Capitalism: The Nightmare

TD ORIGINALS
A worker in a costume representing world capitalism during a 2017 May Day rally in Jakarta, Indonesia. (Dita Alangkara / AP)

The neoliberal, arch-capitalist era we inhabit is chock-full of statistics and stories that ought to send chills down the spines of any caring, morally sentient human. Nearly three-fourths (71 percent) of the world’s population is poor, living on $10 a day or less, and 11 percent (767 million people, including 385 million children) live in what the World Bank calls “extreme poverty” (less than a $1.90 a day). Meanwhile, Oxfam reliably reports that, surreal as it sounds, the world’s eight richest people possess among themselves as much wealth as the poorest half of the entire human race.

The United States, self-described homeland and headquarters of freedom and democracy, is no exception to the harshly unequal global reality. Six of the world’s eight most absurdly rich people are U.S. citizens: Bill Gates (whose net worth of $426 billion equals the wealth of 3.6 billion people), Warren Buffett (Berkshire Hathaway), Jeff Bezos (Amazon), Mark Zuckerberg (Facebook), Larry Ellison (Oracle) and Michael Bloomberg (former mayor of New York City). As Bernie Sanders said repeatedly on the campaign trail in 2016, the top 10th of the upper 1 percent in the U.S. has nearly as much wealth as the nation’s bottom 90 percent. Seven heirs of the Walton family’s Walmart fortune have among them a net worth equal to that of the nation’s poorest 40 percent. Half the U.S. population is poor or near-poor, and half lacks any savings.

Just over a fifth of the nation’s children, including more than a third of black and Native American children, live below the federal government’s notoriously inadequate poverty level, while parasitic financiers and other capitalist overlords enjoy unimaginable hyper-opulence. One in seven U.S. citizens relies on food banks in “the world’s richest country.” Many of them are in families with full-time wage-earners—a reflection of the fact that wages have stagnated even as U.S. labor productivity consistently has risen for more than four decades.

Failure by Design

These savage inequalities reflect government policy on behalf of “the 1 percent” (better, perhaps, to say “the 0.1 percent”). U.S. economic growth since the late 1970s has been unequally distributed, thanks to regressive policy choices that have served the rich and powerful at the expense of ordinary working people. As Joshua Bivens of the Economic Policy Institute showed in his important 2011 study, “Failure by Design,” the following interrelated, bipartisan and not-so-public policies across the long neoliberal era have brought us to a level of inequality that rivals the Gilded Age of the late 19th-century robber barons era. These policies include:

● Letting the value of the minimum wage be eroded by inflation.
● Slashing labor standards for overtime, safety and health.
● Tilting the laws governing union organizing and collective bargaining strongly in favor of employers.
● Weakening the social safety net.
● Privatizing public services.
● Accelerating the integration of the U.S. economy with the world economy without adequately protecting workers from global competition.
● Shredding government oversight of international trade, currency, investment and lending.
● Deregulating the financial sector and financial markets.
● Valuing low inflation over full employment and abandoning the latter as a worthy goal of fiscal and economic policy.

These policies increased poverty and suppressed wages at the bottom and concentrated wealth at the top. They culminated in the 2007-09 Great Recession, sparked by the bursting of a housing bubble that resulted from the deregulation of the financial sector and the reliance of millions of Americans on artificially inflated real estate values and soaring household debt to compensate for poor earnings.

After the crash, the government under both George W. Bush and Barack Obama bailed out the very financial predators who pushed the economy over the cliff. The Obama administration, populated by Goldman Sachs and Citigroup operatives, left the rest of us to wonder “Where’s our bailout?” as 95 percent of the nation’s new income went to the top 1 percent during his first term.

Ordinary Citizens Have No Influence Over Their Government

All of this and much more is contrary to technically irrelevant American public opinion. But so what? You don’t have to be a leftist to know that the United States’ political order is a corporate and financial plutocracy. Three years ago, liberal political scientists Martin Gilens of Princeton University and Benjamin Page of Northwestern University determined that the U.S. political system has functioned as an oligarchy over the past three-plus decades, in which wealthy elites and their corporations rule. As Gilens explained to the liberal online journal Talking Points Memo, “Ordinary citizens have virtually no influence over what their government does in the United States.”

Shock Profits

Most of this results from the normal, business-rule-as-usual operation of the American political process. Sometimes—as during “natural disasters” such as Hurricanes Katrina, Harvey and Irma—crisis moments allow wealthy interests to rack up huge profits almost overnight while much of the population is too shocked and distracted to respond. As Susan Zakin notes in the Los Angeles Review of Books, “Handing out billions for hurricane reconstruction will shore up [Donald] Trump’s faltering support on Wall Street and among major corporations profiting from a bonanza expected to top $100 billion.” Katrina provided precisely such a business opportunity to corporate America. So did the U.S. invasion of Iraq.

‘Isn’t It Beautiful?’

At the same time, Houston, for instance, is a much bigger scene of devastation than it would be but for business-rule-as-usual. The city was recklessly built up by and for elite financial and real estate interests and their governmental tools without the slightest concern for environmental sustainability and resilience. As Zakin notes:

[W]ithout a zoning code, [Houston is] a case study in urban sprawl. Houston was built on a dry (read: low-lying) lakebed that’s laced with bayous. The bayous are lined with concrete, steel and sheet metal, which is functional when it rains a little, but a contender for the luge event when it rains a lot, even in posh neighborhoods like River Oaks. Doing what it takes to prevent flooding, widening bayou channels, managing growth, putting in green space, might impede the only truly important flow: money. Houston’s city fathers have resisted any effort to plan for climate change, because, well, it doesn’t exist. As if that weren’t enough, parts of Houston are sinking, some as much as 2.2 inches a year.

It’s an epitome of the deadly “free market” chaos favored by arch-capitalist political actors such as the right-wing billionaire Charles Koch and his friend, the “libertarian” Sen. Jeff Flake, R-Ariz. In his recent, widely read book, “Conscience of a Conservative,” Flake writes with fondness about the time he met the eminent neoliberal University of Chicago economist Milton Friedman:

We picked him up at the airport, and while we were driving to a suburb of Phoenix we went through what could only be described as suburban sprawl. Someone in the car with us, remarking on this landscape, said, ‘Man, it looks like there was no planning at all.’ Friedman just nodded his head and said, ‘Yes, isn’t it beautiful?’ … [I]t wasn’t government coercion that had brought it into being. It was the invisible hand of the free market. Planning requires control, control empowers government, and empowered government = disempowered individuals.

Houston is the “petro-metro,” a major capital of the petrochemical industry and home to numerous toxic waste sites. As a result, the city’s floodwaters are loaded with hazardous materials.

How beautiful.

The “free market” madness rolls on. Like the melting polar ice, which opens up new business opportunities for oil drilling and ship travel even as it reduces earth’s ability to reflect sunlight back into space, the devastation resulting from extreme weather is both a consequence of the rule of big corporations (the real masters of the “free market” since the early 20th century in the U.S.) and a perverse opportunity for quick corporate profits.

On Aug. 15, 10 days before Hurricane Harvey hit Texas, Donald Trump, himself a global real estate baron, wiped out an Obama-era executive ordermandating that federal reconstruction grants take account of sea-level rise and related aspects of climate change.

