The Republican Core
The Republican core, like the Tory establishment, know that the basis of bourgeois social democracy has to be maintained for the stability of the system, even if it can be trimmed around the edges. But, the material conditions created over the last 30 years, the pandering to the interests of small capital, and the ideology that has engendered, has strengthened the forces to their Right.
When the end of the road for the monetary policies, based on the creation of huge amounts of debt, manifested itself in 2008, it gave added impetus to those forces who insisted, therefore, that the mantras these conservative parties had spouted, about balanced budgets, and small states, should be put into practice.
In the Senate debate, on the issue, last Thursday, one Republican Senator, from the Mid-West, summed up the way this political trend represents the interests of small capital. Having told us that, when employers, in his area, were asked for wage rises, they told their workers that their problem was not insufficient wages, but too much spending, he went on, “My constituents do not buy all this scare mongering about a default,” mirroring the attitude of the climate change deniers. “They believe that the answer is to reduce the spending not increase the borrowing.”
As one Democrat Senator pointed out, he didn't seem to understand that raising the debt ceiling is not about future spending, but about paying for what the Congress has already spent! For these Tea Party Republicans, the epitome of the socialist nature of the government is Obamacare, even though it is little different to proposals put forward by Republican Mitt Romney. The material basis can be seen by looking at who gets what healthcare in the US.
As the article by Matt Miller showed, big, industrial capital needs some kind of socialised healthcare, like Europe. Only on that basis, can the weight of expensive, private health insurance be taken off the backs of those companies. The pressure for Obamacare has not generally come from organised labour, in the US. Workers in organised, large companies have company provided health insurance, which generally provides far superior care to that enjoyed by workers in Britain. In fact, these US workers have been worried that Obamacare might open the door to that provision being lost, as Doug Henwood has referred to recently .
The real need for Obamacare comes from the millions of uninsured US workers, who work for small capitalists, and so it is not surprising that the Tea Party, who reflect the interests of those small employers, should make it the centrepiece of their refusal to agree a budget, or raise the debt ceiling.
Any attempt by Boehner, or the Republican establishment, to reach a compromise with Obama, that does not undermine Obamacare, or preferably suspend it, will be seen by these elements, therefore, as a betrayal. It means that Republicans who vote for such a compromise risk being “primaried”, particularly in safe Republican seats. That is why the Republicans have been prepared to allow this crisis to fester for so long.
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| Bond markets already in a massive bubble may crack, sending global interest rates soaring. |
In the end, the needs of big capital is likely to win out, and a deal will be reached. It may split the Republican Party. It will destroy the Tea Party. But, a deal may not be reached in time. The bond market, which is in a massive bubble anyway, may crack, sending yields soaring, and all interest rates higher. In the last week, the yield on 3 month T-Bills has trebled. Despite continued money printing, yields on 10 year bonds continue to rise, after an earlier pull back.
The closer it gets to October 17th, the more that becomes likely. There is another alternative. All Presidential systems are a form of Bonapartism. As well as being President, Obama is also Commander in Chief. He has responsibility for maintaining the security of the state. If he considers that the potential of a default puts the security of the state at risk, the President can assume emergency powers. He could then use those powers to unilaterally raise the debt ceiling and pay the bills.
There could be considerable political kudos for Obama in taking such decisive action. It would undermine the ability of the Republicans to hold the Presidency to ransom once and for all. Obama would have the backing of most of the people, and of big capital for such action. The question is does he have the courage to do it, and will he have to?
3 comments:
I'm unfamiliar on how Obamacare is funded -- is it funded by a special tax which falls disproportionately on small capital?
Just because the main winners from Obamacare are those employed by small firms who previously went uninsured, it doesn't necessarily follow that their employers are the main losers!
It places an obligation on all employers employing more than 50 people working more than a certain number of hours per week to provide health insurance for their employees.
One of the arguments of Republicans has precisely been that it acts like a tax on jobs, because it encourages small employers to not employ more than 50 people, and to employ people part-time rather than full-time.
It introduces other new measures. For example, it prevents health insurance companies from refusing to cover people for pre-existing conditions, or levying extortionate charges to cover particular illnesses. People who are not covered by employer health insurance, but do not qualify for Medicare or Medicaid can also get health insurance, which is subsidised out of taxation.
Small capitalists and the middle class, and often better paid workers, tend to object to the latter - which is why the Tories here can rouse opposition to rising taxes to cover Welfare - because big capital basically escapes paying taxes, and the burden, therefore, falls upon workers, the middle class and small capital.
That is why as the welfare state expanded in Britain the burden of taxation grew ever larger, and fell on increasing layers of workers. One Marxist economist has calculated that in the period since WWII, the amount that workers have paid in Taxes of various kinds has in each year exceeded the value of the benefits they have derived from the welfare state.
In other words, rather than it representing any kind of redistribution of income towards the less well off, it has amounted to the opposite.
By the way, the job stats do not seem to bear out the republican claims that employers have been putting people on part-time, or reducing their staffing levels below 50 to escape it.
However, what does seem to have happened is that in the past, bigger employers who provided health insurance for their workers, usually allowed them to include their spouses and families on the cover.
Now, those employers are saying that because every employer should provide health insurance, spouses should take out their own cover with their employer rather than being on the cover provided by the larger employer.
As it is mostly big capital that already provides health insurance for these organised workers, this is one way that Obamacare opens the door for some of that cost to be taken off the shoulders of those big employers.
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