As bad as 2020 has been, there is still a heavy backlog of bills (financial and political) that are coming due. Hunger and homelessness rise inexorably, as does long-term unemployment. Loss of medical insurance will leave millions at the mercy of overcrowded Emergency Rooms, as the Covid-stressed medical system continues to break. Corporate profit-seeking has stalled the emergency vaccination plan. Unpaid rent and mortgages will put legions more on the street. They’ll keep cranking up war hysteria. Oh, did I forget the coming across-the-board breakdown of state and local governments, and their accompanying safety net?
Okay, you already know the litany. If I left out anything, the New York Times will update you.
On the political front, the feckless U.S. left has cashed in its credibility for the likes of Joe Biden. They can write scathing missives as Mitch McConnell and his Senatorial cohorts, block Biden from doing all the things that he didn’t really want to do in the first place. Strolling down Memory Lane, recall how Biden was first rammed down the Left’s too-eager gullets. The Left made merry over how progressive he and Kamala were. Bernie dutifully swore that “Joe Biden could become the most progressive president since Franklin Delano Roosevelt.”
Biden would have none of that. If Medicare for All or the Green New Deal came across his desk, he declared that he would veto them out of hand. His whole shtick was how he was going to “reach across the aisle.” And if it turned out that aisle was filled with crocodiles, well … Feet to the fire. Feet to the fire.
Okay. It’s full of crocodiles.
“Once he’s elected, we can STILL ‘hold his feet to the fire’”? Yeah, that’s it. Moments later, “Bam!!!”
“Joe Biden is nothing if not consistent. He has always been an unreconstructed racist and a crass mediocrity. Barack Obama had to admit that he chose Joe Biden as his running mate despite knowing that he is ‘not always self-aware.’ Biden certainly wasn’t aware or didn’t care about either his demeanor or the substance of his discussions with people referred to as civil rights leaders recently.”
These warriors of the NGO establishment asked for lots of Black and other minority appointments. Biden cheerfully swore that his Cabinet and lower-level appointments would “reflect the faces of the American people.” But where the slamming door starting splitting ear-drums was on the police. Biden’s warning: never utter the words “Defund the police.” It loses votes. “How do we go about changing police misconduct?” Training. Review boards. He promised an Attorney General who has a record on civil rights. Eric Holder flashback?
Biden went on to issue his marching orders:
“You’re going to have a partner — two partners— in the White House. You’re going to have a responsibility to push as hard as you can for the nominees [to the Cabinet] we’ve put forward that I think you’re going to like. … You’re going to do your jobs and I know I’m going to do mine.”
Sharpton’s pledge: “I will never embarrass you.”
Biden’s final admonition: “Never, never, never, never, never, never, never [I counted seven ‘nevers’] hurt the wealthy!” He promised (or warned) the leaders that they’d be hearing from him.
Then on February 4, Biden addressed the State Department, officially announcing his expected cranking up of neoliberal war-mongering that had been one of Barack Obama’s hallmarks:
“I made it clear to President Putin, in a manner very different from my predecessor, that the days of the United States rolling over in the face of Russia’s aggressive actions — interfering with our elections, cyberattacks, poisoning its [sic!][ citizens — are over. We’ll confront China’s economic abuses, counter its aggressive, coercive action, to push back on China’s attack on human rights, intellectual property and global governance.”
In the early 80’s, I temped as a word processor for various New York banks. Most interesting was a stint in the Mexico Department at Manufacturers Hanover Trust.
Mexico was in the midst of a major debt crisis, with the government threatening to default on some $80 billion in loans. I typed up the internal memos, in which these corporate predators made shockingly frank calculations. At what point could they keep the squeeze on before the resulting austerity and “unrest” would destabilize the Mexican government and lead to default? Wreck the Mexican government? Lose their money? They had to strike the right balance with mathematical precision.
Similar calculations are going on in the U.S. as we speak. The “real” economy tanks, soaring stock market notwithstanding. Note: as with Mexico, such calculations consider not only actual opposition, but also opposition that might be generated if they overplay their hand. Resorting to force is bad for business, but it can be factored in as additional overhead when push comes to shove.
The events of January 6 were completely predictable.
So on January 6, a lot of chickens came home to roost, for U.S. liberalism, for the mainstream media, for all the pillars of bourgeois democracy, and for the Left.
