The following article appears in Proletarian Revolution No. 82 (Winter 2010).

Barack Obama: Wall Street’s Warrior

Millions hoped that Barack Obama’s election would bring relief from Bush’s years of war and economic disaster. One year later, those hopes are giving way to doubt and even anger. Both at home and abroad, Obama has essentially maintained, and in some respects worsened, the policies of the hated Bush administration. The candidate of “change you can believe in” is proving to be another champion of war and profiteering – that is, of imperialist capitalism as usual.

The League for the Revolutionary Party warned from the start that the change Obama offered meant one thing to the masses who supported his campaign, and quite another to the capitalists and politicians who bankrolled it. At a time of growing political and economic crisis, this country’s ruling class came to favor him as a fresh face who could salvage its prestige and profits. Some liberals and reformists portray Obama as just a weak and compromising advocate for peace and justice. In reality, he is the chief enforcer of capitalism’s class war against the workers at home and abroad. In a country built on centuries of racial oppression, the astounding election of a Black man to the White House produced a president who is just as much an enemy of our class as any white capitalist politician.

Since he took office, Obama’s promises to the hard-hit masses have been unraveling. He has continued the occupation of Iraq, intensified the war in Afghanistan, multiplied the bombing attacks over the border into Pakistan and extended the sanctions and military threats against Iran. At home he has done next to nothing to halt mounting unemployment and home foreclosures while pushing through the multi-trillion-dollar bailout of Wall Street. His administration has encouraged debt-ridden state and city governments to drastically cut social services and jobs and is openly planning to balance the federal budget with attacks on Social Security and Medicare.

Making a mockery of the idea that America has transcended racism, the wave of layoffs and other economic attacks have disproportionately hit people of color. To this Obama has added the stepped-up persecution of immigrant workers, who are quietly being rounded up and deported in record numbers.

The economic crisis and the expanded imperialist wars expose the inhumanity and obsolescence of the capitalist system. Modern science and technology have the potential to support a decent life for all humanity and to heal our planet’s perilously damaged environment. But in the hands of the capitalists, they intensify exploitation, increase poverty and serve growing repression and war. Rarely before has the need for real change – revolutionary change – been so apparent.

Union bureaucrats and liberal politicians discourage the militant struggles that workers and poor people need to defend their interests. Instead of mass struggle, they favor the old reformist lie that real change will come through the system, even though the system’s unworkability is becoming clearer by the day. A great number of workers retain hopes and illusions in Obama, but the pro-Democratic Party misleaders of the unions, civil rights organizations and other social movement groups actively feed into these illusions, stifling opportunities for mass resistance.

The LRP believes that the most politically conscious workers and youth must join together to build the foundations of a revolutionary working-class party. We believe in fighting side-by-side with our fellow workers, advocating powerful united struggles and working to convince more and more workers over time of the need for socialist revolution.

Saving the Empire

When ruling-class figures first began rallying to Obama’s presidential campaign, they were driven mostly by concerns that the Bush White House had gone too far in its aggressive assertion of U.S. imperialist aims in the Middle East. In particular, they saw that Bush’s occupation of Iraq and his uncritical backing of Israel’s oppression of the Palestinians had come to threaten the stability of the U.S.’s global profiteering. As we wrote in Proletarian Revolution No. 81:

The big capitalists and their agents openly express fear that more of the naked imperialism that defined the Bush years will trigger greater struggles of the oppressed abroad, threatening their investments from the Middle East to South America. ... They want to see America’s image restored by a president who will cover the iron fist of its military power in the velvet glove of a little more diplomacy.

Obama won support among primary voters by claiming that he had opposed the Iraq war from the beginning. However, he had never fought hard against the war. In a speech against the then-imminent invasion of Iraq in October 2002 he said, “I don’t oppose all wars. ... What I am opposed to is a dumb war.” He did not speak on the war again until it started to become unpopular. In fact, two years later Obama told the Chicago Tribune that when it came to the occupation of Iraq “there’s not that much difference between my position and George Bush’s position at this stage.” (July 27, 2004.)

Five years later, this admission holds true. The U.S.’s failure to quell resistance to its occupation in Iraq, and the toll the insurgency was exacting on the U.S. military, had already forced the Bush White House to agree to deadlines for the withdrawal of troops at the same time that it scrambled for a way to maintain its control of the country. As president, Obama has delayed those withdrawals while announcing a plan to keep a “residual force” of 50,000 combat troops (plus tens of thousands more “non-combatants”) – in itself an occupation army. Many thousands more will remain in Kuwait and other Gulf states, along with over 100,000 private mercenaries.

The upshot is that the U.S. will not withdraw from Iraq in the foreseeable future, for the same reasons that Bush went there in the first place: to bolster the American military presence in the region and to grab for control over Iraq’s oil resources. Both goals were necessary for the U.S. to assert itself as the world’s dominant imperialist power ready to counter any challenges from upstart subordinates or potential rivals. (For background, see our articles on the Iraq war in Proletarian Revolution Nos. 66 and 67.)

