The maturing global economic crisis is intensifying, now measured by its increasingly destructive impact on the budgets of U.S. states and local governments. The massive layoffs across America that began in the fall of 2008 and continue, combined with nearly 20% real unemployment today, are leaving state and local governments with far less income and property tax revenue required to maintain the status quo in public and human service programs, while the needs and demands for such programs has dramatically increased.
Shifting crisis onto backs of American people
According to the Center on Budget and Policy Priorities (CBPP), all forty-eight states (two states, Kentucky and Wyoming operate on a two-year budget cycle not requiring budgets this year) have released their initial budget proposals for fiscal year 2012 (which begins this July 1 in most states). For the fourth year in a row, these budgets propose deep cuts in primary, secondary and higher education, health care, and other vital public services – in most cases, much deeper than any of the previous cuts since 2008.
Combined state budget shortfalls are expected to exceed $140 billion for fiscal year 2012. This is on top of previous state budget deficits totaling $428 billion since 2008 that have resulted in wholesale public and human service program cuts and massive job elimination, cuts that most state governments use to assist their efforts to balance their books.
Already since 2008, more than 426,000 public sector jobs have been eliminated by state and local governments across the nation. More than 30,000 of them were eliminated in just the month of February 2011 alone. Such figures are a bellwether indicator of the acceleration in the rate that state and local governments are cutting public and human service programs and public service jobs.
The states are shifting the total burden of the economic crisis onto the backs of the American people. A majority of the states – at least 39 of 48 – are proposing major cuts in core public services such as pre-kindergarten, K-12 and higher education, Medicaid and health care services, while seven governors are combining the cuts with increased income tax, higher sales tax rates and/or expanding existing sales taxes to include more taxable products and services. On top of this, seven governors are also proposing large tax cuts for corporations. At least 15 states have proposed layoffs and specific cuts in pay and/or benefits for state workers. (For more, see the March 21, 2011 the Center on Budget and Policy Priorities report “Governors are Proposing Further Deep Cuts in Services, Likely Harming Their Economies”).
Additionally, legislative proposals have been introduced in a dozen states to revoke public employees’ collective bargaining rights, to nullify workplace representation by union organizations, and to restrict unions from organizing workers or negotiating contracts. Other proposals such as Arizona Senate Bill 1350 prohibit public employees from participating in political activity and bar them from being members of the national, state or local committees of any political parties, or even being a candidate for any public office.
These proposals are part of an ideologically driven political attack to silence, weaken and destroy public and private sector workers’ organizations and their job protections (and ultimately collective bargaining in all sectors of the economy), while simultaneously destroying a significant part of the Democratic Party’s organizational base in those states. This frontal assault is being led by Republican governors and legislatures in 12 States: Wisconsin, Ohio, Michigan, Indiana, Pennsylvania, Florida, Missouri, New Hampshire, Maine, Minnesota, Iowa and New Jersey.
The growing breadth and depth of the impending job elimination throughout the public sector, along with the equally massive elimination of public and human services by state and local governments is happening for the first time in U.S. history. The economic revolution is poised to rapidly remove large sections of public sector workers from the economy, thus destroying the commonly held view that a public sector job is the most stable and long-term work anyone might find.
In the midst of the unemployment and poverty that is spreading to broader sections of the American people, the budget cuts, privatization, and elimination of workplace and political rights, the ruling class is moving to impose new forms of political rule upon the American people. Michigan – devastated by the destruction of industrial production and globalization – is, in this like in so many other areas, the harbinger of what the rest of America will soon have to confront.
In March of this year, the Michigan legislature passed the Local Government and School District Financial Responsibility Act. This legislation gives the governor the power to take over cities, counties and town governments and replace elected officials with appointed corporate managers. These appointed managers can revoke and declare null and void any existing contracts, including those with labor unions. They can dissolve school districts, sell assets, and privatize public functions and services. They have the legal authority to dissolve incorporations of cities and towns (some incorporations date back centuries) and re-incorporate them by annexation or redistricting, thereby dissolving entire units of government. The authorities moved quickly, and less than one month after its passage the law was applied to Benton Harbor, the site of fierce struggle between the local government and the corporations. The message: Today, democracy is only for the rich.
