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The Political Economy of Obama/Trump

By Richard D. Wolff / Counterpunch.


US capitalism is again careening down blind alleys. Earlier it had crashed into the Great Depression from 1929 to 1933 before lurching into the New Deal. After 1945 it concentrated on rolling back the New Deal until it turned sharply to neoliberalism and “globalism” in the 1970s. That provided the comforting illusion of a few decades of “prosperous normalcy.” When the second major crash in 75 years hit in 2008, it exposed the debt-dependent reality of those decades. It also sent capitalism careening through a new depression followed by a devastating austerity regime. The economic careening provokes the political: its establishment center cannot hold.

Among leading capitalist circles there was immediate fear that the 2008 crash might well revive the 1930s’ coalition of labor unions (CIO), socialist and communist parties that forced the New Deal from below. True, the sustained post-1945 persecutions of communists and socialists plus the persistent attacks on labor unions had destroyed the New Deal coalition, but no one could be certain that it might not rematerialize from a new generation. What could and did help to prevent that was inserting Barack Obama into the presidency. He was the quintessential liberal, urbane, counterpoint to the Bush-led GOP that presided over the Crash’s arrival. Hillary Clinton might have done the job but Bill Clinton’s enthusiastic embrace of all that had crashed in 2008 gave the job instead to Obama.

And Obama performed as needed. Strictly trickle-down economics was how his administration “handled” the 2008-09 crisis. Nothing capcrisisremotely like the New Deal’s taxing the rich to fund programs for the poor and middle was proposed or debated, let alone adopted as policy. Roosevelt in the 1930s had created and filled many millions of federal jobs. Yet the deep unemployment problem of 2008-09 prompted no serious consideration or even discussion of a federal jobs program from the White House or congressional leaderships.

Given the conditions of global capitalism in the new century, a trickle down policy for the post-2008 US meant that “recovery” would be slow and bypass millions. It would likewise worsen the exploding income and wealth inequalities that had helped provoke the crash. Obama in the White House could temporarily calm and deflect mounting anger and resentment. His words and symbolic gestures effectively blocked many labor unions, students, white liberals and African-Americans from mobilizing against his administration’s economic policies. And when real opposition did arise in 2011, he suppressed it (as with the nationally coordinated forced removals of the Occupy Wall Street movement’s municipal encampments).

However, the powers that be paid a heavy price for the social quiet they purchased with Obama’s presidency. Sections of the white working class plus broad swaths of right-wing and conservative populations recoiled from the Obama administration. The 2008 crash had hurt them too. The trickle down recovery likewise largely bypassed them. Badly needing help, they resented “others” who seemed to have captured the government and would use it exclusively to help themselves. Indeed, those “others” included people they had long feared and/or hated: major parts of old party establishments coalescing with non-whites and “liberals.”

Bitterly, they seethed over symbolic slights, policy changes, and what they increasingly perceived as an America abandoning them to lower incomes, poorer jobs, and lower overall social status than they believed they had earlier enjoyed. Fearing to blame capitalism (and lacking even the vocabulary with which to think or articulate such blame), they undertook instead a classic selection of scapegoats: Mexico, China, North Korea, immigrants, ethnic and sexually identified minorities, Jews, women, and insufficiently nationalistic corporations. The different targeted scapegoats suffered according to their vulnerability: immigrants a great deal, China next to nothing. Trump, many Republican politicians, and rightwing organizations surged. They saw and grasped a moment of real opportunity for what they each represented.

The shared concern animating those gathering around and under Trump took the form of an economic presumption. US capitalism, they believe, is in a new period (maybe “post-neoliberal” or “post-globalized” or “neo-nationalist”). In this new period, the major corporations, the top 1% they enrich, and the top 10 % of managers and professionals they employ will no longer provide the rest of us anywhere near the number of well-paid jobs and generous government policies of the post-1945 period. Given this reality for them, they could hypothetically reduce, more or less equally across the board, the jobs, incomes, and public services available to the bottom 90 % of the US population. But at least in the short run, this is politically too dangerous.

