Now that the dust has settled from November's electoral mess, it's business as usual for the American ruling class. The incoming Bush administration will largely continue the same basic policies as the Clinton administration, particularly in regard to American imperialist interests. Already the bourgeoisie is pushing with great success an ideological campaign to cast the recent electoral embarrassment in the most positive light.
The inconclusive result in the November election was clearly an unplanned accident for the bourgeoisie. Nothing in the current situation either on the level of the economic crisis, inter-imperialist tensions, or the class struggle, required the bourgeoisie to abandon the strategy of the left in power that had worked so effectively for the past eight years. As pointed out in Internationalism 115, "this strategy permitted the ruling class to use the Clinton administration to maintain a continuous implementation of austerity and the dismantling of the New Deal welfare state, and to intervene frequently and effectively on the military level around the world under the ideological cover of 'humanitarianism,' and to maintain the disorientation of the working class. At the same time the ruling class was able to revamp and strengthen the union apparatus in order to confront future working class struggles." Thus, the best interests of the bourgeoisie would have been served by a Gore victory as a continuation of the left in power strategy. The inability for the ruling class of the world's greatest imperialist power to control the electoral outcome was a great embarrassment, one which European powers did not hesitate to ridicule. This failure was largely attributable to the confluence of two factors: the actions of Green Party candidate Ralph Nader, who reneged on a deal with the Democrats not to pursue his campaign in states that might affect the outcome of the election, and the anachronistic Electoral College, which is weighted heavily in favor of sparsely populated rural states, that voted for Bush. The fact that Gore won the popular vote by 500,000 votes, but was not the winner of the election severely undercut the democratic myth that the "people decide," that the government is a reflection of the "will of the people."
Following the election night impasse, this accident was exacerbated by a tendency for the political situation to spin out of control, as political ambition, and not the best interests of the ruling class became dominant. With 9,000 senior and middle level appointments at stake, the political and legal wrangling was quite unsightly for the bourgeoisie, incidentally exposing for the moment the hypocritical qualities of bourgeois electoral democracy. Robert Reich, former Secretary of Labor in the Clinton administration openly lamented this losing sight of the national interest in an op-ed piece in the New York Times, in which he complained about "the career politicians, congressional aides, party activists and the staffs of partisan think tanks and Washington-based interest groups that have gone ballistic." Reich moaned, "None of them expected an outcome so hair-splittingly close. There was no script for anything like this," and complained that this led to a "naked quest for power in the absence of clear rules" for settling the election (New York Times Dec. 4, 2000).
A popular e-mail parody of the election began circulating throughout internet asking what the media would say if in an African nation, there was a controversial election in which the winning candidate was the son of a previous president, who had previously served as director of the state security forces (CIA), and where the victory was determined by a disputed counting of the ballots in a province governed by a brother of the presidential candidate. Even the Supreme Court, which normally benefits from a mythic ideological portrayal as an exalted, "non-political" branch of government guaranteeing the rule of law in American society, permitted itself to be drawn into the highly charged partisan maneuvering. The Court ruled 5-4 along narrow political lines to stop the recount in Florida and award the election to Bush, a decision tainted by the vested interest of two of the conservative judges in the outcome of the election: Scalia, whose son was a Bush campaign official, and Thomas, whose wife was working as a personnel recruiter for the Bush transition team.
As embarrassing as this political loss of control was for the bourgeoisie, the American ruling class was not powerless to protect itself. First, as we pointed out in Internationalism 115, the dominant faction of the ruling class had preventatively protected against serious damage in the event of such an accident by making sure that both major party candidates, Al Gore and George W. Bush, represented the outlook of the same ruling class faction, and that no matter who won essentially the same policies would be implemented. Thus, both Gore, and Bush, a champion of "compassionate conservativism," advocated identical positions on imperialist issues, and very similar positions on domestic policies. In this sense, while there was definitely a loss of political control for the bourgeoisie, it occurred within very proscribed limits and posed no particular threat to political stability. This was not a clash of two rival political factions for control of the capitalist state, but rather a bickering between two members of the same faction.
