Pearls and Irritations

Our challenge now is to detach Australia from the death grip of the United States and to pursue an independent future, which we are quite capable of doing. To do so we will need not only to remove the old sycophantic parties but also to root out the US ‘security’ zealots from our own secretive security establishment. They will not go easily.

The US Democrats failed, again, because they don’t understand that it is what they have been doing that feeds Trump support.

Bernie Sanders gets it. He says an American on an average income is worse off today than they were fifty years ago. Fifty years. All that ‘growth’ of ‘the economy’ and your average punter is no better off, perhaps worse off.

People know it. They know they are struggling, that good jobs are disappearing, that they are slipping backwards. And they can see the fat cats raking in the wealth and flaunting it.

This has been known for a long time. Robert Reich showed it in this simple graphic thirteen years ago. 

Since around 1980 median income in the USA has stagnated, even as productivity has continued to increase steadily, as it did in the immediate postwar decades.

What happened? The game was rigged (and here) so the wealth flowed upwards. One key change was that tight restrictions on the financial sector, imposed after the searing experience of the Great Depression, were loosened by Ronald Reagan, and loosened again by Bill Clinton. Turnover in the financial markets jumped by a factor of fifty (yes, fifty times greater) as their unproductive speculative gaming sucked huge amounts of wealth from the productive economy.

Congress was purchased by Wall Street and the military industrial complex. CEO salaries became obscenely high and the capturing of other people’s wealth became flagrant. Private sector debt rose dramatically until it crashed in 1990 and again in 2008. The rich were rescued from their follies and everyone else was left to flounder and sink.

The value of Reich’s graph is that it shows that things were not always like they are now. In the nineteen fifties and sixties the increasing wealth was shared around (because people demanded it, not because the rich gave it away). The rich were taxed and governments provided valuable services. Most people don’t remember that any more, and economists seem to be too ignorant or compromised to tell us.

Sanders went so far as to call himself a democratic socialist when he ran for the Democratic nomination for President in 2016. ‘Socialist’ is a dirty word in the US, but he quickly attracted a large following.

It is plausible that Sanders could have defeated Trump the first time around because he was appealing to the same dispossessed people, and his message was gaining traction, against all odds. But the Democratic Party power brokers used undemocratic rules to out-muscle him and nominate Hilary Clinton. Clinton advertised her out-of-touch mainstream mindset by calling some of the Trump supporters ‘deplorables’. She lost, and gave the world President Trump.

The blame does not all belong to the Democrats. Reagan and his Republicans started it with the deregulation of the financial sector and shifting government spending from government services to the military. Bill Clinton made it worse by removing restrictions on banks’ gambling with other people’s money.

Barack Obama kept the seat warm for eight years and, apart from a compromised medical insurance scheme, did little to rebalance the social compact. One of Obama’s first moves was to appoint a Wall Street banker to be Secretary of the Treasury, thus demonstrating he had no grasp of the source of growing social divisions. Trump I is a measure of Obama’s failure.

An analysis by Ben Davis offers some support for this interpretation. He says an important factor was that people felt better off because of special social supports introduced during the Covid pandemic, but that Biden let these supports quietly expire and now people feel worse off. Rightly or wrongly, people credit Trump and blame Biden.

The neoliberal ideology has been used as cover by the wealthy sharks to increase their power. As I have written, neoliberalism has been an economic failure and a social disaster. But we should understand that, regardless of any ideology invoked as justification, there has been a series of specific changes made that have led to the present disastrous situation, and those changes can be unmade, or replaced by better ones.

It seems unlikely the Democratic Party will make the radical shift that is needed for it to regain power on behalf of ordinary people. There are some who are trying, like Alexandria Ocasio-Cortez, but the party power brokers are deeply entrenched in a very corrupt system. It also seems to be more difficult in the US for third parties to gain traction.

Trump’s promise, and his appeal, is that he will smash the system, and the Democratic Party may go down with it. We will see whether anything constructive emerges, or whether the next four years will be a descent into fascism accompanied by civil violence and potential anarchy. It will be a disastrous time for US society and a dangerous time for the world.

We are fortunate in Australia that a challenge is being mounted to the old, corrupt political parties by community independents and others. We have suffered much of the same history as the US, but to a less extreme degree, and our social fabric, always stronger, has not been as badly shredded. Our electoral system more readily allows such challenges. Our challenge now is to detach Australia from the death grip of the United States and to pursue an independent future, which we are quite capable of doing. To do so we will need not only to remove the old sycophantic parties but also to root out the US ‘security’ zealots from our own secretive security establishment. They will not go easily.

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