Two weeks before US midterm election
Democrats embrace right-wing austerity policies
By Patrick Martin
18 October 2010
With only two weeks remaining in the 2010 election campaign, Democratic Party candidates in closely contested races for the Senate, the House of Representatives and many statewide offices are highlighting their right-wing policies and minimizing any differences with their Republican opponents.
Opinion polls and media analysts are generally forecasting a Republican takeover of the House of Representatives, now held by the Democrats by a margin of 255 to 178, and significant Republican gains in the Senate, where the Democrats hold 59 seats out of 100, counting two independents who vote with them.
Some 40 states are electing governors as well, with Republican candidates expected to sweep a belt of economically devastated industrial states—Pennsylvania, Ohio, Michigan, Illinois, Wisconsin—from the Atlantic to the Great Lakes. There are more closely contested gubernatorial races in three of the four largest states: Florida, Texas and California.
The right-wing policies of the Obama administration, above all its failure to take any significant measures to alleviate mass unemployment, have opened the doors for a revival of political influence for the Republican Party, which was thoroughly repudiated by the American people in the past two elections, losing control of both houses of Congress in 2006 and losing the White House in 2008.
The anticipated Republican victories are due mainly to a projected collapse in turnout by those who voted for Obama and other Democratic candidates in 2008, not to any great surge of popularity for the Republican candidates, many of them associated with the ultra-right Tea Party movement. An Associated Press-Knowledge Networks poll published over the weekend found that one-quarter of Obama voters were considering voting against the Democrats this year, and an even larger number were not planning to vote at all.
A Quinnipiac poll published in the Wall Street Journal last week detailed a major demographic shift in projected voter turnout in the state of Ohio, where as many as six incumbent Democratic House members could be turned out. In 2008, voters aged 18-29 and those aged 65 and older each comprised 17 percent of the electorate. The poll projected that in 2010, the youngest age group would be only 10 percent of likely voters, while those 65 and older would account for 25 percent.
Similar figures are reported for other states, reflecting the widespread disillusionment with the Obama administration among young people, who are the most opposed to the continuing war in Afghanistan, the most affected by the destruction of jobs, and the most alienated from the official two-party system.
The Obama White House, like the congressional Democratic leadership, has already begun planning for an expected Republican takeover of the House of Representatives, if not the Senate. Obama gave a lengthy interview to Peter Baker of the New York Times, published in the newspaper’s Sunday magazine, in which he suggested in broad strokes the coming shift further to the right.
Baker writes that according to Obama, “He let himself look too much like ‘the same old tax-and-spend liberal Democrat.’” Obama virtually parroted the right-wing rhetoric of the Republican election campaign, describing the response of “average Americans” to his administration in the following terms: “They started feeling like: Gosh, here we are tightening our belts, we’re cutting out restaurants, we’re cutting out our gym membership, in some cases we’re not buying new clothes for the kids. And here we’ve got these folks in Washington who just seem to be printing money and spending it like nobody’s business.”
This reinforces the myth promoted by the corporate-controlled media that concern over federal deficits—rather than anger over unemployment and the refusal of the Obama administration to do anything about it—is the driving force of the coming Democratic electoral defeat.
Obama promised to engage in a more intensive effort to win Republican congressional support during the next two years. The contours of “Obama 2.0,” as White House aides described it, include seeking even closer relations with corporate America, and working with the Republicans to cut federal spending, particularly through the bipartisan deficit reduction commission that is to issue its report in early December.
Asked to name Republicans on Capitol Hill with whom he could work, Obama singled out Senator Judd Gregg and Congressman Paul Ryan, both of them identified with plans to cut spending. Ryan, a member of the deficit reduction commission, has issued a plan to privatize Medicare, the federal program that underwrites medical care for the elderly.
Obama made it clear that he was prepared to ride roughshod over popular resistance to the destruction of social programs. “If the question is, Over the next two years do I take a pass on tough stuff,” he told Baker, “the answer is no.”
Congressional Democrats have responded to the polling numbers—and the flood of campaign cash into the coffers of the Republican Party, mainly from the wealthy and big business—in two ways: moving further to the right politically, and throwing in the towel outright in an increasing number of campaigns.
The Democrats have effectively conceded several Senate seats. Both the New York Times and the Washington Post ran profiles Sunday of the collapsing campaign of Senator Blanche Lincoln of Arkansas, who has been virtually abandoned by the national party and trails by 20 points to a Republican challenger.