The only other option they see is to divide the bottom 90% into two groups. For the favored one, jobs, incomes, and standards of living will be only marginally reduced or perhaps, if possible, marginally improved. For the other group, their economic situation will be savaged, reduced to conditions formerly associated with seriously underdeveloped parts of the planet.  The time has thus arrived in the US for a major struggle – economically, politically, and ideologically – over just who will be in those two groups. The violence lurking in this struggle has surfaced so far most starkly and provocatively in the murder of the protester at Charlottesville. It reflects the stakes in the proliferating struggles.

Trump keeps stoking the anxieties gripping large sections of the mostly white population about their deteriorating conditions. He also promises that they will become the favored group within the bottom 90%. Playing on race and ethnic (and also regional and educational) differences, he postures as their champion, the only leader who will favor them by protecting them against the threatening long-term descent into poverty and degradation. He attacks Obama as the leader who did (and Clinton and mainstream Democrats as leaders who would) favor and protect instead the non-whites, urban liberals, and coastal elites at the expense of Trump’s “deplorables.”

Neither Trump nor Obama (nor their respective party establishments) can conceive of the economic problems and threats they face as systemic in nature. A careening, out of control capitalism is nothing they see in past or present. Thus no notion of system change ever enters their discourses. They did not succeed in getting the mass of Americans to expunge system critique from the realm of possibility (hence recent polls about socialism versus capitalism and the Bernie phenomenon), but they did the job on their own minds. And while they did divert mass attention and anger from directly challenging the system, can they continue to do that?

US capitalism used up the Obama diversion to get through most of the first decade after the 2008 crash. It is fast using up the Trump diversion. The social groups kept from system critique by Obama have become noticeably more interested in it since he departed the White House. Trump only accelerates that process. Meanwhile, Trump’s followers keep waiting for the promised protection from decline, but it does not appear. They get lots of symbolism but little substance. He and they blame their usual others, but their frustrations may soon open them too to system critiques. Meanwhile, those critiques proliferate and mature across the society.

An out of control US capitalism careens into ever-deeper inequalities (economic, political and cultural) that worsen its confrontations and conflicts. Contradictions, like chickens, come home to roost.

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Norwegian Elections: Another Right-Wing Victory, and a Serious Labour Defeat

By Asbjørn Wahl / Socialist Project.

The centre-left failed in getting rid of the so-called ‘blue-blue’ government at the parliamentary elections in Norway on 11 September. The Labour Party was the main loser, while small parties on the centre-left advanced slightly. However, the parliamentary basis of the right-wing government has started to unravel. A deeper political crisis may be looming in the background, while social contradictions are on the raise. Social Democracy followed the general European downward tendency (except Britain).

More Austerity Ahead

First, some basic facts on the Norwegian electoral system. There are 169 members of parliament, who are elected through proportional representation. The 19 counties serve as the electoral constituencies. There is a threshold of 4 percent to qualify for the proportional distribution of representatives, although it is possible to win direct representation from the counties also if the national gain of votes is below the threshold. Two political parties won representation in that way.

In the previous four-year parliamentary period, Norway was governed by a minority government formed by the Conservative Party and the so-called Progress Party (a right-wing populist party). Therefore the name blue-blue government. It was supported by two other parties – the Christian Democratic Party and the so-called Liberal Party (which in reality is neoliberal, but with a touch of green). This support was established through a formal agreement, but to secure a parliamentary majority for the government, it was sufficient with support from only one of those two parties.

Fragmentation and Move to the Right

Norway has seen an increasing political fragmentation over the last years. After the current elections, there are 9 political parties in Parliament. The four on the right are mentioned above, while the centre-left opposition includes the Labour Party, the Centre Party, the Socialist Left Party, the Green Party and the Red Party. As in many other countries, however, the entire political spectre has moved to the right during the neoliberal offensive from around 1980.

