I was moved to write what has turned out (so far) to be a two-part essay as a response to the brazen rejection of the Bernie Sanders campaign by the evil shit-heads leading the Democratic Party USA and their elevation of the useless (at best) Joe Biden. Supposedly Donald Trump is an existential threat to (the non-existent) US-American democracy, but given a choice between Bernie Sanders, (a Senator who consistently polled as the most popular national politician in the country) and a corrupt, misogynist corporate lapdog descending into senility, the Democratic leadership chose the latter. They did so because the policies championed by Sanders, and which make him so popular, would negatively impact the profits and power of the US oligarchy.
There is a global ecological catastrophe unfolding, on top of increasing, debilitating economic inequality, and the annual crimes of tens of thousands of US-Americans dying and hundreds of thousands being bankrupted, by the absence of a national pubic healthcare system. And the "good cop" of the US political duopoly, the Democratic Party has decided to ignore reality, ignore its membership, ignore the electorate, and continue their slavish devotion to the oligarchy.
That the same thing recently happened in the UK (with the political class sabotaging Jeremy Corbyn) shows that this death-wish of capitalism is a global phenomenon. And here in Canada, the Liberals' refusal to entertain debt and mortgage moratoriums when many people are being prevented from earning incomes, and continued federal and provincial allocation of scarce resources to the fossil fuels industry, exposes our own symptoms of this disease. The decision of the Democratic Party USA to assert that electoral politics will not be anything other than empty theater, which is a declaration of suicide. If you consciously decide to block the voters from being able to use the current political system to avert the destruction of civilization and the possible annihilation of the human species, then you make revolution inevitable.
OUR STORY THUS FAR
Part One of this essay started out with a description of the depressing state of politics today, but ended up being a summation of US electoral politics since the late-19th Century, with the expansion of the franchise, the transformations of the political parties under the pressures of economic, demographic, social and international events (such as wars and Cold War) up to the 1980s. The gist being that under these pressures capitalist societies were forced to allow political movements and governments to enact policies beneficial for the majorities of their populations, and, importantly, to allow oppressed minorities access to these benefits as well. The high point of this was the so-called "golden age of capitalism" from 1945 to 1973. 1973 was the year of the OPEC oil-shock and is generally held to be the culmination of a series of events that brought about the end of the "golden age."From 1973-79 the world economy endured an economic crisis that would produce a capitalist "counter-attack" against the egalitarian policies of the golden age and in which governments would no longer promise to do anything for their populations other than to create the conditions whereby capitalism would "thrive" and create the conditions for steady economic growth and subsequent "job creation." (Actually, I didn't get as far as that last sentence. But I wanted to.)
From 1973-79 the world economy endured "stagflation" (stagnant economies coupled with price inflation) as competing groups, including workers and employers, struggled to obtain compensation for the rising prices of fuels, foods, wages, and prices of consumer goods. During the process the inflation rate rose faster than the interest paid on the savings of the wealthy. They actually saw declines in their net worth. And it was this, more than anything else, that was so intolerable to the elites. That was what really led to the right-wing "counter-attack." This consisted of "neo-liberalism": government/state attacks on unions, regulations on industries, "free-trade" deals that entrenched corporate rights and forced workers in "developed" countries to compete with oppressed, low-wage workers in the LDCs. And, the main immediate weapon of the counter-attack, monetarist policies of high interest rates to depress the economy, and produce recessions to tame the working class with high unemployment. The deficits and debts produced by these recessions could then be used to justify subsequent economic austerity. Disgustingly, policy makers also pointed to the high unemployment that they themselves had deliberately engineered as evidence of workers' psychological "
dependence" on the pleasures of subsidized unemployment. There was no other remedy to this problem than to attack unemployment insurance and basic welfare assistance as a form of "
tough love" to help the working class regain its self-respect and get them back to work.
Let's continue now. I'd left off with a graph depicting USA-USSR military spending in the 20th Century. Massive increases in military spending was one of the key policies of the presidency of Ronald Reagan, the figurehead of the right-wing counterattack in the USA.