Democratic candidates in North Dakota, Indiana, Ohio, North Carolina and Louisiana have also been largely written off, and in Florida, Democrat Kendrick Meek is denying reports that he will withdraw from the race and throw his support to Republican Governor Charlie Crist, who is running as an independent.
The triage process is more advanced in the House of Representatives, where as many as 100 of the 255 Democratic-held seats are believed to be at risk. Last week the Democratic Congressional Campaign Committee cut off further national funding for a dozen House campaigns, effectively conceding these districts to the Republicans. These include seats held by two incumbents in Ohio and one each in Pennsylvania, Florida, Colorado and Wisconsin, as well as open seats in Arkansas, Indiana, Kansas, Louisiana and Tennessee.
In the dozen or so Senate races still closely fought—New Hampshire, Connecticut, Delaware, Pennsylvania, West Virginia, Illinois, Wisconsin, Kentucky, Colorado, Nevada, California, Washington, Alaska—the contests between the Democratic and Republican candidates show a definite pattern.
Obama, Vice President Biden, and other national party spokesmen have adopted a bogus, pseudo-populist stance, seeking to motivate Democratic Party voters to turn out at the polls by bashing the Republicans as stooges of big business. But the Senate Democratic candidates have by and large refused to follow suit. They have focused instead on personal mudslinging, while distancing themselves from the Obama administration.
In West Virginia, for example, Democratic Governor Joe Manchin, who faces millionaire businessman John Raese for the seat vacated by the death of Robert Byrd, declared that he would support repeal of Obama’s healthcare legislation, at least in part, and trumpeted his opposition to any environmental restrictions on the coal industry.
In Kentucky, state attorney general Jack Conway faces Republican Rand Paul, son of the Libertarian former candidate for president and an extreme proponent of free-market policies. But Conway has declared his adamant opposition to government regulation of the coal industry, going so far as to file a suit against the federal Environmental Protection Agency.
In the only televised debate in the Delaware Senate race, Democrat Chris Coons avoided any serious discussion of the ultra-right politics of Republican Christine O’Donnell, the Tea Party candidate who upset the favored candidate of the Republican establishment. He presented himself as a responsible ally of the state’s business establishment, and responded defensively to O’Donnell’s description of him as a “bearded Marxist” in his college days, declaring himself to be “a clean-shaven capitalist.”
In a Senate debate in Illinois, Democrat Alexi Giannopoulos and Republican Mark Steven Kirk traded accusations of personal corruption and mendacity. The Democrat has been linked to corrupt practices that led to the collapse of the bank owned by his family, while the Republican is a former military intelligence officer who lied about his service record during the Iraq war.
Perhaps the clearest demonstration of the bankrupt and right-wing character of the Democratic Party election campaign came in the only debate in the Nevada Senate race, between Democratic Majority Leader Harry Reid ands his challenger Sharron Angle, a Tea Party favorite.
While Angle is an ultra-right, not to say bizarre, candidate—her political record includes support for indoctrination of state prison inmates by the Scientology cult, as well as abolition of the federal Department of Education—Reid was thrown on the defensive over his personal wealth and lavish lifestyle.
Reid was a multi-millionaire lawyer and property developer when he first won election to the Senate in 1992, and now enjoys a personal fortune estimated at $3.1 million to $6.7 million, according to documents he filed with the Senate. It was therefore difficult for him to posture as an advocate of working people against Angle, who is of modest personal means.
The Republican candidate supports draconian measures against undocumented immigrants, in a state with nearly a quarter of the population of Hispanic descent. She opposes requiring insurance companies to cover specific procedures and medical conditions, and has advocated privatization of Social Security.
But Reid did not press her on these issues, a performance that the Washington Post described as “remarkably restrained.” He also called former president George W. Bush a “friend” and praised right-wing Supreme Court Justice Antonin Scalia as a “masterful mind” on legal affairs.
In the contests for the House of Representatives, the most notable embrace of Republican talking points has been the slew of Democrats who have publicly repudiated Speaker Nancy Pelosi, one of the principal targets of Fox News/talk radio venom.
Several incumbent Democrats who voted for Pelosi as speaker in 2007 and 2009 have declared that they will not do so in 2011, when the next Congress convenes. A Mississippi Democrat boasted that in 1,466 votes over the past two years, “Nancy Pelosi agreed with my vote 34 times.”