Afghanistan Quagmire

While his position on Iraq has shifted to accommodate imperialist needs, Obama has been consistent in supporting what he has labeled the “good war” in Afghanistan. By September 2009 there were 120,000 Americans fighting there, and in December he ordered the deployment of 30,000 more. Many of his liberal supporters call this “surge” a betrayal, but they forget that in his campaign he had openly called for expanding the Afghan war.

Between Iraq and Afghanistan, the Obama administration had already increased U.S. troop strength by tens of thousands. It is funneling over $800 billion to fight the wars it took over from Bush. Obama’s overall military budget for the 2009-2010 fiscal year surpasses Bush’s by 4 to 5 percent, and the number of military personnel will increase by hundreds of thousands.

At the rate Obama has expanded the U.S.’s war-making, he will need those forces. Upon taking office, Obama’s Pentagon stepped up the rain of drone missiles on villages in Pakistan near the Afghan border allegedly aimed at Taliban and Al Qaeda leaders. By early October these strikes had exacted a toll of hundreds of civilians killed and made two million homeless.

As the U.S. war in Afghanistan enters its ninth year, the claim that the war is for democracy, women’s rights and economic development has become a hollow joke. The Karzai government is notoriously corrupt and blatantly rigged the recent election. The population despises the American presence, and retaliatory attacks are spreading. The number of civilian deaths reached a record number in 2009. The year has also seen the highest death toll among American and other NATO troops.

Debate over what to do has increased within the political and media establishment, given the rising U.S. casualties, the understanding that the U.S.’s murderous presence is itself the cause of the resistance’s growing strength – and the fear that the war is irretrievably lost. Through escalation, Obama hopes to salvage some vestige of American prestige and power in the region and maintain a force to thwart the rival ambitions of Russia and China. The bloody imperialist wars will continue.

Bailout Bonanzas for Bankers

Just as he has used his image as a peacemaker to cover ­continuing the Bush White House’s occupations of Iraq and Afghanistan, Obama has taken advantage of the idea that he is progressive to push through pro-capitalist policies his predecessor likely could never have gotten away with. He began performing this role before he was even elected, serving as the Bush administration’s key ally in overcoming early opposition to its proposed bailout of Wall Street.

When the bill to fund the first near-trillion-dollar giveaway came to a vote in Congress, popular outrage pushed many Representatives to oppose it, and it was defeated. With Bush sidelined as the lamest of ducks and Republican nominee John McCain vacillating aimlessly, Obama stepped up. He used the prospect of his election as the first Black president to bully Democrats, particularly members of the Congressional Black Caucus, into changing their votes and dropping their calls for amendments to help homeowners avoid foreclosure and protect individuals from bankruptcy. The bailout was re-voted and passed.

After his election, Obama signaled his intention to put the interests of big capitalists before all others by assembling an economic team heavily weighted with conservative Democrats and Wall Street insiders that emphasized continuity with the Clinton and Bush II administrations. His top economic appointments, National Economic Council head Lawrence Summers and Treasury Secretary Timothy Geithner, have shuttled between federal jobs and lucrative positions in the world of high-finance; as well, Geithner was a principle author of Bush’s bailouts.

As the full scale of the financial crisis became clear, Obama’s White House directed a massive expansion of the bailout of Wall Street. According to a report on March 31, the Federal Reserve and the Treasury have committed $12.8 trillion, up from just $7.4 trillion as of November 2008.

Borrowing the huge amounts needed for these purchases means monster repayments of principal and interest to the wealthy investors who buy the Treasury’s bonds. The administration projects a federal budget deficit of $1.6 trillion over the coming year, and it is clear that it will grow. Printing all these dollars will eventually mean price rises that will predominantly affect the working class: inflation is a disguised way to reduce wages and benefits. And the huge deficit is being used as a justification for slashing working-class benefits.

Stimulus Spending

Since the “Great Recession” officially began in December 2007, the U.S. economy has lost close to 10 million jobs. The real jobless rate – counting “discouraged” workers no longer actively seeking jobs and part-timers who want full-time jobs – is close to 20 percent. (The official rate of unemployment as we go to press is over 10 percent.)

Some of Obama’s supporters have likened him to Franklin Roosevelt, whose New Deal public works programs reputedly pulled the U.S. out of the Great Depression of the 1930’s. In fact, it was World War II that ended depression levels of unemployment. But Obama has not even called for, much less implemented, the sort of jobs program that put millions of workers on the public payroll in the 1930’s through the Works Progress Administration and the Civilian Conservation Corps.

Obama’s vaunted $787 billion stimulus plan that promised to “save or create” millions of jobs amounted to little more than one sixth of the Wall Street bailout. Even then, much of it was just another massive giveaway to capitalists in the form of new tax cuts. The Wall Street Journal celebrated: the package’s “huge breaks for firms” meant that Obama’s tax cuts would “pack more punch in two years than either of President George W. Bush’s tax cuts did in their first two years.” (Jan. 5, 2009.) But since the stimulus was enacted, almost three million more jobs have been lost.