REAGAN'S MILITARY SPENDING
As I said in the Part One, "military Keynesianism" was the one sector of public spending that met with the approval of US elites. Employment in the military necessitated obedience of the workforce. The US military served as a tool with which to dominate other countries in the world system. Industrialists liked it because the
cost-plus contract system encouraged
massive fraud and
enormous profits to arms manufacturers. And this could all be sustained indefinitely because of (often nonsensical) claims of "national security." Anybody questioning the brave generals "keeping us safe" could be smeared as unpatriotic. War was also manly. Peace was for sissies and faggots and traitors and appeasers. It followed that the "defense" budget was macho and anyone who questioned it was a pinko queer. And, it did employ a lot of people in all parts of the country. So what if it crowded-out spending on health care, education, infrastructure? (Those first two items employed a lot of
wimmen - nurses and teachers - so, like, they are obviously inferior. And spending on roads and bridges and the like can't be so obviously inflated. Nor do bridges and roads provide for opportunities of planned obsolescence and continued spending on upgrades the way weapons and weapon systems do.)
This whole myth suffered a tiny burp when, in his
farewell address, President Dwight Eisenhower warned the country of the dangers posed by the "
military-industrial-complex." The MIA, he said, would become an entrenched domestic power and would not shrink from advocating a bellicose foreign policy to justify its existence. Eisenhower could not be dismissed as a pinko queer because he had been the
Allied Supreme Commander in World War Two. He was a slightly above average racist in his day (a much more openly racist period than the present) but, as a general, he was deeply affected by his responsibilities over the fates of tens of thousands of lives during the war. [NOTE: I was reading
this link to back-up my statement about Eisenhower's racism. It includes the direct quote from him about
Brown v. Board of Education that inspired my statement. But if you read the link there's a nuanced discussion about his role in that affair that I'll allow you to draw your own conclusions from.] Read about
his state of mind during the lead-up to the D-Day Invasion to understand this. Eisenhower genuinely
did not like military spending. But, aside from him, US presidents have engaged in happily spending on bloated military budgets which (as seen in the above chart) remain above the general year-to-year levels of the pre-Reagan Cold War.
Reagan's military spending is important for a number of reasons. US military spending had declined during the 1970s, due to the ending of the US attack on Vietnam. US elites bemoaned the so-called "
Vietnam Syndrome" that their failures in Vietnam had created which made military adventurism unpopular. Furthermore the economic crisis of "stagflation" meant that keeping the dollar level of spending flat constituted annual spending cuts. Ronald Reagan was an idiot who loved the military. He was going to
spend money to overtake the Soviet Union's nuclear parity with the US and bankrupt them in the process. He was going to make the US military capable of foreign interventionism again. He was going to pour weapons around the world to
prop-up "death squad" governments in Latin America and to turn allies of the USSR towards the USA.
Doing all of this in a time of monetarist high interest rate policies and tax cuts had the effect of mitigating the effects of the engineered recession (military Keynesianism while household and business spending cratered) and massive deficits. Reagan's spending and tax cuts continued after the monetarist recession ended and contributed to the "
Reagan Boom" as well as continued deficits. These deficits have been used to justify austerity policies against the welfare state ever since.
REAGAN, the US$, JAPAN, and US MANUFACTURING
Raising the interest rate makes the cost of money increase. "You want to borrow money from me? You'll have to pay me 5% on top of the original amount when you pay me back. I might want to use that money myself in the interim and lending it to you means I'd be inconvenienced. That inconvenience is what I'm charging you for." Seen this way, we can understand how making the price of borrowing at the principal plus twenty percent has raised the price of money. The international economic fears of 1979 to 1982 made people around the world want US dollars. Whatever its problems the USA was (and continued to be) the safest currency in the world. It remains the reserve currency of the world and the currency that petro markets function with. And now the US$ was paying 20% interest! The value of the US$ increased in world markets. But a high dollar makes imports cheaper and exports more expensive. This hurts domestic manufacturing. During the 1980s it was Japan that benefited the most from the appreciation in the value of the US dollar.
During the 1970s the US auto industry was still producing large gas guzzlers. Europe and Japan made smaller cars for a number of reasons. Japan's manufacturing costs (and sometimes the quality) were cheaper than Europe's. So when the second oil shock hit in 1979,
US car-buyers decided they should switch to more energy efficient vehicles and Japan was providing them at affordable prices. But this process also extended to other consumer durables as well.