For the blue-blue government, two important things changed with the last election. The Christian Democratic Party says that it is no longer willing to sign a contract of support to a government in which the right-wing populist party takes part; and the government is dependent on both the two former supportive parties to achieve majority in Parliament. In other words, the Government’s political basis is much weaker than in the previous period, something which opens the possibility of a breakdown of the blue-blue government. Since Norway does not have the possibility to call an election in a mid-parliamentary period, this can lead to a lot of political turbulence or an open political crisis.

Norwegian Parliamentary Election in Figures
PartyVotes %Gain/loss from last electionNumber of MPs
The right-wing coalition:
The Conservative Party 25.0 -1.8 45 (-3)
The Progress Party 15.2 -1.2 27 (-2)
The Liberal Party 4.4 -0.9 8 (-1)
The Christian Democratic Party 4.2 -1.4 8 (-2)
The centre-left opposition:
The Labour Party 27.4 -3.5 49 (-6)
The Centre Party 10.3 +4.8 19 (+9)
The Socialist Left Party 6.0 +1.9 11 (+4)
The Green Party 3.2 +0.4 1 (unch)
The Red Party 2.4 +1.3 1 (+1)

Many people expected a centre-left victory at this election, since the blue-blue government had carried out many unpopular policies. The discontent was particularly strong in the trade union movement. However, the Labour Party’s election campaign proved to be quite disastrous under its new leader, Jonas Gahr Støre. One of the big ‘mistakes’ was a flirt with the so-called political centre (centre right), that is with the two political parties which had supported the blue-blue government and by that had also supported attacks on the labour law and other economic and social gains for the working class. Further, the Labour Party was not even able to take a clear stand against the ongoing and very unpopular commercialization of core services in the Norwegian welfare state. Neither did the party come up with a credible policy against the undermining of labour market regulations, which to a high degree is promoted by the increasingly authoritarian, neoliberal European Union. This is a policy which in Norway is being implemented through the European Economic Area (EEA), an agreement which is strongly supported by the Labour Party.

The right-wing populist party, on the other hand, was successful in setting the agenda for much of the election campaign, first and foremost by playing the anti-immigration card and by focusing on identity policies. The Labour Party was unable to respond to this with the only measures which can really confront such right-wing policies, namely a clear class policy. This did not necessarily happen because the party’s leadership is unwilling to do so, but simply because class politics are strongly in deficit in today’s social democracy – deeply rooted as it still is in a social partnership ideology.

While social democracy is on the verge of breaking down, and even being eradicated, in big parts of Europe today (Greece, Iceland, Ireland, the Netherlands, France), much suggests that also the Norwegian, actually the Nordic, social democracy, despite its fame as the creator of the Nordic welfare model, is now following the downward course of their European sister parties, although more gradually. Power relations do not seem to be part of the actual social democratic narrative – their raison de vivre is obviously to administer capitalism within the limits given the existing power relations – not to shift the balance of power. Thus, the right-wing political offensive is not really being confronted by social democracy.

The golden age of social democracy was based on a class compromise and a balance of power which made it possible to move forward socially within the framework of a regulated capitalism (i.e. the welfare state). The material basis for such policies is now coming to an end with the deep crisis and stagnation of capitalism, and the subsequent neoliberal offensive. The social democratic attempt to re-establish the class compromise, with its successful tripartite cooperation and social dialogue, even without class mobilization and confrontations, is an illusionary project in the current political conjuncture.

Maybe the Norwegian election is just another sign that the era of social democracy is now coming to an end. All those, all over the world, who have been looking at the Nordic Model as their final aim, may have to rethink and reassess their policies and strategies. But who on the left can now provide us with a class policy with perspective? •

Asbjørn Wahl is a Norwegian trade union and political activist.

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