Bernie Sanders, and the Unexpected Socialist Revival

CULTURE
Bernie Sanders proved socialism isn’t dead—and some young people are even open to the banished ideas of Karl Marx.

Photo Credit: Gage Skidmore / Flickr

Since his grassroots presidential campaign took the world by storm last year, Sen. Bernie Sanders has been widely credited with bringing socialism back into the mainstream of American politics and introducing an entire generation to left-wing politics. As a major presidential candidate who unabashedly identified as a democratic socialist, Sanders essentially resurrected an idea that has been considered off limits in our political discourse for many decades: that there is an alternative to capitalism and the status quo.

This radical idea has become less taboo in recent years, and today an increasing number of millennials say they reject capitalism, while a majority of Americans support “socialistic” policies like universal health care (for the first time in a long time, single-payer is gaining mainstream momentum). Clearly, Sanders deserves the credit he has received for shifting the Overton window and reintroducing a form of left-wing class politics to America. It is safe to say that no single person has done more to revive the American left than the Vermont senator.

But Sanders’ political rise did not happen in a vacuum, and it’s unlikely he would have achieved much success had the social and economic conditions not been ripe. Though the 75-year old senator played an essential role in demystifying socialism to the public and instilling a radical spirit in the progressive movement, the current resurgence of class politics on the left has been in the works for many years, going back to the 2007-08 financial crisis.

It hasn’t been white-haired socialists who have provided the foundation for this resurgence, but young people who grew up in the era of neoliberalism. This was evident last week, when progressive millennials flocked to Chicago for the biannual Democratic Socialists of America (DSA) convention, where delegates came together to vote on various resolutions for the party. In the past year, the DSA has tripled its membership, and what is particularly telling about this growth is that the average age of DSA members has dropped by half virtually overnight, from 64 in 2015 to just 30 today.

This trend has led to a cottage industry of think pieces speculating about why millennials have embraced old school leftists like Sanders and British Labour Party leader Jeremy Corbyn, but it is hardly a great mystery. Millennials came of age during the worst capitalist crisis in 80 years and live in a time when income and wealth inequality have reached historic levels — as evidenced by the fact that the eight richest men in the world (seven of whom are white American men) own as much wealth as the bottom 3.6 billion people.

Millennials inhabit a planet that faces ecological collapse, and most grasp the threat of climate change on a visceral level. Young people are also crippled by record levels of debt and despite being better educated than their parents earn 20 percent less than baby boomers did at this point in their lives. Finally, millennials have grown up in a time when moneyed interests have completely infiltrated the political process, creating an oligarchic form of government that serves the economic elite rather than the majority.

In other words, millennials are increasingly ambivalent about capitalism because it is a system that has failed their generation. Not surprisingly, this has led to a significant number of young intellectuals who have also rediscovered the works of Karl Marx, the great diagnostician of capitalism’s ills. Around the same time that the Occupy Wall Street protests erupted around the country in 2011, Bhaskar Sunkara founded Jacobin, the left-wing quarterly that has grown rapidly over the past five years, publishing the work of many millennial Marxists.

Of course, it is one thing to call yourself a socialist (or a “democratic socialist”) in America, and another thing entirely to identify as a Marxist. For the past century Karl Marx has been the ultimate intellectual bogeyman in the United States. For the majority of Americans who have no first-hand familiarity with the 19th-century thinker and his work, the term “Marxism” is synonymous with Stalinism and totalitarianism.

As with the millennial embrace of an elderly democratic socialist, this Marxist revival has predictably confounded many liberal and conservative critics, who assume that youngsters simply don’t know their 20th-century history. “That Marxism is not viewed with a similar horror as Nazism is one of the greatest failings of contemporary education,” tweeted Claire Lehmann, editor of the libertarian-leaning publication Quillette magazine, last month.

