Wednesday, January 27, 2010
During his December confirmation hearing, Bernanke sang from the old Fed songbook, emphasizing the urgency of entitlement reform as a way of reducing the federal deficit: Willie Sutton robbed banks because that’s where the money is, as he put it. The money in this case is in entitlements. In the current social climate, Bernanke's unrepentent orthodoxy has temporarily slowed his confirmation by the Senate. After all, scapegoats are desperately needed, and if the choice is between Senators and congressional representatives up for reelection and appointed figures like Bernanke and Treasury Secretary Geithner, the choice is obvious.
But no one should mistake the theatrics of Congress for an insistence upon a change in policy. Neither Bernanke nor Geithner are going to lose their job. And, in any event, here at American Leftist, we are more concerned about the societal implications of the policies of the Fed and the Obama administration. It is not difficult to piece the puzzle together. Bernanke and the Fed regulate monetary policy in such a way as to preserve the dominant transnational financial players, while the four horsemen of unemployment, foreclosure, state budget deficits and small business failure lay waste to community after community.
Meanwhile, Obama implements an anemic stimulus plan and a cosmetic mortgage modification program. At the very moment that I write this (he's giving the state of the union), he's probably insisting upon a freeze upon domestic expenditures. In the last few days, his proposals for increasing employment have been limited to increasing tax breaks for businesses to hire people, people with children and people saving for retirement. Maybe, he will embrace the pitifully small stimulus proposals pending in the House and Senate. The fact that many state governments are on the verge of insolvency is not important enough to mention.
Surely, by now, you've figured it out. Neither the Fed nor Obama want to do anything that will revive the economy until it has been completely restructured on terms dictated by capital. What does that mean? Put simply, it means rendering the lives of approximately 75% to 85% of the US population so insecure that they will gladly work under any conditions imposed by their employers. More concretely, it means eviscerating the power of labor unions and the government to impose constraints upon the ability of corporations to extract maximum profit, while reducing what remains of pension benefits, Social Security and Medicare, you know all those things that neoliberals have successfully rebranded as entitlements.
Eventually, there will be a reckoning, but, as Ernest Mandel cautions, we should not anticipate a millennialist, utopian outcome. The character of the society that will replace the one in which we now live depends upon us. The representatives of capital within the US political system are making their intentions clear, as they have since this recession began. To date, beyond expressions of populist anger, there appear to be no signs that Americans recognize the necessity of broad based collective resistance. But, perhaps, we need to look a little more closely.