Politicians rob workers, protect the wealthy

By Fred Goldstein
Published Jul 27, 2011 4:31 PM

Whether or not a deal is reached in Washington on how to raise the debt ceiling and avoid a government default, the workers and the oppressed have no independent voice in the debate. The process gives them no choice but to accept the result of venomous political warfare in the capitalist establishment.

Several factors have made the political warfare between the big business parties over raising the government debt ceiling especially turbulent. First, there is the upcoming 2012 presidential election and the struggle over control of the federal government and its $4 trillion budget.

Aggravating this warfare is the emergence of the Tea Party wing of the Republican Party, which has pushed the politics of the negotiations further and further to the right.

Finally, the struggle takes place against the background of the capitalist economic crisis.

The underlying problem of the deficit is the massive government emergency spending of trillions of dollars for bank and corporate bailouts that were meant to stave off a world capitalist crisis. In the short run, however, the debt-ceiling crisis is politically driven by the ultra-right.

The struggle began with the Republicans refusing to agree to raise the debt ceiling unless the Obama administration agreed to cut the federal deficit by cutting Social Security, Medicare, Medicaid and other social spending that benefits the broad masses. The Obama administration agreed to massive cuts in entitlements, but not enough to satisfy the right.

The Republicans also want to block any increase in tax payments by the rich. Obama wants them to pay a small part of the bill.

In this struggle over the terms of raising the debt ceiling, the workers are supposed to choose one of the different options posed by factions of the big business parties.

Debt ceiling fight is over how to protect the rich

The fury over raising the government’s debt ceiling is, at bottom, a fight over two things: 1) how to ensure continued government payments of billions of dollars to rich, coupon-clipping bondholders; and 2) how many trillions of dollars can be taken from the entitlements due the workers and the oppressed in the form of Social Security, Medicare, Medicaid and other benefits.

The crisis atmosphere generated by every organ of big business propaganda — network television, cable TV, newspapers, magazines, bloggers, etc. — is a reflection of the anxiety of bankers, bondholders, insurance companies, hedge funds and other investors over the possibility of default and all its implications.

Over and over again one hears the demand for an agreement that will raise the debt ceiling, avoid default and maintain the “full faith and credit of the U.S. government.” This means, in practice, maintaining the certainty that bondholders will not miss a payment of principal or interest on their investment in U.S. government bonds.

This is the future “crisis” that the White House, the congressional leadership of the big business parties, and all the pundits of the bourgeoisie — regardless of their opinion about what to do — say must be avoided.

But there already is a crisis — a crisis of the working class. It has been going on for four years. It not only has to be avoided; it has to be reversed.

The real crisis: jobs, housing, health care, hunger

The workers and the oppressed must break free from these arguments tailored to the interests of the capitalist rich. From a working-class point of view, the debt-ceiling crisis should not be about paying the rich and cutting entitlements.

What about raising the debt ceiling to create a massive jobs program to achieve full employment? If the government is going to borrow more money, let it put the 30 million unemployed or underemployed workers back to work. Better yet, don’t raise the debt ceiling and instead create jobs with the funds that otherwise would go to the banks and bondholders.

Why should our class, the working class and the exploited, worry about a millionaire or billionaire missing an interest payment when 50 million people in this country are missing meals? Why should workers be concerned that some millionaires will not be able to pay the overhead on their mansions when millions are already homeless and millions more are threatened with foreclosure?

In fact, justice demands that the profits of the bankers and other financiers be used to aid the 47 million people who are on food stamps. It should be used to give health care to the 50 million people who have none because medical care has been turned over to the profit-seeking insurance companies and pharmaceutical monopolies.

The Tea Party & the crisis

A question must be answered in the present crisis. How is it that the mainstream Wall Street financiers and the political establishment have been demanding a solution to this problem for several weeks now, yet things have come so close to the brink of default? Already the prospect of downgrading the credit rating of the U.S. government is on the agenda, regardless of whether or not there is a default.

One answer is that the Republicans will turn heaven and earth to sabotage the Obama administration in order to win the White House in 2012. But, ironically, default threatens the very bankers and bondholders who call the tune in the Republican Party.

House speaker John Boehner was responding to Wall Street when he entered into secret negotiations with President Barack Obama last week to strike a “grand bargain.” Wall Street had been satisfied up until then to use the struggle as a battering ram against Medicare, Medicaid, Social Security and other spending programs. But as the Aug. 2 deadline approached, finance capital was getting anxious for a settlement.