Many of the lost jobs have come from layoffs by state and city governments across the country, which have fallen into fiscal crisis as tax revenues have fallen and their debts to banks and bondholders have risen. With the total public-sector shortfall in the order of $400 to $500 billion, Obama’s stimulus bill deliberately offered only $140 billion to the public domain. Though the White House does not publicly acknowledge it, privately it recognizes that the working class must be made to pay for the crisis. Therefore it has withheld funds to local governments in order to push them to cut services and jobs. So far three-quarters of a million state workers have been forced to take “temporary” job ­furloughs, forced time off without pay. California, the most populous state, faces the deepest crisis and is making the severest cuts, but others are close behind.

“Reforming” Health Care

Obama has placed no limit on what his White House is prepared to pay for its wars or for its bailout of financiers. But he has emphasized strict spending limits and cost-cutting when it comes to funding practically anything else. This became particularly clear with the long Congressional battle over health-care “reform,” which ended up as a major attack on working people.

The high cost and poor quality of health care in the U.S. is a major concern for working people. But Obama and the Democratic-run Congress are dedicated to preserving the stranglehold of the private insurance and pharmaceutical companies whose parasitic profiteering is the main culprit. Even Medicare, the government insurance program that serves the elderly, requires recipients to have costly supplemental private insurance to fill in the gaps in its coverage. The starting point for a real struggle to win quality health care is a fight to seize the industry from the profiteers to provide nationalized health care for all.

Squabbling over legislation dragged on for months, as Obama and his Democratic allies whittled down all the benefits they had once promised – allegedly in order to craft a “bipartisan” bill that would please everybody. The satirical newspaper The Onion (August 18) accurately summed up the debate:

Congress Deadlocked Over How To Not Provide Health Care

The first casualty was “single-payer” government insurance – “Medicare for all” – the plan that still has the highest support in public opinion polls. Nevertheless, its advocates were never even allowed a hearing in Congress. Instead, the liberals and labor leaders pushed for a “public option” to compete with the private insurance companies. But this too was abandoned by Obama and the Democratic leaders, since the insurance industry fears that even a whiff of “socialized medicine” would encourage further demands against profiteering.

Obama insisted all along that the final plan must not add a cent to government health-care spending. As a result, public opinion wavered, as many sensed that the final plan will cost people more and provide less than today’s already inadequate plans. Labor, Black and Latino leaders could have rallied millions to demand quality health care for all. Instead they limited themselves to lobbying their supposed friends in Washington and received nothing in return.

Obama had previously assured the opponents of reform that any bill would ban federal funding for abortions. The House bill goes a step further, banning federal subsidies for any insurance policy that covers elective abortions. He also promised that the bill would ban health care coverage to “illegal immigrants.” These concessions to reactionaries are outrages. Abortion is a basic right for women that must be defended against steadily growing attacks. And denying health care to undocumented immigrants is a vicious blow in itself, designed to cover the attack on the entire working class.

Washington’s long and rancorous debate ultimately produced bills that manage to attack both the poorest uninsured workers as well as better-off workers, encouraging the latter to blame the former for rising health care costs. Thus the bills would force the uninsured to “choose” between paying a hefty fine or buying state-subsidized plans that will demand high out-of-pocket expenses and therefore be too expensive to use. Meanwhile, the Senate’s proposed excise tax on better quality, more expensive “Cadillac” health insurance plans targets gains won by union workers in particular – often in lieu of wage raises. The White House’s offer to exempt union workers from this new tax was explicitly formulated to last no longer than a few years before they get taxed like everyone else.

Populist Responses – Right and Left

Handing a trillion dollars to the health insurance and pharmaceutical companies and setting one group of workers against another in competition over the crumbs, the Obama Administration’s anti-working class “reforms” play straight into the hands of right-wing demagogues. Racist leaders in the “tea party movement” are already arguing that Obama’s tax on health insurance is a hidden form of reparations to uninsured Blacks. It is just the beginning.

The immediate beneficiaries of the White House’s plans have, however, been more mainstream reactionaries. The Massachusetts election to fill the Senate seat once held by the late Ted Kennedy saw Democrats approach the contest as if they were entitled to victory. Massachusetts has had a get-fined-or-buy-insurance plan since 2006, and family premiums there average about $6000 annually. That plan was already unpopular, and the proposed “Cadillac” tax on top of it enabled the obscure right-wing Republican candidate, Scott Brown, to masquerade as a populist champion of the “little guy” against “elites” who sell them out, promising to be the vote that would stop Obama’s plan. Combined with the fact that the Democrats’ anti-working class policies led to a significantly lower turnout of Black and Latino voters, Brown was able to ride a protest vote against the Democrats’ policies to an upset victory.

The loss of their 60-vote super-majority in the Senate is a debacle for the Democrats. As we write, they have not yet figured out how to salvage their health bill. If a version is adopted that is essentially like the current proposals, it should be opposed as a social attack on the rights of women and immigrants, as well as an austerity attack on the working class as a whole.

