The Austerity of Hope


Poor Mitt Romney. He is worth “somewhere between $190 and $250 million”. Even he is not sure of his net worth. He cannot account for the gap of $60 million. CNN asked the multiple-millionaire about his economic policy. He said, “I’m in this race because I care about Americans. I’m not concerned about the very poor. We have a safety net there. If it needs repair, I’ll fix it.” He has been pilloried for his callousness not only by the Democratic Party but also by his own Republican primary rivals.

Rick Santorum, who has been a steady challenge to Romney, said that Romney’s comments about the poor “sent a chill down my spine”. Romney, who not only comes from the world of finance capital but also is its preferred candidate, has been unable to grasp the deep crisis of everyday life for millions of Americans.

The “safety net” that Romney mentioned has been frayed beyond recognition since the 1980s. One of the most grotesque problems is hunger. Last year, the United States Department of Agriculture reported that in 2010 about 17.2 million households in the U.S. did not have the resources to buy food (that is about 14.5 per cent of all households).

Additionally, about 6.4 million households reduced or disrupted their eating habits because of a lack of access to food. To seek food, the U.S. Department of Agriculture showed, people had sought refuge in emergency food pantries. During the recession’s early years, 2007 to 2009, use of these pantries increased by 44 per cent. The Agriculture Department’s September 2011 report on “Household Food Insecurity in the United States” showed that one in six Americans do not have the money to feed themselves. The problem is acute.

Charity fills in the gap left by an inadequate governmental response. But here the challenge is enormous. With anxiety about the economy, charitable giving has dropped significantly (by 11 per cent to the big charities). Donations to organisations that help the very poor have dropped even further. According to the Nonprofit Research Collaborative, the charities with less than $3 million to spend saw their donations fall the most. These charities, such as homeless shelters and food pantries, are the ones that serve the very poor. They are in dire straits.

The children’s TV show “Sesame Street” has introduced a new puppet, Lily, whose task is to speak on the problem of food insecurity once a week to the children who tune in. She does not get enough to eat. She will share her story with children who are in her predicament. At least the puppet is concerned for the very poor.


Building on his surge in the Republican primaries, Santorum went to give a big speech in Colorado Springs, the heartland of the new American conservatism. Santorum, who went on to win the primaries in Colorado, Missouri and Minnesota, told the thousand people in the Biggs Centre that he wanted to distinguish between the French Revolution and the American Revolution. The French had a three-part slogan, two of which Santorum was happy with: Liberty and Equality. The third, Fraternity, was not appropriate because it suggested that people in community would be able to
create codes to live by. Santorum preferred Paternity to Fraternity, with the Father being God. God’s law should precede human law. No one amongst the Republicans challenged this anti-democratic tendency towards theocracy.

Rather than deal with the serious problems of hunger and homelessness, the right wing has tried to shift the debate toward what are known as “social issues”. These include abortion rights, marriage rights for gays and lesbians, discussions about birth control and sexuality in schools, as well as the teaching of diversity in schools. The Right remains fixated on the body and on sexuality, with a morality that is out of touch with the everyday lives of people. No wonder that one of the problems for the Right has been the constant eruption of scandals among its leadership, with this or that spokesperson for an anachronistic morality found with sex workers or with pornography. Hypocrisy is the touchstone of an obsolete morality.

As part of his health care overhaul, President Barack Obama announced a rule that all health care providers (including religious hospitals) needed to provide free contraception for their employees. They did not have to provide contraception to their customers, but their employees had to be covered by federal mandates. A 2010 study in Vital and Health Statistics showed that 99 per cent of women aged 15 to 44 in the U.S. had used at least one contraceptive method. In other words, contraception use is universal among women in the U.S. It seemed as if the Obama policy was, therefore, quite straightforward and of great use to the 62 million women of childbearing age in the U.S.

Nevertheless, the Right went ballistic, calling the Obama policy an infringement on religious freedom. This is fairly typical of the Right, which masquerades its social suffocation as freedom. Santorum’s linkages between liberty and equality with the sanctity of God’s Law is an example of this unhappy marriage.

With Obama having been painted as anti-religion, it was impossible for the White House to stand firm on its principle. Harder for Obama to navigate this issue with one in five Americans of the erroneous view that Obama is a Muslim. Instead, Obama had to compromise with the Right and allow religious health care providers to sidestep this provision. Despite Obama’s surrender to the Right, Romney tried to fan the fire of this issue, “I will reverse every single Obama regulation that attacks our religious liberty and threatens innocent life in this country.”

