvious that the accrued “profits” and “assets,” like mortgages and other paper instruments, proved to be ethereal—not in any manner based on the production of commodities for sale on world markets.
Indeed, in the first two years of the crisis, capitalism disappeared some $50 trillion, as its paper profits evaporated almost overnight.
The lesser banks went under or were absorbed, factories lay idle, mortgages were deemed near worthless, and property values plummeted.
Corporate greed and corruption, accounting fraud, a two-party capitalist system that aimed at defending the interests of the one percent against all others, increasing racism and imprisonment of the oppressed, endless wars over raw materials, the re-colonization of Africa and indeed all poor nations, while important, were merely symptoms of the inherent contradictions of the system itself—a social system where the endless compulsion or need to advance the accumulation of profits of the corporate elite overrules all rational decisions.
Competition for oil and other fossil fuels increases unchecked even at the expense of humanity’s future. Wars that murder tens of millions and the starvation of billions continue because these are requirements of a system based on the accumulation and profitable reinvestment of capital at the expense of everything.
Capitalism’s fundamental law, “grow or die,” today takes its toll across the globe; the system’s trillionaire practitioners have no alternative but to solve its burning contradictions at workers’ expense.
It is left to capitalism’s ideologues to justify or rationalize the horror. Today it is to “defend against terrorism” everywhere, or to defend the “national security interests” of the nation, or to demonize the Black and Brown masses to justify their increasing imprisonment, exploitation, and/or capitalism’s need for cheap labor—even slave labor—or to “fight crime” or pursue the “war on drugs.” The system requires scapegoats to justify its existence and perpetuate its rule.
The working class and its allies among all the oppressed, women, and youth, on the other hand, have no need to kill, maim, plunder, and exploit in order to live full and productive lives. They have only to unite in a common challenge to a social system that must be replaced by an egalitarian society in which, for the first time in human history, the vast majority will rule society in their own name, through their own institutions, and to satisfy human needs—not corporate profit.
The name of that system is socialism—not the twisted distortion that existed in the now defunct USSR—but the real socialism, a society free from all the horrors of subordinating human needs to the corporate elite, a society that can reverse the monstrous damage already done to the earth and its people and provide a rich, full, and rewarding life for all.
Photo: Tony Savino / Socialist Action