Capitalist Climate-astrophe

Meanwhile, speaking of climate change, anthropogenic—really, capitalogenic—global warming threatens to turn the venerable popular struggle for a more equal distribution of wealth into a fight over the slicing up of a poisoned pie. The signs of climate catastrophe are unmistakable. Record-setting wildfires raged on the nation’s West Coast, and a devastating drought plagued much of the nation’s northern Great Plains as Houston was sunk in epic, chemically polluted flooding and Irma bore down on Florida. Like Hurricane Sandy (which filled New York City subway tunnels with storm surge on the eve of the 2012 elections), the Indian and Pakistani heat waves of 2015, Hurricane Katrina (2005), the Alberta, Canada, wildfires of 2016 and numerous other recent, lethal, meteorological episodes, this extreme weather is intensified by the spiking balminess of the planet.

The warming is fueled by capital-captive humanity’s excessive release of carbon dioxide resulting from the profit system’s rapacious extraction and burning of fossil fuels and its reliance on animal agriculture. Carbon accumulates in the atmosphere, trapping heat and melting the world’s glaciers and permafrost, which holds vast reserves of carbon-rich methane. As the ice caps retreat, less sunlight gets reflected back into space and more of it heats the planet toward a point where it becomes uninhabitable.

Extreme weather is just the tip of the melting iceberg. If not reversed, global warming will destroy the human species through famine, dehydration, overheating, disease and resource wars. It has us on the path to hell.

‘A Death Knell for the Species’

Trump has taken advantage of the nation’s plutocratic political dysfunction to become a kind of one-man ecological apocalypse. The fossil-fueled hurricanes, drought and wildfires of 2017 have hit the U.S. at a time when the White House is occupied by an openly ecocidal billionaire whose election rang what Noam Chomsky called an environmental “death knell for the species.” Trump has pulled the United States out of the moderate Paris climate accord. He has removed all references to climate change from federal websites and chose a fellow petro-capitalist climate change denier dedicated to crippling the Environmental Protection Agency to lead that department. Trump’s secretary of state is the former longtime CEO of Exxon Mobil Corp., history’s most powerful fossil fuel corporation—a company that buried and then organized propaganda against its own scientists’ warnings on carbon’s impact on the climate. Trump’s proposed budget calls for a 16 percent cut to the National Oceanic and Atmospheric Administration, which monitors all things climate- and weather-related.

This is ecocidal petro-capitalist madness on steroids.

After Harvey nailed Houston and before Irma hit Florida, Trump held a chilling ecocidal rally in front of an oil refinery in North Dakota. He boasted of how he had exited the “job-killing” Paris agreement (“It was so bad”) and approved the planet-cooking and supposedly job-creating Dakota Access and Keystone XL pipelines.

“I also did Keystone,” Trump said. “You know about Keystone. Another other one, big one—big. First couple of days in office, those two—48,000 jobs.”

Trump said the White House was going to make North Dakota’s current terrible drought vanish because “we’re working hard on it and it’ll disappear. It will all go away.”

The president also asserted that the thousands of Americans who protested the Dakota Access pipeline within and beyond the Standing Rock Indian Reservation last year had no idea why they were against it.

It may have been his most absurd speech yet.

The System Is Working

Like so much else in U.S. government policy, Trump’s anti-environmental actions are contrary to majority-progressive public opinion. Who cares? It’s one more in a long line of examples showing that “We the People” are not sovereign in the failed, arch-plutocratic and militantly capitalist state that is the 21st century United States.

Many Americans find this difficult to process because they have been taught to foolishly conflate popular self-governance with capitalism—what the George W. Bush White House called “a single sustainable model for national success.”

This is a great lie. My old copy of Webster’s New Twentieth Century Dictionary defines capitalism as “the economic system in which all or most of the means of production and distribution … are privately owned and operated for profit, originally under fully competitive conditions: it has been generally characterized by a tendency toward concentration of wealth and, [in] its latter phase, by the growth of great corporations, increased government controls, etc.”

This definition does not mention any of the things routinely and inaccurately identified with capitalism in the dominant U.S. political and intellectual discourse: democracy, freedom, trade, job creation, growth and/or a “free market” that is characterized by widespread competition and/or little or no government interference. Capitalism is about profit for the owners of capital—period. They attain this through any number of means. The most damaging include:

● Seizing others’ land and materials.
● Slavery (the leading source of capital accumulation in the United States before it was outlawed in 1863–65).
● Firing workers or replacing them with technology.
● Undermining the value and power of labor by “de-skilling” workers by reducing the amount of knowledge and experience they need to do their jobs.
● Abject authoritarian tyranny in the workplace, where Marxist economist Richard Wolff reminds us that most working-age adults spend the majority of their waking hours.
● Outsourcing work to sections of the world economy with the lowest wages and the worst working conditions.
● Hiring and exploiting unprotected migrant workers.
● Slashing wages and benefits, or cheating workers out of them.
● Purely speculative investment.
● Forming monopolies and using them to raise prices.
● Dismantling competing firms, sectors and industries.
● Deadly pollution and perversion of the natural environment.
● Appropriating public assets.
● Military contracting and war production.
● Working to shape political and intellectual culture and policy in capital’s favor by funding political campaigns, hiring lobbyists, buying and controlling the media, manipulating public relations and propaganda, investing in the educational system, offering lucrative employment and other economic opportunities to policymakers and their families, holding key policymaking positions, and threatening to withdraw investment from places that don’t submit to capital’s rules while promising to invest in places that do.

When capitalism is understood for what it is really and only about—investor profit—there is nothing paradoxical about its failure to serve working people and the common good, much less the cause of democracy. If corporate and financial sector profits are high, the system is working for its architects and intended beneficiaries: capitalists. Its great corporations (now granted the legal protection of artificial personhood) are working precisely as they are supposed to under U.S. common law, which holds that (as Michigan’s Supreme Court ruled in Dodge v. Ford Motor Company in 1919), corporate “managers have a legal duty to put shareholders’ interests above all others and no legal authority to serve any other interests.”

The Growth Ideology

Environmental ruin lies at the heart of the system, intimately related back to class rule. As Le Monde’s former ecological editor Herve Kempf noted in his aptly titled 2007 book, “How the Rich Are Destroying the Earth,” the oligarchy sees the pursuit of material growth as “the solution to the social crisis,” the “sole means of fighting poverty and unemployment” and the “only means of getting societies to accept extreme inequalities without questioning them.”

“Growth,” Kempf explained, is meant to “allow the overall level of wealth to arise and consequently improve the lot of the poor without—and this part is never spelled out—any need to modify the distribution of wealth.”

Trump was channeling this deadly “growth ideology” in North Dakota. Sadly, growth on the current carbon-fueled capitalist model has put humanity—not to mention thousands of other sentient beings on earth—on the path to near-term (historically speaking) extinction. We are currently at 410 carbon parts per million in the atmosphere—60 ppm beyond what scientists identified as a hazardous point years ago. We are on pace for 500 ppm—a level that will destroy life on earth—by 2050, if not sooner.

