Although things are very much in flux, the dim outlines for the next two years are starting to emerge from the mist.
Whatever the reason, Biden’s Covid relief proposal goes a lot further than anybody expected. (To what degree it will be watered down is another question.) He followed that with thirty executive orders within 48 hours. Included were orders returning the US to the World Health Organization, the Paris Climate Accords and the Iran nuclear deal. The great majority of the US capitalist class supports these steps as well as others, including Biden’s orders eliminating the travel ban from predominantly Muslim countries and the one establishing a path towards citizenship for the 11 million undocumented immigrants. (Among other things, that’s also potentially 11 million more votes for Democrats.) Slightly more controversial for the capitalists was his reimposing a ban on oil drilling in the Arctic refuge, and certainly controversial – and a complete surprise – was his termination of construction on the Keystone XL pipeline. (It remains to be seen if he also terminates construction on the Dakota pipeline.)
These orders as well as his Covid relief plan seem to show an unexpected degree of change. Not so with almost all of his key appointments, 80% of whom worked for the Obama administration:
- On the all-important issue of the environment, Biden has appointed John Kerry, former
Secretary of State under Obama, as his international climate envoy. In a recent interview, Kerry was asked about meeting with oil executives. “I’m listening to what their needs are on how they view the world so I can begin to understand better what the possibilities may be once the president is sworn in…” Kerry replied. He added, “I talked the other day with the head of a big oil company. And they understand that changes are coming and that things need to be done.”
- Biden has appointed Michael McCabe to head the “agency review team” for the Environmental Protection Agency (EPA). McCabe formerly worked for DuPont, where according to The Intercept he “helped the giant corporation dodge the [the EPA’s] efforts to set binding limits” on the toxic PFAS chemical.
- Another aspect of environment policy is agriculture. Biden has appointed Tom Vilsack as
secretary of agriculture. Vilsack served in that position under Obama. Because of his strong links to the company, he is known as “Mr. Monsanto”. He is also known to be closely connected with agribusiness in general. As such, it seems very unlikely that he will do anything to really encourage regenerative farming. (See: Global Warming, “Grass” Farming and a Planned Economy for an explanation of regenerative agriculture.) This also impacts the issue of future pandemics since industrial agriculture/factory farming is part of the basis for the rise of new pandemics. There is also a more directly political aspect to this appointment: In recent decades, industrial farming has come to dominate rural America, driving millions of small farmers to the wall. It is their desperation that has caused many of them, and those around them, to turn to far right politics. If the encouragement of industrial farming continues, as seems likely under Vilsack, then it will be impossible to change this mood in rural America.
- Biden has appointed Antony Blinken as secretary of state and Avril Haines as director of
national intelligence. These two are linked not only because they both worked for Obama, but also because Blinken co-founded and Haines worked for WestExec consulting. This relatively new company consults with private businesses in helping them make connections with the US government as well as other governments. See this article for more on the company. Their motto is “Bringing the situation room to the board room.” (The “situation room” is like the war planning room in the White House. It’s the secure room where the most high level and secure urgent meetings with the president are held.) One of the key initiatives in which Westexec was involved was in helping link up private tech companies with the government in advancing facial recognition. Specifically, this was for drone warfare, but clearly there are domestic uses also. We should keep this in mind since it is virtually certain that the government at the federal, state and local levels will be using the attempted lynching of January 6 to crack down on all protests, including but not limited to Black Lives Matter protests, worker strikes, etc.
Haines helped cover up the CIA torture operations in 2002 and ‘03.
As for Blinken, he was a key player in drafting Obama’s policy towards Syria. That policy amounted to initially encouraging Assad to step down while the rest of his regime remained in place and then, later, even dropping trying to get Assad out. (See: Revolution and Counter-Revolution in Syria.) Blinken also played a key role in the Obama administration’s helping to install the corrupt Maliki into power in Iraq. So Biden will revert to Obama’s policies regarding that region, including support for Israel while pressuring the government there to be less blatant in its crimes against humanity.
