Obama: Mr 99%?

The US president needs to recognise the resentments that have sparked the 99% movement.

Just a bunch of "kids and kooks" or the early and messy stirrings of a deeper shift in US politics? That's the question pre-occupying US politicians and assorted commentators from left to right as the one month old occupation of Wall Street spreads to a growing number of cities.

They call themselves the "99 per cent" -- representing, they say, everyone apart from the super-rich and powerful. On the left the nacsent movement has been lionised by Naomi Klein as "the most important thing in the world" with self-conscious comparisons made to the recent uprisings in Tunisa and Egypt, as well as the "indignados" in Madrid and those on the streets in Athens. In contrast, high-brow centre-right commentators view it as inchoate, unimaginative, and amateurish: all slogan, no proposal. Grow up, put on a suit and do some hard policy work is their message.

Meanwhile the Tea Party, scornful though they are of the notion that government should do more to tackle the problems of the 99 per cent, take the protestors a bit more seriously even if they they don't like to say so. Until now Tea Party activists have enjoyed a near monopoloy on grass-roots energy and righteous anger, so they are eyeballing the new competition carefully. They've been prompted to spawn their own counter-movement "the 53 per cent", representing the interests as they see it of the half of the population who are federal tax payers. (Memo to Liberal Democrats seeking to remove ever more low-earners from the UK tax-system: working people who've been taken out of the tax-system are viewed as non-contributors by the populist right). Other voices lament the fact that the cultural chasm between the 99 per cent-ers and the Tea Party is so large that it will not permit common cause to be made on one or two specific issues where there is some populist shared ground.

But perhaps most interesting is that some important establishement and centrist voices are choosing not to dimiss the protestors, which they surely would have done only a few years ago. Hence the likes of the New York Times and the Financial Times have adopted sympathetic, if questioning, stances (indeed the FT even felt moved to invoke the spirit of The Diggers -- which surely must be a first -- in a recent op-ed).

This measured response is prompted in part by the increasingly widespread reconigtion of the scale of mainstream resentment at the explosive growth in rewards going to the richest 1per cent -- and this at a time of continued public outrage about the cost of the last bank bailout (as the next one moves into view). But it's also rooted in a new appreciation of what has been happening to the living standards of most of the other 99 per cent, and a deepening sense of anxiety about what could happen if these trends persist.

There is now indisputable evidence that the US economy isn't working for what are termed middle-class families. The income of the typical American family has seen only aneamic growth for a generation. But from 2000 - 2010 these these trends worsen: the median income of families with children in the US has fallen by more than 11per cent, with a fair chunk of that fall happening before the onset of the recession, though it has deepened since (indeed 11per cent will be an understatement as incomes fell again sharply in 2011). As the chart below shows, this has cut across all racial groups -- always an important factor in US politics -- though some far more than others, with African-American families seeing a staggering 18 per cent drop in their incomes.

 

[Source: US Census Bureau]

Until recently one of the main virtues of the US economy -- often held up in mitigation against these long-term wage trends -- has been its powerful record jobs. Yet employment levels have been crashing over recent years, which will act as a further drag on future wage growth. The "American jobs machine" hasn't just run out of steam; it has broken down.

These challenges leave the Obama administration with little choice but to run against the economic system that it oversees. The President now regularly opines about the bad deal that the middle-class are getting: "a lot of folks who are doing the right thing aren't rewarded and a lot of folks who aren't doing the right thing are rewarded". In another echo of our own politics, Vice President Joe Biden proclaims that "the bargain has been breached."

Yet for all this rhetorical effort the Democratic leadership is nonetheless torn between different strategies for responding to this new vibrancy on the left. On the one hand, the case against embracing the new currents animating US politics is deeply institutionalised: it's been a long time since the Democratic Party successfully mobilised populist political sentiment -- and there are strong grounds for questioning its willingness to do so now, a point Robert Reich has recently made. Moreover, Obama will clearly want to fight from the centre in 2012, doing everything he can to push the Republicans to the right. He is very unlikely to think that standing shoulder to shoulder with unruly street protestors will help this cause. And for all his tough talk about Wall Street, he will also be looking for his own big money donations.

Against this is the obvious appeal of finding a way of tapping into some raw political energy, rekindling idealism and identifying some plausible enemies -- all of which Obama needs -- and which together add up to some of the key driving forces in politics. Clearly this doesn't mean signing up to all the myriad ideas emerging from the 99 per cent movement, but it does mean recognising more directly the resentments and insecurities that have sparked this new force. If handled deftly this approach could also strike a chord with the anxious American middle-classes.

As all sides look to 2012 it is clear that the anger that has surged across US society, well beyond those occupying Wall Street or attending Tea Party meetings, is a highly unpredictable and potent force, especially for an incumbent President. If Obama fails to find a way of riding and successfully steering it, then it is set to turn against him.

Gavin Kelly is a former adviser to Downing Street and the Treasury. He tweets @GavinJKelly1.