‘Inclusive Capitalism’

“Capitalist democracy” is an oxymoron and a mirage. So is the curious notion of “inclusive capitalism”—a term taken up by the corporate right wing of the Democratic Party, including Hillary Clinton’s closest economic advisers, in 2015. This is the Orwellian name of a global “coalition” set up in 2014 by Lady Lynn Forester de Rothschild for super-wealthy elites to advance a “caring capitalism” that “works better for the broad base of society.” Lady Rothschild’s Coalition for Inclusive Capitalism started with what former Rep. Cynthia McKinney described as “a Working Group comprised of such luminaries of social justice as Sir Evelyn de Rothschild of E.L. Rothschild [a financial firm owned by a family worth an estimated $2 trillion], Dominic Barton from McKinsey and Company [$1.3 billion], Ann Cairns [annual salary of $5 million] of MasterCard, Sir Sherard Cowper-Coles of HSBC, Paul Polman [paid 10 million euros in 2014] of Unilever, along with CEOs of various pension plans and philanthropic foundations, like the eponymous Ford and Rockefeller foundations.”

According to one British media report, the Coalition for Inclusive Capitalism’s opening conference boasted a “guest-list … estimated to hold one-third of the world’s investable assets, around £18tr [nearly $25 trillion].”

One of the coalition’s leading speakers and champions is the great arch-neoliberal, former U.S. President Bill Clinton (with a net worth of $80 million)—a right-wing Democrat who did every bit as much to advance the Wall Street “free market” and globalist agenda as Ronald Reagan.

‘We Must Make Our Choice’

One does not have to be a Marxist or other variety of radical to acknowledge basic differences and conflicts between capitalism and democracy. D and capitalism have very different beliefs about the proper distribution of power,” liberal economist Lester Thurow noted in the mid-1990s. “One [democracy] believes in a completely equal distribution of political power, ‘one man, one vote,’ while the other [capitalism] believes that it is the duty of the economically fit to drive the unfit out of business and into extinction. … To put it in its starkest form, capitalism is perfectly compatible with slavery. Democracy is not.”

More than being compatible with slavery and incompatible with democracy, U.S. capitalism arose largely on the basis of black slavery in the cotton-growing states (as historian Edward Baptist has shown in his prize-winning study, “The Half Has Never Been Told: Slavery and the Making of American Capitalism”) and is, in fact, quite militantly opposed to democracy.

“We must make our choice,” the late Supreme Court Justice Louis Brandeis is reputed to have said or written: “We may have democracy in this country, or we may have wealth concentrated in the hands of a few, but we cannot have both.” This statement was unintentionally but fundamentally anti-capitalist. Consistent with the dictionary definition presented above, the brilliant, liberal, French economist Thomas Piketty has shown that capitalism has always been inexorably pulled like gravity toward the concentration of wealth into ever-fewer hands. In the U.S., as across the Western world, the tendency was briefly and partially reversed by the Great Depression and World War II, producing the long “middle class” Golden Age of 1945-1973. But that was an anomalous era, a consequence of epic economic collapse and two global wars. Capitalism has returned to its longue durée inegalitarian norm over the last four-plus decades.

And even before the onset of the neoliberal period, capitalism at its comparatively egalitarian and high-growth, post-WWII Keynesian best had already pushed livable ecology into crisis. It tipped the world into what leading earth scientists have designated a new geological era: The Anthropocene—a period when “human activities have become so pervasive and profound that they rival the great forces of Nature and are pushing the earth into planetary terra incognita … a less biologically diverse, less forested, much warmer, and probably wetter and stormier era.” The not-so-Golden Agebrought what sociology professor John Bellamy Foster called “a qualitative transformation in the level of human destructiveness.” If this ecological destructiveness isn’t tamed very soon, nothing that progressives and the left care about is going to matter much: Who wants to turn a poisoned world upside down?

Can environmental catastrophe be averted under capitalism? Not likely. Shifting from fossil fuel reliance and other unsound environmental societal habits and practices—built-in obsolescence, mass consumerism and the endless pursuit of quantitative economic growth, accumulation and “cheap nature” resource appropriation—requires a level of coordinated social and public intervention so extreme that it is incompatible with continued capitalist control of the means of production, investment and distribution. It requires an empowerment of ordinary people and a radical rehabilitation of the concept of the natural and social commons—things that very likely cannot be attained under the continued rule of capital. Stark as American activist Joel Kovel’s formulation may sound, I suspect he is right: “The future will be eco-socialist, because without eco-socialism there will be no future.”

Paul Street
Contributor
Paul Street holds a doctorate in U.S. history from Binghamton University. He is former vice president for research and planning of the Chicago Urban League. Street is also the author of numerous books,…
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US Census report shows increasing social inequality

Small median income gain offset by debt and living costs

By Eric London
15 September 2017

US Census data from 2016 released on Tuesday shows increasing social inequality amid a small gain in household income that is offset by a massive growth of personal debt and rising living costs.

The data tracks the ongoing redistribution of wealth from the working class to the wealthy as a result of the pro-Wall Street policies of both the Republican and Democratic parties. It substantiates the oligarchic character of the United States.

Social inequality

The Gini index, used to measure social inequality, with higher figures indicating a wider economic divide, rose slightly from 2015 (.479) to 2016 (.481). The 2016 figure, according to rankings in the CIA World Factbook, makes the US slightly more equal than Madagascar and less equal than Mexico.

In terms of aggregate income share, the shift from 2015 to 2016 is as follows:

Income share from 2015-2016. *Census data reported to one significant figure, meaning percent decline is not reflected in 2015 and 2016 share columns.

The growth in inequality is even starker when traced from 2007, the year before the Wall Street crisis.

The data reflects income and not wealth, thereby providing an incomplete and conservative indication of the scale of inequality. Even within the highest quintile, the income share increased only for the top 10 percent, and, in particular, the top 5 percent.

Income share from 2007-2016

Household income

The corporate media has portrayed the report as a sign of positive income growth, since it shows a slight rise in median income of 3.2 percent from 2015 to 2016.

But according to the Census data, the earnings of “full-time, year-round workers” remained stagnant. For men in this category, a total of 63.9 million people, earnings declined by 0.4 percent, from $51,859 in 2015 to $51,640 in 2016. For women in this category, 47.2 million people, there was a minor increase, 0.7 percent, from $41,257 in 2015 to $41,554 in 2016. In other words, families with 2 adults working full-time saw a paltry $78 increase in their yearly earnings from 2015 to 2016.

Claims of rising incomes mask the growth of inequality. The Census data shows that the household income of the 90th percentile (the 100th being the highest) was 12.53 times higher than the household income of the 10th percentile in 2016, up from 12.23 times higher in 2015 and 11.18 times higher in 2007. The degree to which income is concentrated in the richest 10 percent of the population is exemplified by the fact that the 5th percentile boasted a household income 3.82 times higher than the 50th percentile in 2016, up from 3.79 times in 2015 and 3.52 in 2007.

As Bloomberg News reported Wednesday, “Since 2007, average inflation-adjusted income has climbed more than 10 percent for households in the highest fifth of the earnings distribution, and it’s fallen 3.2 percent for the bottom quintile. Incomes of the top 5 percent jumped 12.8 percent over the period.”