This enabled the bourgeois media, despite the ridicule emanating from Europe, whose leaders bragged that such a mess could never happen in their parliamentary democracies, to unleash an ideological campaign that emphasized the strength and maturity of American democracy. The ridicule that portrayed the U.S. as little better than a banana republic was refuted by the argument that the electoral stalemate did not lead to violence, that the rule of law would prevail, and ultimately that the system worked. This campaign to salvage the democratic myth, of course, was bolstered by Gore's concession speech after the Supreme Court ruling, which was hailed, even by conservative commentators, as one of the greatest speeches in American political history.
The emerging Bush cabinet demonstrates the effectiveness of the bourgeoisie's policy of minimizing the dangers of an electoral accident. Bush's political inexperience and alleged "lightweight" intellectual capacities, are fully compensated for from the very beginning by the role of the new vice president, Dick Cheney, who served under the elder Bush as Secretary of Defense during the Gulf War in 1991, and coordinated the transition team and played a key role in cabinet member selection. So prominent a role has Cheney played that the Economist, and even some American journalists, have quipped that the US is switching to a more European style government, with a largely ceremonial president, and the vice president serving essentially as prime minister (Economist Dec. 23, 2000, and Tom Brokaw, NBC News Jan. 20, 2001).
Bush's cabinet selection clearly demonstrates that his administration does not personify the Republican Party's right, but occupies essentially the same ground as the Clinton-Gore administration. Cabinet members for the most important posts, those dealing with imperialist and economic policy, come from the Republican Party mainstream, what the Economist (Jan. 6, 2001) called the traditional Republican "east coast establishment," not the right of Ronald Reagan. The imperialist policy team members have all served in previous administrations: Secretary of State Colin Powell who previously served as Chief of Staff of the U.S. military and National Security Advisor in the elder Bush's administration; and Defense Secretary Donald Rumsfeld, who previously held the same post in the Ford administration. Treasury secretary designee Paul O'Neill also served in the Ford regime, as Budget director, and more recently as CEO of Alcoa Aluminum Corporation. As further evidence that his administration is not representative of the Republican right, Bush has gone out of his way to outdo Clinton in making his cabinet the most ethnically diverse in American history. This demonstrates clearly that Bush is not representing the far right of the party, but rather the center of the Republicans. Bush has thrown a bone to the far right by making several controversial appointments to less important posts, especially John Ashcroft as Attorney General, who will serve as a lightning rod for liberal and left opposition, especially on abortion - a social issue that the bourgeoisie purposefully and skillfully exploits to stir up emotions and divert attention from fundamental class questions. In fact, some news commentators have pointed out that the liberal Democrats want Ashcroft in office so they will have someone to attack.
The one error made in cabinet appointments made by the Bush transition team was the initial nomination of Linda Chavez as Secretary of Labor. She was forced to withdraw not, as the media would have us believe, because she had lied to the Republican vetting team and FBI investigators about employing an illegal immigrant as a housekeeper in the early '90s, which was surely just the pretext, but rather because she was too far right for the post. The Labor Department has a key role to play for the government in regard to the class struggle, through its regulation and control of the unions and laws regulating wages and employment. The bourgeoisie still needs to continue its efforts to revitalize the unions, and because of Chavez's opposition to unions, and minimum wage laws, her leadership at Labor would have jeopardized the continued strengthening of the unions, undercut the cozy relationship between the unions and the government of the Clinton years, and risked provoking premature confrontations with them. A more centrist nominee, like Elaine Chao, who was named within 48 hours of Chavez's withdrawal, will assure a more peaceful relationship with the capitalist unions in the immediate future.
The election is over, and after embarrassing itself and momentarily losing control of the political situation, the American bourgeoisie has already recovered, and is repairing whatever damage may have been done. Even if the election outcome appears to contradict the principle that the majority wins, the American population is being serenaded with a lullaby about the rule of law and the legitimacy of the new president. As soon as possible the Bush administration will get down to business, continuing to make the working class bear the brunt of the economic crisis and embarking on military missions to defend America's threatened hegemony in the world arena.
JG.
