To review: the controversy which had arisen before the State of the Union speech was about Obama’s consideration of a "spending freeze" to apply to certain portions of the budget. I suppose there was an attempt in there to balance it out, in terms of a jobs program and a student aid program.
Now, the standard rhetorical template for criticism of Obama seems to be lodged in a comparison between Obama and some past President. For some critics, he’s FDR; for others, Hoover. The critical question with both comparisons seems to be one of whether Obama can resuscitate the economy using a Keynesian stimulus, as FDR did, or is Obama another Hoover, bailing out the banks while letting the economy sink. Of course, declaring a budget freeze is a Hoover thing to do, whereas the jobs program and the student aid program are FDR moves. The question we ought to be asking, however, is one of whether or not we ought to trust the capitalist economy at all.
The alternative, a post-capitalist economy, is not obvious. As science fiction writer Kim Stanley Robinson points out, this is because our model of "business as usual" is based upon the short term, in which we imagine the continuance of the current system. However, problems such as abrupt climate change require us to imagine the medium term, in which the continuance of the system runs up against a rather onerous greenhouse effect. We thus need, for this reason and for others, to be thinking of ways in which we might "end the multigenerational Ponzi scheme."
The past is prologue: how we got to this point
The fundamental momentum of history from the mid-1970s onward is captured in Harry Shutt’s 1998 classic, The Trouble With Capitalism. Once upon a time, the reigning truth of capitalist economy was captured by classical economics, in which it was imagined that "economic stimulus" would lead to inflation. The result of classical economy was the "boom-bust cycle," in which periods of growth alternated with periods of economic contraction, because for the existing system to continue there had to be periods of saving as well as periods of spending.
What changed all this was the adoption, by the government, of Keynesian guarantees for the capitalist economy during the second Roosevelt‘s administration (1933-1945). The boom-bust cycle was replaced by a system in which government "pump-priming" was to result in steady economic growth. This worked sporadically until the spending boom of the 1950s and 1960s, when it resulted in the most robust period of economic growth in America’s history.
Of course, this was only to last so long as well. Eventually American corporations, having gotten fat off of the boom period’s profits, would find themselves making products that consumers weren’t buying — but this was during the pivotal period of the 1970s. The economy of the ’70s was characterized by a vast surplus of capital, both in terms of investment funds and actual physical businesses, in comparison with the actual need for business. Inventories were high and sales were low.
So in order to insure the survival of all this surplus capital, the business elites created a new economy in which governments around the world would assure their profitability while jettisoning everything else. This economy was based upon dollar hegemony, and its fundamental trope was "privatization" — privatization of entire economies into corporate hands. This was done mainly through international trade agreements conducted under the slogan of "free trade" and with the assistance of international banks (the "World Bank/ International Monetary Fund") and the World Trade Organization.
Thus the past thirty years have seen the political transformation of the Federal government into a facilitator for the maintenance of the rate of profit. (This might have been bearable had the rest of the world received sufficient attention as well.) As profits through the manufacture of real goods and services slowly declined, however, profits through speculation increased, so the financial "environment" had to be greased for speculators.
As for corporate profit, its fundamental nature was altered so that the foundation of corporate profit was no longer in the manufacture of commodities, but rather in the gaming of the financial system through "bubbles," bouts of asset inflation, and through dependence upon government largess. Shutt’s conclusion about this late form of "development" is ominous:
Indeed it ought scarcely to be a matter of dispute that unless there is a sustained revival of growth rates to levels consistent with both a reversal of the upward spiral of debt and the satisfaction of the financial market’s voracious demand for higher profits, than a cataclysmic collapse of the market values of financial assets and securities will be unavoidable. (183)
Yet all of what the government has done with bank bailouts has been to reinforce those asset values in the absence of such growth rates. Thus the final crash has still not yet happened; corporate dominance of government forestalls it yet.
The recent Supreme Court decision in Citizens United v. FEC has revealed how far the process of corporate dominance of government has proceeded. Corporations can, in essence, now buy as much government policy as they so desire. As massacio pointed out over at Firedoglake, the Supreme Court has reinforced "corporatism," the principle of corporate domination over economic and political affairs.
You thus have an endless loop in which government passes legislation profitable to corporations, who use a small portion of the money they get to buy the services of politicians, who then pass more legislation. How are you going to keep political action from becoming just another commodity? Citizens United v. FEC merely re-asserted what we already knew from reading Open Secrets — our politicians are on the take, and that it is easier to take gobs of political money and fool the public than it is to refuse the money and campaign honestly. You say you’re going to pass laws restricting campaign finance, enough to keep money influence out of politics? How are you going to buy the politicians who will do that?
Thus politicians today are further constrained by their immersion in an economic reality which makes them guardians of the "neoliberal state." Kees van der Pijl describes how this happened on a global level in his piece "The Aesthetics of Empire and the Defeat of the Left." Here’s how he describes it:
As a cadre entrusted with the day-to-day management of politics and administration, the ‘political class’ of each state is an internally cohesive force, and the particular sources of the entitlement to occupy state management posts such as the class struggle of the labour movement, have increasingly been left behind by that part of the cadre which entered politics as representatives of the working class aspirations for socialism.
