The 2010 Mid-Term Elections have come and gone with disastrous results for the Democratic Party. The Republicans won a strong majority in the House of Representatives, giving them the ability to obstruct any legislation that must pass both houses of Congress. For the bourgeois media, these elections were nothing sort of a sea-change event putting the Republicans in the driver’s seat to defeat Barack Obama in the 2012 Presidential Election. President Obama himself admitted to taking a “shellacking” in the elections and promised to do his best to work with the Republicans in Congress. Meanwhile, “progressive” Democrats sang a different tune, arguing that the election results were best explained by the collapse of the President’s electoral coalition due to his fecklessness in the face of Republican obstructionism, his sell-out on national healthcare and his pro-Wall Street agenda.
However, it was not all good news for the Republicans as the election served to highlight important and deepening fractures within the GOP. The growing weight of the Tea Party within Republican Party ranks probably cost their party control of the U.S. Senate. Although the Tea Party’s right-wing demagoguery was useful in rallying the party base in conservative House of Representative districts; it actually worked to turn voters off to the Republican candidate in a number of Senate races that they might have otherwise won. Still, a number of firebrand Republicans, such as the extreme libertarian Rand Paul of Kentucky, will take seats in the Senate when the new Congress convenes in January 2011. The GOP will enter the new Congress with growing divisions, as its insurgent right-wing faction often appears to be as much at odds with “mainstream Republicans” as with the Democrats.
It is clear that the bourgeois political system in the U.S. is under severe stress in the face of a persistent economic crisis that no matter what the bourgeoisie does just will not go away. Unemployment remains sky high, credit is still largely frozen, and businesses supposedly sit on mounds of cash that they simply cannot invest profitably, just as the consumption power of the working class is massively reduced by the collapse of the home equity/debt shell game. Meanwhile, the bourgeois class finally begins to take notice of the ominous national debt, at the same time state and local governments face severe budget shortfalls.
So what does all this mean for the working class? As we pointed out in the last issue of Internationalismthe proletariat has no stake in the outcome of bourgeois elections. Elections are moments in the life of the bourgeoisie through which it attempts to tie the working class to the state through the electoral circus, settle internal disputes within its ranks and manipulate the machinery of the state and media to bring the best ruling team to state power for a given historical juncture. However, the working class does have a vital need to understand the political strategy of the bourgeois class as it attempts to utilize the state to manage the permanent economic crisis and suppress the mortal threat to its existence that emanates from the class struggle. As we have argued in Internationalism for some time now, the deadening weight of social decomposition on the bourgeoisie’s political apparatus has resulted in a growing difficulty for the ruling class to manage its political and electoral system to achieve the best possible results from the point of view of the national capital as a whole. The increasing tendency for “everyman for himself” in the arena of bourgeois politics, the growing number of factions, and movements and the increasing unpredictability of bourgeois elections are weighing heavily on the U.S. bourgeoisie at the moment. What depth has the political crisis of the bourgeoisie reached? This is the vital question facing the working class movement when it comes to analyzing bourgeois elections.
The Contradictions of Bourgeois Economic Policy: Austerity or Stimulus?
According to the bourgeois media, economists are divided on what should be the most pressing economic policy priority at the current juncture. On the one hand, the “deficit hawks” believe that the U.S.’s national debt has spiraled out of control threatening the nation’s long-term position as global imperialist leader. For these economists, the most-pressing need facing the state is to enact painful austerity measures to reduce federal spending, enact deep cuts in social programs, reduce the federal workforce, rationalize the tax code and make the state solvent once again. According to this line of thought, if the debt is not brought under control, the U.S. will eventually face a sovereign debt crisis on the order of what Greece and Ireland are now experiencing. Seeing the U.S. as a bad investment, unwilling to take the necessary measures to get its financial house in order, foreign investors will stop buying U.S. government bonds; pulling the rug out from under the “borrow and spend” model that has kept the U.S. afloat for at least the past decade. The recent report of the Presidential Debt Commission, operating in this vein, called for raising the Social Security retirement age, eliminating the mortgage tax credit, cutting the federal workforce and even certain reductions in the military budget in order to reduce the national debt.
On the other hand, economists on the left, such as Paul Krugman and Robert Reich, argue that concern over the federal debt—although a real problem—is overblown. The most pressing priority facing the state is to get the economy moving again by enacting expansionist stimulus programs in order to boost consumer spending and create jobs. According to this perspective, the U.S. economy is suffering from a massive problem of “underconsumption” in which the wages of the working class have been reduced so far in real terms that they simply cannot afford to buy what is produced. While this problem was suppressed during the last 20 years through a massive resort to consumer debt, this logic has now run its course. According to the Reich-Krugman thesis, another round of Keynesian stimulus is necessary to put more money in consumers’ pockets, eventually causing economic growth to resume and unemployment to drop. Only once a “normal economy” prevails again do followers of the Reich-Krugman thesis believe reducing the national debt should become a priority for the national state. To enact austerity too soon and too fast could be a disaster.
