By ERWIN FREED
On March 13, Socialist Resurgence held a meeting for all members to discuss and approve the organization’s perspectives on world and domestic political affairs, and the tasks before it. Below we reprint a section of the Political Report, delivered by Erwin Freed, that briefly outlines some of the key characteristics of the current political situation in the United States.
The seven-day rolling average of COVID deaths sits at about half of what it was when the vaccine roll-out began. Economists are predicting high levels of growth for a short period as the federal government increases social spending and makes various cash injections into the economy. Of course, this “growth” is relative to the massive contraction in GDP in 2020. Mainstream economists are predicting the U.S. GDP will not return to its 2019 level for at least five years.
A severe crisis of profitability exists that is unsolvable without either capital or labor taking hits. According to calculations by Michael Roberts, the rate of profit in the United States dropped by almost six percentage points, or roughly a third, since its recent high around 2014. This was the trend before the pandemic, but it was also exacerbated by it.
As Roberts explains, “When it comes down to it, the only really sustainable way to raise profitability across the board would be to cut the size of the workforce, get rid of ‘unproductive’ workers; merge, consolidate or liquidate weaker firms; and so create the conditions for better profitability through investment in new labour-saving technology. That’s possible down the road. But for the moment, those ‘unproductive workers’ are being mostly kept on the company books or supported with social benefits; while small and weak companies are being kept above water with cheap loans and other support.”
A working paper from the National Bureau of Economic Research argues that “COVID-19 may accelerate the automation of jobs, as employers invest in technology to adapt the production process to safeguard against current and potential future pandemics … [and] that occupations held by U.S. females with mid to low levels of wages and education are at highest risk.”
The recovery plan’s commitment to propping up companies of all different sizes based on fiscal measures like maintaining low interest rates, a $120 billion/month bond buy-back program, and various means of “easy credit” are likely exacerbating the already-existing situation in which speculation and debt spending in the private sector have created thousands of large “zombie companies.”
Michael Roberts explains the situation: “200 big corporations have joined the ranks of so-called ‘zombie’ firms since the onset of the pandemic. They now account for 20% of the top 3000 largest publicly-traded companies, with debts of $1.36 trillion. That means 527 of the 3000 companies didn’t earn enough to meet their interest payments! So there remains a significant risk of a credit crunch and financial crash down the road, perhaps in 2021, when the Fed largesse is curtailed.” The continuing operation of these entities is the real content of the stock-market highs.
The U.S. Bureau of Labor, in its most recent report, states that “the unemployment rate, at 6.2 percent, and the number of unemployed persons, at 10.0 million, changed little in February. Although both measures are much lower than their April 2020 highs, they remain well above their pre-pandemic levels in February 2020.” Changes in unemployment appear to be leveling off at the current rate. One of the most dramatic figures is the fact that, amidst a public health crisis, there are almost 1 million less social and health workers than at the beginning of the pandemic.
This context helps to explain the fact that the ruling class is buying itself time to implement the worst aspects of the post-pandemic “recovery.” One of the most lauded aspects of the new stimulus bill is the per-child cash benefit being offered to families. That program is said to “cut childhood poverty in half,” but that must be understood alongside the fact that virtually everywhere in the country the full stimulus for a family of two covers only between zero and two months of rent, while at least 12 million renters owed at an average of $5,840 in back rent and utilities in January. Similarly, the rates of forbearance on all debts are highest among low-income people, with the NBER citing an average of $1800 debt overhang for those in forbearance. A federal Judge in Ohio recently ruled that the eviction moratorium issued last March by the CDC was illegal. The full meaning of this ruling is not yet clear.
As even liberal economist Paul Krugman recognizes, “the great bulk of the spending will fade out within a year” and stagnation will set in. The only solution from the ruling class to the various budget crises resulting from the total domination of corporations over the state will be to deepen severe cutbacks to not only the new pandemic programs but also the public sector and social services in general. While there may be a nominal increase in the minimum wage, it will not affect decreasing income levels. This means that public sector jobs, especially education, and fights for redistribution will be major areas of the class struggle in the coming period.
Confirmations of the fundamental inter-relation between nature and society in the anthropocene continue to be made through massive destruction and loss of life. The Southern winter storms are a good encapsulation of this dynamic. Climate change likely increased the severity of the storm, ideological and financial assumptions about climate invariance aggravated the lack of preparation, and deregulation for the benefit of capitalist interests allowed for speculation amidst the crisis. Tellingly, working-class Black and Latino communities were disproportionately affected by the disaster.
In the midst of a fracturing political landscape, the ruling class is desperately grasping for temporary solutions to permanent problems. On the one hand, as just mentioned, they are debt-funding a number of temporary programs to stave off the worst of the crisis. This includes increasing money for parents, extended enhanced unemployment benefits, and an unevenly applied eviction moratorium. On the other hand, there are multiple lines of ongoing roll-back of basic democratic rights, seemingly in preparation for future showdowns like what happened last summer.