During the 1990's the bourgeois media portrayed the US economy as an oasis of unlimited prosperity. Today this talk of a never-ending, booming economy is heard no more. The days of the "longest running economic recovery in US history" - as they used to call it - seem now to be gone. The debate now among bourgeois economists is not about the likelihood of a recession, but rather about how bad it will be, whether there will be a hard landing or a soft one. There are even some so-called pessimistic economists who say that there is already a recession, particularly in the manufacturing sector, the central industry of the economy.
Certainly there is not much to brag about in the present US economic situation. The official figures themselves can't hide an increasing deterioration of the economic indicators that the dominant class uses to measure the health of its system. For instance there is a virtual collapse of economic growth, from about 7% annual rate in the last half of 1999 to a 1.8% annual rate in the last six months of 2000. In the fourth quarter of last year, the rate slowed to a meager 1.4 percent, the lowest since the second quarter of 1995. So far for 2001, Federal Reserve chairman Alan Greenspan estimates that economic growth has declined to near zero. For its part, Wall Street, the 1990's miracle machine that produced riches out of thin air is lately looking quite humble. The same "analysts" that peddled the virtues of the stock market before are now referring to last year's plunge in technology and Internet stocks as "a bubble that burst." It is quite symbolic that the big losers of this explosion are the infamous "dot-coms," the Internet companies that were supposed to epitomize the bright future of the "new economy," that according to the fashionable mumbo jumbo of the bourgeoisie characterizes today's capitalism. For the last year these companies, many of which were an aberration, never turning out profit, have been going belly up one after the other, making the myth of a healthy American economy collapse like a house of cards.
The reality is that - as we have often insisted in the pages of Internationalism - the US "booming economy" has been from start to finish a sick organism, bred by an explosion of private debt, growing commercial deficits and a tremendous wave of speculation on the stock market, which helped sustain growth and created a façade of general prosperity.
As bad as the situation of the US economy is, the dominant class is still not calling it a recession. According to its definition, a recession will only start after two consecutive quarters of negative economic growth. The truth of the matter is that official recession, or not, the working class is already suffering - like always, bearing the brunt of the economic troubles of the bourgeoisie. On the job front it is a blood bath. January's layoffs -142,208- are the highest in 8 years, rising 6.4 percent over December's 133,713 job cuts. And these jobs lost are not MacDonald's or busboy jobs, but positions in sectors where, on average, workers can make a living salary. For instance in January the auto sector layoffs reached 34,959, while the telecoms, E-commerce and computer companies accounted for 44,851, about 32% of the total.
At the command of the state, the economic witch doctors of the bourgeoisie are hurriedly trying to breathe some life into the ailing economy. The Federal Reserve is busy playing its monetary games, dropping another ½ percent of its benchmark short-term interest rate at the end of January, on top of the half percent already cut at a few weeks before. The engineering of a reduction of a full percentage point in less than a month by the Federal Reserve under Alan Greenspan, who one bourgeois commentator put it, "never before…. moved this fast to rescue the economy from a slide," bears testimony to the worrisome situation. For his part, the new president, George W. Bush, is pushing for a tax cut, which will supposedly be central in jump-starting the moribund economy.
However, the bourgeoisie doesn't seem to be very optimistic about the immediate impact of either its monetary or fiscal policy in preventing the downward economic slide. The bourgeois analysts themselves are recognizing that the lowering of interest rates are at best encouraging people to play the stock market again, while the big banks, overburdened already by bad debts, are for the moment unwilling to open wide a flow of money that very likely will never be paid back. The irony of the situation is that in order to bring back some semblance of prosperity, the bourgeoisie has had to resort to a mechanism that the Federal Reserve had already found unsustainable and was trying to curtail when it started raising interest rates at the end of the 90's. Thus, faced with the present convulsions and the perspective that things will get worse rather than better, the bourgeoisie again resorts to a policy that will foster renewed speculation. Nor is there much enthusiasm for tax cuts among the bourgeoisie either. Some are arguing that it needs to be retroactive to have any impact in the slowing economy. Probably the real reason of this lack of enthusiasm is the fact that they know that, given the present economic troubles, the projected budget surpluses for years to come - the basis for the proposed tax cuts - may now never materialize at all. Of course the working class doesn't have much to be enthusiastic about in this tax cuts - the average 8 dollars more in their weekly paycheck they would get is nothing to cheer up about.