For the working class, any income increase was transferred to the corporate elite in the form of rising debt payments and increasing living expenses, especially for health care.

According to figures from eHealth, a large private health exchange, average deductibles for families rose 5 percent from 2016 to 2017 (a year after the period covered by the Census report) and average individual premiums rose 22 percent over the same period.

The rising cost of student debt alone largely erases income increases seen by some young people. According to the Census, those aged 15 to 24 saw an income increase of 13.9 percent, from $36,564 in 2015 to $41,655 in 2016, while incomes for young people aged 25 to 34 rose 4.9 percent, from $58,091 to $60,932, nearly double the percentage increase for older age groups.

However, in 2016, student debt rose to an average of $30,000 per young person, up 4 percent from 2015, eliminating over 80 percent of the income rise for 25-34 year olds. For 15 to 24 year olds, the $4,000 increase in median income would hardly cover one sixth of the average debt payment, let alone make up for the fact that young people face a future in which they are unlikely to receive a pension, Social Security or Medicare.

Rising debt levels are not a phenomenon limited to young people. A Bloomberg report from August 10 notes that credit card defaults increased from the beginning of 2015—when roughly 2.5 percent of debt holders defaulted—to the end of 2016, when the total hit 3 percent. This figure subsequently climbed in 2017 to reach 3.49 percent.

Bloomberg notes: “After deleveraging in the aftermath of the last US recession, Americans have once again taken on record debt loads that risk holding back the world’s largest economy… Household debt outstanding–everything from mortgages to credit cards to car loans–reached $12.7 trillion in the first quarter [2017], surpassing the previous peak in 2008 before the effect of the housing market collapse took its toll, Federal Reserve Bank of New York data show.”

“For most Americans,” the report continues, “whose median household income, adjusted for inflation, is lower than it was at its peak in 1999, borrowing has been the answer to maintaining their standard of living. The increase in debt helps explain why the economy’s main source of fuel is providing less of a boost than in the past. Personal spending growth has averaged 2.4 percent since the recession ended in 2009, less than the 3 percent of the previous expansion and 4.3 percent from 1982-90.”

The Bloomberg report explains that income from wages minus household debt trended downward in 2015, meaning that debt is rising faster than wages, causing a loss of roughly $500 billion across the US economy in the space of just one year.

Poverty rate

Though the Census report shows that the poverty rate declined from 13.5 percent of households in 2015 to 12.7 percent in 2016, this figure is substantially higher than the 11.3 percent level that prevailed in 2000. In reality, individuals and families must make 2.5 to 3 times the official poverty rate of $12,000 for an individual, $15,500 for a married couple and $25,000 for a family of four just to make ends meet.

What the data really shows is that the poorest half of the country–over 150 million people–is in a desperate financial position, with the next poorest 40 percent facing constant financial strain and a declining share of the national income. In regard to poverty, the Census Bureau maintains figures that go up only to 200 percent of the official poverty level. The latest report shows that 95 million people—29.8 percent of the population—fall into this category. The share of those under the age of 18 in this category is much higher–39.1 percent.

This is the context for the drive by the Trump administration and both big business parties to slash corporate taxes, impose a health care “reform” that will increase costs for millions of people, and accelerate the transfer of wealth from the working class to the financial aristocracy.

WSWS

 

 

 

New York Times surveys the results of 35 years of affirmative action

By Fred Mazelis
13 September 2017

In a front-page lead article over a two-column headline a few weeks ago, the New York Times informed its readers that its own detailed analysis had shown that “Black and Hispanic students are more underrepresented at the national’s top colleges and universities than they were 35 years ago, despite decades of affirmative action efforts.”

What the Times presents as the somewhat unexpected result of longstanding social policy was illustrated by an unusually detailed full-page series of graphs for 100 institutions of higher education, broken down into five categories: The Ivy League, Flagship Public Universities, Other Top Universities, Top Liberal Arts Colleges, and the massive University of California system.

The graphs use percentages of white, Asian, Hispanic and black students at each of these schools, compared to their numbers in the college-age population, to depict the degree of “overrepresentation” or “underrepresentation” for each group.

Overall, the survey shows that white and Asian students are more “overrepresented” than ever, and blacks and Hispanics more “underrepresented” today than in 1980. Hispanic students made up 13 percent of the freshman class among these 100 schools, for instance, compared to 22 percent of the population. In 1980, with a far smaller Hispanic population, the “gap” was only 3 points.

Black freshmen were 5 percent of the enrollment in 1980 and 12 percent of the population. Thirty-five years later, the gap has grown to nearly 10 points: the percentage of African-Americans is 15 percent, but the college freshman enrollment is only 6 percent.

The rationale for affirmative action, which has its origins in policies initiated by the Nixon administration more than 45 years ago, was that it would level the playing field and enable broad layers of black and Hispanic youth to obtain enter colleges and universities for the first time.

The failure of affirmative action to meet these promises is not accidental, nor was it unforeseen—certainly not by socialists, who understood the real purpose of this program.

It is obvious that without providing tens of millions of good-paying jobs, without vastly improved educational opportunities for all youth from pre-kindergarten through high school, and without the provision of free universal health care and child care, there can be no serious expectation that the latest generation of black and Hispanic working class youth will fare any better than its predecessors in obtaining and in making use of a quality higher education.

The decades of affirmative action have coincided with the decades of social counterrevolution, of the shredding of the social safety net that increased under the presidency of Ronald Reagan and that has continued since then, under Democrats and Republicans. The political and corporate establishment demagogically used the suffering of minority workers and youth to promulgate programs that were never designed to help them in the first place.

This does not mean that some aims of affirmative action have not been achieved. They have—but they are for the most part unstated ones.

A small slice of the African-American population, largely from the middle class, has been selected and integrated into the ruling elite, including the corporate and political establishment. These are the men and women who have been elected to high office, who occupy a few more of the top rungs of the corporate ladder, and who are helping to set the agenda in higher education and other spheres of social life. They in turn are presented as role models and representatives for a small but significant upper middle class constituency, in that way serving as a new base of support for the capitalist system.

The image of “progressivism” and diversity is also used to burnish the image of American capitalism as it competes against its rivals internationally. The small layer that has benefited from affirmative action is utilized to showcase the supposed virtues of the market and the endless possibilities for success under the profit system.

At the same time, however, a political division of labor involved in affirmative action has also become ever clearer with the passing years. The program was first backed by Nixon, who saw no contradiction between affirmative action and his own racist views. For about a decade the programs were largely bipartisan policy, accepted by both major capitalist parties. This began to change, especially in the 1980s. While the Democrats became the program’s biggest boosters, the Republicans discovered that Nixon’s “Southern strategy” could be expanded throughout the country by utilizing resentment caused by racial preferences.

The two big business parties developed a reactionary and cynical means of magnifying and promoting racial division. Affirmative action was attacked from the right, and challenged up to the US Supreme Court. It continues today, as college administrators are for the most part allowed to take race into account in admissions policies, as long as they do not employ quotas.