We can understand Trumpism as an emerging right-wing populist movement that is willing to whip up and defend street mobilizations of the disaffected sections of the petty bourgeoisie and workers who comprise the right-wing rank and file and who, in a situation of virtually no visible working-class alternatives to the Democratic Party, are increasingly susceptible to chauvinism and conspiracy theories. While Trump himself was an important individual within this movement, the phenomenon is much wider in scope. Obviously it was most emphatically displayed during the storming of the capitol building on Jan. 6.
The threat of an increasingly active far and proto-fascist right will become more pressing as these forces regroup between now and when the economy falls back into stagnation in the next two or three years. Broad, unite-front-type anti-fascist countermobilization is a priority.
Within bourgeois politics, we can expect to see an increase in economic populist efforts based on nativist promises to U.S. workers and small business owners, and speaking in the language of working-class interests. Tom Cotton and Mitt Romney are two examples of this trend. While attempting to outflank some Democrats from the left on so-called bread and butter issues, these politicians will frame the cause of the economic crises in anti-immigrant and anti-Black language, pushing the related policies.
The Jan. 6 riots are being used as a cover to accelerate attempts to pass more and more extreme anti-protest legislation all around the country. While the liberal press has largely positioned this as a “Republican” phenomenon, Democrats supported and even wrote some of these bills, including in Maryland and Oregon. Biden is making fighting “domestic terrorism” one of his main priorities, which can only mean increasing surveillance and policing of the left and minority communities. A number of protesters face charges from last summer but, chillingly, arrests have continued into this year, including in Florida, against anti-protest laws, and California, where four Indigenous women were arrested in February fighting land speculation.
While there has been a nominal increase in some places of non-police first-responder programs, the fact remains that none of the demands of the movement last summer have been realized. On a local level, this seems to at least be partially due to the co-optation of new and young activists into running as Democrats or through incorporation into the “non-profit industrial complex.” Nationally, the Justice for George Floyd Act not only increases funding for police but if it, had been passed in 2019, Floyd would still be dead. Despite a massive amount of police violence against protesters and BIPOC communities, virtually none have seen charges.
A fundamental component of economic crises is attacks on reproductive rights. States have been increasingly mobilized against abortion access. In 2019, for example, politicians attempted to add over 300 new restrictions. In some states, abortion access is already severely curtailed, as in Texas, where most people in the state have to travel hundreds of miles to get to a clinic, or in Missouri, where there is only one abortion provider.
However, the baldly anti-women policies of a section of the ruling class, although they have created a desperate situation, will create an opening for struggle and expose the liberals who insist on carrying out the fight in the courts and statehouses rather than the streets.
According to the ACLU, well over 100 anti-LGBTQIA+ bills have been introduced at various levels already this year. A large proportion of these are anti-trans and/or attempting to allow organizations to redefine marriage as between “one man and one woman.” Already within the last week, Mississippi and South Carolina have passed extreme anti-Queer legislation, respectively barring trans people from gender-appropriate sports teams and giving religious institutions carte blanche to discriminate against gender and sexual minorities.
In the first months of his administration, Biden has shown more continuity than rupture with Trump’s policies on immigration. Despite “promises” for no deportations in his first 100 days of office, hundreds have been deported, tens of thousands have been pushed back from the border, and children remain in prisons. So-called left Democrats, like AOC, have shifted their rhetoric on immigration to soften their criticisms of Biden versus Trump. Companies that rely on precarious migrant labor see Biden as a friend who will help facilitate their hyper-exploitation of vulnerable workers.
To top all of this off, the movement against voting rights is reaching a new stage. Georgia, which was the Democratic Party’s shining example of the possibilities of electoralism and enfranchising Black people to vote, just passed one of the most restrictive assaults on voter rights in recent years. That is just one of 253 voter-suppression laws being considered in 43 states.
While the conditions of a labor upsurge are being laid, special emphasis should be made on new developments in organizing the South. The unionization drive at Amazon in Bessemer is a prime example of workers’ seeing the immense profits being made on their back and organizing against it. The effects, both subjective and objective, of that drive will likely be far-reaching. Already there are reports that over 1000 Amazon workers reached out to RWDSU about organizing their shop, and the Teamsters are openly running their own campaigns. The largest single unionization of nurses, catalyzed by the pandemic, happened in September of last year at the Mission Hospital system, significantly in North Carolina.
In concluding this section of the report, I want to stress that the severity of the crises of profitability, climate, and public health are showing former Biden supporters the impossibility of the capitalist class to create real solutions for working people. Now is a time when we can patiently explain to workers and students what is happening, what is going to happen, and what needs to be done.