US lurches closer to recession before elections. posted by Richard Seymour

The bizarre Nixonian campaign to turn a half-hearted quip about the Bush administration by Kerry into an slander on America's brave boys (who can, if they're so easily offended, go fuck themselves with a chemical light), and therefore an electoral issue, has partially succeeded. I didn't expect that Kerry would be so cowardly as to apologise, but at any rate it will make little difference. There is a last-minute Republican "surge" going on according to at least two polls (ABC/WaPo and Pew). I don't believe for a second that this is because wavering Republicans were really upset by What Kerry Didn't Say. Even wavering Republicans aren't that preposterous. What is more likely is that, as usual, the Republicans are much better at mobilising their base at the last minute. Notice that among likely voters, the Democrat lead is much smaller: few people are enthused about this grey shower of pro-war crooks, and it is hardly surprising. It also has to be said that the Republicans are cutting into what was going to be a "tidal" victory for the Democrats, so they aren't necessarily looking toward a glorious outcome. Moreover, some of the key swings to the GOP are taking place in what have been Republican strongholds and were only recently faced with the prospect of surprise Democratic successes. Furthermore, not all piolls register that shift. Saturday's polling for Angus Reid puts the Democrats 19 points ahead.

The Democrats do not deserve a victory - but elections have little to do with desert. At the moment, a solid defeat for the Republicans would have a heartening effect on the American left, (as would strong votes for Greens, radicals and socialists wherever remotely possible). However, as usual, the Democrats cannot win the election for themselves, because they are completely unwilling to address the issues that make them more popular than the Republicans: the war and the economy. If you watch the Democratic ads, it is so disheartening: they have their candidates pandering to puritanical bigotry. One would-be congressman wonders how he will explain the 'Foley scandal' to his eighteen year old daughter and, get this, he holds up a picture of the sweet little thing so we can all let our lips wobble at the impugning of her purity. If his eighteen year old daughter is so unfamiliar with the ways of the world, then he should be fucking locked up for child abuse, not elected to Congress. Even where they do address the war, it is with cod patriotic plucking on the heart-strings, such as with Tammy Duckworth's campaign (which, unlike her, may have some legs to it). It falls to radical campaigners to raise the issues that they will not, and therefore to focus the public mind as far as possible on the real business of politics rather than on the very professional advertising.

And aside from the war, the next most important issue for American voters in every single poll on the matter is the economy. Fred Magdoff's recent Monthly Review article, The Explosion of Debt and Speculation, addresses some of the structural problems in the US economy - underuse of capital, underemployment, structural imbalances, the very very poor rate of recovery since 2001-2, the housing crisis, the build up of massive private debt, and so on. The latest news is that "Real estate and auto sales woes are feeding recession fears". Recent growth has been slower than expected. The hardest hit by the recent economic woes have been manufacturing workers: 3 million jobs have been lost in that sector since 2000. Even though the US economy is still adding jobs at the moment, it is losing manufacturing jobs at an alarming rate. Last month alone, 39,000 were lost. This is not all because of Bush, by the way: the locust years of late were prepared by the Clinton administration whose policies would perhaps have led to an earlier and harder fall more generally had it not been for Bush's military Keynesianism. Nevertheless, Bush's policies have exacerbated the crisis in manufacturing in a number of ways. State investment in military hardware boosts demand for high technology manufacturing goods, but not necessarily for mass consumer goods, which is where the fall in demand has been greatest. The radical transformation in the tax structure transferred huge amounts of funds to the rich, and the suppression of labour (such as during the New York transit strike), alongside the recession, allowed companies to keep pay raises well below the rate of inflation - thereby in fact cutting the pay rate.

Of course, the US has no formal incomes policy, but it does have a fairly unique administration of economic affairs by the open representatives of Wall Street in the Federal Reserve, whose decisions need no ratification by any branch of government. Its monetary policies send the relevant signals to the owners of capital. And the Fed provides the organic connection between the state and the main actors in the economy through investment banks - bear in mind that investment banks don't merely lend money to companies, since most of their business is in equity, which is to say that they provide investment cash in exchange for a temporally delimited share in ownership of the company. That is not only leverage, but an excellent way to communicate policy. Further, the state sets pay standards in its deals with public sector workers, and through its minimum wage policy. In sum, while capitalists need no permission or encouragement to pay as little as possible for as long as possible, the state has such an enormous coordinating role in the economy (contrary to all this bullshit about laissez-faire) that matters of income are directly political, and not merely issues for labour struggle.

The Democrats wouldn't dream of trying to reverse any of this, although they might consider slowing up the rate of exploitation a tiny bit. It is people like Ralph Nader and the Green Party and so on who have been properly raising these issues, and it would have taken a serious and focused campaign by these groups to redirect the public discourse from piddling 'moral' controversies. Unfortunately, they don't stand much of a chance, and show no signs of even trying. There really needs to be a new radical coalition formed, based on the interests of the American working class, but specifically including attempts to embrace Arab Americans who are especially vulnerable to racist discrimination and who have experienced a massive loss of pay in recent years. It would have to be radical without being characterised by the language of schisms, including marxists but not marxist, including Greens but not Green, including unions but not an outgrowth of union bureaucracy - a broad, radical, left-wing movement representing the unrepresented working class on every front, articulating their interests on the war, Katrina, wages, employment conditions, the economy and so on.

For now, of course, the Republicans need to be given a damn good hiding.