One of the greatest failings of contemporary education, one might counter, is that critics of Marxism know next to nothing about Marx or Marxism, other than the fact that some unsavory historical figures identified themselves with the term. This is obviously not a new phenomenon, and more than 50 years ago the American sociologist C. Wright Mills attempted to provide an objective account of Marx’s ideas in his 1962 book, “The Marxists,” meant to counteract the propaganda efforts of Cold Warriors. Mills’ book is just as useful today when it comes to explaining why Marx remains relevant in the 21st century. (Some might argue he is even more relevant today than in the mid-20th century, as capitalism has conquered the globe). In order to uncover what makes Marx’s work so valuable, Mills makes an important analytical distinction between the philosopher’s methodology/model and his theories:

model is a more or less systematic inventory of the elements to which we must pay attention if we are to understand something. It is not true or false; it is useful and adequate to varying degrees. A theory, in contrast, is a statement which can be proved true or false, about the casual weight and the relations of the elements of a model. Only in terms of this distinction can we understand why Marx’s work is truly great.

Marx’s model, argues Mills, “is what is great; that is what is alive in marxism. [Marx] provides a classic machinery for thinking about man, society, and history. That is the reason there have been so many quite different revivals of marxism. Marx is often wrong, in part because he died in 1883, in part because he did not use his own machinery as carefully as we now can, and in part because some of the machinery itself needs to be refined and even redesigned. . . . Neither the truth nor the falsity of Marx’s theories confirm the adequacy of his model.”

Marx’s model looked at the structure of society as a whole, as well as that “structure in historical motion,” and the German philosopher and economist employed this model to examine and reveal the dynamics of capitalism. This largely explains why there has been a renewed interest in Marx’s work in recent years, especially among millennials who have lived their entire lives under a global capitalist order. Marx’s model of looking at the world, along with his exhaustive analysis of capitalism, helps us to understand our own contemporary reality and where we are headed.

While Marx’s model is essential to understanding modern society, another fundamental aspect of Marxism is, of course, the merging of theory and practice. As Marx famously declared, “Philosophers have hitherto only interpreted the world in various ways; the point is to change it.”

This remains the ultimate goal for millennial Marxists and socialists. Although capitalism has never been more globally dominant than it is today, this has also engendered social and economic conditions that are ripe for left-wing political movements. As the Marxist economist Richard Wolff recently said during an interview on Fox Business:

Socialism is in a way the shadow of capitalism. Nothing guarantees the future of socialism so much as capitalism, because socialism is capitalism’s self-criticism.

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The future of Cuba after Fidel

In recent months, Andrea Gutmann Fuentes and Coco Smyth each spent at least a week in Havana, Cuba. Here, they offer their observations about conditions in Cuba today and what the future may hold in the era after Fidel Castro’s death last year.

Graffiti on a wall in Cuba (Coco Smyth)

Graffiti on a wall in Cuba (Coco Smyth)

FIDEL CASTRO, the leader of the Cuban Revolution and longtime Cuban president, died on November 26 of last year.

In both the Western and Cuban media, Castro’s death took on a key significance, though in sharply different respects. In the West, many news outlets rejoiced, hoping that Cuba would pursue a new and less combative course. In Cuba, the media eulogized the death of a heroic fighter who secured a free and independent state in the Caribbean.

But during our encounters with Cubans in Havana, we found that most people refrained from such overheated rhetoric.

No Cubans we talked with assumed that the death of Fidel would lead to a sharp rupture with the politics of the past. Rather, while Fidel’s death may represent the symbolic closure of a chapter in history, no one, whether supportive or critical of Castro, saw his death as marking a fundamental change in the orientation of the Cuban state.

But even if Fidel’s death doesn’t signal a break between the politics of the past and the present, many Cubans are wrestling with the real antagonisms and contradictions drawing Cuba in new directions.

– – – – – – – – – – – – – – – –

IN REALITY, Cuba had been changing long before the death of Fidel. After the collapse of the USSR, Cuba was plunged into an economic crisis now known euphemistically as “the special period.” The Soviet Union had heavily subsidized the Cuban economy since the 1970s, and when it collapsed, Cuba was forced to alter its economic approach.

In 1994, the Cuban state created a dual-currency system, pegging one of the currencies (the CUC) directly to the U.S. dollar. Additionally, Cuba slowly began to open its economy, reorienting towards tourism, allowing remittances, and looking for international investment.