It doesn’t take much analysis to recognize that in the short-term these two policies are in complete contradiction to one another. One calls for contracting the economy in order to improve the long-term fiscal position of the state, while the other risks making the national debt worse in order to improve the economy now. However, it shouldn’t be surprising that two different factions of economists produce two contrasting visions of the most important policy priorities for the state. This simply reflects the fundamental contradiction that state capitalism finds itself in on the international level. After nearly one hundred years of full-fledged state capitalism, nearly all states find themselves faced with a fundamental choice in the face of the permanent economic crisis: attempt to stimulate the economy and risk further long-term fiscal damage or enact austerity now and potentially cause a weak economy to become comatose.
Nevertheless, we should not interpret the debate between these two policy positions as evidence of any real difference within the U.S. bourgeoisie over the need to enact austerity against the working class’ living and working conditions. All bourgeois factions recognize that the fiscal crisis of the state is real and will eventually need to be dealt with by making “painful sacrifices.” The policy debates within the bourgeoisie at the moment concern only the timing of austerity and the question of whether or not another round of stimulus—given the long term risks—will actually help the economy recover. Despite a concerted media campaign directed towards the working class around the threat to the nation posed by the national debt, a strong faction within the U.S. bourgeoisie believes that greater stimulus is needed. At the moment, this faction appears to have the ear of the Obama administration. The recent extension of the Bush era tax cuts, combined with another extension of the federal emergency unemployment compensation program and a cut in the Social Security payroll tax has been marketed by the administration as a “stimulus program” that they believe will add up to 1.3 million jobs in the next two years. Of course, all of the tax cuts and the extension of unemployment benefits will have to be charged on the national credit card.
The working class should not be fooled by the Obama administration’s continued resort to Keynesian policies. Behind these short-term policies, all factions of the bourgeoisie know that the day of reckoning is coming when the Scylla of debt and fiscal crisis will outweigh the Charybdis of unemployment and economic stagnation. The question facing the bourgeoisie at the moment is what political faction should hold state power when the assault on the social wage begins?
From the perspective of history, it would appear likely that the U.S. bourgeoisie would attempt to move the Democratic Party out of power so it could play the traditional role of the left in opposition when the Republicans preside over enacting the tough austerity measures that lie ahead. However, given the amount of turmoil that has occurred in the U.S. political system over the last decade; this is no longer either a straightforward decision or such a simple maneuver for the bourgeoisie to accomplish. While social decomposition has affected the entire bourgeois political spectrum over the last ten years, it has not affected both American political parties equally. Over the last decade the Republican Party has become increasingly penetrated by factions of the bourgeoisie that do not necessarily have the capacity to act in the overall interests of the national capital. The Republicans current coalition includes the obscurantist Christian Right, ideological libertarians who want to abolish the Federal Reserve, free-market fundamentalists, the most belligerent anti-immigrant factions the bourgeoisie has to offer and those who relish the legacy of Cowboy diplomacy from the Bush era. On top of this, we now have to add the Tea Party, many of whom are true ideologues who really believe the extreme philosophies they preach. While “mainstream Republicans” wise to the ways of Washington still control the levers of power in the Republican Party; they are under increasing assault from the right-wing insurgency in their ranks, causing them to pander to this constituency at the same time they manipulate it to improve their electoral position.
There are numerous risks for the bourgeoisie in the period ahead as it attempts to negotiate this difficult political situation. Should it move the Republican Party back into power in preparation for the tough austerity necessary, risking a repeat of the Bush years and empowering the ideological wing of the GOP? Should it rally behind Obama again in 2012 in the hopes of maintaining a more responsible and competent center-right Democratic administration, but risk upsetting the ideological division of labor against the working class?
The 2012 Presidential Campaign
In the days following the Mid-Term elections, Obama looked like a certain one-term President. His party had suffered an historic defeat at the polls. Democratic Congressional candidates in important industrial states Obama won in 2008, suffered defeat after defeat. The Democrats were even unable to hold Obama’s former Illinois Senate seat. The media called these elections a “Republican Tidal Wave.” It was billed as a total rejection of the Obama agenda, especially his controversial health care reform legislation. It was declared certain that the only way the Republicans would lose in 2012 would be to nominate an extreme Tea Party candidate like Sarah Palin. All the Republicans had to do to return to power in 2012 was nominate a credible candidate, who would promptly trounce a discredited and demoralized Obama. The Republicans would obstruct any and all legislation from making it through Congress for the next two years, leaving Obama looking weak and ineffective. The public would reject him for sure.