The health care farce proves that the Democrats, who have always been a party of capitalism, are now tied hand and foot to Wall Street. Working-class outrage rises whenever it is revealed that the bailout’s banker beneficiaries are awarding themselves more multi-million dollar bonuses. After one such report last spring, the president advised bank executives to be discreet with their astronomical payoffs, using imagery of history’s bloody peasant uprisings against royal rulers:

Be careful how you make those statements, gentlemen. The public isn’t buying that. ... My administration is the only thing between you and the pitchforks. (, April 3, 2009.)

The ruling class is right to worry about the potential for an upsurge of popular protest. In the 1930’s, Roosevelt campaigned against the “economic royalists” of Wall Street in order to divert mass discontent away from capitalism as a whole. Obama has the luxury of not yet having been confronted by a mass movement, so he has not hesitated to offer Wall Street what it wants.

Obama recently has made some efforts to adopt populist rhetoric, in order to maintain control of the Democrats’ discontented working-class and liberal base. But his late-in-the-day confrontations with Wall Street ring hollow, given his record of loyally serving American capitalism. Inevitably, some Democratic politicians will feel pressured to mount a populist challenge to Obama from the left – the better to prevent working-class struggles from breaking out of the Democrats’ electoral trap and mounting a real challenge to the ruling class.

The fundamental divide in society is not the vague division populists point to of the financiers on “Wall Street” versus everyone from small business owners to workers on “Main Street,” but the capitalist class of profiteers against the workers it exploits. If leadership is not provided for a united, interracial struggle against the capitalists, the reactionaries and racists will succeed in keeping the working class divided, setting white workers against Blacks, Latinos and immigrants – while the capitalists continue to laugh all the way to the bank.

Entitlement Attacks

The Obama administration is preparing a further devastating attack on the working class in the form of “entitlement reform” – cutting back Medicare and Social Security. For years, Wall Street has been eager to get its hands on public money. Bush tried to hand over part of the Social Security fund at the start of his second term but got shot down by an outpouring of public outrage. Now Obama’s economic team is warning that the huge deficit hole demands cutbacks in social programs.

Early on, Obama convened a bi-partisan “Fiscal Responsibility Summit” in February, at which he promised to halve the federal deficit in four years, specifically pointing to Social Security. According to Newsweek magazine, a leading role was played by Obama’s top economic strategist, Larry Summers:

Summers’ greatest test will be persuading Congress to vote for “entitlement reforms”– i.e., cutbacks and/or higher taxes on Social Security and health benefits for the poor and elderly. ... Summers made clear that he will urge the president and Congress to venture in an area where politicians have long feared to tread, the so-called third rail of politics (touch it and you’re dead). (Feb. 21, 2009.)

And more recently, Federal Reserve Chairman Ben Bernanke explained to the Senate Banking Committee on December 3 why he was so focused on this area of “reform”:

Willie Sutton robbed banks because that’s where the money is ... The money in this case is in entitlements.

Rarely do ruling-class figures make their highway robbery so explicit. Of course, Bernanke is no Willie Sutton – Bernanke & Co. are robbing the workers for the banks.

Obama is showing once again that the Democrats and Republicans play the roles of good cops and bad cops in defending American capitalism. Given their image as the party that cares about the welfare of working-class and poor people, the Democrats are better placed to win the cooperation of union heads and “grassroots” leaders in implementing pro-capitalist policies. As we have seen in the Obama administration’s overturn of some of the auto workers’ most important and hard-won gains (see box), the Democrats are often able to get away with anti-working class attacks that the Republicans could not.

Class and Race in Obama’s America

The collapsing standard of living that Obama has presided over in the first year of his presidency has hit the entire working class hard but has had a particularly devastating impact on Blacks and Latinos.

All the economic blows compound one another. Many of the jobs workers have lost were the source of employment-based health insurance for them and their families. The foreclosure of homes dramatically lowers the market value of the surrounding properties, so layoffs and cutbacks create a whirlpool of social crisis that is swallowing whole communities.

When President Obama was asked at a June 2009 press conference what he would do about the “bloodletting in the Black unemployment rate,” he offered only the usual trickle-down theory. “The best thing that I can do for the African-American community or the Latino community or the Asian community,” he replied, “... is to get the economy as a whole moving.” But it is more obvious than ever that trickle-down economics does nothing for working-class people.

One study summed up the impact of the foreclosures:

Blacks and Latinos are suffering their largest loss in wealth (over 200 billion dollars during the last three years) in modern history. (

The economic crisis is hammering the final nail into the coffin of the “American Dream,” literally taking back from workers the jobs and homes that were the dream’s symbols. This is most true in the case of Blacks, who only began to win access to the dream as a result of the mass struggles of the 1950’s and ’60’s and who are now seeing those gains disappear. One Black man’s advance to the highest office in the land cannot be allowed to obscure the fact that the Obama presidency is proving a disaster for Black people.

