Friday, October 7, 2011

Vive La Occupation! (or, how a progressive movement finally came about)

For the upcoming issue of the fabulous Zahranicna Politika.

On several occasions in the past, I have wondered in these pages why we haven’t seen a populist progressive movement rise up in the wake of the 2008 financial crisis and the subsequent economic meltdown in the United States.  This seemed logical given that the crisis, which traces its origins to broad deregulation of the financial sector and reckless behavior of the banks, has left millions of Americans without jobs, homes and any hope for a better future.  What’s more, the banks have not only escaped unscathed - no criminal prosecutions to date to report on - but they have also been kept alive thanks to a near trillion dollar bailout from taxpayers and shortly thereafter returned to the good old days:  record profits and bonuses.

And yet, the only populist movement that has begun since those days was the conservative and libertarian “Tea Party.”  Their primary principle was animus towards the government, taxes, spending and the President. In their interpretation of events, it was Obama who orchestrated the Wall Street “bailouts”, the “government takeover” of healthcare and the “failed” stimulus of 2009.  This interpretation resembles reality only to the extent that it doesn’t distort it completely:  the “bailout” of Wall Street was actually the idea of Hank Paulson, the Treasury Secretary of George W Bush; the health reform law which passed in 2010 relies on market mechanisms to expand insurance coverage, not on government bureaucracy; the biggest problem with the 2009 stimulus was that it was too small not that it was too big.

Indeed, Obama has been relatively centrist in many of his proposals and policies.  The banks which caused the crisis needed government funds to survive because they were “too big to fail” and yet Obama’s administration did not dismantle them.  The fiscal stimulus the president sought when the recession started was relatively modest (given the magnitude of the output drop) and combined spending with tax cuts, something to like both by Democrats and Republicans.  At the end of 2010, when the tax cuts for the wealthy that President Bush signed in 2001 and 2003 were set to expire, Obama sided with the conservative view that one should not be raising taxes during a recession.  A blood thirsty socialist he was not.

Despite this apparent centrism, the Tea Party movement was gaining strength.  In a sense, the Tea Party rose up from a conservative fear of what Obama could be, if he really was the person that progressives hoped he was.  While the reality of Obama’s administration did not reflect these fears by any stretch of imagination, by the summer of 2010 the Tea Party has coalesced into a political force bent on pushing the Republican Party further to the right and dismantling anything and everything that Obama has dared to touch.  In November 2010 the movement scored a victory: with many of their candidates elected to the House of Representatives and the establishment of a Tea Party caucus it became a distinct force in the Republican party.

While Obama’s first two years in office were difficult - even with Democratic majorities in the House and the Senate passing reforms turned out to be difficult - things got exponentially harder with the new Republican majority and Tea Party extremists in the House.  This led to a shift:  Obama, a centrist from the start, started moving further to the right to compromise with Republicans who, in turn, were pulled to the extreme right by their Tea Party colleagues.

This shift became crystal clear during the debt ceiling negotiation which we covered in the last issue: there was absolutely no need to cut spending or the deficit in order to raise the debt ceiling, an arbitrary limit of the total amount the US Federal government can borrow.  However, Obama has previously decided that cutting the deficit and government debt are worthwhile goals - 10% unemployment rate be damned.  And so, from the get-go, he was there alongside with the Republicans talking about the government balancing its checkbooks “just like every household has to”, even though most economists have warned: the government is not at all like a household: when times are tough, governments have to borrow and spend, not cut and save.  By the time the debt ceiling debate climaxed it was not a question of whether spending would have to be cut - the President has already agreed that it does - but by how much and whether there would be any corresponding tax hikes (something the conservative staunchly opposed).  In a clear move to accomodate the nihilists on the right, Obama went as far as to agree to $4 of spending cuts for every $1 of tax increases, for a total of $4 trillion dollars.  The fact that even this was not enough is a testament to both his sloppy negotiating tactics and the extremism on the right.

All of this rightward shifting by the Tea Party, Republicans, Democrats and Obama has created a clear vacuum on the left.  It is perhaps this vacuum that created the perfect breeding ground for a progressive movement to finally come together.  On September 17th, a group of people started a protest called Occupy Wall Street, and almost three weeks later the protest is continuing and growing.  While at first the effort was at best unnoticed and at worst mocked by the media, as days go by it is gaining traction and similar protests are being staged in hundreds of cities around the US.  Perhaps as a result of its indefinite nature and notable growth, coverage of the protests has turned from sardonic to curious.  It has been amusing to watch journalists scratching their heads, “what do these people want?”, as if they have lived on Mars for the last 3 years.  

Very pointedly the movement has called itself “We Are The 99%”, referring to the majority of Americans who have seen their incomes drop and prospects dim at the expense of the richest few whose fortunes have never been better.  A brief look at, a website dedicated to people posting their personal stories, shows that these are not anarchists or hippies but regular people who have played by the rules and found themselves trapped in desperate situations.  Another common theme is the sense of disenfranchisement that happened as a result of a supreme court decision that deemed corporations to have the same free speech rights as people and as such eligible to give unlimited donations to candidates.  One of the consequences of this ruling is that the culprits of the meltdown of 2008 are much more powerful in influencing political outcomes thanks to their ability to “finance” politicians, which in return, comes at least partly from capital they received from the taxpayers.  All things considered, protesting seems like the only reasonable thing to do.

It is too early to say if this movement will amount to much real change.  So far they may lack clear goals and methods, however there seems to be a real momentum for it to grow into something much larger.  At its outset the Tea Party itself seemed like a bunch of crazies with silly poster and it took several months for it to form into a more coherent movement and eventually to become a real political force.  Perhaps the same faith awaits the occupiers of Wall Street and the 99%.  

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