Many of the Cubans we talked with–especially those who remember the revolutionary year of 1959–spoke fondly of the early days of the revolution, before the rise of the bureaucracy stemming from a close relationship with the USSR.

Many of these people approvingly recognized that the Cuban state still prioritizes basic human needs like health care and education for its people. Cuba’s relaxation of restrictions on foreign investments over the past couple decades calls into question how these priorities may change over the coming years.

“The key problem is how we both preserve our social institutions while opening up more greatly to foreign investment,” said a city planner and Communist Party member in describing what he considered one of the biggest threats to Cuba’s future.

Ultimately, he believed–along with other Communist Party members we spoke to–that if planned correctly, the bureaucracy could come to a successful resolution of this contradiction.

However, while Communist Party members were attuned to the significance of these economic contradictions, their answers reflected the limitations of the Cuban Communist Party’s (PCC) conception of socialism.

Socialism is understood by the CCP primarily as a set of economic and political programs clustered around public institutions and a strong welfare state, similar to Scandinavian social democracy. These programs include universal health care, public education, funding for the arts and wealth redistribution. Other features of Cuba’s political system after the revolution include state direction of the economy, a one-party state, and a large bureaucracy.

It can’t be denied that Cuba’s revolution brought about a much more just system than what had existed before–and a system which is enviable in many respects, even for citizens of the most developed capitalist countries. But the CCP’s vision leaves out the most crucial aspect of socialism: workers’ democratic control.

As Karl Marx famously wrote, “The emancipation of the working classes must be conquered by the working classes themselves.” Socialism cannot be handed to the working class by bureaucrats or benevolent guerillas, nor can it be decreed in a speech two years after the revolution, as happened in Cuba.

– – – – – – – – – – – – – – – –

MANY OF the Cubans we spoke with shared experiences that highlighted the contradictions inherent in “socialism” without working-class rule.

One man, a retired physics professor at the University of Havana, spoke of wanting to move to Chile in search of a new teaching job. Unlike Cuba, he said, “In Chile, the professors can protest to raise their wages.” Indeed, it’s a bitter irony that Cuba claims to be a communist country, but workers possess very little collective bargaining power in relation to their employers.

Others spoke of Cuba’s reliance on capitalist economies. An artist we spoke to lamented that because of the absence of an art market on the island, contemporary Cuban artists gear their work specifically for export to Western markets, resulting in what he described as a sort of deference to Western tastes.

Ultimately, attempts to build “socialism in one country” both ignore the centrality of internationalism and working-class rule and cannot sustain themselves indefinitely against the weight of the world capitalist system.

Cubans continue to hope for an end to the U.S. embargo, but the recent election of Donald Trump appears to have dimmed the immediate prospects for completing the normalization of relations that Obama initiated.

The embargo has negatively impacted the economy of Cuba for generations. But if the embargo ends, and Cuba opens up significantly to foreign investment to solve its current economic problems, it will not be able to do so on its own terms, as the PCC suggests.

Economic investment never comes without strings attached. The West utilizes investment and aid as a means of domination and control. Thus, opening to the West poses a threat to much of the progressive content of the Cuban system. On the other hand, without more investment from outside Cuba, the necessary funds to continue progressive programs will run dry.

The long-term choice facing the Cuban ruling class is to watch its economic system falter or to respond to the imperatives of economic openness by cutting back on health care and other public spending, at the price of eroding the positive contributions of the revolution.

The only way to preserve and ultimately complete the Cuban Revolution is for the working class to take power into its own hands in Cuba, as part of a worldwide and internationalist struggle against capitalism.

https://socialistworker.org/2017/06/14/the-future-of-cuba-after-fidel

Why the Conditions Were Perfect for Bernie’s Socialist Crusade

Behind Bernie’s unlikely appeal is a generation marred by precarious employment and economic disruption.

Image: Sen Bernie Sanders talks to reporters in Dubuque, IA
Photo Credit: Screen capture

Once again, Bernie Sanders has demonstrated, with a trifecta of big wins in Hawaii, Alaska, and Washington State, that he has broad and enthusiastic support, especially among the young. Equally astonishing is the large percentage of voters who say they are attracted rather than repelled by Sanders’s embrace of socialism.

