How disconnected is the American political process from economic reality?
The growing disconnect between the capitalist system and the economic realities plaguing the United States is now coming to an end. On the ground, the accumulated problems of American capitalism undermine its empire and challenge its very future. Meanwhile, ever-deeper inequalities in wealth and income conjure up images of the pharaohs of ancient Egypt. Three economic crashes opening the new century (2000, 2008 and 2020) shook the system; just like the two wars that America lost against very poor countries in the Middle East: Afghanistan and Iraq. The worst public health crisis in a century during the COVID-19 pandemic has further exposed how ill-prepared American capitalism was and still is, thus imposing massive new human and financial costs that will last into the future.
A government that primarily serves American capitalism has borrowed trillions and allowed trillions in more new (corporate and household) debt that has been used to fight long lost wars and shore up a faltering economy. Now, after two terrible years of COVID plus an economic crash, with 3 million fewer jobs in 2022 than before COVID, high inflation is looming. Meanwhile, aided in part by profit-driven American capitalists who have moved their operations to China, the Asian country is now in a position to challenge American capitalism on a global scale.
Above the troubled ground are two old political parties, the GOP and the Democratic Party, which are formed by and are stuck in the old political economy before all these problems piled up into crises. From 1820 to 1970, American capitalism went through cycles, but these cycles were firmly anchored in a long-term upward trend. Real wages have risen every decade, at least for white workers. The downturns of the recession only interrupted the long uptrend (and even then not for long). The Republican Party and the Democratic Party have rarely gone beyond the routine rituals of orderly contests over who deserves credit for economic growth and who deserves blame for disruptions during recessions.
The one big exception resulted from the one super-big hiatus: the Great Depression of the 1930s. This shook American capitalism to the core. Mobilized and led by a coalition of militant unions (CIO), socialist parties and a communist party, the American working class has veered sharply to the left. This change won a New Deal from the administration of President Franklin D. Roosevelt. This agreement imposed a lot more taxes on corporations and on the wealthy. He then funneled much of those funds into the new Social Security system, unemployment compensation, and a massive federal jobs program. Thanks to the New Deal, Roosevelt was re-elected three times and was the most popular president in US history. Likewise, American companies and those they enriched felt seriously threatened during this period.
The GOP reacted strongly. With FDR dead and World War II over, the Republican Party took the initiative to undo the New Deal. He did this by splitting the coalition (which included the CIO, Socialists, and Communists) of the Democratic Party and coalition partners from each other. Anti-communism, McCarthyism and the Cold War served as the weapons of choice for the Republican Party. The GOP succeeded in part because Democrats offered mostly weak opposition or none at all. Postwar Democrats were largely complicit in destroying much of what the New Deal had achieved (helped, ironically, by many of the Democratic Party’s prewar efforts). After 1945, the White House, Congress, and state and local governments resumed orderly political contests between the GOP and the Democratic Party. Both endorsed a type of musical chairs of rotating public authority staff between them (until this system was reversed by former President Donald Trump in 2020).
Established former leaders of both parties still do not understand or accept that the orderly rotation of government personnel is now over. Unable or unwilling to critically assess American capitalism, these leaders missed the signs leading to the accumulation of capitalism’s problems that now plague them. The Bushes, the Clintons, President Joe Biden and the like want the old political system to persist. After all, for them, this old political system worked well. But now their disconnect from the capitalist reality that ultimately controls them threatens to render them blatantly ineffective, sadly out of their element. Because they cannot or dare not criticize this reality, its growing difficulties and the resulting massive disaffection are beyond their reach with the old tools, arguments and pirouettes that worked before.
Given the disconnected mainstream of American politics, mass disaffection is causing escapism and the search for scapegoats. The GOP eagerly validates many of them (anti-immigration, white supremacy, quasi-fascism, culture wars and anti-leftism) to broaden its electoral base. The Democrats, for their part, try to fight against the extreme forms of this escape and this search for scapegoats (as in “the basket of deplorables”) without offering a real alternative. The socialism represented by politicians like Sen. Bernie Sanders (I-VT) and Rep. Alexandria Ocasio-Cortez (D-NY) is so moderated by them that, given mainstream media bias, it only sits marginally within the confines of national politics. conversation.