The struggle has moved beyond the economic sphere. Few can deny that when states are reorganizing governments, overturning legal elections and formally dismantling the system of representative democracy, as they are doing in Michigan, that America is being reorganized along fascist lines.
Underlying causes and political direction
In the midst of all this new and emerging political polarization, most labor unions, their counterpart think-tanks, together with associated policy wonks, mainstream media, bloggers and most independent presses and media outlets, incorrectly define the 2008 financial crisis as the “cause” of the current “bankrupting” of the states. The logical but incorrect conclusion then follows: to define the mass layoffs and furloughs of public sector workers, cuts in their hours and pay, and the across the board gutting of social programs as “effects,“ as consequences of the 2008 crisis.
As a result, most of the organized resistance to the state budget cuts and anti-labor attacks by state governments has been to demonstrate and fight back against the anti-worker legislation, explore alternative legislation, and get involved in referendum strategies and electoral defenses like the recall efforts in Wisconsin. These efforts corral the spontaneous development of independent working class impulses and motion and direct it into a maze of Democratic Party initiatives to control and nurture working class passivity and prevent any economic self interest based, independent political impulses from developing.
This leaves the working class trying to fix the problem with solutions as if the cause was a singular 2008 event and its effects are only a temporary problem that over time can be reformed and fixed, rather than a symptom of a qualitative, systematic failure of capitalism, an outmoded system of production and exchange.
The 2008 crisis grew out of the housing speculation bubble originally designed by global financial institutions and international banks to extend credit in order to create an artificial rise in the value of housing to attract investments. It developed a fictitious market to replace the real market that was saturated and had nowhere to expand for new investment.
But this financial crisis was only one of the many “effects,” which were “caused” by the antagonism in the economy created by the use of laborless, electronic-based, digital production in a labor based economic system.
The current attack on public sector workers is also an effect of the continued elimination of jobs in the private sector over the past four decades, where workers continue to be replaced by robotic and computer applications in the production of society’s goods and services.
This digital production increasingly creates a growing number of workers, who cannot consume the abundance being produced and who don’t pay taxes. They in turn become the ones who need more public and human service programs that government won’t fund because less tax revenue is being collected. As the stages of economic destruction are played out, the impact penetrates ever deeper into the working class. The cycle continues, resulting in fewer people with jobs with and more and more people not consuming or paying taxes.
Which way?
The electronic revolution began nearly forty years ago when robotic and computer production methods were first applied to the production process. The resultant job loss and social destruction are penetrating and targeting a new sector of the economy – the public sector. Under capitalist laws of private property, the economic revolution takes no hostages. It simply eliminates wage labor from the economy. continues on page 2
However, that same economic revolution is creating the conditions for the birth of an entirely new society, where humanity can begin to benefit from the fruits of society rather than be denied them.
Developing an understanding among revolutionaries that we are in a social struggle that’s birthing a new politically polarized environment is a fundamental first step. Otherwise, those who are leading sections of our class will remain hampered by the all-class ties that deny sections of our class the freedom to discover their independent class interests. The never-ending defensive fights will continue to sap the energy out of the combatants, and our class will continue to adhere to the all-class ideas propagated by the ruling class.
A tactical foundation for developing independent class understanding can be found in fighting for the historical, American traditions and impulses that in the past demanded that U.S. society “Tax the Rich” and “Tax the Corporations.” Creating the strategic room for these impulses to sustain themselves and grow on a simple and traditional basis of them versus us can begin to cultivate the beginning stages of understanding independent class interests.
This kind of propaganda can assist revolutionaries in instilling a sense of class identity, at the same time laying the foundation for further independent steps that will take the class along the general direction of the revolutionary line of march toward the ultimate solution of a cooperative, communist society.
Political Report of the Standing Committee of the League of Revolutionaries for a New America, April 2011
June/July 2011.Vol21.Ed3
This article originated in Rally, Comrades!
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