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US Capitalism in Crisis: An Emperor With No Clothes

by Richard Mellor Monday, Aug. 09, 2010 at 11:28 PM

The champions of US capitalism are having to get used to a changing global stage on which they play a diminishing role

Richard Mellor

AFSCME Local 444, retired

Oakland CA

Sunday, August 8, 2010


Peggy Noonan, admirer of Ronald Reagan and speechwriter for both him and George H.W. Bush is somewhat pessimistic about the future of US capitalism. “The biggest political change in my lifetime….”, she writes in her column in yesterday’s Wall Street Journal, “….is that Americans no longer assume that their children will have it better than they did.”

Ms Noonan is concerned about the future and so she should be. What she is describing is the end of the American Dream. Those that lived the American Dream (and millions didn’t) “Now fear something has stopped”, she writes.

She's right about something. The objective conditions that gave birth to the American Dream, the idea that the next generation will do better than their parents, are no longer present. It is said now, that if you want the American Dream, go to Norway or Finland.

The present economic crisis has transformed the American psyche for years to come if not indefinitely. The depth of this recession, the lost homes, the lost jobs, the American nightmare has made the American consumer extremely cautious. The American consumer has become the American saver although the increase in the savings rate has a lot more to do with paying off accumulated debt than stashing money away for vacations in Europe. With consumer spending some 70% of the US economy, this is not a good sign.

Noonan, like all the strategists of US capitalism, does all she can to avoid any hint that there are classes in America. She points to the chasm that exists between the politicians and the rest of the American people, that they have no sense of “What people are feeling deep down.” “I think their detachment from how normal people think is more dangerous and disturbing than it has been in the past.” She writes.

She refers to the theoreticians of capitalism as the “thought leaders” of this classless society and the difference, between them and the working class, those that live “normal lives on the ground in America.” She describes the 1980’s, a period during which there were numerous major strikes, some national or semi national in character, like those at Greyhound, Hormel and in the airline industry, as the period when she first noticed this “growing gulf” between the two groups, what we recognize as the increased class polarization between workers and bosses; between the sellers of Labor power and the buyers of it. A formidable combination of the employers and the heads of organized Labor defeated all these strikes, although the strategy of some of the local leaders of these disputes was also a factor------ relying on corporate campaigns and the like.

Noonan frets that the gap has never been wider than it is now and has become a "chasm." Her greatest concern is that the political representatives of capitalism in its two parties do not seem to understand what’s happening. What concerns the more forward thinking defenders of capitalism the most, Noonan spells out quite clearly, is that the strategists of capital “don’t seem to know or have a sense of the mood in the country.”

We have commented on this blog http://www.weknowwhatsup.blogspot.com about the extreme military and economic crisis that embraces US capitalism. Every day there is a new crisis. The firing of its military chiefs who break ranks and criticize policy in the mass media; the quagmires that are Iraq and Afghanistan and the environmental crisis, not to mention mine disasters, crumbling cities and the worst economic crisis since the great depression that is far from over. The objective situation is shattering a political stability that might have existed prior to the crash. Bourgeois political life is in turmoil, “They make their moves, manipulate this issue and that, and keep things at a high boil.” Noonan writes, “And this at a time when people are already in about as much hot water as they can take.”

This is not the face of optimism from a major bourgeois writer. It is important for us who are politically active, whether in our communities, Unions or in general, that we recognize also the increased polarization of the classes in this country and the potential for an explosion. The situation is very volatile. There is no doubt that there would have been the beginnings of a movement by now were there somewhere for people to turn. The crisis of the US working class is one of leadership. As yet there has not arisen a significant social force that can provide organized expression to the anger that exists beneath the surface of US society and the great militant traditions of the US working class have undoubtedly been driven back.

Noonan yearns for the good old days. “The American Dream itself needs a boost” she whines, it “needs encouragement and protection.” Unfortunately, this is wishful thinking on Noonan’s part. The present economic crisis is but confirmation of a trend that has existed for some years now, that is, the decline of the influence of US capitalism on the world stage. US capitalism has the military power to destroy its rivals but it is no longer the economic powerhouse it once was and the relations between the major powers have shifted in favor of rising economies like India, Russia, Brazil and in particular China, which is now the world's number two economy.

Trade between the “emerging market” economies is upward of .8 trillion dollars today. It is expected that emerging markets will grow three times faster than the rich nations says Stephen King, chief economist for HSBC. In 2008, Chinese exports to emerging market economies were 9.5% of its GDP compared to 2% in 1985. The Chinese are building railroads, power plants and buying banks throughout the former colonial world once considered the home turf of the Europeans and the US. This will increase tensions between the powers as the competition for global market share heats up.* Then there is the weakening of the US dollar as the reserve currency. Various emerging economies are willing to trade in their own or the Chinese Yuan. The Chinese and others have also raised anew Keynes’ idea of a global currency.

US capitalism is in severe crisis. “Long term pessimism has set in.,” writes Noonan and this is not a healthy situation. In the last analysis ideas have a material base though. The American Dream is long gone and the present economic crisis has opened up a very favorable period for those of us wanting to change the society and world in which we live. This does not mean that a socialist alternative springs in to the minds of the masses fully formed. Due to the role that the workers' leaders play our struggle has been and will be much harder than it need be.

Noonan concludes “Inner pessimism and powerlessness: That is a dangerous combination.”

It is indeed. It is dangerous for her and her class as it undermines their propaganda about capitalism, its ability to provide the basic necessities of life, security and stability. It forces people to question more the economic system in which they live and at some point an organized expression of the anger at the system develops.

Pessimism and powerlessness turns in to its opposite: The Emperor has no clothes.

* There’s a New Silk Road and it Doesn’t Lead to the U.S.: Business Week 8-09-10

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capitalism? not. bg Thursday, Aug. 12, 2010 at 8:21 PM
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