Key elements agreed upon by Obama and Boehner included $250 billion in cuts to Medicare and a slow increase in the eligibility age from 65 to 67. Obama agreed to $110 billion in cuts to Medicaid and other health care programs, while Boehner wanted $150 billion. Other domestic programs were to be cut between $200 billion and $214 billion. Adjustments were to be made to the Social Security formula for cost-of-living adjustments, which would lower payments.

As the two sides were coming closer together, word of the negotiations leaked out, and Boehner was forced to walk out of the negotiations and denounce them. From then on his position shifted further and further to the right, toward intransigence. The liberal wing of the Democratic Party also revolted — against the cuts — but Obama stuck by his bargain with Boehner.

To understand the collapse of the talks, it is important to remember that, of the 290 Republicans in the House, at least 141 are endorsed by the Tea Party Express or Freedom Works, a pro-Tea-Party-wing organization, or are part of the Congressional Tea Party Caucus.

These forces have been derided in the capitalist media as “childish” and “crazies.” But these characterizations conceal an important political point about U.S. capitalist politics.

These forces emerged in 2008 in the struggle against a Town Hall meeting held on the health care issue. A phony “grass-roots” movement, dubbed the “Astroturf” movement, was organized and funded by right-wing billionaires like the Koch brothers, the Bradley Foundation, the Olin Foundation and others who are at war with the political establishment in both parties and with the main stream, Wall Street section of the ruling class.

These are the forces that spit on Black Representative John Lewis and gay Congress members on the steps of the Capitol building during the 2008 election campaign. They also showed up with guns at Town Hall meetings that were called to defend health care reform. These are the forces that confronted a conservative Republican, Arlen Specter, at a Town Hall meeting in Pennsylvania and shouted him down. They eventually drove him out of bourgeois politics, even though he was a reactionary member of the establishment.

The Tea Party forces are funded by these billionaires with campaign ads, organization and staff, and were propelled into office in the 2010 elections by the ultra-right-wing of the ruling class. The Koch brothers are paying the bills for Gov. Scott Walker in Wisconsin to break the public sector unions. The Tea Party ideologues reflect the ideology of their benefactors. To this extreme right, which is outside the political establishment, default is not a danger.

When Martin Bashir of MSNBC interviewed Judson Phillips, founder of the Tea Party Nation, on July 25, Phillips blurted out the Tea Party strategy on default. He said it was not a first choice. That by Aug. 2 the federal government could avoid default by paying its debt service to the bankers and bondholders but stop “wasteful” spending on entitlements.

In other words, by pushing the stalemate to the end, one strategy of the ultra-right Tea Party billionaires is to force the government to choose between default and paying Social Security, Medicare, Medicaid and other benefits.

While this is a doubtful scenario, nevertheless it reveals what is on the minds of the ultra-right. And this is why the politics of the ruling-class parties are working at cross purposes to the broader interests of the ruling class as a whole. Dismissing Tea Party members as “crazies” in this debate is to conceal their role as a cat’s-paw of the ultra-right-wing of the ruling class. Whatever their clinical condition, they are a direct expression of ruling-class forces. And that is what is important to the working class.

The global economic crisis

Finally, whatever the outcome of this struggle, it will not eradicate the underlying crisis of the capitalist system. Representing the European ruling classes, Angela Merkel of Germany and Nicolas Sarkozy of France together with the other eurozone countries have just come to an agreement to bail out the Greek ruling class and also establish a superfund to bail out future governments and banks that are in danger of default in Europe.

This codifies a perspective of long-term crisis dictated by slow growth or actual decline in many of the capitalist countries there — including now Italy and Spain, the third- and fourth-largest economies in the eurozone.

In the U.S. the projections for growth are being marked down by the “experts.” Unemployment is rising. Layoffs are rising. State and local governments are shrinking and so are education and social services. The bond-rating agencies have said that up to 7,000 municipalities may have their credit ratings downgraded, meaning they will have to pay more interest to banks and investors.

The real default is capitalism’s default to society as a whole. It is destroying the environment, undermining the health and wellbeing of the entire population, promulgating racism, sexism and anti-lesbian/gay/bi/trans/queer oppression and anti-immigrant, anti-Muslim division. It is spreading war, intervention and occupation around the globe at the cost of trillions of dollars.

The time has come to open up a struggle to fight back against a system that puts the profits of millionaires and billionaires above everything — as can be seen in the present debt-ceiling battle. An anti-capitalist struggle must be put on the agenda of the workers and the oppressed as the only way out of the present crisis.