Tuesday, Oct 26, 2010, 9:24 am
Coming Soon to America: Big Push for Austerity
While big crusades for austerity—reserved for workers only, of course—are being waged in France and Great Britain, working people in the United States can also look forward to a major push for cutbacks in social spending and a longer wait before retirement.
Despite the evident need for vastly expanded government spending
and consumer buying power to lift each nation out of recession, the "austerity fad"—as economist Paul Krugman labels it—has been embraced by the corporate and political elites of major nations.
On December 1, the Deficit Reduction Commission, which Obama stacked with opponents of the American social safety net, will be releasing its recommendations. Expect the worst. The battle certain to follow the Deficit Commission will be a test of the AFL-CIO's resolve and ability to organize on behalf of hard-won workers' rights to a reasonable retirement age and a secure retirement.
LITTLE FIGHT THUS FAR IN BRITAIN, UNLIKE IN FRANCE
Despite draconian proposals in Great Britain, there have been few visible protests by the labor movement or others to proposals. The new Conservative government, and its Liberal Democratic accomplices, calls for cutting all segments of government—except for healthcare—by 19% They also plan to lay off 490,000 public workers (the equivalent of 3 million in the U.S.) and a more rapid increase in the retirement age.
The destructiveness of such cutbacks on consumer spending power would seem obvious, but the Cameron government is dutifully carrying out the mandate of Britain's corporate class. No matter that budget-balancing would be both easier and more sensible after conquering the recession and enjoying vastly increased tax revenues. Britain is perversely set on a course which will instead stretch out the recession.
Vive la difference! In contrast, French workers have hit the streets, with 3 million taking part in a general strike in September. In France, despite low "union density" (10%-12%) that is basically about the same as that in the U.S., as long-time labor writer Staughton Lynd pointed out to me, the specter of a higher retirement age has ignited militant workers protests occurring across the nation.
The shutdown of key petroleum refineries and public transportation had a massive effect. While U.S. media show little sympathy for the workers' plight, 70% of the French public supports the workers in trying to prevent the
retirement age from rising from 60 to 62.
As economist Mark Weisbrot, co-author of Social Security: The Phony Crisis, points out,
France can afford to keep the retirement age as it is. The conventional wisdom, that rising life expectancy necessitates a longer life spent working, fails to consider that retirement at age 60 is enabled by rising productivity: France's retirement age was last set in 1983. Since then, GDP per person has increased by 45 percent. The increase in life expectancy is very small by comparison.
But despite public opposition, on Tuesday France's Senate approved legislation pushing the retirement age up. The country's National Assembly is likely to pass the measure tomorrow. Union leaders there have vowed to fight on after the measure becomes low, but in "different forms."
NOV. 2 ELECTIONS WILL MAKE DIFFERENCE
In the US, the intensity of the Austerity-For-Workers program will
depend partially on the size of Republican gains in the November 2 mid-term elections. More seats going Republican—particularly the loss of
the House—means more momentum for attacking working families'
social safety net.
Senate Majority Leader Mitch McConnell blurted out the single-minded focus of the Republicans at a time when 15 million people are officially unemployed and the U.S. is mired in two bloody wars initiated by a Republican president:
The single most important thing we want to achieve is for President Obama to be a one-term president.
McConnell's nakedly partisan motive helps to explains the use of
filibuster threats or actual filibusters to block over 420 bills passed by the House since Jan. 20, 2009.
Unfortunately, the Democrats have failed miserably in explaining the GOP strategy of obstruction and sabotage to the public, and thus gotten stuck almost entirely with responsibility for the government's inadequate response to the Great Recession. But in truth, the Republican agenda actually extends beyond merely frustrating any and all attempts to cope with the recession.
The GOP is eager to re-implement the very same ideas that produced the Great Crash of 2008 in the first place: tax cuts for the rich, deregulation of and over-reliance on the financial sector, the continued offshoring of our productive base to China and Mexico, pushing down wages and spending power, and slashing social spending.
BATTLE ON AMERICA'S HORIZON?
We can anticipate that one key battleground will be the Deficit Reduction commission's proposals. The commission has the explicit goal of reducing the federal deficit by one-third by the year 2015, but its generally conservative members clearly have their sights set on whacking away at two key pillars of retirement security, Social Security and Medicare benefits.
The commission has already been fittingly nicknamed the "Catfood
Commission"—referring to the panel members' already-evident lack of
concern for the elderly being forced to eat catfood and engage in other humiliations just to survive.
The panel is co-chaired by former Wyoming senator Alan Simpson (whom Obama declined to fire despite Simpson mocking seniors' reliance on Social Security and delicately declaring that Social Security is like “a milk cow with 310 million tits”).
Much less crude, but equally dangerous, have been the sentiments of
the other co-chair, Erskine Bowles, former White House chief of staff under Bill Clinton:
We’re going to mess with Medicare, Medicaid and Social Security because if you take those off the table, you can’t get there. If we don’t make those choices, America is going to be a second-rate power, and I don’t mean in fifty years. I mean in my lifetime.
In reality, the Social Security system is sound, as Mark Weisbrot
and Dean Baker document in their book, requires only modest tinkering to remain in solid health for decades to come.
Simply raising the $106, 800 ceiling on taxable income ,so that the wealthy and super-rich contribute more, would make up for modest deficits projected for the distant future.
Medicare's long-term financial picture is more complex, as its rising costs reflect the underlying absence of cost controls in America's uniquely profit-obsessed healthcare system, whose basic features were largely untouched by the new healthcare reform law.
The Deficit Commission will almost certainly ignore the root problem and will likely promote raising co-pays and deductibles, and offering a voucher program for the purchase of private insurance. Instead of weakening Medicare, the nation actually should be considering a Medicare-for-all, or single-payer program that has proven effective in holding down costs.
Since Medicare-for-all is improbable right now, the time has come for cost controls on those profiteers exploiting the Medicare system, not cutbacks in care to the elderly.
Meanwhile, the French workers' battle is showing signs of waning, and no major anti-austerity movement has emerged yet in Great Britain. The explosive movement in Greece against austerity has now seemingly been quelled.
But Staughton Lynd, the veteran labor and civil rights activist and author, thinks that America's elites may be setting off a major explosion with their attacks on Social Security and Medicare: "They are very popular programs, and trying to cut them back may produce a battle royale here in the U.S."
Roger Bybee is a Milwaukee-based freelance writer and University of Illinois visiting professor in Labor Education. Roger's work has appeared in numerous national publications, including Z magazine, Dollars & Sense, The Progressive, Progressive Populist, Huffington Post, The American Prospect, Yes! and Foreign Policy in Focus. More of his work can be found at zcommunications.org/zspace/rogerdbybee.