Yves here. Some readers have taken to
comparing the Democratic Party to the Whigs, which collapsed in the mid
1850s. One of the reasons for the implosion, according to Wikipedia, is
“The party failed to develop an effective platform on which to
campaign.”
voters are wising up on the Democratic Party failing to deliver on
economic promises that they intended never to honor, and trying to
distract from that “Orange Man Still Bad!” and identity politics. It’s
hard to attribute voter rejection of a Clinton hack to progressives, but
the Democratic Party is skilled above all at denial.
And the irony is that in 2016, the Democrats were braying that the
future was theirs, that one-time minority groups becoming the majority
was sure to consign the Republicans to a permanent diminished state.
Apparently they never heard of Maslow’s hierarchy of needs. Having
shelter and food are far more important than identity, yet the Democrats
haven’t retreated from “Let them eat wokeness” mode.
By Michael Hudson, a research professor of Economics at
University of Missouri, Kansas City, and a research associate at the
Levy Economics Institute of Bard College. His latest book is “and forgive them their debts”: Lending, Foreclosure and Redemption from Bronze Age Finance to the Jubilee Year
History has been rewritten daily this week almost immediately as it occurs. A Wall Street Journaleditorial
on November 4 spun its view of what is at issue for the Democratic
Party: “Voters warn Democrats to walk away from the Sanders-Pelosi
agenda.” The Democrats’ own leadership quickly agreed with this take,
playing the blame game against the Progressive Caucus for insisting on
economic reforms that opinion polls have reported are precisely what
voters say they want.
But these are not the policies that the party’s major donors want.
What really is at issue is just whom the Democratic Party (and their
duopoly partners the Republicans too, of course) support: corporate
lobbyists and the Donor Class, or wage-earning voters seeking economic
policies that benefit them as employees, consumers and debtors.
Can there really be doubt as to what is causing the apathy of voters
to support the Clintonite Virginia candidate Terry McAuliffe? Was his
loss really because voters opposed Sanders and the Congressional
Progressive Caucus as radical extremists for supporting the policy
platform that President Biden himself ran on and which got Democrats
elected? Was it that Democrats are not sufficiently supporting their
Wall Street and corporate donors and lobbyists, and that somehow voting
for McAuliffe might empower Bernie Sanders, AOC and the Squad?
Democrats calling themselves “centrist” or “moderate” insist that the
Progressives surrender to the Manchin-Sinema rewrite of the original
version of the Build Back Better (BBB) act and make it into a grab-bag
benefiting the Five Percent instead of the 95 Percent by replacing its
most popular proposals with giveaways to the wealthy – as if this will
win elections. Or at least, win campaign financing for the party.
One of the most popular proposals in the original BBB act was twelve
weeks of paternity/maternity, sick and caregiving leave, child support
and pre-schooling support. Such aid is provided by nearly every advanced
nation for its for its citizens. But the Democrats assigned Senator Joe
Manchin the task of opposing this as an anti-corporate move to
subsidize employees getting paid without working. Nancy Pelosi and the
House leadership obliged by removing it altogether, but then agreed to a
rather stingy four-week support program. Even so, Joe Manchin will not
commit himself to support the downsized BBB bill when it is sent over to
the Senate, saying that he wants “to work with Republicans on paid
leave in separate legislation.”[1]
In today’s U.S. political duopoly the role of the Democratic Party is
to protect the Republicans from attacks from the left. What the
Republicans and centrists want is the “hard” business infrastructure
program, not its pro-labor elements. The Progressives rightly warn that
their only opportunity to get the pro-voter BBB version approved by
Congress is to tie it to Biden’s bipartisan infrastructure bill. Their
fear is that Manchin will make good on his preference to wait a half
year (meaning “never” in political time) before submitting the BBB that
was downsized first from $6.5 billion to $3.5 billion, and now to a
reported $1.8 billion.