One conservative southerner, Jim Marshall of Georgia, went so far as to run television commercials showing “hippies” in San Francisco—Pelosi’s district—with the narrator intoning, “Georgia is a long way from San Francisco. And Jim Marshall is a long way from Nancy Pelosi.”
Pelosi’s response has been characteristically cynical. “I just want them to win,” she told the PBS program “News Hour”. “They know their districts.”
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THE OBAMA’S ECONOMIC PLAN: service Wall St., CORPORATE PROFITS SOARING. BANKSTERS’ PROFITS AND BONUSES SOARING.
SO IS FORECLOSURES, DEM CORRUPTION, UNEMPLOYMENT, AND THE DEMS’ PUSH FOR AMNESTY = ILLEGALS’ VOTES AND DEPRESSED WAGES!
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These statistics provide a only a pale indication of the human suffering and social devastation at one pole and ever more obscene enrichment of the financial aristocracy at the other resulting from the failure of the capitalist profit system and the drive by the ruling class, spearheaded by the Obama administration and backed by both big business parties, to impose the full brunt of the crisis on the working class.
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The Administration's Phantom Immigration Enforcement Policy
According to DHS’s own reports, very little of our nation’s borders (Southwestern or otherwise) are secure, and gaining control is not even a goal of the department.
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While the official unemployment rate has climbed from 7.6 percent when President Obama took office in January to 10 percent today, the administration’s worksite enforcement strategy has amounted to a bureaucratic game of musical chairs. The administration has all but ended worksite enforcement actions and replaced them with paperwork audits. When the audits determine that illegal aliens are on the payroll, employers are given the opportunity to fire them with little or no adverse consequence to the company, while no action is taken to remove the illegal workers from the country. The illegal workers simply acquire a new set of fraudulent documents and move on to the next employer seeking workers willing to accept substandard wages.
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THE ENTIRE REASON THE BORDERS ARE LEFT OPEN IS TO CUT WAGES!
“We could cut unemployment in half simply by reclaiming the jobs taken by illegal workers,” said Representative Lamar Smith of Texas, co-chairman of the Reclaim American Jobs Caucus. “President Obama is on the wrong side of the American people on immigration. The president should support policies that help citizens and legal immigrants find the jobs they need and deserve rather than fail to enforce immigration laws.”
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US corporate profits soar on layoffs, wage cuts
By Barry Grey
6 October 2010
US corporate profits are soaring in the midst of the deepest economic slump since the Great Depression, on the basis of a ruthless policy of using mass unemployment to slash wages and heighten the exploitation of American workers. In order to make the impoverishment of the working class a permanent feature of American life, companies are hoarding vast amounts of cash rather than hiring workers and expanding output.
These are the conclusions that flow from a Wall Street Journal analysis of second-quarter 2010 corporate profits, reported in the newspaper’s Monday edition under the headline “Propelling the Profit Comeback: Retooling, Downsizing.” The article gives statistics showing that US corporate profits are surging despite stagnant and even falling revenue, sharply increasing the percentage of revenue represented by profit.
None of the other major industrialized nations has registered a rise in corporate profits in the aftermath of the financial panic of September 2008 comparable to that in the US. Not coincidentally, none has witnessed mass layoffs on the scale seen here.
(OBAMA’S ASSAULT ON WAGES IS CALLED LA RAZA ‘THE RACE” AMNESTY!)
This difference points to the critical role played by the Obama administration. It has rejected any serious measures to create jobs and thereby fostered an economic environment of It gave the signal for a nationwide offensive against the wages and conditions of US workers when it forced General Motors and Chrysler into bankruptcy and insisted on tens of thousands of layoffs and unprecedented wage cuts as part of a government bailout of the auto bosses.permanent mass unemployment.
Among the statistics reported by the Journal are the following:
• The Commerce Department estimates that for all US companies, second-quarter after-tax profits rose to an annual rate of $1.208 trillion, an increase of 3.9 percent from the first quarter and a 26.5 percent rise from a year earlier. This is the highest annual rate on record, although it does not take inflation into account. As a percentage of national income, after-tax profits were the third highest since 1947, surpassed only by two quarters in 2006, at the height of the last boom.