- For Secretary of Defense, Biden almost chose another former WestExec official, Michèle Flournoy. Instead he appointed retired general Lloyd Austin. One controversy surrounding this appointment is that Austin had to get a special waiver from the senate because he has not been retired from the military long enough to serve as defense secretary. This is not a minor issue because of the close links between the military tops and the main military suppliers. Austin will continue those links in his new role. So the “military-industrial complex” will be represented in one single person: the new defense secretary.
- Biden has appointed Janet Yellen to head the Treasury. A former deficit “hawk”, she has now gotten religion and is in favor of “going big”, as is Biden himself. In her testimony before the Senate regarding her appointment, she replied to Republican senator John Thune that she agreed that the deficit is of concern but right now the main thing is to “help people”. The key to this exchange is that she did not challenge the double standard of the Republicans in any way. The largest deficits in US history were run up under Trump, but the Republican senators were fine with that. If this is an indication of the developing attempts of the Republicans to sabotage any of Biden’s spending plans, then it is not a good omen.
On his economic plans, Biden is taking a lot more definitive action than almost anybody expected, maybe even including himself. (See Biden’s Covid Relief Plan: Not Just Neoliberal “Austerity”.) The main reason is probably the effect of the Black Lives Matter protests of this last summer, but also the attempted lynching on January 6. That event must have shaken a lot of capitalist politicians and made them realize that serious action is necessary if they wish to allow capital to continue ruling in the same way.
Democrats and Republicans
One big issue yet to be resolved, which in fact will probably never be resolved, is the relations between the Democrats and the Republicans: There were ten Republican Representatives who voted with the Democrats to impeach Trump. They did so in hopes of winning stronger backing from their class – the capitalist class. Former Republican official Ken Spain explained the issue: “I would hope that members of the business community who are standing on principle and refusing to support Republicans who voted against certifying the election results would focus their energy and resources toward helping those members who did stand up on behalf of the American democratic process,” he said.
On the other hand, nearly every Republican who voted to impeach will be facing a serious
primary threat, starting with Liz Cheney (who had had hopes of becoming the Republican nominee for president in 2024), Peter Meijer (Michigan) and Tim Rice (South Carolina). The reason is that about ¾ of Republican voters still back Trump and ½ “strongly” back him. In fact, 8% of the US population supports the attempted lynching of January 6! And as for those corporate PAC’s that threaten to stop donating to Republicans, that is mainly for show. The overwhelming majority of corporate donations to Republicans goes to the Republican House and Senate Leadership Funds.
Therefore, impeachment will be Dead On Arrival in the Senate, where it would need a 2/3 majority to convict Trump.
As for Biden’s Covid relief plan, it’s doubtful that one single Republican senator will vote for it as it stands, and at least one Democrat (the conservative Joe Manchin from West Virginia) also probably won’t support it. They will hide behind concern for the government deficit, which is now headed towards the stratosphere.
Biden and US Economy
Marxist economist Michael Roberts recently wrote an article about the US economy under Biden. He explained that US public debt is now 110% of US Gross Domestic Product (GDP). Right now, that is bearable because interest rates are so low. Here’s a related possible issue, though: In the past, I have often raised the prospect of inflation. Inflation of prices of consumer goods hasn’t really happened, though. So I’m reluctant to raise it again. However, Roberts raises it here. “And then there is the debate about the size of the public debt and inflation,” he writes. That’s because more debt means more money circulating in the economy. And if there is more money circulating and it’s not matched by increased production of goods, that naturally means that more money will be required to buy the goods. My theory is that there has actually been a lot of inflation – in real estate prices and stock market prices. In other words, a lot of the increased money has gone to the rich and the uber rich, who use it to buy real estate and stocks. (Also, as shadostats.com shows, the actual inflation rate is quite a bit higher than the official rate.)
There is a related problem: If inflation goes up, then interest rates have to rise also. If that happens, then the federal debt really becomes a burden. Likewise for the value of the dollar vs. other currencies. Since November, 2020, the US dollar has been falling steadily. It’s true that this fall in the dollar, if it continues, will help US companies export, but the flip side is that a fall in the value of the dollar means higher prices at home – in other words, inflation. One way a government can prop up its currency is to raise interest rates. But that puts a real stress on the Treasury since it would mean greater payments on the debt.