Class War or Race War

For those who believed that racism is basically a function of bad attitudes among whites, Obama’s election seemed like an historic victory. But racist ideas have always been driven by the demands of capitalist profit-making. Racism was born of the need to justify slave labor, and it continued after slavery’s abolition in order to keep Blacks as a super-exploited caste – the better to divide, rule and exploit all workers. Racism has been the secret of American capitalism’s success.

Today the gap in living standards between white workers on the one hand, and Blacks and Latinos on the other, is rapidly growing. Under conditions of deepening poverty for all, the capitalists can hope to avoid an increasingly united working-class struggle only by encouraging more poisonous divisions between workers. That means fostering a rising tide of racism by enforcing the caste oppression of Blacks and all people of color.

Obama’s rush to bail out his class brothers and sisters on Wall Street, and his simultaneous betrayal of the masses of Black Americans who were his greatest supporters, shows how class is the fundamental driving force in society. Against the capitalists’ attacks, the working class needs to forge interracial unity in struggle. As long as workers are held back from fighting against the blows coming both from the private capitalists and from all levels of government, the flames of racism will be fanned.

The racists are already active. They lyingly blame the sub-prime mortgage crisis on supposed pressure by liberals on banks to lend to unqualified Blacks. They blame rising health care costs on the liberals’ promises to subsidize insurance for the poorest Americans, whom they imagine are mostly Black. They even encourage Black workers to join them in this racist war of all against all by blaming undocumented immigrants for the jobs crisis. And in this last effort, they are being directly assisted by the Obama administration.

Continuing the Attack on Immigrants

Immigrant rights organizations pumped up hopes that Obama would take steps toward legalizing the status of undocumented immigrants and stop the brutal workplace raids and summary deportations that were carried out by the Immigration and Customs Enforcement (ICE) police under Bush. Obama, however, has made clear that he has much the same policy as Bush, even if some specifics have changed.

On August 12, the New York Times wrote in an article titled “Napolitano Focuses on Immigration Enforcement”:

A day after President Obama announced that legislation to overhaul immigration laws would have to wait until next year, the secretary of homeland security played down the need for change in a speech here and took a tough stance on enforcing current immigration laws.

The secretary, Janet Napolitano, defended the administration’s assertive strategy against illegal immigrants and companies that employ them, relying largely on programs started under President George W. Bush. That strategy has drawn fire from immigrant groups and many of Mr. Obama’s Hispanic supporters, who say the president has not lived up to campaign promises.

Specifically, Obama has ended most of the vicious workplace raids on immigrant workers by ICE under Bush. But under Obama, the Department of Homeland Security is actively pursuing the “E-Verify” techniques of harassment widely condemned by liberals when they were done under Bush. This year, ICE is also deporting an average of over 4000 immigrants every week, a sharp increase from last year under Bush.

In September, so-called employer sanctions were invoked against the American Apparel company in Los Angeles, as a result of which almost 2000 workers will have lost their jobs. Napolitano has announced that her department would target 650 companies in the coming year. (For background, see the May Day statement Complete, Unconditional Amnesty for All Immigrants Now!.)

As we have pointed out in the past, the capitalist system in the U.S. abuses undocumented workers as part of its divide-and-conquer strategy to undermine the working class as a whole. Although many capitalists are eager to hire undocumented immigrants, the ruling class does not want to grant legal status to the great majority. Why this seeming contradiction?

The answer is that undocumented status keeps immigrant workers permanently vulnerable to super-exploitation and abuse by their bosses. Capitalists welcome workers who have to accept miserably low wages and who they hope will remain docile out of fear. Millions of workers are driven to emigrate to the U.S. and other wealthier countries because of the desperate conditions in homelands plundered by imperialism. By forcing immigrant workers into competition with native-born workers, the capitalists intensify the exploitation of all.

In the spring of 2006, in response to proposed anti-immigrant laws, huge protests exploded across the country, especially in Los Angeles and Chicago. But the movement’s leadership diverted the energy of the struggle into campaigns for the Democratic Party. The Democrats won Congress and the presidency, and what is the result? Obama’s and Napolitano’s attacks may not get the media attention that Bush’s did, but their persecution of Mexican and other immigrant workers in this country is carried out with the same oppressive result.

Obama’s Economics: Serving Capitalism?

From Wall Street hedge funds that produce nothing but casino-like bets on financial markets, to health insurance companies whose profits rise to the extent that they care less and charge more, the Obama administration has shown its commitment to propping up even the most parasitic capitalists. With good reason: it fears that the collapse of one company could lead to the collapse of the entire financial structure. And so it continues to bail out these dead weights and seek ways to make the working class pay.

But the Obama administration’s unswerving loyalty to today’s capitalists does not mean that the ruling class’s best long-term interests are being served. For example, the domination of health care going by the parasitical insurance and pharmaceutical monopolies isn’t just a source of poor care and exorbitant bills for workers. To the extent that employers are responsible for paying a portion of their workers’ health care costs, these costs are a drain on the rest of the ruling class. The Big Three auto manufacturers, for example, have spent more on health care than on steel! With health care reform plans that do little to reduce costs, the White House has failed to solve a pressing need of strategically vital capitalists.