Affirmative action was never the demand of the working class. It was the brainchild of the political establishment, of a faction of the ruling class, with the approval of sections of the middle class civil rights leadership. And it has been used for decades to encourage resentment among white workers and youth, among students passed over for college admission, all the while ignoring the conditions and needs of the vast majority of the youth—black, Hispanic and white.

The challenges that black and Hispanic youth face are essentially no different than those facing millions of white working class families. The purpose of the Times study, even as it acknowledges part of the truth about affirmative action, is to cover this up so as to continue the effort to divide the working class on racial grounds.

The New York Times put its reporters and researchers to work for many hours, if not weeks, to document the racial breakdown of the student body all over the country. No one appears to have been assigned to analyze the class reality underlying the percentages, however. No one looked at the plight for the vast numbers of white working class youth for whom college has become increasingly unaffordable, and who are likewise “underrepresented” as compared to the upper middle class families, of all races. The category of “whiteness,” by combining the poor, the unemployed, the underemployed and the victims of deindustrialization and wage-cutting, together with the wealthy, is being used to obscure the reality of class relations.

Sixteen years ago, the World Socialist Web Site, in a statement on “Affirmative action and the right to education: a socialist response,” contrasted the demands of the civil rights movement of the 1960s, for greater social equality, with affirmative action, part of “the politics produced by [the capitalist] system, which is based on splitting working people along racial, ethnic religious and other lines to cover up the fundamental class divisions of society.”

For as long as it has been used, the WSWS explained, “affirmative action measures have benefited primarily a small section of middle and upper class minorities. … Affirmative action not only fails to overcome the problem of racism, its discriminatory character inevitably exacerbates racial divisions and pits white and minority workers and youth against each other in the struggle for a completely inadequate number of jobs and educational opportunities.”

In 2001, the average tuition at a public university was $3,500. Today it is $9,650 for state residents, and more than $24,000 for those out of state. For private schools, average tuition in 2001 was more than $15,000. The latest figure is $33,480, not including $10,000-$15,000 in room and board and other expenses. More than ever before, affirmative action has become a means of integrating a very small section of the upper middle class and grooming it for future roles presiding over increasing inequality and repression.

Growing sections of the working class, including African-American and Hispanic families, are coming to recognize that affirmative action is worth no more than any other promise made by any capitalist politician. This recognition must be translated into a complete break with the Democratic Party.

In opposition to the promise of a step up for a select few by trampling on the hopes and futures of the vast majority, the working class must fight for a socialist program of free quality higher education for all. This is part of the struggle to defend and extend the basic rights of the working class and eliminate the social inequality that is the product of the profit system. This fight is taken up only by the Socialist Equality Party.

WSWS

Enough With the Top 1 Percent: The Top 20 Percent, the Upper Middle Class, Is Hoarding the American Dream

ECONOMY

Scholar Richard Reeves points out the real winners in the economy as Congress eyes tax reform.

Photo Credit: University of Nevada Las Vegas / Youtube.com

Already President Trump and the Democrats are trading clichés in the opening skirmishes over Trump’s tax reform proposals. Yet both are missing the bigger reality of who are the economy’s winners and losers—a pattern that’s only grown over recent decades.

Trump, of course, want to cut corporate taxes, and consolidate and lower rates for income tax brackets, among other things. All one really needs to know there is that he is dubiously assuming the savings for businesses wil “trickle down” to employees in jobs and wages. Leading Democrats, in response, are being misleading in a different way.

“If the president wants to use populism to sell his tax plan, he ought to consider actually putting his money where his mouth is and putting forward a plan that puts the middle class, not the top 1 percent, first,” Senate Minority Leader Chuck Schumer said.

Trump’s plan mostly would benefit the biggest corporations and the wealthiest individuals. But Schumer’s Occupy-Wall-Street-like whack at the top 1 percent and defense of the so-called middle class is muddled in a different way. That’s because it isn’t the super rich, but the upper middle class—representing the top 20 percent, or households making at least $117,000 a year—that disproportionately have been doing better than the rest of Americans, the bottom 80 percent. Their tax breaks are one reason why.

“The upper middle class, the top fifth, broadly, and above, not only maintain their position very nicely, but perpetuate it over generations more effectively than in the United Kingdom,” said Richard Reeves, a Brookings Institution scholar and author of Dream Hoarders: How The American Upper Middle Class is Leaving Everyone in the Dust, Why That is a Problem, and What to Do About It. “And yet, that that’s not so widely known or seen as a problem, because of the kind of myth of classlessness that has developed in the U.S.”

Comments like Schumer’s—defending a blurrily defined middle class—are a perfect example of the myth of classlessness that is parsed by Reeves, who was born in Britain but became a U.S. citizen. The biggest picture statistic he cites to frame the problem of improperly dissecting the economy’s real winners and losers is pre-tax income growth between 1979 and 2013. The bottom 80 percent saw their incomes grow by $3 trillion, while the top 20 percent saw their incomes grow by $4 trillion. When you put this on a graph, the bottom four quintiles, or 20 percent sections, slope upward slightly. But not so with the upper middle class; people making roughly $120,000 a year or more.

Why does this matter? It doesn’t just confirm what most Americans feel—that they are relatively stuck economically, perhaps doing better than their parents, but sometimes not even that. It shows that bashing the super-rich, the 1 percent, is politically expedient rhetoric that diverts the focus from those in America, members of both major parties, whose interests are maintained by the political system, instead of sharing the wealth. Reeves’ book, Dream Hoarders, explains how the top 20 percent protects its status, essentially by segregating educational opportunity, their housing—which is federally subsidized through the tax deduction for home mortgage interest rates—career networking and other government-supported perks. As he recounts in a lecture that traces how he wrote his book, he started by noticing the politics surrounding a 2015 proposal by President Obama to change the way the feds managed tax-free college savings plans, called the 529 program.

“Don’t you dare touch my 529!” was the response upper-middle-class constituents told top Democrats, Reeves said, then laying out how these folks think: “Do you know how hard it is to make ends meet by the time I’ve saved for my kids’ college, paid their private school fees, paid my massive mortgage—thanks for the [mortgage deduction] tax break; still it’s lots of money—I’ve got a skiing holiday, school trip gets more expensive, I’m barely making even here…I’m working really hard. I’m part of the 99 percent.”

“No, you’re not,” Reeves said, underscoring how the upper middle class is different. The 529 tax break was a college savings plan where you don’t pay any capital gains on money set aside and invested here, he explained. Who has these college savings plans? he asked. Forty-seven percent of people earning $150,000 or more annually, he answered.

“The truth was it [Obama’s proposal) was unbelievably unpopular among the constituency that really mattered… something that was virtually sacred for the upper middle class in America. It was about education. This was rewarding savings. It was about the future,” Reeves said. “For me, it was like, boom! No wonder we can’t change the tax system, when even relatively liberal people try to do it… People also forget this [529] was a tax break that has long been proposed by Republicans… Don’t mess with the American upper middle-class—that was the lesson.”

Reeves listed a series of metrics that he says amount to hoarding the American dream. It’s the inverse of the way social scientists talk about intergenerational poverty, or cite statistics about how most people don’t stray far from the rungs on the economic ladder of the family they were born into.

