Trump is different
I posted this question to the r/abolishawagelabornow and r/debateacommunist subreddits for comments:
Can communists explain why the most recent 4.1% increase in GDP and 3.9% unemployment is bad for the working class?
Trump is crowing about the impact of his economic policies. In particular he is pointing to the rather impressive GDP growth rate in the second quarter. Bloomberg reported the number this way:
“Trump seized the chance to declare his policies, including the biggest tax overhaul since the Reagan era, a success, calling the data ‘amazing’ and ‘very sustainable.’”
The Atlanta Fed is now indicating that growth in the third quarter may be as high as 5% — a shockingly high number considering recent performance of the US economy.
One of the more effective arguments against abolishing wage slavery (on both the Left and the Right) is the argument that government can create ‘full employment’ through effective economic management. The major criticism directed at this idea by the radical Left is that growth is lopsided and unequal — the rich get richer. Yet this expansion appears to be reducing the official unemployment rate among all sectors of the working class. (Wages have not benefited, so far, but why that is happening is not explained.)
From the standpoint of communists this argument is ridiculous, of course, but how do you explain to workers why GDP growth is no short-term substitute for putting an end to wage slavery? Can you explain why, even if GDP growth rate is high and rising, while the unemployment rate is low and falling, that putting an end to wage slavery is still necessary?
Supposedly, it is easy to make this argument during a crisis (although, tbh, this never seems to happen in reality), but how do we make it when “times are good”?
After the 2008 financial crisis, the world market faced not only the collapse of some of the most important financial capitals, but the collapse of state-managed wage slavery itself. To avoid the complete collapse of capitalist accumulation, the fascists were forced to add eight trillion dollars of new debt and drive interest rates to near-zero in order to avoid a true catastrophe. With interest rates at near-zero, the economic model (centered on the assumption that continued capitalist accumulation could be assured by monetary policy alone) that had endured for almost 40 years, teetered on the brink of collapse as well.
Trump’s ‘Economic Turnaround’
Yet, Trump is now being credited with a considerable economic turnaround, at least as expressed in fairly widely accepted economic indicators. The list is impressive by recent measure and it’s getting longer each day:
- RECORD Number of Employed – 63 Percent labor participation
- Worker pay rate hits highest level since 2008
- Black and Hispanic Unemployment rates hit record low in April
- Business Investments up 39 Percent Due to Tax Cuts
- Food Stamp Usage Drops Half Million in Single Month
- Highest Ever Manufacturer Optimism over 94 Percent
- Unemployment claims have fallen to a 45-year low
- Trump Economy Explodes Record Number of Americans Employed Stocks Soar
- U.S. Consumer Confidence Is at 17-Year High
If you are like me, all of this enthusiasm over what is, in actuality, meaningless economic data still is rather disturbing. By the widely held standards of economic performance, Trump’s administration is appearing more successful with each passing day.
Meanwhile, the deck chairs are looking good
The radical Left, if the recent success of Ocasio-Cortez and the Sanders DSA traveling roadshow is a reliable indicator, seems quite unaware that they are merely passengers on the Titanic, plowing it way toward an as yet undetected iceberg called Trumponomics. Essentially, they are re-fighting the 2016 primary fight against the Clinton Cartel, even as Trumponomics is set to sink the Democrat Party into the icy black seas of late-20th century neoliberal ideology.
For decades now, the radical Left has been trying to put the neoliberal model of capitalist accumulation in the grave — in the struggle against Reagan and Thatcher; then in the struggle against the third-way politics of Clinton and Blair, the field of battle has ranged from Washington to London to Athens, Cairo, Beijing and the so-called emerging markets of Asia, Africa and Latin America. This battle has shaped what we today call the radical Left: Syriza, DSA, Corbyn’s Labour, the Bolivarian Revolution, Socialism with Chinese characteristics and so forth.
In all of this time, who imagined the final nail in the coffin of neoliberalism might very well be driven by a Right-wing fascist demagogue like Donald J. Trump? For all the radical Left’s blathering about globalization, against free trade agreements, deindustrialization, the loss of manufacturing jobs and declining earning among the working class, who could have imagined that the benefits of all of this radical Leftist agitation would fall to a real estate developer with a long-history of white supremacist rants, a penchant for grabbing women by the pussy and a predilection for low interest rates and big deficits.
This tends to confirm Richard Seymour’s thesis that the rise of movements around Corbyn in the UK and Sanders in the US — and, by extension, Syriza, Die Linke, and Podemos — owe their prominence not to the success of their uninspiring Leftish agitation, but to the collapse of the post-war social democrat consensus. The radicals didn’t win, neoliberalism imploded in 2008 — leaving a slightly pinkish nebula of political debris behind.
The beneficiaries of anti-globalization agitation
Unfortunately, in the United States, Trumponomics is uniquely situated for success. Like Greece, where Syriza ran into the neoliberal brick wall of European indifference, and the United Kingdom, where Corbyn can promise little more than marginal changes in economic policy, the United States no longer has control of its national capital. Globalization of capital has worked its magic, stripping nation states of their ability to manage accumulation within the limits of their national territory.
This period of fascist state national economic management was brief: lasting roughly from 1930 to 1971. It soon gave way to the crisis of the 1970s and the neoliberal offensive of 1980-2000. The successor model to classical fascism — globalization of capital markets, deindustrialization, etc. — gave way in 2000 or so to a crisis of neoliberal policies. It pretty much collapsed in the financial crisis of 2008-2009.
Unlike Greece, however, where Syriza, lacking any real control over its national economy, was never able to find a new model to replace the dying neoliberal model, the US is “fortunate” enough to find itself in the unique position that it owns the world reserve currency — accounting for 60-70% of global transactions. This is a powerful position to occupy; it basically means you can print the US to national economic prosperity. US bonds are riskless “investments” for every capitalist firm (like Apple) who find themselves sitting on a pile of excess capital. They can loan the cash to Washington and sit back to let the stream of fictitious returns accumulate. In return, Washington can use this excess capital to finance a historically unequalled military buildout to encircle China — another profitable investment for the owners of capital.
This means, unlike Syriza in Greece, Trump can tap massive deficits to boost the rate of economic expansion in the US, since he has access to a global pool of excess capital at virtually no cost. He can cut the taxes of the wealthiest members of society and employ the resulting deficits to boost economic performance. This might be a radical Leftist’s wet-dream, but it is in the hands of the last person on Earth radical Leftists might wish to have it.
To put this in as graphic terms as possible, Trump can put the radical economic program of state-managed capitalism into full effect not to implement the radical agenda, but to build a huge following among the working class, the likes of which has not been seen since Hitler announced, on the rally grounds of Nuremberg in 1936, that Germany had achieved “full employment”.
Radical Leftists who have not yet figured out where Keynesian economic theory ultimately leads, may get a surprising economics lesson in the near future.