The U.S. ruling class’s fundamental interests demand re-industrialization, a faster, more cost-efficient transportation system and a new power grid. The stimulus bill did little to address any of this. It earmarked $30 billion for highway construction, but its much publicized plan to build a new high-speed rail network to ease road and airport congestion received a paltry $8 billion. This allocation not only failed to deal with the deterioration of the existing system; it also reflected a clear preference for established patterns of transport rather than the needed overhaul.

Further, the bill barely dealt with the critical issues associated with the need for alternative energy. As sources of fossil fuels like coal and oil either decline or are more costly to procure, and as environmental degradation increasingly threatens not just public health but capitalist profit interests, the ruling class as a whole would be well served by a shift to “green” energy sources and the development of an electrical grid capable of maximizing and distributing their output. This requires hundreds of billions if not trillions of dollars and a mobilization of resources on a scale never seen except during world wars. The stimulus falls woefully short: the output of supposedly “clean” electricity is expected only to double its presently minuscule percentage of electrical capacity.

The American ruling class faces a long-term industrial crisis. More goods are still manufactured here than in any other country – European and Japanese manufacturers in particular have expanded their factory operations in Southern states, as have many Northern and Midwestern U.S. companies. The myth of America’s de-industrialization is based on the extent to which American manufacturers have moved their operations to low-wage countries overseas, especially China, leaving states like Michigan a ruin of abandoned factories and mass unemployment. This industrial restructuring has led to increased profits for American-owned companies in the short-term, but also to a decay in the productive capacity of American industry that is essential to its social stability and continued position as the world’s lone military superpower.

Fear of Nationalization

Despite the vast sums of government money being spent, the stimulus, budget and bailouts reflect the desires of their creators to limit state intervention and above all state control. In past crises some capitalist countries have nationalized their banks, and liberal bourgeois “experts” like Nobel winners Paul Krugman and Joseph Stiglitz have advocated such a step for the U.S., even if only temporarily, in order to force-feed credit into the sickly economy.

Nationalizations may yet happen if a collapse leaves the capitalists no alternative. But even as a means of saving their system, nationalization is still regarded as a curse by America’s bourgeoisie, and the government is reluctant to even mention the word. It has already bought a big share in key banks, but it refrains from actually providing direction and control.

Why the bias in the ruling class against a strong state role in the economy? In the most immediate sense, capitalists see government as an annoying interference into business. They also feel threatened, justifiably from their point of view, by the fact that the working class generally supports government intervention. The more the government intervenes, the more workers will not only come to expect more concessions but will also demand that it act in their interests. After all, key to the ruling class’s democratic façade is the illusion that the government is elected to serve the interests of the people. Any actual nationalization would show that private property is not sacrosanct and would set a precedent for the government taking over even more of the economy.

Another consideration is that American capitalists don’t want to set a precedent that encourages other countries to nationalize their own companies. Since the crisis is world-wide, and the U.S. is still the strongest power economically as well as militarily, they expect that American firms will be able to buy up foreign industries, as they did a decade ago in even relatively wealthy South Korea when the previous financial crisis devastated much of East Asia. The “open door” for U.S. capital has always been a top priority for American imperialism.

Just as Obama’s bailouts cannot save Wall Street from its ultimate collapse, the U.S. ruling class cannot avoid an ultimate reckoning with its need to radically modernize and expand its industrial base on a scale that can only be achieved by a massive expansion of the government’s control of the economy. Washington’s overnight conversion from an almost religious adherence to free market ideology to desperate government intervention to prevent financial collapse is but a taste of the future.

As this epoch’s defining crises of depression and decay assert themselves, the need to mobilize all of society’s resources in response will increasingly be felt by all. The capitalists’ attention will focus on the ability of its governmental and state powers to solve the problems they are too divided to solve by themselves. But international imperialist rivalry prevents any fundamental solution in a capitalist world other than war. And so the working class must learn that it must overthrow the capitalists’ state power and build workers’ states in their place in order to save humanity from the disasters capitalism threatens.

The Revolutionary Alternative

No solution to the growing economic and social crisis can be found as long as capitalism rules. Socialist revolutions, in which the working class rises up in struggle and seizes power from the capitalists, are the only answer. Workers’ revolutions would replace the capitalist governments with governments of democratically elected councils of the workers and oppressed. They would smash the capitalist states of cops and militarists, replacing them with the armed power of mass working-class organizations. On that basis, workers’ states would get rid of the profit-based economy over time, redirecting economic production toward providing for the masses’ needs. An abundance of all human needs could be produced and the division of society into exploiting and exploited classes transcended. A classless, communist society of peace and freedom could grow.