Another popular element criticized as being too pro-labor to appeal
to voters is dental and vision care for Medicare recipients, and
payments for hearing aids and home health care. As medical and health
insurance costs squeeze family budgets, most voters also back
negotiating drug prices to stop the price gouging by the pharmaceutical
companies. Governments throughout the world have long been doing this.
But the “centrists” threatened to exclude it, and finally proposed some
reduction in the most exorbitant monopoly prices by promising a
give-back for their drug-company donors in the form of more patent
protection (for research initially funded by the government itself). The
aim is to prevent other drug companies from producing low-priced
generic versions after the patents expire.
Student debt relief has been drastically cut back, along with plans
two free years of community college. One after another, Biden’s campaign
promises are being broken – with Biden himself disowning them and
showing impatience at how long it is taking the Progressives to
surrender to “reality”.
Already thrown overboard at the start of the Biden Administration his
promise to raise the minimum wage. The Senate parliamentarian pretended
that this could not be submitted as a “reconciliation” agenda, on the
ground that it did not affect federal revenue. That was nonsense, of
course. Raising the minimum wage would reduce federal subsidies to
families below the poverty level – a subsidy that has long saved Walmart
and other minimum-wage employers dollar for dollar by enabling them to
pay less than the actual living wage, with food stamps and other
transfer payments making up the gap.
Joe Manchin sheds crocodile tears over how the government will pay
for pro-labor policies, but shows no concern about giveaways to the
wealthy to the corporate interest or for military spending – or for tax
cuts for the highest income brackets. It is as if only pro-voter
policies add to the national debt.
Neoliberal Clintonite centrists vetoed Progressive proposals to pay
for their program by passing one of the most popular taxes of all: the
carried-interest tax loophole that frees financial speculators and money
managers from having to pay income tax on their profit share and even
management fees, lowering the rate to the capital-gains tax rate. The
heavy hand of Wall Street campaign donors far outweighs what voters want
– including reversing the Trump Administration’s income-tax cuts for
the wealthiest classes.
While downsizing these early popular elements, Congress has increased
its giveaway to the Donor Class in an attempt to win them over. Most
egregious is cutting taxes for the wealthiest home owners, especially on
the East Coast, by raising the income-tax deductibility of property
taxes – the State and Local Tax (SALT) – from $10,000 to $72,500. As
head of the Senate Budget Committee Chairman, Bernie Sanders sounded
exasperated on election-day Tuesday when he explained that this $400
billion giveaway to the wealthiest 5 percent was so large, that “the top
1% would pay lower taxes after passage of the Build Back Better plan
than they did after the Trump tax cut in 2017. This is beyond
unacceptable.”
Sanders pointed out that “Democrats campaigned and won on an agenda
that demands that the very wealthy finally pay their fair share, not one
that gives them more tax breaks.”[2] But the
Democratic leadership replied that without favoring the Donor Class,
their campaign financing would shrink – a prospect that would lead
Senate recipients of lobbying largesse to vote down the BBB.
The Democratic leadership argues that failure to raise subsidies and tax breaks for the economy’s wealthiest rentierlayer
while cutting back support for wage-earners will threaten their
electoral prospects – by reducing their fundraising appeal to the Donor
Class.
The mainstream press chimes in with the view that pro-labor policies
are so radical that they will frighten most middle-class voters as an
attack on property and their own hopes to somehow join the ranks of the
rich someday. President Biden is blaming Progressives for “blocking” the
program by trying to preserve the policies that most voters actually
want, and which he himself ran on in his presidential campaign a year
ago.
But most voters are wage-earners, after all. And many need child
support and other social welfare spending, and lower drug prices and
other living costs. Voter polls in Virginia reported that economic
issues were their most important concern, as they are in most of the
United States.
The problem is that pro-labor social policies are not what the major
lobbyists and campaign donors want for themselves and their clients.
This that raises the obvious question: Did Democrats lose on Tuesday
because their leadership was supporting opposing what their campaign
contributors want instead of the Progressive agenda that most voters say
want and what they voted for last November?