The Right has gone ballistic on contraception but is virtually silent on the home foreclosure crisis and on the criminal activity by banks. Millions of Americans have been turned out of their homes as a result of the collapse in the home mortgage market.

As part of the neoliberal transformation of the U.S., low-rent, government-provided homes disappeared from the 1980s, with the private sector coming in as the main provider of homes. But with wage incomes stagnant since the 1970s, and with little wealth in the hands of ordinary people, the only way for them to get the keys to a home was through no-money-down, balloon payment mortgages. Banks devised these schemes to ensnare desperate people into homes, and then moved their mortgages into the secondary and tertiary financial markets as securities to be traded. These securities were given good bond ratings from Moody’s and Standard & Poor’s, whose culpability has not been fully addressed.

When it became clear that these securities were built on unsustainable dreams, the housing market collapsed. Banks received bailouts (along the grain of the neoliberal view that the government must make sure to remove Bad Money from the financial system and replace it with Good Money). There was no bailout for the millions of Americans. They were evicted from their homes.

Popular outrage at the criminal behaviour of the banks forced an investigation of financial activity. Banks were afraid that they would face a series of lawsuits from public interest litigants and from those among the foreclosed that might be gathered together into class action lawsuits. This was the spur for the banks to begin negotiations with the government for a deal.

The Obama administration and several Attorneys General of the different States sealed a bargain with the banks in early February, where the banks promised to pay $5 billion into a fund, which would include $21 billion taxpayers’ money. This fund would be used to pay out between $1,500 and $2,000 per borrower foreclosed upon, between September 2008 and December 2011. It is a ridiculously small amount of money both from the banks and to the victims of the foreclosure epidemic. That means the government believes that the fine to banks for forging and fabricating documents is no more than $2,000. The government decided to settle with the banks (including the worst offender, Bank of America) without any serious investigation of their offences.

Foreclosures slowed down in 2011 in anticipation of this bank deal. “Foreclosures were in full delay mode in 2011,” notes Brandon Moore of RealtyTrac, which follows the housing market very closely.

“The lack of clarity regarding many of the documentation and legal issues plaguing the foreclosure industry means that we are continuing to see a highly dysfunctional foreclosure process that is inefficiently dealing with delinquent mortgages – particularly in States with a judicial foreclosure process. There were strong signs in the second half of 2011 that lenders are finally beginning to push through some of the delayed foreclosures in select local markets. We expect that trend to continue this year, boosting foreclosure activity for 2012 higher than it was in 2011, though still below the peak of 2010.”

This is a very chilling thought, that the bank deal will not stem the foreclosure crisis but intensify it.

Occupy movement

Police action against the Occupy movement has cleared out most of the encampments. The Occupy movement has now shifted its focus towards much more focussed, local political endeavours (including fights against eviction).

One year ago, in Wisconsin, a massive social upsurge promised to open up a new dynamic in America. With the labour movement as its backbone, the Wisconsin demonstrations that began in March 2011 showed what was possible when the people refused to back down before the politics of cruel austerity (the story is captured in a new book edited by Mari Jo and Paul Buhle, It Started in Wisconsin: Dispatches from the Front Lines of the New Labor Protest, Verso, 2012). One hundred and fifty thousand people, mainly those affiliated with trade unions, stood in the cold and occupied the State House against their Governor Scott Walker.

Seven months later, in New York, the Occupy movement took off and spread across the country. It was grounded in the many facets of social distress in the U.S.

The initial position of both the Wisconsin protests and the Occupy movement was to change the conversation from the defence of the banks and the question of “social issues” to the broad questions of freedom and justice in the country. When the state decided to respond to these protests with police pressure, the immediate issue before the protesters was to deal with the forces of repression. The conversation around social suffocation and economic distress had to be set aside.

The battle lines were drawn between the police and the protesters, when the real contradiction is between the people (the 99 per cent) and the powerful (the 1 per cent). As cruel austerity cuts into the social lives of Americans, it is likely that the full range of issues that debilitate the well-being of Americans will return to the table. The tragedy is that neither of the two mainstream parties is capable of holding a real debate over these issues. They have other obligations, other priorities.

VIJAY PRASHAD is Professor and Director of International Studies at Trinity College, Hartford, CT. This Spring he will publish two books, Arab Spring, Libyan Winter (AK Press) and Uncle Swami: Being South Asian in America (New Press). He is the author of Darker Nations: A People’s History of the Third World (New Press), which won the 2009 Muzaffar Ahmed Book Prize.


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