But if you’d bother to conduct your own focus group among Americans under 40, neither phenomenon should be surprising. Except for those graduating from elite universities, with either full scholarships or wealthy tuition-paying parents, this is the stunted generation—young adults venturing into a world of work, loaded with student debt, unable to find stable jobs or decent careers.

This is also the post-Cold War generation, for whom Soviet communism is a distant memory (along with reliable jobs). For this generation of Americans, capitalism is not exactly a good word, nor is socialism a bad one.

And this is the generation that finds employer-paid health insurance hard to find; often the “Bronze” version of the Affordable Care Act, with its high out-of-pocket payments, is all they can afford; a generation paying too much of unreliable incomes in rent, and putting off the dream of homeownership and having children.

So, when a candidate comes along calling for free college education and free universal health care, and far higher minimum wages, it sounds pretty fine. And if capitalism means the 1 percent making off with everything that isn’t nailed down, then maybe Sanders-style socialism is worth a try. So say the young.

Private frustrations and longings have at last become politicized. And well they should be. Because the reality of the rules of the game turning brutally against the young has nothing to do with technology or the immutable realities of the digital economy—and everything to do with who gets to write the rules.

The policy wonk types like to point out that the Sanders program would require a huge tax increase.

And indeed it would. But as long as the tax hike is on the upper brackets, that only adds to the appeal of the program. During and after World War II, the top marginal tax rate was north of 90 percent, and this was the era of a record economic boom.

At the heart of this generational revolution is the vanishing good job. Until recently, the claims of a new, on-demand economy, made up of short-term gigs, was challenged by economists, even liberal ones.

It was kind of a new category that didn’t show up in the data. You could debate whether Uber and Task Rabbit and kindred companies were good or evil, but they just didn’t affect that many workers.

Now, belatedly, this shift is being confirmed. The economists are right—most of the unreliable jobs are not on-demand gigs. Rather, they are other forms of lousy “contingent” work. That category includes temping, contract work, on-call workers, workers hired by staffing agencies, workers with no job security, and inferior forms of conventional employment like adjunct college professors who can make less than minimum wage, Ph.D.’s and all. (So much for the education cure.)

Jobs that used to pay decently are being turned into inferior jobs, whether in the manufacturing economy or the service economy. Yes there is an uptick in entrepreneurship, but for every young person who creates a company like Amazon, there are tens of thousands working in its warehouses.

The Wall Street Journal, of all places, reports a 60 percent increase since 2005 in the proportion of U.S. workers who have these inferior forms of employment.

The Labor Department, denied adequate funding to update its numbers, had not revised its count of contingent workers. So two eminently mainstream economists, Lawrence Katz of Harvard and Alan Krueger of Princeton (one of the very people carping about the cost of Sanders’ program) hired the Rand Corporation to do what the Labor Department should be doing—surveying actual current workers.

Katz and Krueger analyzed the results. And guess what? They confirmed in rich detail what your local 28-year-old could tell you: Real jobs are getting harder and harder to find. No wonder the uptick in GDP growth is not impressing voters, especially younger ones.

So Sanders is likely to continue making off with the youth vote. Even if he falls short of the nomination, this is bad news for Hillary Clinton. Whatever her other virtues, most young Americans don’t see her speaking to the realities of their condition.

This also presents a real conundrum for mainstream, moderate liberal economists like Katz and Krueger. Altering these trends will require radical reforms, not adjustments at the margins.

Sanders’s program may cost a lot of money. It may be socialistic. And it may require congressional majorities that will be a long time coming. But Sanders has the loyalty of the kids because he is speaking truth.

Robert Kuttner is co-editor of The American Prospect and a visiting professor at Brandeis University’s Heller School. His latest book is Debtors’ Prison: The Politics of Austerity Versus Possibility.

 

http://www.alternet.org/election-2016/why-conditions-were-perfect-bernies-socialist-crusade?akid=14126.265072.ttmOMd&rd=1&src=newsletter1053651&t=10

The Myths of US Exceptionalism

Exceptional in Health, Education & Retirement?

AmericanExceptionalism-300x199

by JACK RASMUS

One of the elements of cultural ideology in the USA is that the United States is somehow exceptional compared to other countries; that is, it is different in a number of positive ways that distinguish it from all other countries.