• Companies in the Standard & Poor’s 500 stock index reported second-quarter profits of $189 billion, 38 percent higher than a year earlier and their sixth highest quarterly total ever, without adjusting for inflation.
• This year’s second-quarter profits at S&P 500 companies were 10 percent higher than in the second quarter of 2008, prior to the financial panic, even though revenue was down by 6 percent. Out of every dollar of sales, companies kept nearly 8.4 cents as profit, up from 7 cents in the 2008 quarter.
• Cumulative profit at technology firms rose 33 percent in the second quarter compared with the same quarter in 2008, though revenue increased by only 7 percent.
• In the consumer discretionary category, which includes the finance and auto industries, net margin—the percentage of revenue that represents profit--more than tripled between the second quarter of 2008 and the corresponding period this year.
As the Journal notes, “To achieve that performance, companies laid off hundreds of thousands of workers, closed less profitable units, shifted work to cheaper regions and streamlined processes.”
The article singles out a number of companies that sharply increased their profits by means of cost-cutting and downsizing, including Texas Instruments, video game maker Electronic Arts Inc., Starbucks, Coca Cola, Ford Motor Co. and industrial parts maker Parker Hannifin. All reported higher profits despite flat or declining sales as compared with 2008, the newspaper notes.
“Despite the hefty profits,” the Journal says, “executives aren’t expected to boost spending on new employees, products and equipment anytime soon.”
John Riccitiello, chief executive of Electronic Arts, which slashed its video game releases by nearly half and laid off 2,000 of its 9,800 employees, is quoted as saying, “We’ve focused on permanent changes that won’t have to be undone as sales improve.”
At Parker Hannifin, profits more than quadrupled from a year earlier while sales grew only 25 percent. Its CEO is quoted as saying the firm plans no significant new hiring “for the foreseeable future,” and will instead stretch its work force by using part-timers and adding weekend shifts.
The turnaround at Ford is even more staggering. In the second quarter of 2008 the company posted an $8.7 billion loss. This year, even though sales remain 15 percent below 2008 levels, Ford reported a second-quarter profit of $2.6 billion, its fifth consecutive quarterly profit.
Far from this upsurge in profits arising from a general expansion of production and employment, it has been achieved almost entirely from the destruction of jobs and the use of mass unemployment to blackmail workers into accepting wage cuts and speedup.
As Financial Times commentator Tony Jackson writes in a column published Monday, “Among the many puzzling phenomena of the post-crisis world, one of the oddest is the astonishing rebound in American corporate profits.” Noting that US corporate profit as a proportion of total national output is “back at record levels in spite of the financial crisis,” Jackson attributes this fact to the “division of the pie between capital and labour.”
Also on Monday, the New York Times published a front-page article on the immense cash hoard being piled up by US corporations as a result of the Federal Reserve’s near-zero interest rate policy and the increase in profits. The estimated $1.6 trillion of cash in corporate coffers is not being used to hire more workers. To the extent that a portion of this money is being invested, it is largely going for such parasitic purposes as stock buy-backs (which drive up share values without producing any real value) and mergers and acquisitions, which inevitably result in more job-cutting and downsizing.
These statistics provide a only a pale indication of the human suffering and social devastation at one pole and ever more obscene enrichment of the financial aristocracy at the other resulting from the failure of the capitalist profit system and the drive by the ruling class, spearheaded by the Obama administration and backed by both big business parties, to impose the full brunt of the crisis on the working class.
What is involved here is not a temporary downturn, after which conditions will improve for the masses of people, but rather a fundamental realignment of class relations based on a drastic and permanent lowering of working class living standards.
To carry through this offensive, the ruling class relies on the collaboration of the trade unions to suppress working class opposition. In the United Auto Workers union and the AFL-CIO and Change to Win union federations the Obama administration and the corporate elite have accomplices whose only concern is to secure for the union bureaucracy a cut in the spoils of the class war being waged against working people.
The Socialist Equality Party urges workers to carry out a rebellion against these corrupt, right-wing organizations and establish independent and democratic rank-and-file action committees to fight against layoffs, plant closures and wage cuts. These committees should spearhead the struggle to unite all sections of workers and young people and mobilize the power of the working class.
This is a political fight against the Obama administration, both big business parties and the capitalist system which they defend. We urge workers and youth to read the SEP program, “The Breakdown of Capitalism & the Fight for Socialism in the United States,” attend the public meeting in their area and make the decision to join the SEP.
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