Thirty-seven percent of those born into the top 20 percent also stay there, he said, a slightly bigger number than the poorest 20 percent of Americans. “Wealth is even stickier than income. Forty-four percent of the wealth of the upper 20 percent remains there.”

Why is this happening? It comes down to hoarding the best opportunities in education, housing, careers and government tax policies that reinforce that status. This is not about inheritance taxes, which is a rarified subject. It’s how 40 percent of the upper middle class live near the public schools that have the best test scores. It’s how zoning in those communities only allows housing at price points well above those affordable by people earning median incomes—the real middle class. It’s about how the mortgage deduction allows people to buy even pricier homes. It’s about going to top schools, colleges and universities, and sending your kids there, and creating networks that turn into select entry-level jobs, internships and careers. In short, Reeves says all the political verbiage about equal opportunity, meritocracy and fighting inequality is sullied.

“Forty-six percent of those in the top 20 percent have the same educational status as their parents. The inheritance of educational status is even greater than wealth, which is even greater than income,” he said. “The expansion of higher education in the U.S. has disproportionately gone to the top. Four out of five of those in the top 20 percent go to elite schools. Two-thirds of the students in the top schools are from the top 20 percent.”

On the subject of tax breaks—which will be coming to the national political landscape as Trump and the GOP push tax reform—the upper 20 percent gets the most capital gains benefits, mortgage interest deductions and Social Security and pension earnings, Reeves said.

“The point is clear. This is upside-down. These are upper-middle-class tax breaks,” he said. “And, like the 529, guided with laser precision to the bank balances of people like me: to the bank balances of people who have been doing so well in recent years. And by god, it’s hard to touch them. Even the incoming Treasury Secretary [Steve Mnuchin], he mentioned we might reduce tax rates but do so by getting rid of a lot of these deductions. Wow, that didn’t last very long. By the time the National Association of Housing and the Republicans [weighed in]… This stuff is hard to get at. I think part of the reason is we [the upper middle class] have kidded ourselves that we are part of the 99 percent.”

Reeves said that nine out of 10 Americans tell pollsters they are middle-class. That isn’t accurate or useful on many levels, he said, especially when it comes to addressing the lingering frustrations about one’s place and prospects in the American economy.

“I have genuinely come to believe that unless the conscience of the American upper middle class is somewhat awakened, then it will be very hard to bring about the political reforms that I believe are necessary… to one of equal opportunity,” he said. “Right now, America, some of America, has something of a problem of a sense of entitlement. And I mean the upper middle class. And they are very good about sometimes talking about people who feel entitled to welfare; I think they feel pretty entitled to their upper-middle-class welfare too. I think Obama found that out too.”

Indeed, Reeves said it is not very useful for Democrats to keep pushing out the rhetoric blasting the 1 percent, because among other things, that’s not what’s really going on, and it doesn’t address structural inequality.

“I think that until and unless we recognize that we are not the 99 percent, that we have done pretty well, and that we will have to give something up—not much, but a bit, a bit on zoning, a bit on school admissions, a bit on taxes, in order to help the others—then we won’t get anywhere,” he said. “But that will require us to recognize that we are not the losers from inequality trends, but the winners.”

Steven Rosenfeld covers national political issues for AlterNet, including America’s democracy and voting rights. He is the author of several books on elections and the co-author of Who Controls Our Schools: How Billionaire-Sponsored Privatization Is Destroying Democracy and the Charter School Industry (AlterNet eBook, 2016).

http://www.alternet.org/economy/enough-top-1-percent-its-top-20-percent-upper-middle-class-thats-hoarding-american-dream?akid=16043.265072.7R3xaE&rd=1&src=newsletter1081981&t=4

Ten percent of Mexican families earn two thirds of country’s income

By Alex González
23 August 2017

A new study by the United Nation’s Economic Commission for Latin America and the Caribbean (CEPAL) reveals that economic inequality in Mexico is much higher than had been previously estimated. According to the study, the top 10 percent of Mexicans received over two thirds of the country’s income in 2012, while the bottom 10 percent earned just 0.4 percent that same year. This level of inequality is 77 percent higher than what had been previously calculated using official data.

According to the study, the richest 1 percent of Mexicans—between 125,000 and 220,000 people—own one third of the country’s assets. Meanwhile, half of the population—over 60 million people—lives in poverty. If the country’s wealth were to be equally divided among the population, each individual would receive a lump sum of $56,300, an amount greater than one person working at the minimum wage would earn working every day for 30 years.

After two centuries of vast improvements in the productive process, contemporary levels of inequality have reached standards not seen since feudal times. In nineteenth century New Spain, a mine’s owner earned between 700 and 1,000 times more than an average miner. In 2012, the top 1 percent earned 729 times more than the bottom 1 percent.

The results of the study would place Mexico, alongside Chile, as the countries with the highest levels of inequality in the Organization for Economic Co-operation and Development (OECD), an organization encompassing supposedly “developed” countries.

Most workers in Mexico—some 24 million people—work without a contract or as temporary workers. One of out every five Mexicans goes hungry, and the daily minimum wage ($5 USD) is not sufficient to support a family. Over half of the population does not earn enough to cover basic expenses, such as food, clothing, transportation, and housing. According to a 2015 report by Oxfam, the wealth of Mexico’s 16 billionaires multiplies fivefold each year, while 48 percent of state schools have no access to sewage, 31 percent have no drinking water, 13 percent have no bathrooms or toilets, and 11 percent have no access to electricity.

The study lays bare the degree to which financial corporations, many from the United States, have come to dominate every aspect of life in Latin America, producing widespread social misery while filling the pockets of the top 1 percent and the next 9 percent.

In Mexico, the average yield from capital has been 15 percent annually in recent years, compared to a rise in the average industrial wage of only 4 percent per year. Eighty percent of financial assets in the country are in the hands of 10 percent of the population. A mere 23,000 people and corporations control about one fifth of the country’s financial assets, while half of the population does not even have a bank account.

The vast monopolization of the economy is also present outside of the financial sector. Six hundred companies own 64 percent of assets in the manufacturing sector, 40 companies own one-third of assets in retail, and 22 companies own 89 percent of assets in the telecommunications sector. Overall, just 10 percent of Mexican companies control 93 percent of the country’s assets.

While nominally owned by Mexican firms, these companies are overwhelmingly controlled by US finance capital. In 2015, Delta Air Lines announced plans to acquire up to 49 percent of Aeroméxico, the airline with the highest domestic market share and second highest international market share in the country. Delta’s majority shareholders are Berkshire Hathaway, Vanguard, and J.P Morgan. Vanguard is also the largest shareholder of Bachoco, the country’s largest chicken producer, while mutual fund company Dodge & Cox is a leading shareholder of Mexican multinational building materials company CEMEX.

The claims of various pseudo-left groups that Chinese trade in Latin America has supplanted US hegemony in the region are nothing short of absurd. As the figures from the CEPAL study lay bare, it is US finance capital that calls the shots in the Mexican economy. Their cries of “Chinese imperialism” serve to obscure the reactionary role of the US in the region and to position their own forces as willing partners in the suppression of working class opposition.

These conditions of mass misery and want have created a social powder keg, where further attacks on the living conditions of the working class can generate reactions—such as the spontaneous gasolinazo protests that erupted throughout the country earlier this year—that could explode into a massive movement throughout Mexico, and even throughout the continent.

