November 2010, Week 1


Options: Use Monospaced Font
Show Text Part by Default
Show All Mail Headers

Message: [<< First] [< Prev] [Next >] [Last >>]
Topic: [<< First] [< Prev] [Next >] [Last >>]
Author: [<< First] [< Prev] [Next >] [Last >>]

Print Reply
Portside Moderator <[log in to unmask]>
Reply To:
Mon, 1 Nov 2010 22:50:30 -0400
text/plain (288 lines)
After the Election

William K. Tabb

[These remarks were prepared for the North Atlantic
Left Dialogue, Berlin, November 22-23. See

Submitted to portside

The discussion of electoral politics needs to be
positioned in the context of the continuing economic
crisis, the decades long stagnation of working class
real income, growing insecurity with regard to a future
which Americans feel is less likely to contain the
American Dream future for themselves and their
children. Global shifts make the prospects of most
workers in the territorial United States bleak even as
US-based transnationals and international financiers
look to so-called emerging markets for new

While the more individualist fractions of capital have
always fought the Welfare State, trade unions, and
funded politicians advocating small government and
laissez faire policies, transnational capital no longer
needing a liberal-labor alliance has abandoned
commitment to Keynesianism, sees slow growth, and
redistribution of the burden of government as a key
issue and abandons reformist efforts at any costly
modernization of the American state, taking an approach
driven by the financialization of American capitalism,
pressure for short term maximization of share holder
value, and joins in the attack on pensions and health
care spending as means to reduce the federal debt
driven higher in recent years by regressive tax cuts,
costs of imperialist militarism, and the financial

With this context obscured by misdirection (guns, gays,
and other culture war wedge issues) and now (Big
Government, out of control spending, Muslim terrorists
and other “take back our country” issues) the Democrats
not wanting to be seen as unpatriotic or anti-business,
give away class issues which could win votes (like not
extending Bush tax cuts for the top two percent of
wealthy Americans) and do the same in the matter of the
country’s needs for financial reform which would cut
the megabanks who have been rescued by the taxpayers
and now return to their obscene profiteering ways
through social control of investment priorities. They
dare not given the need to finance election campaigns
under the existing system of money driven democracy

Having compromised to get what they could in these
areas they allow the Republicans to distort what is
positive in what they have done. The far right does not
hesitate to defeat RINOs (Republicans in Name Only) in
Republican primaries. The Democrats recruit and fund
DINOs in conservative districts achieving 60 votes in
the Senate but not having a majority on most anything
that matters but getting the blame for achieving too
little of the progressive goals they were elected to
achieve. The future of progressive politics, youth and
minority voters were not drawn to vote in 2010. With
twenty percent of Americans un- or underemployed Obama
talk of “Recovery Summer,” “heading in the right
direction” etc. rang hollow. Gridlock will push the
Dems further to the center in the next two years hoping
the Tea Party right will overstep and the country will
return to the Democratic Party for 2010

If the job situation remains bleak, the economy
stagnates, and economic insecurity grows, the Fox News
Right will grow more threatening and there will be no
Left to the left of a John Stewart let us be reasonable
and have a respectful discussion in which we agree to
disagree politely. Obama will continue to be called a
socialist (and far worse) so that his reasonable ideas
for change can be ignored. Explaining that the Tea
Party is being manipulated by the rich and corporate
interests which do not want social regulation or to pay
taxes – like the Koch brothers will not make a dent in
the ability of the Right to mobilize dissatisfaction
from a “leave me alone,” “give me the mythical past
back” legion.

Building and (rebuilding) independent movements of the
Left (left of the left-center of the Democratic Party)
is the necessary task. What socialists have to
contribute is making the connections between issues and
the system of capitalism in a language which can be
heard by the broader movement as not the same old
pitch. It is about a public philosophy which builds and
demands solidarity and exposes the class interests
served by the ideology of individualism. Free choice as
an individual is not possible when what we want is a
different sort of society. The critique form the Left
needs to be a more accessible explanation of what
capitalism has done to the country and its working
people, that government is a terrain of struggle just
as the workplace is and that we do not need “less
government” or “more government” but a democratic
government which does not bow to capital which finances
the show and limits our choices to ones we do not want
by saying what we want is unrealistic or socialism. If
what we want is socialist and people agree that those
things are good let us just agree to define socialism
as what working people need and want for themselves and
their country.

The discussion of Obama and the Democrats needs to
change from is he a sellout? versus “we told you he was
a capitalist flack misleading voters,” to critical
support. Support for the president and progressive
Democrats when they support things we like and
criticism when they favor measures we do not like –
making it clear at elections we will vote against the
extreme right and the party of “no” which is the attack
the working class vehicle of the most vicious sectors
of capital. In primaries progressives should vote for
principled candidates supporting left ideas and
explanations of the system. There are a number of these
folks and there will be more. Unlike some on the left I
cannot see a successful Third Party effort in the
contemporary situation and do not see sellout Democrats
as the main enemy. We see what  even mildly serious
effort to bring capital under some control even to
preserve the system does to the flow of campaign
contributions from Wall Street, energy companies and
the rest. It is the system stupid. It is the economy,
the economic mess, because of the system (stupid). This
is not an American thing. Matters are little different
in France (the “Socialist” Party?), the U.K. (a
“Labour” Party?) or Germany (the SDP is social
democrat?) The unwillingness to confront global capital
and lack of a better explanation turns fearful voters
against easy targets, immigrants, terrorists.

