Global crisis shows capitalism won’t recover
Fight for jobs, Social Security!
Published Jul 14, 2011 10:57 PM
The latest economic reports show a dismal outlook for workers, students, youth
and communities. The numbers show that there is not now, nor will there be, a
genuine recovery from the capitalist crisis that began in 2007. The only way
out for workers is mass struggle.
In June, the second anniversary of the so-called “recovery,” only
18,000 more jobs were created than were lost. It takes 125,000 to 150,000 new
jobs each month just to keep up with new workers entering the workforce. The
official unemployed rate went from 9.1 percent to 9.2 percent. Thus the
official unemployment rate has been 8.8 percent or higher during the entire
“recovery.”
Oppressed people fare much worse. According to a July 8 report from the
Economic Policy Institute by Heidi Shierholz, unemployment in June for
African-American workers was 16.2 percent and for Latino/a workers 11.6
percent. For workers age 16 to 24 as a whole, unemployment was 17.3
percent.
When those who have given up looking — so-called discouraged workers
— and those forced to work part-time are added to the general statistics,
the picture is even bleaker. The official number of those underemployed as well
as unemployed now comes to 25.3 million, rising in June from 15.8 percent to
16.2 percent of the entire workforce.
In addition, wages fell in all age groups; hours worked declined; average
weekly earnings dropped 3.9 percent; and more than a quarter-million workers
dropped out of the workforce. The long-term unemployed — jobless for more
than 26 weeks — hit a record at 6.3 million.
‘Debt-ceiling’ frenzy used to attack
‘entitlements’
President Barak Obama dropped a bombshell just days before these job numbers
were released. In a secret meeting with Republican Speaker of the House John
Boehner on July 6, Obama made an agreement to exchange new tax revenues for
“substantial spending cuts, including such social programs as Medicare,
Medicaid and Social Security — programs that had been off the
table.” (New York Times, July 7)
The compromise/capitulation by Obama on cuts to Medicaid, Medicare and Social
Security was made in the atmosphere of a “debt-ceiling” frenzy
created by both parties, as well as the capitalist media and economists of the
ruling class.
As a result of massive bank and corporate bailouts; trillions in military
spending on weapons and wars in Afghanistan, Iraq and now Libya; and interest
payment to the banks on government loans, the federal government has had to
borrow vast sums of money to pay its bills. The limits on that borrowing are
set by law. The current debt ceiling is $14.3 trillion. That debt limit, passed
by Congress earlier this year, will have to be increased by Aug. 2 in order for
the government to pay its bills.
Washington needs to borrow more money to continue to pay off the banks and
bondholders and to fund operations, including social services, in the coming
period. Thus the administration needs Congress to raise the debt ceiling so it
can continue functioning.
Don’t take one cent from the people!
From a working-class point of view, there should be no crisis over raising the
debt ceiling. Not one penny should be withheld from payments for Social
Security, Medicare, Medicaid, SSI, food stamps, Temporary Assistance for Needy
Families, government pensions, veterans’ benefits or any other funds
legally due to sustain the masses, especially in a time of high unemployment.
To keep expenses below the ceiling, the government should simply suspend or
cancel debt payments to the corporate rich.
Workers should have no obligation to assume responsibility for the debt to
billionaire bankers and bondholders, the military-industrial complex —
nothing but merchants of death and destruction — or the oil companies and
other corporate vultures. These parasites all feed off the public treasury and
devour the funds that rightfully belong to the working class. The funds in the
treasury come from taxes paid by workers and the middle class, or taxes paid by
corporations, which are simply taken from the profits they stole from workers
in the first place.
Social Security is a right won by workers through struggle in the 1930s. It is
paid for out of their wages, and the bosses are required by law to contribute
matching funds. These funds are supposed to be held in trust by the government
for workers. This money should be inviolable and not part of the government
budget in the first place.
Now, in mid-2011, there is $2.6 trillion in the Social Security trust fund,
enough to fund the system for decades. If the fund really needs more money, the
government need only lift the cap on the highest-paid people and make all their
salaries subject to Social Security deductions, instead of them paying only on
the first $107,000 earned each year. Finally, in order to really replenish the
fund, reduce the retirement age and increase benefits, the bosses and/or the
government should put the millions of unemployed back to work and raise wages.
That would instantly solve any hypothetical financial problems of Social
Security.
The fact is that the rich, both the financiers and the industrialists, have
wanted to destroy Social Security since it was created. And now they are using
the so-called “debt-ceiling” frenzy as a battering ram against this
program, which has benefitted hundreds of millions of workers and seniors for
three-quarters of a century.
If the threats materialize to cut Medicare for seniors and Medicaid for the
poorest people, which are vital programs to help fund health care also won
through long struggle, that would only further impoverish the population and
add to deteriorating health conditions for the multinational working
class.