Nonetheless, despite the fact that the dominant class is more or less openly acknowledging that something has gone wrong with its economy and that things will only get worse, it is still promoting its mystifying way of looking at the world, only telling half truths. It wants us to believe that its present troubles are nothing but a normal phase in capitalism's economic cycle, after which a new period of prosperity will follow, and everything will continue as before. Nothing could be farther from reality. What present bourgeois economists call recessions are not the classical economic crises suffered by capitalism during the 19th century. Then, each cyclical decline of the economy was followed, through the expansion of the world market, by a new expansion of production reaching higher levels than the previous period. Today this way out is not possible. The world market been saturated since the beginning of the 20th century, opening up the historical crisis of capitalism. The youthful periodical crises of the bourgeois system of production have been transformed into a chronic economic crisis of a historically decadent system, which has nothing to offered humanity by cycles of crisis, wars, and reconstruction.
Since the end of the 1960's, following the "economic boom" of the period of reconstruction after the devastation brought about by the barbarism of WW II, capitalism as a whole has been confronted by an ever deepening worldwide open economic crisis, to which the bourgeoisie can only offer artificial solutions. Particularly the lack of solvent markets, in which it would be possible to realize the surplus value produced, has led the bourgeoisie to the creation of fictitious markets through the permanent abuse of credit. Thus for the last three decades, each "recovery," following a so called "recession' has been made possible only by an increasing growth in public and private debt. The result is that each one of the phases of convulsions has meant a more violent fall into the abyss, while each moment of recovery softens the fall. Nevertheless, both are situated in a dynamic of progressive collapse.
In this context the present troubles of the US economy are nothing but a moment in the general economic crisis that the whole system of capitalism has been confronted with for the last three decades. The years of "unprecedented" recovery after the world recession of the early 90's, which we often heard about, was mainly reduced to the US, bearing witness to the depth of the world crisis of capitalism. The second largest economy of the world, Japan, has not been able to come out of recession, while the countries of Western Europe - the other centers of capitalism - at best have shown only very anemic rates of growth over the past decade.
At the end of the 90's the US bourgeoisie was able to avoid the cataclysm of the system threatened by the collapse of the economies of South East Asia in 1997-98 thanks only to a historically unprecedented speculative bubble. Investments in the stock market were turned into the only profitable investment. Families and businesses in the US were pulled into the aberrant mechanism of taking out debt in order to speculate on the stock market and using the stocks acquired as pledges in order to frantically buy goods and services. The "wealth effect," or, more accurately, the dilution of wealth produced by this speculative bubble, has been in fact the real motor behind the famous "unprecedented" longest recovery of the US economy.
As we said above, the bourgeoisie itself had already recognized even before the present troubles of the economy became apparent, that it could not go on forever sustaining growth through the speculative mechanism and was trying to prick the speculative bubble and "cool" down the economy. This attempt to engineer a soft landing of the economy, judging by the sudden change in monetary polices by the Federal Reserve at the beginning of this year, has not been totally successful.
Paralysis of growth, massive layoffs, credit crunch, rising inflation are all indicators of the beginning of a new convulsion of the US economy which will without doubt have a tremendous effect on a world capitalism already very much weakened by thirty years of open economic crisis.
During the 90's, while the bourgeoisie was celebrating the wonders of the "booming economy," workers experienced salary freezes, worsening working conditions, the dismantling of the welfare state - in short, an all out austerity attack, sugar-coated with the promise that they eventually would get their piece of the pie. Yet the only thing that workers saw rising was their debts and the hours that they have to work to keep up with the deterioration of the purchasing power of their salary being eaten up by chronic inflation. Now they are told that the good times are off for a while. Now they will be asked to continue tightening their belts and bear the austerity made necessary by the bad phase of "business cycle." More than ever the working class needs to give its own solution to the crisis of capitalism: fight on its own terrain against the attacks of the system, overthrow capitalism and all its bourgeoisie institutions.
Eduardo Smith.