In this context, Andrés Manuel López Obrador of the “left” Movement for National Regeneration (Morena) is seeking to channel this social anger into a nationalist program that blames “corruption” and the “mafia in power” for massive inequality in Mexico.

In fact, the growth of millionaires and inequality in Mexico is the inevitable outcome of capitalist economic relations, where the socially produced labor of workers enriches the private owners of the means of production. López Obrador speaks for the “next 9 percent” of Mexican society, who seek better terms for the Mexican bourgeoisie from US finance capital and are deeply hostile to the Mexican working class.

As the CEPAL study’s figures starkly reveal, any significant improvement in the lives of the Mexican masses will require a direct attack on the wealth of the ruling class, in Mexico and around the world. This reallocation of wealth from the pockets of the few to the benefit of the masses can only take place in a struggle for international socialism in unity with their North and South American class brothers and sisters.

http://www.wsws.org/en/articles/2017/08/23/mexi-a23.html

Frustrated young white men are facing class divisions more than racial divides

Why can’t white supremacists confront the fact that the source of their economic problems are white economic elites?

Why can't white supremacists confront the fact that the source of their economic problems are white economic elites?
(Credit: AP Photo/Bruce Smith)
This article originally appeared on AlterNet.

AlterNet

There’s no disputing the white anger and rage seen in Charlottesville, even if conservative publications like the National Review say these “angry white boys do not have a political agenda.”

Their anger is real and grievances differ, even if they took the old path of joining mobs spewing racist filth. Yet these white supremacists are blaming the wrong slices of society for their angst.

Racial divides are not what’s plaguing vast stretches of white America — deepening class divides are. If you think about who is to blame, it is mostly powerful white capitalists and their government servants that decimated regional economies in recent decades.

Many Democrats keep saying inequality is the top economic issue, as Eduardo Porter wrote for the New York Times in a piece that recaps the party’s national political agenda. However, the conventional wisdom that Democrats need to “recover the support of the middle-class — people in families earning $50,000 to $150,000, whose vote went to Mr. Trump,” especially in swing states “where three-quarters of voters are white” — is not acknowledging the roots of America’s latest outburst of white supremacy.

“Our economy is in very serious trouble. Ten or fifteen years from now, the standard of living of our average citizen may actually be lower than it is today,” writes Steve Slavin, author of the new book, “The Great American Economy: How Inefficiency Broke It and What We Can Do To Fix It.” “Large swaths of the suburbs will be slums, and tens of millions of Americans will have joined the permanent underclass. There will be three separate Americas — the rich and near rich, an economically downscaled middle and working class, and a very large poor population.”

Slavin cites eight major economic trends, pointing out that almost everyone who is not living in wealthy enclaves — usually coastal cities or inland hubs — is facing a downward spiral that’s been decades in the making. These are the same stretches of suburban and rural America that elected Trump, elected the right-wing House Freedom Caucus, where hate groups are concentrated, and where many of those arrested in Charlottesville come from. They hail from the losing end of the trends Slavin cites and forecasts for the country.

It may very well be that the external circumstances of the whites protesting are “pretty good,” as the National Review’s Kevin Williamson writes, compared to non-white America. That’s even more reason to condemn their visceral rage and hate speech. But as Slavin notes, the national economy and sense of well-being is on a downward slide that accelerated in recent decades.

Those responsible are largely white politicians, white business executives and more recently the graduates of elite business schools — where the curriculum involved outsourcing domestic industries that once allowed people without degrees to prosper.

The culprit here is primarily class — even though race and class are often synonymous. If anything, the downwardly spiraling sections of white America today eerily resemble inner cities in the 1960s, where non-whites called for economic justice. Those urban cores were abandoned after two decades of white flight to the suburbs and manufacturers also leaving.

Here are eight overarching economic trends that Slavin notes have clobbered the middle class, working class and poor.

1. Manufacturing has mostly vanished. Notwithstanding Trump’s announcements that a few companies based overseas are returning, factory jobs have largely disappeared from the interior of America, where from World War II through the 1980s they anchored cities and counties.

2. Many cities have fallen into decline. Starting after WWII, the government and industry promoted suburbia, abandoning scores of cities to the mostly non-white poor. Detroit’s carmakers bought and dismantled public transit. That led to today’s costly transportation needs with a nation of commuters paying a lot for private vehicles, gas and insurance and spending hours away from home.

3. Health care costs have left wages frozen. Average wages have not seen increases, after being adjusted for inflation, for decades. A big part of the reason is businesses that provide health insurance have to keep paying more to insurers rather than employees. Meanwhile, insurers keep finding ways to draw on what’s left in people’s pockets.

4. Public education is vastly underfunded. Suburban schools in wealthy enclaves might be fine, but nationally half of high school graduates are not at the same level as graduates of other countries and their better achieving peers. That forecloses opportunity.

5. The government is not reinvesting in America. This is not simply about neglected roads and bridges. The U.S. government supports a beyond bloated military industrial complex that accounts for 40 percent of global spending on weapons. This may be domestic spending, but it is not spending on domestic needs.

6. The criminal justice system is bloated. Here too, the U.S. has the highest incarceration rate of any industrialized nation; a predatory system that targets lower-income people and creates taxpayer-funded private police forces.

7. The make-work private sector’s useless jobs. This isn’t just the growth of service industries, but “more than 15 million Americans hold jobs that do not produce any useful goods or services,” such as bill collectors, telemarketers, sales reps paid on commission, etc., Slavin writes.

8. The bloated financial sector. This is Wall Street’s diversion of savings from productive investments to speculative ventures, where money is made from tracking the movement of other assets or the public is sold repackaged securities that generate fees.

In every one of these eight areas, wealthy whites in positions of power and privilege have made decisions that collectively have set the country on the path to today’s downward economic spiral. Right after World War II, the federal government would not lend money to black veterans to buy homes in newly expanding suburbs. They gave real estate investors like Fred Trump, the president’s father, money to build what became urban housing projects where many occupants were non-white renters.

There were not many non-white executives in Detroit when the auto industry acted to destroy public transit systems. There were not many non-whites on corporate boards in the 1980s, when the first wave of moving manufacturing abroad hit. The business schools minting sought-after MBAs were teaching predominantly white students to take operations to countries where labor was cheaper, or extolling the virtues of businesses like Walmart that decimated entire Main Streets across small-town America.

The list goes on and a pattern emerges — a class division, more so than race — which has deepened and afflicts America today. As Slavin writes, “Perhaps the most persuasive indicator of our nation’s economic decline is that millennials are on track to be the first generation in our nation’s history to be poorer than its parents’ generation. In January 2017, CNBC reported, ‘With a median household income of $40,581, millennials earn 20 percent less than boomers did at the same stage of life, despite being better educated, according to a new analysis of Federal Reserve data by the advocacy group Young Invincibles.’”

The Young Invincibles are a progressive group concerned about health care, higher education, workforce and finance, and civic engagement. But their name could also be used to describe the belligerent attitude of the white marchers in Charlottesville.