What people increasingly need is protection against an embattled capitalist system itself, against its intrinsic instability (the accumulated crashes and their effects), the intrinsic inequalities of wealth and income (and their effects), devastating ecological damage and profit fetishism. But the GOP and the Democratic Party have long lost the ability to see or deal with all of this. They keep repeating neoliberal ideology (and its reframing of an American empire as “globalization”) so often that they actually believe and are thus imprisoned in the system.
Thus, a particular political theater of disconnection has emerged. Republican and Democratic leaders can’t see what most of us can. They consider that “the big problems” do not concern capitalism. Yet what they see and the solutions they offer will in fact be their response as the crisis of capitalism deepens. So, under Trump, the Republican Party has moved towards fascism. His GOP has used and will continue to use the government to enforce capitalism as it falters in extinguishing what remains of the unions, crushing the left, and weaponizing media and culture, much like other dictators the have done, notably Adolf Hitler in Germany after January 1933 and Benito Mussolini. in Italy after October 1922. Like them, Trump used hyperpatriotic nationalism laced with racial superiority to justify all his actions. This is the true meaning of Trump’s campaign slogans and his public’s cheers of “Save America” and “Make America Great Again.” How far Trump and others like him will go down German and Italian fascist paths depends on the circumstances.
The crisis of capitalism does not exist for Biden or the Democratic establishment he leads, just as it does for Trump and the GOP. The Democratic establishment defines itself over and against Trump. There is no question of taking the fascist path. Instead, he proposes to “protect democracy” from what Trump stands for. This difference will frame many election campaigns in 2022 and 2024; it already does. Democrats will “protect democracy” by “returning to pre-pandemic normalcy”. The Democratic Party’s version of “Make America Great Again” is a political economy resurrected after World War II, with American global dominance based securely, they imagine, on rapidly growing American capitalism.
Both Republican and Democratic establishments are warning their megadonors and the public that allowing the other to take political power will disrupt civil society and prevent America from being great again. The GOP is screaming that antifa and the Black Lives Matter movement will destroy white America and lead to civil war. Democrats counter that Trump and January 6-type “insurgents” will dissolve social peace in the United States, provoke counter-actions and thus lead to civil conflict. Social peace, each side insists, requires political warfare to defeat the other side. Neither side sees the absurd contradiction in his assertions.
The direction that American politics will take depends less on the two parties or their disconnected rhetoric. What matters far more are the realities of American capitalism as the American empire continues to decline and the accumulated problems of American capitalism deepen. These latter factors will determine how the public perceives disconnected party politics. Today’s inflation provides an example. Like another slap in the face of the American working class that has faced two years of economic crash and the health catastrophe of COVID-19, inflation and rising interest rates aimed at stopping it will eventually shake up capitalism and shape politics.
How many angry working families will now sympathize with a politician who proposes big changes versus a politician who proposes to “stay the course”? The business community wants to stop inflation. The reactive Fed will therefore resort to quantitative tightening and higher interest rates. The reactive Biden will applaud the Fed. These Fed actions can and will likely threaten jobs. Biden must therefore choose between the electoral risks of inflation and those of deteriorating employment. It’s the risky dead-end “choice” that the problems of capitalism will dump on Biden. And if 2022 turns out to be the year the crisis of capitalism comes to light, will most Americans lean toward Trump-style fascism or the “democracy protection” offered by Democrats to protect themselves from crisis of capitalism?
The fascist solutions of Hitler and Mussolini to the crises of their nations’ capitalisms did not end well. Yet today’s leading American capitalists seem unaware of or care about historical precedents. They continue to comfortably pursue their disconnected politics, oblivious to the implosion of capitalism and the resulting damage to Americans.
In this they resemble the upper classes in Russia (until 1917), Germany (until 1933) and Italy (until 1922). The most important questions therefore are whether or not and within what timeframe a new left can emerge that targets capitalism per se, proposes an alternative system, and charts a transition to that alternative system.
Richard D. Wolff
Independent Media Institute
This article was produced by Economy for allan independent media project