A Political Recession

Huddled over numbers, the actuaries of the U. S. Bureau of Labor Statistics (BLS) find themselves at the center of interest. In the first week of each month they report on the employment data, collected through surveys. This “Employment Situation Summary” used to be posted on the BLS website and no-one paid attention, except for a few career economists who worked on labor matters and perhaps a few odd business journalists who sent along the numbers to reassure Wall Street that things in the “real” economy were spluttering along. No longer. Now, as the jobs hemorrhage, the report is on the front page of most national newspapers and is occasionally taken seriously even by the generally flabby television news shows.

Even as the Obama administration’s foghorns sound the all clear, news from the BLS predicts that the storm is not even halfway gone. June’s numbers are bleak, with an additional 460,000 added to the unemployment rolls. That brings the numbers to in excess of 6 million unemployed, and inches the official unemployment rate to within sight of ten percent. These figures do not count the induced furloughs, with firms and government offices asking workers to stay home without pay for one day a week or a few days a month. Underemployment means less money in consumer pockets, which itself spirals outward to dampen hopes of a consumer-driven recovery. April’s consumer numbers were negative, and May’s provided little comfort, all this despite the tax rebate checks and the various other incentives provided from Washington.

Many unemployed workers have no home as refuge. The Office of the Comptroller of the Currency reports that home foreclosures escalated by twenty-two percent, to 844,389, which means they were seventy-three percent higher than the rate last year. This is ominous, particularly as the timid approaches to salvage the crisis by the Bush and the Obama administrations have had almost no impact. Bush wanted to help the banks weather the storm, and Obama followed him, although with the liberal caveat that he promised banks $1000 per mortgage that they would modify the rates downward (this is Obama’s program called “Making Homes Affordable”). In June, according to the New York Times, banks oversaw 32,000 home liquidation sales, and took an average loss of 64.7% of the original loan balance. Rather than refinance the mortgage and take less of a monthly check from the homeowner, the banks preferred to throw them out of their homes, rake in whatever they could from the fire sale of the homes, and collect insurance on the failed mortgage. Banks win, the homeowners lose. This pattern has been unrestrained by Washington’s pleas for good corporate citizenship.

Meanwhile, of course, the Obama administration continues to prosecute Bush’s Long War, both in Iraq and Afghanistan. The façade of moving troops out of cities has neither cut back on U. S. military involvement in Iraq nor, therefore, of its immense cost. The bill from Iraq now totals about $684 billion, and the fees remain at $1 billion a week. The Afghan war, slightly less expensive, has cost the U. S. exchequer $191 billion (with additional input from NATO, the UK and the Canadians). This amount will no doubt increase as the U. S. begins its new offensive in Helmand Province and elsewhere. Even moderate Afghan politicians, such as Dr. Roshanak Wardak, whose house was almost hit by a Predator drone bomb, are expressing their doubts about the military occupation. Earlier this year, scholar and retired Army colonel Andrew Bacevich wrote in Newsweek, “Afghanistan will be a sinkhole, consuming resources neither the U. S. military nor the U. S. government can afford to waste.” Any escalation there, he pointed out, will simply shift the radical Islamists across the Pakistani border and destabilize Pakistan. This is already the case. Of course, one could argue that the principle strategic victory sought by the United States is for a permanent presence in this geo-political crossroads, whatever the expense. In which case, such irritants as the failure to attain stability are hardly the option. But it all costs money.

The Foiled Opposition.

The Obama administration certainly inherited a mess, whose origins are not only in the Bush White House (the wars), but also in the Clinton White House (the economy). Enthusiastic financial globalization married with cowboy war-mongering are the two horns upon which the Obama presidency rests. But it seems unwilling or unable to remove itself from its perch, offering salves here and there but little more. Part of the problem is that there is no longer any opposition to the Democratic agenda, which is to prosecute Bush’s wars and to protect the neo-liberal dispensation. In the 1930s, when crisis struck, Roosevelt’s Democrats faced immense pressure from the unions and the Left, whose push made the administration conduct a few fundamental reforms of the economic institutions. Roosevelt recognized this, warning his peers in the power elite, “The millions who are in want will not stand by silently forever.” Roosevelt spent some of his own muscle to absorb the independent parties to his left, such as the Progressive Party of Wisconsin and the Farmer Labor Party of Minnesota. When they were absorbed into the Democratic establishment, Roosevelt crowed, “We have on the positive side eliminated [Progressive Party leader] Phil Lafollette and the Farmer Labor people in the Northwest as a standing Third Party threat.” Obama has no such worries. The Third Party threat is no longer a realistic irritant.