Here is what van der Pijl is saying. Never mind that you may have been a socialist (or whatever) when you were running for office — when you get into public office you discover that you have to work with other politicians in the job of maintaining the neoliberal state. (This, then, is what the rhetoric of "bipartisanship" is all about.) And this neoliberal state, as we can see, is pervaded through and through with corporate interests.
The neoliberal state, however, acts as the guardian of an unstable economic order. We have now entered what John McMurtry called the "cancer stage of capitalism." It’s not as if the corporations are evil — let’s put that up front. The corporations are there to make a profit, and while profit might have been a smart path for them under the earlier dispensation, after World War II and before Reagan, now it just looks parasitical. Today, profit is too tied in with malignancy. Stan Cox’s Sick Planet describes how this works — since capitalist business operates to separate people from their money, it must cater to those who have money (whether they need anything or not), rather than that larger population that genuinely needs something. So parasitical businesses win the day. And, mind you, there’s nothing really wrong with parasites — it’s just that at some point they kill off the host organism. Thus there is something really unsettling about "business as usual" in this era.
Elishastephens reflects upon how this works for the health insurance business in his most recent diary. As an for-profit insurer, your primary job is to separate your clients from their money, and so you want to sell policies full of co-pays, limits, and deductibles, while maximizing your opportunities to deny claims. "Health insurance reform," moreover, will not stop insurers from doing what they would normally do, then, if the penalties for noncompliance are insufficient to deter insurers, or unenforceable. The bottom line is that when you get sick the insurers are hoping to hasten your death, because only your death will limit their payouts and thus save them money.
For the ideologues of capitalism, the corporatist, or neoliberal, reality is not "pure capitalism," as if there were something "pure" about the capitalist system. They associate "capitalism" with "freedom," as in the "free market" (in which participation is in fact both expensive and mandatory, and which grants us a rather low exchange-value as workers unless we have money or property to begin with). The ideologues of capitalism assume that the ingenuity of "capitalist" invention will save us from whatever disaster happens to be occurring at the moment. (The idea that we might get "ingenuity" from some other social order is never even considered by such people.)
There is, however, no quick technical fix for abrupt climate change, and no assurance that capitalist society would be willing to use such a quick technical fix were such a thing in fact available. Remember, world society has had the technical quick fixes to end world hunger for quite some time, yet the world still contains about a billion malnourished people.
What’s to do about it?
This is not 1932 anymore — nor is it 1950 or any previous year. It’s 2010 — pretty late in the game. Thus comparisons of Barack Obama with Hoover or FDR seem to forget which year it is. We need a transition to a different world, not a Keynesian stimulus or a set of half-measures.
Moreover, we are not going to get back to any revival of Roosevelt, Truman, Kennedy, or Johnson under current conditions, not under the government we have now, and not even with a different government. The conditions just aren’t there anymore. We no longer live in an expanding nation-state trying to win the Cold War against the USSR.
Any "more and better Democrats" we care to elect will have to reflect upon this fact: the challenges of this era are ecological challenges. They involve reducing, not increasing, the impact of human society upon planet Earth, so that we don’t kill it off — so that future generations can enjoy what Earth has to offer.
The challenges of this era are also, fundamentally, educational challenges. The most important thing to know about the idea of an ecologically-sustainable world society is that it will require that we all be smarter. Not smarter in terms of having more facts in our heads, or in terms of "performance" and "achievement," the buzzwords of the test-prep fanatics, but smarter in terms of being more aware of our interconnectedness with the natural world. The "throw-away" society was an attempt, begun in earnest in the 1950s, to boost economic growth by detaching the consumer society from processes of interaction with the natural world. We need to go "back to nature," instead, in a way which will not amount to mere "green consumerism."
Now this is not a routine call for "socialism" along the lines of what you might read, say, here. We can look at the rhetoric of "socialist" demands to see what the problem is. The demands made in this sample "socialist" article are fair enough, if rather typical:
We need a society that guarantees everyone a job with a pension, housing, free universal health care, free high quality education through college, paid vacation, paid maternity leave and childcare. We deserve the right to live in peace without having to go to war to kill or die for corporate interests.
This looks like something we should all want — however, there is little point in demanding "socialism" as such because there are too many unanswered questions about how we are going to get the social order which will provide such amenities for everyone. The word "revolution" does not make this problem any easier. This is the fundamental problem to be solved — developing a workable post-capitalist order in piecemeal, trial-and-error fashion.
How we create this order will depend upon where we are. Fundamentally, its first prerequisite revolves around the idea of shelter — creating shelter from the requirement that we all participate in a "free market" in which we aren’t worth very much. That’s the prerequisite we’ll need in order to engage alternatives to capitalist ways of doing business.
I’d like to conclude by making a rhetorical point about the State of the Union address. Whereas the President’s speech seemed (to me at last) to be rhetorically based upon the principle of "something for everyone," the Republican response to the State of the Union address contained some rather specific ideological content, as follows:
Here at home government must help foster a society in which all our people can use their God-given talents in liberty to pursue the American Dream. Republicans know that government cannot guarantee individual outcomes, but we strongly believe that it must guarantee equality of opportunity for all.
That opportunity exists best in a democracy which promotes free enterprise, economic growth, strong families, and individual achievement.
Free enterprise, economic growth. Well, that’s how we got to the corporate governance which rules us today. It’s what will get us the further disaster where we’re headed, too, unless we can create an alternative.