In fact, Japan's trade surpluses started to get so excessive and destabilizing that world leaders (including Japan) got together in New York's Plaza Hotel and negotiated the
Plaza Accord. In the agreement the US $ was devalued against the Japanese yen, the Deutsche mark, the French franc and the British pound. This made US exports cheaper and they were able to make some headways against European competition, but Japan was another matter. There are supposedly many bureaucratic restrictions on imports to Japan which operate in the place of formal tariffs. US exports to Japan stayed low while Japan itself took advantage of the higher value of the yen to buy raw materials in bulk at cheaper prices and build assembly plants in low-wage East-Asian countries to further entrench their manufacturing advantages.
So, a few things: Japan's industrial successes were attributed to new, post-Fordist manufacturing methods. Instead of mass production by large numbers of centralized assembly-line workers, Japanese management methods involved more diversified product-lines, with only essential functions being filled by permanent, skilled workers. Much of what they did involved contributing production ideas and taking advantage of automation and robotics. Everything else was farmed-out to subcontractors who had their own core workers and hired everything else out on temporary contracts too. "Japanese Production Methods" or "Lean Production" or "
Kaizen" [continuous improvement] had to be the way to go for US and European manufacturing as well. (Especially since that would mean slashing work-forces, and weakening the trade union movements in these countries.)
The turmoil and tragedy taking place in Flint, Michigan in Michael Moore's "
Roger & Me"? Much of it
a response to the pressures just described above.
Writing this post has made me realize how one thing leads to another thing. The Third World Debt Crisis (described in the last post) was followed by Reagan's bloody policies in Central America. Marxist groups probably gained more adherents in Latin America as the banks and the IMF turned the screws on their economies, to which US President Ronald
Reagan responded with terrorism.
Anti-inflationist monetarism produced a manufacturing crisis which produced "lean production" and union-busting. It also produced the
Japanese real-estate bubble and crash and
Japan's "lost decade." You see, computers weren't sophisticated enough to do all of the derivatives trading and risk-management that they're capable of now. As trade surpluses and foreign currencies piled-up inside Japan they ran out of places to invest. Eventually they put their money in real estate, thereby driving up prices so that the value of Tokyo real estate exceeded that of the continental United States! Eventually there was a crash, that was extended by a refusal to let the powerful who had crashed, go bankrupt. Or I don't know.
Read this instead of me.
Computing capabilities is probably one of the leading contributors to the
financialization of our economies. They're also a key component of "globalization." That is, the offshoring of production to low wage countries the way Japan did in the 1980s. This couldn't be effectively managed without modern telecommunications capabilities. Financialization, globalization and neoliberalism (deregulation) are the three pillars of the new world economic order.
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| "Dorchester," Edward Mitchel Bannister (source) |
WHAT is the POINT?
I think I'll continue this in another post. I need to put something up so this'll have to do. My point is that the 1980s saw the beginning of the process whereby our governments all stopped providing things for us. Back in the 1950s even right-wing governments agreed that people needed protections from economic uncertainties and that there should be equality of access to a decent education and to the medical capabilities our societies were capable of. I mentioned President Eisenhower's warnings about the "military-industrial-complex" last time. He also (as a Republican)
had this to say about social security, unemployment insurance and labour laws:
Now it is true that I believe
this country is following a dangerous trend when it permits too great a
degree of centralization of governmental functions. I oppose this — in
some instances the fight is a rather desperate one. But to attain any
success it is quite clear that the Federal government cannot avoid or
escape responsibilities which the mass of the people firmly believe
should be undertaken by it. The political processes of our country are
such that if a rule of reason is not applied in this effort, we will
lose everything — even to a possible and drastic change in
the Constitution. This is what I mean by my constant insistence upon
“moderation” in government. Should any political party attempt to
abolish social security, unemployment insurance, and eliminate labor
laws and farm programs, you would not hear of that party again in our
political history. There is a tiny splinter group, of course, that
believes you can do these things. Among them are H.L. Hunt
(you possibly know his background), a few other Texas oil millionaires,
and an occasional politician or business man from other areas. Their
number is negligible and they are stupid.
But since the days of Reagan and Thatcher this stupidity has been commonplace. Our society is so debased that it is actually received as "wisdom." And (as I hope to eventually show) it has gotten to the point where the "lesser evil" of US national politics, ... the Democratic Party ... in the face of a determined effort by activists to use it to implement a long-overdue social justice (the collective right of the public to healthcare) and to prevent the destruction to humanity that will be caused by global heating, ... has rigged an election and spat in their faces [again!]. Signalling to any who wish to know, that US electoral politics is a dead-end for anyone attempting to achieve anything lasting and good.
