Disaster Politics

As pundits and the American People digest the Debt-Budget Deal many have concluded that the White House miscalculated or simply blew it. John Stewart and others suggested that the President could have avoided the entire scenario by simply conditioning renewal of the Bush tax cuts on raising the debt ceiling. Others say the White House should have demanded a clean debt ceiling bill. Either of those explanations requires assuming that the Obama White House is naïve or stupid or both.

Don’t believe it. President Obama and his advisors were playing a different game. They decided they could use a debt crisis created by Republicans to push through cuts to Social Security and Medicare in a manner that would provide the President with plausible deniability. In other words, Obama could claim “They made me do it!” while achieving what his Wall Street backers want – maintaining Global Capital’s police force on the backs of working folks, the middle class and the poor.

Most readers will be familiar with Naomi Klein’s Shock Doctrine and her book of the same name. Klein describes Disaster Capitalism: how Global Capital – operating through governments, the International Monetary Fund and other international institutions – uses political crises to impose structural economic and government changes which invariably function to transfer wealth from workers and the middle classes to international banks and capitalists. We have seen this strategy migrate from the Global South – the so-called “Developing World” – to the North; workers in Greece, Ireland, Portugal, Spain and Great Britain are now also paying the price. When one strips away the rhetoric, it becomes clear that the Obama Administration has brought the same approach home to America.

Why this has happened

At the close of World War Two the United States controlled 60% of global wealth. It was an artifact of war – the productive capacities of Europe and much of East Asia had been destroyed.  Led by Europe and Japan, the destroyed infrastructure would be rebuilt, economies would rise again, global wealth would be redistributed and the United States would once again face fierce competition.

The architects of post-war US government policy recognized that the US could not control 60% of global wealth forever.  The US would help Europe and East Asia rebuild their economies because global capital demanded stability and needed places to invest.  And that would inevitably lead to a redistribution of global wealth.  Under those circumstances  – and as expressed by George Kenan, one of its chief architects – the raison d’etre of American foreign and economic policy during the second half of the 20th century would be to maintain the wealth gap – to delay as long as possible the inevitable redistribution of global wealth.

We are now in the 21st century. The US no longer controls 60% of global wealth and capital has abandoned its national character. As a consequence of trade agreements, capital is free to move over most of the globe in search of higher profits.  But while capital has become international, the United States military continues to function as capital’s chief global cop.

The difference is that the US no longer controls enough of the world’s wealth to maintain both the empire’s cop function – a world safe for Global Capital – and the US standard of living, i.e. the American Dream. Something has to change: either the empire will be scaled back or some Americans will have to sustain a cut in living standard.

Global Capital needs the empire but it does not want to pay for it. Wealthy Americans also refuse to bear the burden. That necessitates transferring the cost of empire to US workers, the poor and middle class. Obama is committed to maintaining the empire and its police force – the US Military.

While he would prefer that rich American’s share the burden, when push comes to shove he will sacrifice fairness to the interests of his Wall Street backers.  Obama is the instrument by which Global Capital hopes to secure cuts in Social Security and Medicare necessary if working, poor and middle class folks are going to be made to pay for the empire.

One indication of global capital’s agenda is what President Obama and Congress have done with the military budget. While claiming that he wants to end wars which have produced 15-25% of US debt and which do not make Americans safe or secure, Obama has escalated one war and begun yet another military adventure (Libya). While claiming that he wants to cut military spending, Obama actually requested a $26 billion increase in military spending for the 2012 fiscal year. The Republican House recently approved a $17 billion increase.  The debt/budget deal ostensibly cuts $350 billion from military budgets over the next ten years.  However, automatic increases for inflation could offset the entire amount. The US Military – global capitalism’s global cop – is unlikely to sustain real and substantial budget cuts.

The Obama Presidency is Global Capital’s creation and he is their man. The Obama White House has now delivered part of what Global Capital demanded: the debt/budget deal will shift more of the economic burden of empire from corporations and their owners (aka the rich or monied interests) to working people and the poor.  Obama has not yet been able to raid Social Security and Medicare. But the Debt/Budget Deal holds within it the means to that end as well. Through it Social Security and Medicare can be cut and most in Congress can claim they did not vote for those cuts. I can almost hear Nancy Pelosi rhetorically wringer her hands on camera now.

How much abuse will Americans take?

The Democratic Party and the Republican Party have become instruments of Global Capital. That is the inevitable consequence when corporate “speech” is unfettered, information is controlled by global corporations and elections can be bought and sold.  US progressives are demoralized and fractious; we have no unifying analysis and no unified program. Progressive Democrats can’t even manage a “Dump Obama” movement.

All over the world regular folks are rebelling. From England and Greece to Egypt and the Middle East – even in Israel – workers, middle class folks and the poor have taken to the streets and are demanding changes which would have the effect of limiting the economic and political dominance of Global Capital.

It is too early to tell whether the popular revolts popping up around the globe will lead to real change. The opponent – Global Capital – is well organized and powerful. The popular movements for change, on the other hand, are new, fragile and linkages among them are rudimentary or non-existent.  Unlike Global Capital, organized labor remains primarily national; labor lacks strong, unified and international programs to challenge capital’s global dominance.

Will the emerging revolts be sustained? Will they link across borders? And how will everyday Americans react? Will working, poor and middle class Americans continue to absorb raids on their wealth and welfare? Can they continue to be persuaded to vote against their own interest? Will they continue to vote for the candidates Wall Street chooses?

How much abuse will the American People take before we rise up?

Felice Pace is a writer and activist in northern California. He holds a degree in economics from Yale University.   

Felice Pace is a longtime environmental activist in northern California. You can find his writings online at Bearitude in Black.