Is the U.S. political system a democracy, or oligarchy?
Put bluntly, is the Democratic Party an agent of democracy, or
oligarchy? The past month’s Congressional debacle confirms Aristotle
description of democracy. Many states have constitutions that are
democratic in form, he wrote, but actually are oligarchies.
The reason, he explained, is that democracies tend to evolve into
oligarchies as a result of the increasing concentration and polarization
of wealth. That gives the leading families control of the political
system. (In his schema, oligarchies aim at making themselves hereditary
aristocracies.)
Translating the concentration of wealth into political control has
been accelerating since the 1980s, and almost all increase in U.S.
wealth and income in the year and a half since the Covid-19 outbreak
struck in spring 2020 has accrued to the One Percent in the form of
rising stock, bond and real estate prices. In the non-financial economy,
prices charged by the oil, pharmaceutical and IT monopolies have led
the rise, while housing prices have risen nearly 20 percent in the last
twelve months. These sectors are the largest lobbyists and political
campaign contributors.
The Democratic leadership policy is to back the candidates who are
able to raise the most money. For most candidates the lion’s share come
from these lobbyists and special interests, for whom their donations are
a business investment. Only a minority of progressive candidates have
been able to raise enough small sums from many individuals to become
political players.
The situation is much like that of ancient Rome. Its constitution
organized voting according to wealth cohorts, mainly measured by land
ownership. The wealthiest Senatorial class, followed by the equite
“Knights”, were assigned voting weight overshadowing that of the 99
Percent. In the United States, to be sure, all votes on election day are
counted equally. The problem is how to be nominated in the first place
and vie with rivals in the political primaries. In Rome, to succeed as a
candidate running for office required heavy backing by the wealthy.
(Crassus played this role, financing Caesar’s campaign, among others.)
Leading politicians tended to be heavily in debt to their backers.
In the United States, the debt is not as crassly monetary. What is
owed is political support. The job description for a politician is to
deliver voter support to one’s campaign contributors. That is how
oligarchies suppress democracy, today as in the Roman Republic.
Centrists and Moderates Support Existing Oligarchic Trends in Economic Polarization
Upon taking office, President Biden said that nothing would really
change. This was the opposite of Barack Obama’s slogan of “hope and
change,” but it was simply more honest. The Biden Administration not
only has maintained Donald Trump’s tax cuts for the wealthy, it has
increased them under the BBB’s SALT provision. Biden has extended
offshore oil drilling rights, and policies benefiting the financial and
corporate sectors.
This is called being a “centrist” or “moderate.” If the world is
polarizing between the One Percent and the 99 Percent, between creditors
and debtors, monopolists and consumers, where is the middle ground? The
Chinese have a proverb: “He who comes to a fork in the road and tries
to go two roads at once will get a broken hip joint.” Being a moderate
means not interfering with the economic trends that are polarizing the
U.S. economy between the rentierOne Percent at the top and the increasingly indebted 99 Percent.
That is the situation confronting today’s economy. Refusing to take
steps to change the dynamics that are enriching the oligarchy means not
reversing or even slowing the trends that are polarizing the economy.
The Democratic Party leadership has opposed the influence of the
Progressive Congressional Caucus from the beginning. This is oligarchy,
not democracy. It is not even the largely empty formalities of political
democracy, to say nothing of substantive economic democracy.
What really is democracy, after all? It is the ability of voters to
legislate the policies that they want – and which presumably are in
their economic and social interests. But the process is manipulated by
the DNCC’s reliance on the Donor Class. Its political program is simply
an advertising vehicle, with no “truth in advertising” regulation.
The question is, can it be reformed? Can democracy succeed without
replacing the Democratic Party leadership with an altogether different
political system from today’s Democratic-Republican duopoly with its
common set of donors?
What I cannot understand is why the Progressive Caucus has not insisted on naming their own supporters to the DNCC.
