GEORGE GRUENTHAL
NSC Webmaster
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GEORGE GRUENTHAL
NSC Webmaster
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My earlier article on Obama’s presidency that appeared in the December issue of NSC was obviously written before he took office. Now that he has been president for several weeks, certain aspects of his role have been confirmed, and other new features have emerged, particularly his economic stimulus program.
Obama has filled out his Cabinet positions with people of “experience,” which means experience in serving the monopoly capitalist class. His Treasury Secretary, Timothy Geithner, was President of the New York Federal Reserve bank before. (The Federal Reserve, despite its name, is actually a government entity made up of the largest private bankers.) And Eric Holder, besides having the distinction of being the first black Attorney General, had been a lawyer defending Chiquita Brands for their role in sending money to the right-wing militias in Colombia. Obama has thus continued the standard practice of appointing top officials who go back and forth between government and the monopoly corporations whose tools they are.
Israeli invasion of Gaza
Since December, we have seen Israel’s brutal attack on and invasion of Gaza. During the invasion, Obama refused to comment, saying that the country has only one president at a time. But once in office, he has made clear that his position on Israel is essentially the same as Bush’s and that of all administrations. Since Israel’s founding in 1948, Israel has been U.S. imperialism’s junior partner in the Middle East. The U.S. gives Israel $3 billion each year in aid, more than to any other country. All the planes and Apache helicopters used in Israel’s attack on Gaza came from the U.S. Obama, in a press conference shortly after taking office, talked of the U.S.’s continuing support for Israel’s security. He supported Israel’s “right” to rearm, but of course denied that same right to Hamas, which is the legitimate government of Gaza and which had won the legislative elections for the whole territory of the Palestinian Authority in 2006. Obama’s only difference from Bush is that he may rely more on collaborators in the Palestine Authority and reactionary regimes such as Jordan and Egypt (which collaborated with Israel by keeping its border with Gaza closed during Israel’s attack). Obama’s only reaction towards the Palestinian people was to see them as victims entitled to humanitarian and reconstruction aid. He talks to a Palestinian state, but one that would in essence be a protectorate of Israel, would not have control of its borders, etc. Osama Hamdan, a representative of Hamas, stated about Obama’s policy towards Israel that “it looks like the next four years, if it continues with the same tone, will be a total failure.”
Economic Stimulus Package and U.S. production
Before his election, Obama and McCain had joined Bush in pushing through the $700 billion bailout to the banks. After his election, Obama held a press conference in which he announced his plans for economic recovery. He spoke in general terms of investments in infrastructure, in high-tech industry and in “green” energy. For the last several decades the U.S. has been getting rid of much of its internal manufacturing base, sending most production abroad to the dependent countries of Asia, Africa and Latin America, whose cheap labor is a source of super-profits. (Manufacturing, which in the 1950s made up about 30% of GDP, now is only about 15% of GDP.) High tech and green energy are areas where the U.S. still has a certain technological edge, and possibly Obama will later introduce programs for these areas, but these were not a major part of the stimulus package going through Congress.
The current package has very little that will actually increase production. The package includes $91 billion for investment in infrastructure (capital improvements for mass transit, road and bridge repairs), but overall this will have a minor effect on stimulating the economy.
The continued weakness of the U.S. economy is angering many foreign countries, especially China and other emerging capitalist countries as well as Russia. The U.S has become by far the largest debtor country in the world, and these countries hold huge quantities of U.S. dollars. It is running a trade deficit of about $500 billion a year, of which $100 billion is with China alone. The only thing that holds up the value of the dollar is U.S. production. When this production continues to decline, the only reason that other countries continue to hold dollars is that if they drop them, their own economies will decline. China’s Premier Wen Jibao, speaking at the recent meeting of World Economic Forum in Davos, Switzerland, stated: “This crisis is attributable to a variety of factors and the major ones are: inappropriate macroeconomic policies of some economies and their unsustainable model of development characterized by prolonged low savings and high consumption; excessive expansion of financial institutions in a blind pursuit of profit...” In other words, the U.S. is consuming much more than it is producing, its wealth has been artificially propped up by the creation of fictitious capital by its financial institutions, and not only the working people of the U.S. but the countries in the rest of the world have been left holding the bill. So far, Obama has made no significant changes in this pattern.
Reforms in the stimulus package
The main thing that distinguished Obama’s program from Bush’s is that Obama has included certain reforms that will ameliorate the consequences of the crisis for some working people to a limited extent. The official unemployment is not 7.6%, the highest in 16 years (and this does not include those employed only part time, or those who have given up looking for work, the so-called “discouraged workers.) Those receiving unemployment insurance will now automatically qualify for Medicaid. We have been treated to the spectacle of Republicans saying that millionaires should not be eligible for Medicaid – as if many rich people would even take Medicaid in the first place. But the package offers no relief, for example, to the 2 million people who have lost their homes to foreclosure in 2008, or to the millions more who have been evicted for their inability to pay their rent.
In the U.S., we must unite working people, whether or not they supported Obama, in putting forward class demands in their own interest. These should include:
We must demand the withdrawal of all U.S. troops (armed forces and “civilian” mercenaries from Iraq and Afghanistan, and an end to all U.S. aid to Israel. One of the large anti-war coalitions, ANSWER, has finally called for a mass anti-war demonstration in Washington DC on March 21, the 6th anniversary of the invasion of Iraq. For two years, all the anti-war coalitions, not just the liberal UFPJ but also the more radical ANSWER and IAC, TONC have refrained from calling such mass demonstrations.
But any economic tinkering will not
solve the economic problems. These are consequences of the capitalist
crisis of overproduction. We are still in the early stages of a crisis
that is likely to rival the great Depression in length and severity. We
have begun to see examples of a working class fight back in response,
including the factory takeover by workers at Republic Windows and Doors
in Chicago, the 5-month-old strike of Stella D’Oro bakery workers in
New York, and the revolt against the union bureaucrats of the SEIU by
health care workers of UHW on the West Coast. These workers must see
that their struggles are part of a class struggle, and that in the long run this must lead to socialism, the dictatorship of the working class.
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