Revolutionaries, however, cannot confine our political perspectives to calling for socialist revolution. The overwhelming majority of workers do not believe that such a dramatic change is either possible or necessary. In fact, without any experience of the power of collective working-class struggle, and with the mistaken idea that the repressive and failed Stalinist states were socialist, most workers in this country don’t want to hear socialist ideas – for the moment. What’s more, in the wake of the financial collapse, workers are more fearful for their future than ever.

But along with the fear there is anger. It is not just that misery is growing; people also plainly see that capitalists are taking advantage of the situation. Workers are furious that people who ran the economy into the ground should be rewarded with bailouts and bonuses while they lose jobs and tighten their belts. Although most see no real alternative to the capitalist system’s unfairness and inequality, such feelings can aid revolutionaries in convincing their fellow workers that the system itself needs to be overthrown.

Mass Action and the Struggles Ahead

Workers are losing their patience with Obama’s empty promises to get the economy growing again with jobs. Workers will inevitably turn to their own power to fight back against the capitalist attacks.

Decades of betrayals by their pro-capitalist leaders have seen the unions greatly weakened in this country. Yet the tremendous advantages of collective organization against the bosses, compared to the terrible vulnerability of the unorganized, means that the unions will likely be an important focus of struggle. Both inside the unions and out, revolutionaries support even the smallest struggles to defend workers’ jobs and living standards and promote militant tactics like protests, strikes and workplace occupations.

Victories won through struggle will show workers the enormous social power they have when united in action. Small and local struggles are important, but the notion that the working class can win its needs without a large and spreading fight is a bigger lie today than ever. We openly explain this and fight for every opportunity for workers to spread and link their struggles.

The LRP has long advanced the idea of a general strike as the best way for the working class to respond to the broad attack on its living standards. While the level of conscious desire for such a fightback among workers is at a low ebb at the moment, the extent of workers’ suffering under the impact of the economic crisis means this mood can change quickly. In many states with severe budget crises, the bulk of the workers directly affected are in the unionized public sector. There a call for a general strike to stop the cuts and layoffs could have resonance in defense of both workers’ jobs and of public services.

Why We Call for Nationalization

In a climate where struggles are under way, the intervention of even a small revolutionary workers’ organization can attract the interest and support of increasing numbers of workers and youth and help convince them of the revolutionary socialist perspective. The League for the Revolutionary Party (LRP) is dedicated to this work of winning our fellow workers to the need to build an internationalist revolutionary socialist party to lead our class’s struggles. We emphasize putting forward a revolutionary perspective to the most receptive audience of politically radical workers and youth. And despite our modest resources, we also look to tap into the mass expectation of decisive action by the government and address the key issues that broader layers of the working class are focused on right now.

Growing levels of working-class struggle, and even general strikes, are only one aspect of the way forward. The economic crisis now places sharp new limits on the potential of even the most militant of old-style trade union struggles. For example, fights to save jobs and raise wages are confronted by the very real bankruptcy of businesses and indebtedness of governments. In such circumstances, even the more radical wings of the trade union bureaucracy, like the leaders of the United Electrical (UE) workers’ union that organized the Republic Windows occupation, are telling workers that there is nothing that can be done but accept the loss of jobs. Can they be right?

Karl Marx observed that:

... the attempt in a particular factory or even a particular industry to force a shorter working day out of the capitalists by strikes, etc., is a purely economic movement. On the other hand the movement to force an eight-hour day etc. law is a political movement. And in this way, out of the separate economic movements of the workers there grows up everywhere a political movement, that is to say a movement of the class, with the object of achieving its interests in a general form ... . (Letter to Friedrich Bolte, Nov. 23, 1871.)

Writing at a time when capitalism was still a progressive, expanding system, Marx expected that workers’ economic struggles would naturally grow into broader political struggles as the workers gained a greater sense of their power and interests, culminating in the “conquest of political power for the working class.” Today, ­however, the economic crisis increasingly makes a fight for broad political demands the only way of advancing workers’ struggles.

Already, we are seeing an important shift in working-class attitudes to such ideas. The terrifying prospect of job losses means that the desire for secure and decent jobs – and the sense that there should be solutions coming from the government – is gaining among workers. And there is still hope among many workers that Obama can be pressured to resolve the crisis in a way that benefits workers and ordinary people.

Transitional Demands

In this context, in addition to the most immediate and limited demands of workers, we promote a program of political demands on the government to act to meet workers’ immediate needs, all the while arguing that workers will have to learn through the experience of struggle that they will need a government and state of their own to really see such policies put into effect in the workers’ interests.

To stop the bleeding of government funds and the propping up of a toxic financial system that triggered the crisis, we raise the slogan Nationalize the Banks! The crisis shows that private banks cannot serve the role that the economy requires of them – providing cheap credit to keep small businesses functioning, protecting the savings of depositors and enabling people to buy and keep their homes, etc. Calling for nationalization of the banks meshes with mass hostility to the bailouts, and many workers accept this idea even if they don’t yet see how to fight for it.