Exceptional in Health, Education & Retirement?

In a perverted way, there is some truth to this. The United States is exceptional in that it is the only advanced economy in the world that has failed to provide universal health care for its citizens. It has a large, parasitical for-profit health care system, dominated by multi-billion dollar profit making private health insurance companies that suck $1 trillion a year from the wallets of US consumers for pushing paper around, a vast network of ‘for profit’ hospital chains that suck another $900 billion a year, pharmaceutical drug companies that charge $94,000 for drugs to treat someone with hepatitis C (that’s $1,125 per pill) and charge patients $14,000 to $64,000 a month for cancer drugs, and it has the highest paid professional medical personnel in the world. The US spends more than $3 trillion a year, and rising, on health care. That’s about 18% of its $17.4 trillion annual GDP, or almost one dollar out of every five spent on everything is for healthcare. That’s the highest spending on healthcare in the industrial world. In return for that massive spending , it ranks 39th in infant mortality rates, 42nd in adult mortality, and 36th in life expectancy. Yes, the US is exceptional in health care.

It is also exceptional in education. Its college students have become, in effect, indentured servants to the education establishment of overpaid administrators and bankers, owing more than $1.1 trillion in debt just to get a college education—more per capita higher education debt than any other country in the world. The cost of attending a four year college today is, on average, $30,000 to $60,000 a year for a four year undergraduate education. For those who can’t afford college there’s no meaningful job training programs available any longer. Meanwhile, 70% of college professors and instructors in the US are part time/temp workers, many of whom earn poverty wages and have no benefits. That too is ‘exceptional’, I suppose.

US workers work the longest hours among the industrial economies, have the shorted annual paid vacations (on average 7 days paid a year), and face the prospect of poverty when they retire or can no longer work. Social security pensions average only $1,100 a month, private pensions (called 401k plans) average less than $50,000 total savings for those age 60 and approaching retirement, and more than half of US workers live pay check to pay check with no personal savings whatsoever. As 70 million ‘baby boomers’ born after 1945 start to retire, tens of millions of them face the prospect of a penniless, poverty-ridden retirement. No wonder the fastest growing segment of the US workforce is those aged 65-74, as many return to work just to make ends meet.

Income inequality in the US is also the most extreme among the advanced economies, and growing worse every year. CEOs of US corporations make around 400 times the average pay of the average worker in their company—the biggest gap in the industrial world. (In 1980 they made only 35 times).The wealthiest 1% households (investor class nearly all), gained no less than 95% of all the net income growth in the US since 2010, which compares to 65% during the George W. Bush years, 2001-2007, and to 45% during the Clinton years in the 1990s. Meanwhile, the median family income has been declining in the US at 1%-2% every year for the past decade. (Ok, maybe that’s not exceptional, since pay for workers has been steadily declining in Europe and Japan too).

US workers may get only 6 months unemployment benefits, at less than one-third their pay, when they lose their jobs, compared to German workers, for example, who get up to two years in jobless benefits and job retraining to boot. But, what the hell, we got more aircraft carriers than the Germans.

Yes, the US is exceptional. Its workers are the sickest, most indebted, most overworked, insecure, and among the least compensated and the most fearful of the future than any in the advanced industrial world.

The US is also exceptional in that it spends more on its military than all the rest of the advanced economies combined. The US’s true ‘war budget’ is about $1 trillion a year, not the reported $650 billion or so for the Pentagon, which is stuffed away in dozens of corners in its annual economic budget. It has more than 1000 military bases worldwide. It is engaged constantly in more wars worldwide than any other country by far. And it spies every day on more of its, and rest of the world’s, citizens than all the ‘spooks’ in the rest of the world do combined. ‘Exceptional’? You bet.

The Myth of US Economic Exceptionalism

Another favorite focus of late for the ‘US is exceptional’ crowd is the US economy.

Japan may be in its fourth recession since 2009. The Eurozone may be slipping in and out of recession every couple of years. But the US economy is in full recovery. So we’re told. It is growing nicely, while the rest of the world lags behind. Or so the ideological spin goes.