Behind austerity program: capitalism is stalled
Behind the entire political and economic establishment’s full-court press
against Social Security, Medicare and Medicaid is a deeper reason. Mass
unemployment and austerity are intimately connected. The ruling class is
completely overwhelmed by the utter failure of the capitalist economy to show
any real signs of recovery.
The politicians and the rich know that the only way back to solvency of any of
the social funds, not to speak of the well-being of their profit system as a
whole, is through economic expansion. Not just the kind of miniscule growth
that they refer to pathetically as a “recovery.” They need the
robust growth of a previous era, an energetic capitalist expansion that puts
the millions of unemployed workers back to work. They need the type of
expansion that generates massive quantities of surplus value, which is unpaid
labor from workers. The bosses and their system need the creation of real
wealth, real value, not just the paper value of speculation.
Surplus value is the lifeblood of the system. But as millions remain jobless
for protracted periods and mass unemployment stubbornly grows, despite the
stimulus programs and the bailouts, the prospects for growth are fading. All
the predictions of the bourgeois economists about growth have failed.
The experts projected that the economy would grow at 3 percent or more last
quarter. Instead it grew at 1.8 percent. The pundits predicted the creation of
150,000 jobs or more in June. Instead there were 18,000 net jobs, with
thousands of government workers laid off.
Crisis of capitalism is global
And the crisis is global. Behind the Greek debt crisis is a decline in the
Greek economy. The Greek economy is contracting at an annual rate of 3 percent.
European and U.S. bankers are demanding that Greece deal with its crisis by
cutting workers’ pensions, raising the retirement age, and selling off
state industries and facilities to private capitalists. The European bankers
are demanding the layoff of 120,000 Greek workers.
Now the debt crisis is spreading from Greece, Portugal and Ireland to Italy.
Italy’s economy is twice as large as the other three combined. Investors
are moving to dump Italian bonds. German Chancellor Angela Merkel telephoned
Italian Prime Minister Silvio Berlusconi to tell him to cut 40 billion euros
from the Italian budget. In the last quarter, the Italian economy had its first
decline in two years.
This is a formula for making the economic and financial crisis of the Greek and
Italian capitalist governments worse. It can spread to all of Europe and the
U.S. It will bring suffering and hardship so the bankers get paid interest on
their bonds. The profit motive is so strong a force that billionaire financiers
are willing to accelerate a financial and economic crisis because none of them
is willing to give up their loot.
V.I. Lenin, the leader of the Russian Revolution of 1917, said that a
capitalist will sell you the rope you use to hang him. This describes not only
the European bankers, but the U.S. bankers and capitalists as well.
In Washington, both parties are negotiating over how much to cut from the
working class. The Democrats want to cut a lot, but make the rich pay a
contribution, while the Republicans want workers to pay more and the rich
little to nothing.
But seen objectively, both parties are negotiating over how much to deepen the
crisis of capitalism. Capitalism cannot function without markets, without
selling for profit. But it cannot sell if the masses have little money. By
cutting government spending for workers, by cutting the benefits to which they
are entitled, the bosses are slashing away at their own markets.
The entire capitalist world is in a state of slow growth to no growth to
economic contraction, despite the trillions of dollars poured in to bolster the
system over the last three-and-a-half years.
What is becoming clear is that the capitalist system, because of economic
crisis and continual war, is having the historic difficulty of reproducing
itself. It cannot grow, and it is moving toward absolute decline.
After the Middle Ages, the capitalist class in Europe rose from the status of
an “oppressed minority” under the domination of the feudal
aristocracy to become the global, imperialist monster it is today through a
process that Karl Marx called “expanded reproduction.” The
capitalists steadily revolutionized the means of production. Each business
cycle of boom and bust was followed by an expansion greater than the previous
cycle.
The Great Depression of the 1930s brought this process to a devastating and
catastrophic end. After the market crash of 1929, the capitalist system was
unable for years to reproduce itself. It only resumed significant growth on the
basis of military preparations for World War II, increased production during
the war itself, and then replacement of the factories and infrastructure
destroyed by the war. The normal means of capitalist expansion had run out of
steam. The system was strangled by capitalist overproduction and could not
recover.
The working class must recognize that a similar crisis point has been reached
again. As in the 1930s, workers will have to organize, mobilize and fight to
put an end to the capitalist offensive and gain concessions that push the
crisis back onto the ruling class. Workers need a massive government program
that provides decent jobs for all. They need housing and an end to foreclosures
and evictions. They need an end to the assault on education, health care and
pensions. And they need an end to oppression and imperialist war.
Articles copyright 1995-2012 Workers World.
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