structural adjustment comes to the usa

For the Old Mole August 1 2011. Last week, well-read red Tom Becker read from Paul Craig Roberts' essay on the so-called debt crisis in the US, "An Economy Destroyed: The Enemy Is Washington." At the risk of repeating some of his key points, I'm going to repeat some of his key points. Chiefly, if you haven't figured it out already, the downgrading of Treasury bonds, the debt-ceiling debate, and the threat of government financial default are make-believe crises, hyped in order to force cutbacks in social services.

The reason the US is short of money is not that people have been living high on the hog on Social Security, Medicare, or Medicaid. It's that we have massively cut taxes on the wealthy and corporations; we are paying for wars and occupations in Iraq, Afghanistan, Lybia, Pakistan, and . . . a few more places; we have bailed out the banks that crashed the economy on the strength of triple-A ratings given to junk bonds by the same agencies now threatening to downgrade US credit.

As the blog pink scare puts it, the current version of the supposed "deal" includes …

punishing, cruel … cuts to the living standard of the majority of Americans. That means cuts to education, cuts to scholarships, cuts to health care, cuts to pensions, massive cuts to public transportation, cuts to unemployment insurance, cuts to the arts, cuts to cutting edge scientific research. It will mean worse infrastructure, canceling desperately needed maintenance on our country's bridges and roads, massive layoffs and severe pay-cuts for public sector workers, worse sanitation services, worse libraries, worse public parks. It means that Obama and the Democrats will sign off on all of this as their own.

Now,  there is the claim that austerity, though regrettable, is inevitable. If "we're broke", the story goes, "tough choices will have to be made." Two points must be made here. First, "we" aren't broke. The US is the richest society in the world, and the ruling class managed to make record-breaking profits last quarter. That means the richest upper echelons of the ruling class made more money in one quarter than ever in US history. ... The working majority may be broke, but the ruling class sure isn't. They're pulling in record-breaking profits at a time when the gap between rich and poor is reaching record levels as well. The money is there- we have only to modestly increase our obscenely low marginal income tax rates, reinstate the estate tax and close corporate loopholes in order to bring all public budgets out of the red. …With the amount of surplus wealth lying about in ruling class bank accounts we could even expand such programs drastically (imagine re-vamped and greatly expanded public transit, a genuine single-payer health plan, free tuition for public universities, a nation-wide rail network, and so on and so forth.) Such measures would obviously be unpopular with the ruling class, but that is to be expected.

Second, the amount of money spent on foreign military interventions proves, beyond the shadow of a doubt, that the funds exist to cover budget shortfalls at home. It's obvious that the money spent blowing things up in the Middle East could just as well be spent building things (like bridges, roads, hospitals, schools, libraries, and so on) right here in the US. Moreover, the amount of subsidies and spending allocated to the ruling class in the form of "corporate welfare" also proves that the funds already exist, even under the current regime of taxation, to cover the things that matter….We live in a society with vast sums of wealth concentrated at the top, which could easily be tapped to ameliorate the suffering brought about by unemployment and budget cuts. And, regarding the imperialist military machine, if our government can find money to kill people, why can't that money be spent helping people instead.

Now, some will still claim that austerity is "unavoidable" since [those ]suggestions, attractive though they may be, are "unrealistic" or "politically infeasible". To be sure, looked at through the narrow lens of our electoral mechanism, it is true that  [these ] suggestions are "politically unrealistic". .. But is that [lens]  our only option? Of course not. The cul de sac of electoralist lesser-evilism only means that resistance, in order to be "realistic", must take shape outside the proper channels. It must take the form of grassroots, independent social movements which are prepared to take a confrontational, oppositional political stance vis-a-vis the traditional corporate parties and their candidates. That doesn't mean talking tough while, at the end of the day, committing to throwing in with whomever the Democrats put up for election. It means actually organizing with broader goals in mind, e.g. defending social security and medicare from attack, fighting for expanded (rather than reduced) public transportation, fighting local budget cuts of all kinds, defending teachers from savage scapegoating attacks, fighting against the privatization of public assets, etc. Moreover, these fights should be waged with the assumption that Democratic representatives will tend to contain and minimize, rather than ignite and encourage, such independent struggles. This isn't some new idea: the fact that we have collective bargaining rights and the Civil Rights Act are testaments not to the progressive character of the Democrats, but to the power of independent Left social movements that had more ambitious goals than electing a Democrat to office. People power, from Greece to Spain to Egypt to Tunisia, is anything but a utopian phrase. It is the watch word of those on the frontlines of the struggle against austerity. The explosion of mass protest in Wisconsin was only the beginning. The Left needs to invest all of its energy in building ground-up struggles like Madison all over the country. Without such struggles, there will be no progress.

It's also crucial that we emphasize the following. Austerity is not new. It used to be called "Structural Adjustment" when it was imposed from above by the IMF on populations in the global South who fiercely resisted it. It's the same thing today, except that its the "advanced" capitalist countries in the US and Europe that are undergoing "Structural Adjustment" this time around.

Austerity is, at rock bottom, a matter of the ruling class forcing the working majority to pay the bill for a crisis it didn't cause. It is an externalization of culpability, a socialization of massive private losses. The state in capitalist societies, no matter what representative government is at the helm, fulfills the basic function of securing the conditions for the accumulation of profits. This falls under the heading of securing "economic growth" or "a good business climate". Any government, within the framework of capitalism, which fails to do this risks economic stagnation, a capital strike, or, in some cases, violent reaction. To say this is just to say that in capitalist societies the state is structurally dependent on capital. Right now, austerity is the policy adopted by ruling classes the world over to try to restore profitability to the system. It is both a hail-mary pass by the ruling class to insulate its assets in the short term, and a long-term strategy pedaled by neoliberal ideologues who are still convinced, despite all contrary evidence, that economic health is brought about through slashing regulations and public spending and cutting taxes. As such, it is a policy meant to serve narrow class interests. But, as always, the ruling class is obliged to legitimate such policies by speaking the language of universality and shared interests. In public spaces it will seek support for the policy by claiming that it is the best policy for the vast majority. We shouldn't be surprised that this gap between rhetoric and reality is so wide. 

Even in class war, the first casualty is truth.