Getty
Show Hide image

Yanis Varoufakis: The left never recovered from the fall of the Soviet Union — yet there is hope

A radical internationalism is needed to democratise the EU and breathe new life into the left.

The left has been in disarray since 1991 – it never fully recovered from the collapse of the Soviet Union, despite widespread opposition to Stalinism and ­authoritarianism. In the past two decades, we have witnessed a major spasm of global capitalism that has triggered a long deflationary period across the United States and Europe. Just as the Great Depression did in the 1930s, this has created a breeding ground for xenophobia, racism and scapegoating.

The rise of centrism is also partly to blame. For a period in the late 1990s, it seemed that this had become the new doctrine of the left. In Britain, New Labour under Tony Blair was never part of the left. Margaret Thatcher was delighted by the manner in which his governments copied her policies and adopted her neoliberal mantra, though she did ask the question: if you want to vote for a Conservative, why not vote for a real one instead?

Parties such as New Labour, the Socialists in France and the Social Democrats in Germany might have called themselves the radical centre, but that was just labelling. What was happening under the surface was that the progressive parties of the left were being lured into financialisation. In the 1960s and 1970s the centre left was aware of its duty to act as a mediator between industrial capital and labour. Harold Wilson’s Labour Party, Willy Brandt’s Social Democrats in Germany and others understood that their duty was to strike a grand bargain whereby industrial capital ceded to workers’ demands for higher wages and better conditions, while they agreed to help fund the welfare state.

From the mid-1980s onwards, the left-wing leadership abandoned this duty. Industrial capital was in decline and it was much easier to look towards the super-profits of the City of London and the global banks. A Faustian pact was made with the financial sector – European governments turned a blind eye to what the bankers were doing and offered them further deregulation in exchange for a few crumbs from their table to fund welfare. This is what Tony Blair and Gordon Brown did in Britain, Gerhard Schröder did in Germany and the Socialists did in France. Then the financial crisis struck. At that point, social democrats throughout Europe lacked the moral strength and analytical power to tell bankers that although they would salvage the banks, their reign was over.

The best hope for the left is to come together to defeat the worst enemy of European democracy: “Euro-tina”, the reactionary dogma that “there is no alternative” to the continent’s current policies. Hence the EU’s true democratisation is the only alternative. This is what my collaborators and I hope to achieve with our new Democracy in Europe Movement 2025 (DiEM25). We are compiling a new economic agenda for Europe, which will answer the question I am asked on the streets everywhere I go, from Sweden to the UK: what can we do better within the EU? If the answer is “nothing”, the Brexiteers have a point – we might as well blow the whole thing up and start afresh. The alternative to the “Year Zero” approach is to recalibrate European institutions in the context of a practical and comprehensive agenda comprised of policies that will stabilise Europe’s social economy.

The EU institutions are anti-Europeanist and contemptuous of democracy. People might wonder: if that is the case, why am I arguing to stay in, but against the Union? In response, I ask those who support the left-wing argument in favour of Brexit: since when has the British state been a friend of the working class? Never. And yet their argument is: do not dismantle it. The nation state was created to promote a fictitious notion of a national interest to co-opt labour and those on the fringes of society – the “lumpenproletariat”, as we once called them. The left understands that it is not our job to destroy institutions. Instead, we struggle to take them over and use them for good. I cut my political teeth protesting against the Greek state but I do not believe that it should be dismantled and the same argument applies to the EU.

Good people who are motivated to change society often fall out with each other. I am reminded of a scene in Monty Python’s Life of Brian – when the Judaean People’s Front confronts the People’s Front of Judaea and the Popular Front of Judaea. DiEM25’s task is to try to convince our fellow left-wingers that the solution is a pan-European unity movement. A concrete example of the power that this can have is the election of Barcelona’s new mayor, Ada Colau. A DiEM25 supporter, she won the race against the odds,
having started her career running a protest movement that championed the rights of citizens threatened with eviction because they were unable to pay their mortgages.

The Syriza government, in which I served as finance minister from January to July 2015, failed to achieve change because we ended up disunited and the prime minister capitulated to the EU at the moment when he had a mandate from the Greek people to do the opposite. My hope was that if Syriza had carried on with the struggle, we would have been a catalyst for movements across Europe (such as the one that has fuelled the rise of Jeremy Corbyn) to join us.

The capitulation of Alexis Tsipras was a hefty blow to the concept of radical inter­nationalism, but I still believe that internationalism offers the solution to the problems facing Europe in this deflationary era. The number of good-quality jobs has decreased, investment is depressed and optimism about the future is being destroyed. It is the left’s duty to do all we can to end this. If we can explain to the masses what the sources of their discontent are, we have a chance to breathe new life into the left. There are no guarantees – just a chance.

This is the latest article in our “New Times” special series

This article first appeared in the 29 September 2016 issue of the New Statesman, May’s new Tories