However, just two short months since the election, the political wind has seemed to change once again. Obama is fresh off a series of important legislative victories in the lame-duck Congress and he now looks Presidential once again. He pushed the New START treaty with Russia through the Senate against the obstinate obstructionism of certain Republicans. He has also pushed through legislation ending the “Don’t Ask-Don’t Tell” policy in the military, which caused many qualified gay people to be banished from service. The ending of this policy was endorsed by Obama’s Republican Secretary of Defense against the gratuitous objections of a number of obstinate Republicans, including Obama’s 2008 Presidential opponent John McCain.
Still, this did not stop a mini-revolt from taking place in the Democratic Party over the tax deal Obama struck with Republicans. So-called “progressive” Democrats rose in an angry revolt against their own President, accusing him of selling-out, compromising without fighting and caving into the Republican Party’s demands to continue irresponsible tax cuts for the richest Americans adding to the national debt.
For the better part of the week, left-wing blogs and the MSNBC network were ripe with calls for a 2012 primary challenge to Obama or the launching of a third party challenge from the left. Congressional Democrats vowed to vote against the tax compromise, while Bernie Sanders—the self-professed Socialist Senator from Vermont—grandstanded on the Senate floor with a mock filibuster against the tax compromise, railing against the decline in living standards of the American working-class, while the richest Americans keep on lining their pockets. During this period, a sense of shock and disbelief emanated from the base of the Democratic Party as they appeared to form an angry left opposition to their own President.
Nevertheless, quickly the hoopla died down and the tax compromise qua stimulus program won enough Democratic votes to pass both houses of Congress and become law. The drama over this legislation may be a preview of things to come. Should the bourgeoisie decide it is too risky to move the Republican Party into power, is it possible they could attempt to enact austerity through a center-right Democratic administration supported tacitly by “mainstream Republicans,” while the Democratic Congressional base plays the role of the left in opposition. At this time, we cannot say if this will occur. However, the controversy over the tax compromise gives some precedent for how such an arrangement might work.
Still, this governmental arrangement could risk further radicalizing the right-wing of the Republican Party and possibly evoking a split with the Tea Party and a third party challenge from the right. Many ideological Republicans in Congress will reject the attempts of their leaders to compromise with Obama.
Already a campaign is under way in the media—led by “responsible Republicans” to try to persuade Sarah Palin from running for President in 2012. While she may be useful for raising campaign funds for Republicans and rallying the conservative base to come out and vote, there is a general consensus among the main factions of the bourgeoisie in both parties that she would make a disastrous President—exponentially worse that Bush. Moreover, her candidacy could pose difficulties for moving the Republican Party into power in 2012, as she is likely to reenergize Obama voters from 2008.
In the final analysis, the U.S. political situation is currently characterized by the instability wrought by decomposition. All responsible factions of the bourgeoisie recognize the eventual imperative to enact austerity. However, there is little consensus at the moment about how to accomplish this at the political level. While history tells us that the bourgeoisie would seek to move the Democratic Party into opposition, so the Republicans can enact the needed cuts while the Democrats work with the unions to control the working class’ response; the current situation of decomposition makes this somewhat less than straightforward for the bourgeoisie. The ruling class could opt to try to enact these cuts with a center-right Democratic President in league with the Republican establishment, with the Congressional Democratic caucus, along with the unions, playing the role of the left opposition. This course of action would come with the serious risk of upsetting the traditional ideological division of labor between the Democrats and Republicans. However, given the ideological deterioration of the Republican Party and the potential for a dangerous Presidential candidate emerging from its ranks, the bourgeoisie may have no other choice than to opt for such a policy.
Of course is it also possible that the effects of decomposition have already taken such a toll on the bourgeois political apparatus that in the end the main factions of the bourgeoisie cannot prevent a President Palin—or some similar right-wing cook—from taking office. If Palin decides to run, it is possible that the Tea Party insurgency will carry her to victory in the Republican primaries. As the Republican Party candidate, she may energize the Democratic base to come to the polls—but given the constraints of the American political system, in particular the anachronous Electoral College, it is possible that in a farcical repeat of the 2000 Election, Palin could win the Presidency, but lose the popular vote. While this is only remote possibility at the moment, we can be assured that it is an outcome the main factions of the bourgeoisie are preparing for and trying their utmost to avoid.