The Left of the Obama administration will have to cope
with what should be seen as the sellout of Social
Security and Medicare in the name of fiscal
responsibility. The crisis had generated fear and
anger, a setting in which a powerful effort was being
made to cut entitlement programs. In the United States
while people overwhelmingly supported Social Security
as it existed and even the popular Ronald Reagan had
been unable to finesse its privatization (nor had
George W. Bush), the conventional wisdom was that it
was a pot of money which could be raided to pay down
the federal debt. As one member of the bipartisan
commission on debt reduction said, “it was where the
money was.” The co-chair of the commission appointed by
President Obama, former Senator Alan Simpson, has now
famously described Social Security as "like a milk cow
with 310 million tits," according to an email he sent
to the executive director of National Older Women's
League making clear his views. He was chosen by a White
House which saw Social Security as the likeliest source
of the sort of large savings needed to bring projected
annual deficits to sustainable levels. It looked to the
commission to give Washington cover to cut Social
Security and Medicare instead of alternatives such as
“weaning corporations—banks, insurance companies, war
contractors—off the federal teat,” as Matthew
Skomarovsky so accurately writes.

In order to do this a number of issues were widely
misrepresented. The aging of America should not be
confused with an inability of Social Security, modestly
adjusted, to provide for America’s retirees. By
official count it will run surpluses for the next three
decades and needs little adjustment to stay robust for
the next three-quarters of a century, based on official
estimates. The 2010 Social Security Trustees Report
projections it would be possible to not raise the tax
until 2020 and between then and 2040 raise the rate by
a little under a percent and a half (which would take
up only twelve percent of the projected wage growth
over that period) leaving “our children” over forty
percent better after the Social Security tax increase
than we are, as Dean Baker’s calculations show. The
relevant bottom line is that Social Security Fund
currently and for some decades will have a large
surplus. It is invested in US treasury bonds. As it
needs to draw these funds it is accused of “draining
resources from taxpayers.” Social Security monies in
government bonds being paid to recipients is no
different than if Japanese or Saudi Arabian bond
holders ask for their money by selling their treasury
bonds. Potential retirees did not give the money to the
treasury but lent it like the Saudis, Japanese and
American investors. They are not “draining resources.”

If money for Social Security needs to be raised more
progressive payroll taxes are possible. The limits to
which wages are taxed could be raised from its current
$106,000 or, in keeping with the concerns of this book,
a financial speculation tax could be implemented.
Schemes have been proposed which would not inhibit non
speculative investment and could raise as much as one
percent of GDP, $145 billion a year, or twice the
projected shortfall in Social Security to pay benefits.
(A more modest tax on stock trades in England brings in
0.3 percent of that country’s GDP.) While reducing
retirement benefits is spoken of in terms of “making
the difficult choices,” the real difficult choice would
be to make Wall Street which has benefitted from the
rescue from the crisis it created and has grown so
wealthy at the expense of America’s workers pay.

As Emmanuel Saez reports, after decades of stability in
the post-war period, the share of income going to the
top ten percent of earners increased dramatically and
has regained its pre-war level. He finds the top
earnings decile share in 2007 was equal to about half
of total income (49.7 percent), a proportion higher
than any other year since 1917 and surpassing 1928, the
peak of stock market bubble which led to the Great
Depression. Between 1993 and 2008 the top one percent
incomes received slightly more than half of overall
income growth. In the economic expansion of 2002-2007,
the top one percent captured two thirds of income
growth. These very rich people are heavily stock option
receiving top corporate executives and top earners at
hedge fund and private equity and investment banks.
Returns from financial investments add more wealth and
income to those at the top because the rich
disproportionately own financial assets. It is not
surprising that there is a close correlation over these
decades to the growth of financial assets and rising
income for the top one percent. The increase in income
polarization also results from the decrease in solid
working class jobs which have been destroyed in the era
of financialization. The top one tenth of one percent
of Americans receive more income than 120 million of
their fellow citizens, or half the US population.
Looking at the data it is difficult to disagree with
William Lazonick that “any government policy agenda
that seeks to recreate the middle class in the United
States needs to begin with an attack on the
financialized corporation.”

Capitalist democracy is a system in which money power
prevents working class issues central to the lives of
people to be discussed realistically. Doing that is our
job. Voting to prevent a hard right takeover is
necessary even as an independent Left needs both its
own identity and to be part of a broader struggle for
economic democracy breaking don the walls in thinking
between politics and economics which serve capital.
Working people have to defend the entitlements they
have won in the past and demand more government
attention to the needs of the twenty million un- and
underemployed and growing numbers of the poor including
devastating numbers of children who face the harshest
future in an economy which puts bankers and
transnational capitalists first and hopes for some
crumbs to drop down to the rest of us. Over the next
two years leading to the 2012 presidential election
booth parties have reason to make voters forget that
“it is the system, stupid.” It is the job of the
progressive Left to interpret events and politics in
ways that make clear just how much needs to change. It
is change we really need and as the stagnant real wages
of the last thirty years morphs into more strident
demands for more working class concessions just how
this system works is important for us all to understand
and talk about.

*These remarks were prepared for the North Atlantic
Left Dialogue, Berlin, November 22-23. See


Portside aims to provide material of interest
to people on the left that will help them to
interpret the world and to change it.

Submit via email: [log in to unmask]
Submit via the Web: portside.org/submit
Frequently asked questions: portside.org/faq
Subscribe: portside.org/subscribe
Unsubscribe: portside.org/unsubscribe
Account assistance: portside.org/contact
Search the archives: portside.org/archive