It’s time to recognize the current economic condition for what it is: the Bush Depression. While some claim it’s not as bad as the Great Depression, it’s another in a long line of capitalist failures and could get much worse.
It’s time to recognize that there’s a crisis in capitalism, and that corporate policies are a failure.
Naming the depression after Bush may be a little unfair, because he was not responsible for instituting all the policies that began with Ronald Reagan. He did oversee the triumph of GOP policies and push the rising power of corporations to create the disaster. Republican policies, along with assistance from pro-corporate Democrats and bipartisan corruption, led to the depression: low taxes, less regulation, a relentless push for the globalization of finance, loose money policies, shipping manufacturing to China, and blind faith in “the market” and “free enterprise.”
Big business panicked after the youth rebellion of the 1960s attacked capitalism, and it began pumping money into a campaign to promote free enterprise. The Republican Party became a convenient vehicle for propagandizing this faith, and numerous corporate-financed groups, including the Business Roundtable, the American Enterprise Institute, the Trilateral Commission, the Chamber of Commerce, the Hoover Institute, and the Heritage Foundation, grew rapidly.
The oil and gas industry-based Koch Brothers, for example, are among the wealthiest people in the country. They have business operations in 45 states, finance right-wing groups like Americans for Prosperity, and contribute to 85 groups that: fight climate change, reject collective bargaining rights, oppose Wall Street reform, seek to defeat healthcare reform, etc. The Kochs and corporations promote policies to privatize public resources, maximize profit, create new sources of income, control information, centralize financial decisions, eliminate all barriers to trade, and extend U.S. military power around the world in support of corporate domination. Not including government lobbying, their foundations easily outspend trade unions and liberal groups. Today they are abetted by propaganda outlets such as Clear Channel, Fox News, and the Wall Street Journal.
Money spent on shaping the public debate and public policy doesn’t include the $30.1 billion over the past ten years that corporations spent to lobby Congress. Additionally, the upcoming 2012 elections will run over $8 billion, mostly donated by corporations.
Despite their efforts to shape public policy, corporations could not prevent the largest crisis in capitalism since the Great Depression. By relentless pursuit of their goals, they ran up against several limits that are not going away. The problems include a surplus of capital and a surplus of labor. Corporations are sitting on $2 trillion in cash that they can’t invest because they can’t sell their products: People who borrowed too much and overleveraged during the Bush years simply don’t have any money.
Capital seeks the lowest-priced labor, and today globalization opens the whole world to exploitation. Every undeveloped country can now provide cheap labor, except there’s no demand. On the other hand, corporations need to invest capital to make a profit. Unfortunately, when they shipped jobs to China, they discovered that the Chinese save money rather than spend. The Chinese loaned their savings to the U.S., which allowed Americans to overspend, overleverage, and overinvest. This created a classic bubble. Now it has burst; there’s no way to hire all the surplus labor and there’s an oversupply of capital. Capitalism is deadlocked.
People are angry. The bottom 50 percent of income-earners own less than one percent of the country’s wealth. The rich doubled their share of national income over the past 30 years, and the top one percent now own 83% of all U.S. stocks. The number of poor people is at a 15-year high, and the middle class is shrinking. Banks now own more housing than all individual citizens combined. Some 61% of Americans live from paycheck to paycheck.
Obama saved capitalism by bailing out the banks, but there was no reform that would prevent the same thing from happening again. Republicans oppose every Obama policy, downplay the central role they played in creating the depression, and pursue the same policies that created the downturn: low taxes and no regulation.
The outcome of the current political situation could be dangerous for democracy. Some 1,000 right-wing paramilitary, nativist, patriot, Christian Identity, anti-government, and white supremacist groups are stockpiling weapons. Angry over losing their social status, far-right conservatives formed the Tea Party, which gained power in Congress, and uses it to filibuster legislative solutions. Meanwhile, also inflamed by increasing poverty, the largely peaceful, middle-class Occupy movement is taking to the streets. Orchestrated attacks against it could foster a backlash.
Economic uncertainty and hate-mongering politicians contribute to an atmosphere of fear in which anything could happen, and some wonder if violence can be far behind. In any case, it’s worth heeding the warning that when the disparity between rich and poor grows to the extent it has in the United States today, empires fall.