“Build Back Better”, Deficit, and Falling Rate of Profit
Another part of Biden’s economic plan is his “Build Back Better”. This is his proposal to invest about $2 trillion in infrastructure, especially “green” investment, over four years. Again, according to Roberts, this would mean a maximum of 1% of GDP. He writes: “On average, government investment to GDP in most major capitalist economies is about 3% of GDP, while capitalist investment is around 20% of GDP on average. So a revival of investment, growth and jobs in a capitalist economy ultimately depends on capitalist, not government, investment.” He goes on to explain that the rate of profit for investment has tended to decline over the years, just as Marx explained it does.
“Sure, we hear all about the huge profits made by the likes of Amazon, Google, Netflix and the big banks during the 2020 pandemic slump,” Roberts writes, “but the profits of the FAANGS are the exception to the rule. Total corporate profits (after government handouts are removed) have dropped by some 30%. And according to Bloomberg, in the US, almost 200 big corporations have joined the ranks of so-called ‘zombie’ firms since the onset of the pandemic. They now account for 20% of the top 3000 largest publicly-traded companies, with debts of $1.36 trillion. That means 527 of the 3000 companies didn’t earn enough to meet their interest payments!” It also means that the companies won’t be eager to invest since return on investment (rate of profit) is low and declining.
Sometimes Roberts seems to see only one side of things, but he does bring some important statistics and arguments to the table here.
Next Two Years
To return to the question of the next two years of the Biden administration: If Biden is able to start to get the pandemic under control, he will get a lot of credit. The Republicans can’t really do much to stop his plans for vaccine distribution. However, the hysteria they have created about wearing masks and about closing many businesses will linger on well after Trump is gone. That means it will be difficult for him to get compliance with the most basic health practices to prevent spread of the virus. Nor is vaccination the full answer, since the present vaccines apparently prevent people from getting sick a lot more than they prevent people from getting infected and spreading the virus.
As far as the economic disaster tens of millions are experiencing, if Biden gets most of his full package through he will get a lot of credit. However, he would need all 50 Democratic senators (plus VP Harris) to vote for it in order for it to pass. Already, Senator Manchin (West Virginia) has indicated he opposes much in Biden’s proposal. And Mitch McConnell is already showing that he’s going to revert to “Plan A” under Obama: Do everything he can as Republican leader to undermine the president in order to stoke dissatisfaction, which the Republicans will blame on the president.
However, the Republicans face one huge problem: The already existing crisis in their own party. Added to this is the threat of Trump to build a new party. Whether he does or not probably partly depends on whether he thinks he can make more money that way. (Yes, he really is that crude!) But build a new party or continue to drag the Republicans to the right, he will be a threat to that party. That’s because while over 70% of Republicans believe that Biden stole the elections, nearly 30% don’t believe that. This leaves a huge truth denying sector of the US population, but it is not nearly a majority at this time. A sector of Republicans have already left that party and more will do so, especially if Trump continues with his antics and Biden has any degree of success. If the Democrats also abandon their ridiculous commitment to not doing any public campaigning in 2022, and if Biden has any degree of success, it’s entirely possible that the Democrats could strengthen their majority in both houses of congress. And if Trump actually does split the Republicans, that would be like opening the door wide for the Democrats.
Old Way of Rule
No matter what, though – if the Republicans split or are dragged even further to right wing
hysteria; if Biden has any success with the economy or with Covid or not; if there are other crises, including international crisis and environmental crises – the old way of capitalist rule is starting to crumble. That was the rule by balancing between two basically stable capitalist parties. It’s like an equation: If one side of the equation (the Republican side) is dissolving, then the equation no longer balances. (See My Deep State Hearing Aids and Crisis of Republican Party is Crisis of US Capitalist Rule.)
What new will arise out of this? For one thing, if there are two far right parties (the old Republicans and the Trump party) vs. one other capitalist party (the Democrats), that very much weakens the argument against another party to keep the Republicans out since a Trump party would accomplish that for us. Even more important, whether Trump & Co. split or not, the entire crisis would open up all sorts of new, unpredictable possibilities. That includes a renewed opening for the rise of a mass working class party.
What would come of it is impossible to say with any certainty. And those who think they know for sure are the ones who understand it least of all.
Categories: 2020 elections, economics, Uncategorized, United States
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