The ‘exceptionalists’ like to refer to last summer 2014’s US economic growth figures of 4% to 5% in GDP growth rates, its 200,000 a month new jobs created in 2014, and its ever-rising stock and bond markets as evidence of such economic exceptionalism. But a closer look, at last year’s much hyped 5% GDP growth in the 3rd quarter 2014, and at the data for most recent months in early 2015, show there is nothing exceptional about the US economy.

Long term, it continues to grow at an annual rate about half of what is normal in past decades.

Over the past six years, occasional quarter GDP growth rates of 4-5% typically are followed by a sharp collapse of GDP growth, or even negative GDP, within months. This in fact has happened four times since 2009 resulting in a ‘stop-go’ economic recovery: in the first quarter of 2011, fourth quarter of 2012, first quarter of 2014 last year—and it appears it may happen again a fifth time in the recent first quarter, January-March 2015.

The US economy’s ‘yo-yo’, or ‘seesaw’, economic trajectory is nothing special or exceptional. Japan and Europe have been experiencing the same. Their ‘bouncing’ along the bottom is just at a level closer to the bottom (or even below it) than has been the US economy’s the past five years. Whereas the US economy’s growth spikes up to 4% or so on occasion, only to collapse back again to zero or less growth, the US economic growth longer term has been averaging about 1.7% annually the past five years. That’s about half its normal growth rate compared to US recoveries from recessions in the past. Japan and Europe might spike to only 2% on occasion, but then slip to negative growth—i.e. into a bona fide recession.

So it’s ‘stop-go’ recovery for all three, occurring just at different levels of ‘go’ and of ‘stop’. Nothing exceptional or different economically over the longer term, in other words.

Comparing the US temporary 5% economic growth of last July-September 2014, to what will almost certainly prove to be a 1% or less growth rate for the January-March 2015 period when the final numbers come in later this May, shows that temporary, ‘one-off’ factors occurred last summer 2014 to produce the brief 4%-5% GDP US growth. Those temporary factors have since reversed or disappeared in the first three months of 2015. Take away those one-off factors of nine months ago, and one gets the less than 1% growth likely to register for the most recent three months, January-March 2015. Here’s a brief explanation:

Shale Gas/Oil Industrial Production Boom

In early 2014 the shale gas/oil boom was in full swing in the US. That boosted what is called Industrial Production and much of last year’s jobs growth. But when the global oil price glut began last June, precipitated by Saudi Arabia and its emirate friends attempt to drive the shale gas/oil producers in the US into bankruptcy, the shale boom in the US came to an abrupt halt. Industrial production slowed rapidly after the summer and has continued ever since, turning negative since December. Jobs began to disappear. It is projected that jobs in Texas, the largest shale producer, will decline by 150,000 in early 2015. 

Manufacturing & Exports

In early 2015 US manufacturing and exports continued to grow, as the US dollar remained low giving US exports an advantage. But the collapse of world oil prices and the simultaneous talk by the US central bank it would raise interest rates resulted in a 20% rise in the dollar. Japan and Eurozone QEs pushed it still higher. The result was the beginning of a collapse in late 2014 of the contribution of US manufacturing and exports to US economic growth. That continues into 2015. Manufacturing orders have declined every month since December 2014.

Obamacare Consumer Health Spending

Another one-time boost to US GDP in mid-2014 was the signing up of 9 million of US consumers into the government’s new privatized health insurance coverage program, who couldn’t get health insurance. They started paying monthly premiums, and using health care services. That provided a boost to consumer spending that didn’t previously exist. But by 2015 the sign ups have leveled off. No more additional boost consequently in 2015.

Auto Buying Boom Goes Bust

Another consumer spending element that was peaking last summer was the boom in auto sales in the US. That too has now come to an end, as the market in the US has become saturated in terms of auto sales after four years. Auto sales since December, usually a strong month for auto sales, declined and have continued declining through February. The auto boomlet in the US is over.