The banks are not the only problem. We also fight for the nationalization of industries as essential to defending jobs in this crisis. And as with the banks, we argue against compensating the bosses. So far, the Obama administration has refused to nationalize much more than the debts of enterprises like auto companies, leaving the profit-making in private hands. But with mass layoffs and factory closings such a crisis for the working class, we raise the demand to nationalize failing industries to save workers’ jobs and the productive potential of their industries. Thus around a range of struggles, from the Republic Windows occupation and the SK Tools strike in Chicago to the struggle of Stella D’oro biscuit factory workers to save their jobs in New York City, we have raised the call to Nationalize the Failing Industries! and Nationalize the Union Busters!

Just preserving existing jobs is not enough in a climate of skyrocketing unemployment rates. So we have raised Jobs for All! and concretized it by calling for A Massive Public Works Program! There is an immense amount of work that needs to be done – building decent houses, schools, hospitals; reconstructing bridges, railroads, dams, levees and urban mass transit; creating a new electrical transmission grid and new energy sources – and beginning to lay the foundations for modern, “green” versions of these systems. All this work is needed for society, and the human and material resources exist to accomplish all these tasks, but capitalism stands in the way.

Our aim in these interventions is not to create or sustain illusions that the capitalist government is interested in saving jobs or taking any other steps where doing so would get in the way of profit-making. But by stressing the necessity of a fight to demand government action, we help raise workers’ consciousness of the political solutions to the crisis and how they need a revolutionary working-class government and state to secure them. In other words, our aim is to do everything possible to increase the fighting power and the consciousness of our class in order to help workers see the revolutionary alternative.

Demands like those discussed here were substantially developed as a method of raising revolutionary consciousness during the Bolshevik revolution. Such demands were also advanced in the class struggle in the 1930’s and were summarized by Leon Trotsky as a draft program for the founding conference of the Fourth International in 1938. (For further explanation of the method, see Myth and Reality of the Transitional Program.)

When appropriate, revolutionaries propose transitional demands as the basis for a united struggle, through unions and other mass organizations. Many workers start out believing that measures like nationalization or public works were simply big reforms to be won under capitalism. The gap between workers’ objective interests and their subjective consciousness can be bridged only if revolutionaries are honest with our fellow workers, arguing openly that desirable measures like nationalization or public works can only be fully accomplished under the workers’ own state.

The shared experience of mass struggle provides the best opportunities for an ongoing dialogue with greater numbers of workers, who would be able to test out their current leaders as well as alternatives, including revolutionaries. It is both the experience of class struggle and the consistent intervention of revolutionists within the struggle that makes it possible to convince workers over time of the need for working-class power.

The demands we have raised so far are only a partial exposition of the interrelated measures that will prove necessary to answer today’s crisis. Once the working class moves into mass struggle and as the crisis deepens, questions of workers’ control and management of industry, the need for workers’ self defense guards and committees of action, and many other demands discussed in the Transitional Program will have to be advanced systematically, in accordance with the direction of the struggle. New demands and types of organizations that cannot be pre-ordained will have to be proposed to fit broadening of the class struggle.

It is remarkable that in the recent struggles where we have raised slogans like Nationalization and Jobs for All, no other socialist organization has made any effort to put demands on the capitalist government in this fashion. This is particularly striking in the case of organizations claiming to be Trotskyist, which formally adhere to the Transitional Program but have no idea how to use it. Some have proposed reforms without explaining that it will take a massive struggle with the threat of revolution to bring them about. Others ceremonially state that socialist revolution is the solution – but without raising demands, on the government and on the movement leaders, that could prove to the workers in struggle that revolution is necessary.

What Is to Be Done?

History shows that there have been countless inspiring struggles that have not led to successful revolutionary conclusions. A revolution cannot succeed without a revolutionary party leadership that is trained and committed to the science and art of leading the masses to the overthrow of capitalism. Vladimir Lenin, the leader of the Bolshevik revolution in Russia in 1917, was the leading advocate of building a vanguard party.

Lenin saw that in the age of imperialism the working class was not homogeneous in either its conditions or its consciousness. He identified the labor aristocracy as a section of better-off workers that could play a conservative role within our class. Labor-aristocratic workers are most directly tied to a pro-imperialist view. There are also middle-class and lumpen layers that interpenetrate with the working class. Different layers of workers change and advance their views in different rhythms, as well.

To build the revolutionary party it is necessary to start with workers and youth already moving toward revolutionary consciousness. It is possible to convince masses of workers over time of the need for communist revolution, especially as the situation worsens and struggles mount. But revolutionary workers and youth must join together first in order to cohere a force to fight for leadership.

The League for the Revolutionary Party appeals to those who agree with this analysis to join with us. The bloody anti-human imperialist system needs to be buried once and for all. Today with Obama, imperialism has donned a benevolent mask. Obama is an enemy of the workers and oppressed of the world. The working class needs a decisive and dedicated leadership, an internationalist and revolutionary party.

Additional reading:

The Auto Crisis accompanies this article in PR 82.