As Williamson writes derisively in the conservative National Review, “What does an angry white boy want? The fact that they get together to play dress-up — to engage in a large and sometimes murderous game of cowboys and Indians—may give us our answer. They want to be someone other than who they are. That’s the great irony of identity politics: They seek identity in the tribe because they are failed individuals. They are a chain composed exclusively of weak links. What they are engaged in isn’t politics, but theater: play-acting in the hopes of achieving catharsis.”

But Williamson only hints at what they seem to want — and it’s exactly what Slavin nails. These angry whites are being bypassed by structural changes in the economy that are narrowing their options. Needless to say, most people in dire straits do not embrace violence and racism. But it seems the heart of their grievances appear to be based on class frustrations, not race. If the white marchers want to blame someone, they ought to point their fingers at the wealthy whites on Wall Street and in Washington.

 

Salon

The political and social roots of fascist violence in the US

15 August 2017

The eruption of Nazi violence in Charlottesville, Virginia over the weekend has come as a shock to millions of people in the United States and around the world. The images of pro-Nazi white supremacists assaulting counter-protesters and the brutal murder of 32-year-old Heather Heyer have exposed the socially and politically rancid state of American society. Nazi thugs rampaged through a university town and terrorized students and other residents while smirking policemen stood by and winked their encouragement to the attackers. The country that presumes to preach morality to the world and holds itself up as the beacon of law and democratic stability is breaking apart at the seams.

There is a vast difference between the deep-felt anger of millions of ordinary people over the events in Charlottesville and the formal hand-wringing and hypocritical condemnations of violence by politicians from the Democratic and Republican parties and the corporate media. Their statements reek of insincerity. Their pro forma denunciations of the violence in Charlottesville are devoid of any serious examination of the underlying social and political conditions out of which it arose.

Typical was Monday’s editorial (“The Hate He Dares Not Speak Of”) in the New York Times, which speaks for the Democratic Party. The editors criticized Trump for not condemning the white supremacist groups responsible for the violence. They declared that Trump “is alone in modern presidential history in his willingness to summon demons of bigotry and intolerance in service to himself.” The president is clinging to white supremacists, the editors added, “in his desperation to rescue his failing presidency.”

Were it not for Trump, the Times implies, the streets of America would resound with hymns of brotherly love. But the “Evil Trump” interpretation of history explains nothing. The swaggering thug in the White House is, like the violence in Charlottesville, a symptom of a deep and intractable crisis.

As a political and social phenomenon, fascism is a product of capitalism in extreme crisis. Analyzing the rise of the Nazi movement in Germany in 1932, Trotsky explained that the ruling class turns to fascism “at the moment when the ‘normal’ police and military resources of the bourgeois dictatorship, together with their parliamentary screens, no longer suffice to hold society in a state of equilibrium… Through the fascist agency, capitalism sets in motion the masses of the crazed petty bourgeoisie and the bands of declassed and demoralized lumpenproletariat—all the countless human beings whom finance capital itself has brought to desperation and frenzy.” (“What Next? Vital Question for the German Proletariat”)

Fascism is not yet a mass movement in the United States. The national mobilization of far-right organizations to oppose the removal of a statue of Confederate General Robert E. Lee drew only several hundred people.

Notwithstanding their limited support among the broad mass of the population, however, these reactionary elements enjoy the backing of powerful sections of the state, including the White House itself. They have the financial support of billionaire backers (Stephen Bannon, Trump’s fascistic chief strategist, has developed close ties to hedge fund executive Robert Mercer). And they have the active sympathy of significant sections of the police and military apparatus.

Throughout his campaign and his first seven months in office, Trump and his fascistic advisors have pursued a definite political strategy, based on the belief that they can exploit widespread social anger and political disorientation to develop an extra-parliamentary movement to violently suppress any popular opposition to a policy of extreme militarism and social reaction.

However, Trump is less the creator than the outcome of protracted economic, social and political processes. His administration, composed of oligarchs and generals, arises out of a quarter-century of unending war, four decades of social counterrevolution and the increasingly authoritarian character of American politics. Torture, drone assassinations, wars of aggression, police murder—overseen by both Democrats and Republicans—form the backdrop to the events in Charlottesville.

Trump’s greatest asset has been the character and orientation of his political opponents within the ruling class. He defeated Hillary Clinton in the 2016 election because the Democrats ran as the party of the status quo, the embodiment of complacency and self-satisfaction. Since the election, their opposition to Trump has been oriented entirely to the intelligence agencies and the military, where fascist elements flourish, on the basis of demands for a more aggressive policy against Russia. They are unable and unwilling to advance a program that can command any significant popular support since they represent an alliance of Wall Street and privileged layers of the upper-middle class.

Trump has been able to win a certain base in regions of the country that have been devastated by deindustrialization, profiting from the reactionary role of the trade unions, which long ago abandoned any opposition to the demands of the corporations, promoting instead the poisonous ideology of economic nationalism. The “American first” agenda of the Trump administration has found fertile ground among the privileged and thoroughly corrupt trade union executives.

An additional ideological factor has served to fuel the rise of white nationalist organizations: the legitimization of explicitly racialist politics by the Democratic Party. While the Democrats and their media affiliates have denounced the openly racist actions of the neo-Nazis in Charlottesville, the fact remains that the white nationalists have been aided and abetted by the relentless promotion by the Democratic Party and its allies of race as the primary category of social and political analysis.

Endless columns and articles have appeared in the pages of the New YorkTimes and other publications promoting the concept of “whiteness” and “white privilege.” It was Times columnist Charles Blow who, in a June 2016 column denouncing the film Free State of Jones, attacked “the white liberal insistence that race is merely a subordinate construction of class.” As the World Socialist Web Site commented at the time, Blow “is not a fascist, but he thinks very much like one.”

The obsessive fixation on racial politics, from the Democratic Party and the fraternity of pseudo-left organizations that operate in its orbit, reached a peak in the election campaign of Hillary Clinton, which was organized on the principal that all social problems are reducible to race and racism, and that the grievances of workers who are white are the product not of unemployment and poverty, but of racism and privilege.

The racialist interpretation of politics, culture and society by the Democrats was politically convenient in that it served to divert attention from the issues of social inequality and war, while blaming white workers—not the capitalist system and the ruling class—for the election of Trump.

As the Trump administration was intensifying its cultivation of fascistic forces over the past several months, Google—in alliance with those sections of the state particularly associated with the Democratic Party—was implementing a program of censorship targeting left-wing and progressive websites, above all, the World Socialist Web Site. The response of all factions of the ruling class to the social and political crisis that has produced Trump is to seek to block and suppress any challenge to the capitalist system.

Long historical experience has demonstrated that fascism can be fought only through the mobilization of the working class on a socialist and revolutionary program. The fight against the extreme right must be developed through the unification of all sections of the working class, of all races, genders and nationalities. Opposition to fascism must be connected to the fight against war, social inequality, unemployment, low wages, police violence and all the social ills produced by capitalism.

So long as the interests of the working class are not articulated and advanced by taking on an independent political form, it is the forces of the extreme right that will benefit. The urgent task is to build a revolutionary leadership in the working class.

Joseph Kishore

http://www.wsws.org/en/articles/2017/08/15/pers-a15.html