More dangerous might have been the committed progressives within the Democratic Party, whose caucus is the largest in the U. S. Congress. But the progressives have been mute, either overwhelmed by the immense charisma of Obama or by their own lack of any alternative strategy. In March the progressive caucus’ leaders, Raúl Grijalva (Representative from Arizona) and Lynn Woosely (Representative from California) complained that the President had not yet met with them face to face to discuss the legislative agenda. Instead, the President had already met the Black Caucus and the Hispanic Caucus, and the two conservative Democratic groups, the Blue Dog Coalition and the New Democrat Coalition. Claiming to be “choked blue” by the extreme Left of the Democratic Party, the “blue dogs” gathered together in 1995 to hold fast to their mishmash of conservative and liberal views. Obama has also met several times with Congressional Republicans. Woolsey told the press that the progressive Democrats are “good soldiers, but we’re not just a go-along-to-get-along people, otherwise we would not be progressives. We’re a big caucus, and we will be heard” But so far, little has been heard from them.

The Republicans, meanwhile, have imploded. They seem to have followed the script of the 1930s Republican Party when confronted by the enormous New Deal project of the Democrats. Then, the Republicans rolled up their sleeves and held fast to the thoroughly unpopular laissez faire individualism of the Hoover 1920s. In 1935, Republican leader Henry Fletcher said, “All we need to do is to apply to present-day problems and conditions the same devotion to economic freedom and social progress which has characterized the Republican Party through these years.” Ex-president Hoover (who was “more unpopular than Judas Iscariot,” in the phrase of Senator Hiram Johnson) published a turgid book entitled The Challenge of Liberty (1934), in which he argued, “We might as well talk of abolishing the sun’s rays if we would secure our food, as to talk of abolishing individualism as a basis of successful society.” The Club of Growth’s Chris Chocola channeled this 1930s response recently when he said, “We strayed from our principles of limited government, individual responsibility and economic freedom. We have to adhere to those principles to rebuild the Party.” But the principles themselves make no sense to the jobless and the hopeless. Obama’s hope is essential, because without hope reality would be unbearable. The Republicans are churlish, too masculine in their derision of social welfare (matching Bill Clinton, although he allowed his voice to quiver as his hand cut the safety net into tatters). It is what has prevented them from being a party of the moment. Their leaders resemble frogs, sitting on their own lily-pads, flicking their tongues at the occasional fly, but unable to say anything as the water level drops on the pond.

Two of the most dramatic critics of the Obama stimulus plan were Governor Mark Sanford (South Carolina) and Governor Sarah Palin (Alaska). They had little else to offer, but at the very least they were uncomfortable, for the wrong reasons perhaps, with the shoveling of borrowed money to unspecified projects. Sanford fell to earth with a scandal against his own baroque morality (he was one of those who brayed for Bill Clinton’s blood in the 1990s). Sarah Palin decided to fall on her own sword, resigning in haste from a governorship that had already begun to implode. Adultery, bribery and whatnot have impaired the chances of anyone leading the Republicans. It might fall to the haughty and tin-eared Mitch McConnell of Kentucky to carry the tattered standard. More than a third of registered Republicans view their own party unfavorably. Things are at a sorry state. Without a party able to offer a rational critique of war and waste, sections of the population will perhaps move toward anti-social ideologies of racism and xenophobia. Indications of such a direction are already there, as hate crime numbers rise with the unemployment rate.

The coalitions of the hungry and the hardened pushed Roosevelt not only to create a social insurance system, but also to create the means for them to better organize in the workplace (the National Labor Relations Act). They created the basis for a better life and for collecting bargaining. The benefits of their success have now run out; Ronald Reagan’s policies of the 1980s did them in. The tattered labor movement is now trying to pass the Employee Free Choice Act, which Obama supported when a Senator (but then, as president-elect, he was more circumspect, not mentioning EFCA, but saying, “When it comes to unions, I have consistently said that I want to strengthen the union movement in this country and put an end to the kinds of barriers and roadblocks that are in the way of workers legitimately coming together in order to form a union and bargain collectively”). But it is unlikely to move past the Congress, where it currently sits, prone before the Blue Dogs and their Republican allies. The one good piece of legislation that would empower workers and help revive a mass-based left in the United States will not be the one necessary concession made by the power elite. They take their cue from the Chambers of Commerce, who feel no threat from a conciliatory president and an absent labor movement. There is none of the heat and light that Roosevelt felt, only a continued faith in Obama’s hope. Would that were enough.

VIJAY PRASHAD is the George and Martha Kellner Chair of South Asian History and Director of International Studies at Trinity College, Hartford, CT His new book is The Darker Nations: A People’s History of the Third World, New York: The New Press, 2007. He can be reached at: vijay.prashad@trincoll.edu








Vijay Prashad’s most recent book (with Noam Chomsky) is The Withdrawal: Iraq, Libya, Afghanistan and the Fragility of US Power (New Press, August 2022).