General US Consumer Spending

Consumer spending in general has turned negative, starting in December. The US indicator, the Personal Consumption Expenditures Index (PCE) declined in December-January, was flat in February and suggests no change in March. Consumer spending was supposed to surge, according to mainstream economists, as consumers enjoyed lower gasoline prices. Instead, consumers saved the lower gasoline prices or used it to help pay off their massive debt loads (which this writer predicted would be the case last year). US retail sales, which constitute the largest part of consumer spending, grew at a 4%-5% rate over last summer. But once again has turned negative since December 2014, falling by -1.0%, -0.9%, -0.6%, December through February, and likely falling again in March 2015. So both retail sales and consumer spending in general have turned negative.

Business Spending 

In the third quarter, July-September, of the year for the past five years, businesses in the US have boosted their spending, building up their inventories, in anticipation of a rise in year end holiday consumer spending. But the holiday spending then typically falls short of expectations, and businesses ‘work off’ the inventories in the first quarter, January-March, of the following year. This has happened yet again in 2015. Another element of business spending, on new equipment, is barely inching along, growing only 0.6% in the fourth quarter of 2014 and likely no more or even less in the first quarter.

Government Defense Spending 

It is a well-known and documented fact that in the US, every other year in which there is a national election, the federal government holds off spending early in the year so it can release it in the summer before the election. That occurred in 2012 before the national presidential elections and in 2014 before the midterm Congressional elections. That government spending gives an added boost in the July-September quarter, as politicians try to create the impression the economy is doing better than it is longer term. That too happened last summer. But that spending will contract early in 2015 relative to last summer.

US Jobs Creation 

Job creation always lags the real economy. And after growing jobs at a rate of 200,000 a month last year (mostly low paid, part time/temp, service jobs), jobs growth in March rose by only 126,000. Preceding months of January-February were also reduced. The employment data thus are now confirming the general economic slowdown in the first quarter 2015 as well. Apologists for the politicians will no doubt use the excuse of ‘bad weather’ for the feeble March jobs numbers. But what’s really happening is job creation is, and will continue, to slow due to real reasons. The ‘canary in the jobs mine’ is jobs in the goods producing sector, which have been slowing rapidly for several months and now turned negative in March. That reflects the collapse in manufacturing, mining, and good production that began late last year and now continues. The

Ideology of US Exceptionalism

In short, there is nothing exceptional about the US economy when one looks behind the ideological spin. It continues on its stop-go trajectory of the past five years. The economy weakens significantly every 4th quarter/1st quarter and the weak growth is ‘made up’ the following summer. Smoothing and averaging it all out over the year produces the longer term sub-historical average growth rate of around 1.8%–i.e. half of normal. And nothing exceptional. Japan and Europe are doing the same, just at a lower level of ‘stop-go’, sub-normal.

Long term US GDP growth is averaging 1.8% vs. 0.5% (Europe) vs. 0% (Japan). Does that make the US economy exceptional? Not really. 20 million are still jobless in the US; roughly the same as in the Eurozone. That’s not exceptional. Prices are now flat in the US (i.e. no change) and heading toward deflation; price stagnation also exists today in Europe and Japan . Real investment is declining in the US as in Europe and Japan—again nothing exceptional. And real wage incomes continue to decline for median income workers in the US—as they do for workers in Europe and Japan.

One of the favorite ideological strategies of ruling elites and classes is to convince their working classes that they are exceptional—i.e. meaning their situation may not be great, and may even be declining, but at least they are not as bad off as others. ‘It could be worse, just look at those poor workers in country X and Y. It may not be great here, but what the hell, we’re not so bad off, are we?’ The appeal to exceptionalism is just another ideological ploy to get working classes to accept their deteriorating conditions. It’s just another ideological tool to immobilize people. To accept their reality as their fate. To make them believe that, as their living conditions are getting worse, it’s not really that bad. But it is….

Jack Rasmus is author of the forthcoming book, ‘Systemic Fragility in the Global Economy’, published by Clarity Press, 2015; and the previous works, ‘Epic Recession: Prelude to Global Depression’, Pluto Press 2010, and ‘Obama’s Economy: Recovery for the Few’, Pluto Press, 2012. He blogs at jackrasmus.com.

This piece first appeared at TeleSur.

 

http://www.counterpunch.org/2015/04/08/the-myths-of-us-exceptionalism/