The collapse of the Left is near-complete, having sold its soul for Biden. Compounding it was the fact that no leftist in their right mind would really be wanting to make any “ultimate sacrifice” for Joe Biden on January 6. That day, Donald Trump held the field. Even as the country now whistles past the graveyard, telling itself that the U.S. is still the “exceptional” nation, people everywhere see things falling apart, their lives deteriorating. That disconnect is driving them mad across the board.
The forces arrayed against us are indeed daunting. So much of the current buzz about the Left working with Boogaloos and Proud Boys is driven by fear, a desperate need for some attachment to power. Furthermore, there is this myth so glibly circulated that Trump’s base is somehow the “little people.” Smug leftists point out that a large part of Trump’s support is from those with High School education or less. But based on income, the poor by-and-large voted for Biden. Analyzed by class, the Trump base is thoroughly middle-class. This mis-analysis is a product of the left’s rampant classism, an issue the left doesn’t like to touch with a 10-foot pole.
In any event, we need to factor in the state of our current resistance, in order to get serious about what resistance can still be built. We cannot forget that the empire is itself shockingly fragile. If we limit our vision to the U.S. proper, things look bad for us. Fortunately, the U.S. also exists in the world arena.
First, what is the actual state of the Empire?
Understanding the Biden agenda entails our learning some Economics. A December 16 2020 conversation between Michael Hudson and Pepe Escobar (“A Hard Look at Rent and Rent Seeking”) gives us a good start.
Michael Hudson is a former Wall Street analyst, and a classical economist. He is a Professor at the School of Marxist Studies, Peking University, in China, and a distinguished research Professor of Economics at the University of Missouri–Kansas City. He particularly emphasizes the relatively unstudied Volumes II and III of Marx’s Capital, on debt and rent. He has consulted with the Icelandic, Chinese, Russian, Canadian, Mexican, and Latvian governments.
Pepe Escobar is a distinguished international journalist who has worked in London Paris, Milan, Los Angeles, Singapore, Myanmar and Bangkok. Escobar questions Hudson on the difference between U.S. [neo-feudal] Finance Capitalism and the Industrial Capitalism of China, Russia and Iran.
“We’re dealing with two different economic systems, and it’s very hard for one system to understand the other system because of the tunnel vision that you get when you get a degree in economics. …
“Essentially, [the U.S.] became what’s called a rent-seeking economy, not a productive economy. So, when people in Washington talk about American capitalism versus Chinese socialism this is confusing the issue. What kind of capitalism are we talking about? America used to have industrial capitalism in the 19th century. That’s how it got richer originally, but now it’s moved away from industrial capitalism towards finance capitalism. [But it was] the mixed economy that had made America rich.
“All of this has been transformed over the last hundred years. And we’ve moved away from the ethic of what was industrial capitalism. Before, the idea of capitalism in the 19th century — from Adam Smith to Ricardo, to John Stuart Mill to Marx — was very clear. Marx stated it quite clearly — Capitalism was revolutionary: It was to get rid of the landlord class. It was to get rid of the rentier class. It was to get rid of the banking class essentially, and just bear all the costs that were unnecessary for production … How did England and America and Germany gain their markets? They gained their markets basically by the government picking up a lot of the costs of the economy. The government in America provided low-cost education, not student debt. It provided transportation at subsidized prices. It provided basic infrastructure at low cost. And so, government infrastructure was considered a fourth factor of production.”
The burning issue today is the rise of China as an economic powerhouse, now in the process of surpassing the U.S. Hudson explains that both systems have central planning, and in fact America has a much more centrally planned economy than China. It’s just that “America has concentrated the planning and the resource allocation in Wall Street.” Hudson describes the U.S. as having a “service economy”:
“Well, there’s no service in charging a late fee, but they add in all of the late fees. When people can’t pay their debts and they owe more and more, all of that is considered an addition to GDP [Gross Domestic Product]. When housing becomes more expensive and prices American labor out of the market, that’s called an increase in GDP. … Financial services, buyouts, foreclosures, and the Federal Reserve are what’s keeping the stock market afloat.”