The current Democratic impasse shows that no progress can be made
without changing the institutional structure of American politics. It
seems that the only way to do this is to make sure that the Democratic
Party loses so irrevocably in 2022 and 2024 that it is dissolved enough
to enable the Progressives to revive the near corpse.
The Democrats’ Identity Politics – Any Identity Except That of Wage Earners
The Democratic role is to protect the Republican party from
challenges from the left. Its tactic has been to replace the traditional
economic concerns of voters as wage earners, consumers, debtors and, in
a rising proportion of cases, as renters faced with losing their homes
if they fall into arrears as rents and housing prices are soaring.
Identity politics is a strategy to fragment the wage-earning majority
of voters into separate ethnic, racial and gender identities. That
distracts attention from their class consciousness whose interests do
not match those of the Donor Class that has gained control of the
Democrat-Republican duopoly. This explains the DNCC’s refusal to back
progressive candidates.
Instead of appealing to wage earners, the Democratic leadership since
the 1960s has aimed at getting voters to think of themselves as
hyphenated Americans. Half a century ago it was Italian-Americans,
Irish-Americans, Polish-Americans and so forth, with patronage along
ethnic lines in the big cities.
Today the identity politics has broadened to aim at women –
especially white suburban women (whose support they lost in Virginia),
the Hispanic vote (which also faded this week), and support from black
voters mobilized by House Majority Whip James Clyburn and what has been
called the Black Misleadership Council (whose ethnic support finally is
weakening as voters look at who their campaign contributors are). The
Democrats’ calculation has been something like, “OK, we’ve written off
the working class. But maybe we can get some voters to think of
themselves as some other identity.” They’ve pandered to black voters
with cultural applause, but not economic benefits. They’ve sought
Hispanic support, but that is falling away as the Democrats hesitate to
give economic support to low-income workers with families, whom they
readily write off when offered enough Donor Class money from corporate
lobbyists. The effect of cultural pandering to identity politics fails
when voters see their economic condition as being the most important
political issue.
Is America a Failed State?
For the moment (late Thursday evening), the BBB is still stymied as
Congressional staff ponder over what has become a 2,135-page bill.
Little trust is left regarding Manchin’s hint of support in the Senate.
The fear is that the bipartisan $1 trillion business-friendly
infrastructure bill will be passed, leaving the BBB’s social programs
abandoned.
The failure to solve this problem seems to be a duplicitous ploy of
President Biden and the Democrats’ quasi-Republican Clintonite core. Why
not simply remove Manchin from his committee memberships, and stop
federal subsidy of his West Virginia constituency? Instead, they have
put him in charge of the environment bill, which he has disfigured on
behalf of the lobbying money he receives from the oil and coal sectors.
It is difficult to see what may take its place of today’s political
quandary. The United States does not have a European-style parliamentary
system that permits new parties to run and be represented in
government. If they did, the Democratic Party would probably go the way
of European Social-Democratic parties and shrink to a merely marginal
has-been.
But real political and economic democracy is blocked by the existing
Constitution and the Senate filibuster requiring a 60 percent majority
to pass laws, backstopped by a Supreme Court imposing 18th-century solutions to 21st-century finance capitalism and neo-rentiereconomies.
____________
[1]Alexander Duehren, Natalie Andrews and Richard Rubin,” Paid Leave Is Back in House Bill,” Wall Street Journal, November 4, 2021.
[2]Jordain Carney, “Sanders: Proposed five-year SALT cap repeal ‘beyond unacceptable,’” The Hill,
November 2, 2021. The most recent report, as of Nov. 4, is that Sanders
agreed to the tax giveaway for home owners making under $400,000, which
is now being put forth as the top of “middle-class” income. SeeSenators
Sanders and Menendez Propose Eliminating SALT Cap for People Earning
Under $400K.
https://www.c-span.org/video/?c4984949/senators-sanders-menendez-propose-eliminating-salt-cap-people-earning-400k
Source: Naked Capitalism
GFANZ Leadership; Source: GFANZ