By contrast, Hudson gives the example of the infrastructure projects that China is building around the world through its Belt and Road Initiative. The Titans of Finance scoff at Chinese infrastructure spending. For instance, building railroads is a very bad investment (see AmTrak). Hasn’t been profitable for decades. The Chinese keep building them. They don’t care if the railroads turn a profit. The railroads deliver Chinese goods to markets around the world, where the Chinese sell them. That’s the point:
“China creates money to fund actual means of production, basic infrastructure. It provides low-cost education. It invests in high speed railroads and airports, in the building of cities. So, the government bears most of the costs and, that means that employers don’t have to pay workers enough to pay a student loan debt. They don’t have to pay workers enough to pay enormous rent such as you have in the United States. They don’t have to pay workers to save for a pension fund, to pay the pension later on. And most of all the Chinese economy doesn’t really have to pay a banking class because banking is the most important public utility of all.
“Banking is what China has kept in the hands of government. Chinese banks don’t lend for the same reasons that American banks lend. 80% of American bank loans are mortgage loans to real estate, and the effect of loosening loan standards and increasing the market for real estate is to push up the cost of living, push up the cost of housing. … So you have China operating as a real economy, increasing its production, becoming the workshop of the world as England used to be called. … China has never let markets steer the economy, the government steers the markets. That’s what socialism is – as opposed to finance capitalism.”
Hudson gives a depressing case study. After the breakup of the Soviet Union in 1991, the IMF and World Bank had convinced the Russians to convert to a Western-style Finance economy. Of course. U.S. capital said to the Russians, to stabilize your currency, “You’ll have to borrow US Dollars.” Russia ended up “paying 100% interest for years to the leading American financial institutions for money that it didn’t need and could have created itself. Russia thought that America was going to tell it how America got rich, but America didn’t want to tell Russia how America got rich.” The bankers went on to gut the Russian economy.
As Putin later said, “Neo-liberalism cost Russia more of its population than World War II. And you know that to destroy a country, you don’t need an army anymore. All you have to do is teach it American economics.” Putin has been working to repair the damage ever since. Such are the stakes behind the Navalny affair.
Another case study, of the 2008 – 2009 financial crash. Hudson:
“You had the leading American bank being the most crooked and internally corrupt bank in the country, Citibank, making junk mortgages … Its entire net worth was wiped out as a result of its fraudulent junk mortgages. Well, Sheila Bair, the head of the FDIC, wanted to close it down and take it over. Essentially that would have made it into a public bank and that would be a wonderful thing. … [She] was overruled by president Obama and Tim Geithner saying, ‘wait a minute, those are our campaign contributors.’ So, they were loyal to the campaign contributors. … The Federal Reserve ended up creating about $7 trillion of quantitative easing [printing dollars] to bail out the banks. The homeowners weren’t bailed out. 10 million American families lost their homes.”
Flash forward to today. Last year, Trump gave the banks $8 trillion to buy stocks and bonds. Now it’s Biden’s turn. The question is, who is going to take the hit in 2021. I might guess that it won’t be the banks. At least Leftists can be comforted by the fact that we’ll get better sympathy.
Knowledge alone is not power.
It is now common knowledge that there is a total disconnect between the health of the stock market, the health of the “real” economy, and the health of the American people. This fact is [almost] universally decried. The Left endlessly points out the obvious, that if only we could take the trillions that Wall Street and the Pentagon squander every year, we could have free healthcare for the world. We could defeat Covid. We could defeat Climate Catastrophe. We could build a world of peace and plenty. If only if only if only.
If only the American people could seize power in their own right. But even that would only be a good start.
As we also know, this system is constructed of mountains of debt, what Marx called “fictitious capital,” totally interlocked. One sector going under can set off a chain reaction throughout the system. (See the 2008 housing crisis.) During our current pandemic, structures are breaking down across the board, a virtual “perfect storm.” It is understood that the system is already broken. Can the American people reorganize that?
More bad news is that the progressive forces in this country are miniscule. Our political system is both broken and in the hands of tyrants. The right is better organized, better funded, and better armed. Just typing this can get downright depressing.
But the good news is that we are not alone.
The United States in the World Arena.
While we keep in mind that “We’re dealing with two different economic systems,” we can see that Biden’s address cited above holds that the U.S. is threatened in three broad areas: Economic, Ideological, and Military. Or Dollars, Human Rights, and Guns. These will be examined in part 2 of this article.
— Jeff Roby