The Recession (Part I)

Can Good Come Out of Bad?

The United States government is in the process of spending what will amount to an unprecedented several trillion dollars of taxpayer money to prevent the present Great Recession from transforming into the first Great Depression of the 21st Century.

Most of these trillions will be invested in bailing out the financial oligarchy that has brought the US model of capitalism to the brink of economic insolvency as a consequence of its extreme free market laissez-faire policies.

We’re referring to the Wall Street gamblers, the bankers who took insane risks in quest of profits, the greedy houses of high finance and, above all, the utterly irresponsible White House, Congress, and government departments that presided over their destructive practices.

Lesser trillions will be devoted to “stimulating”our stagnant, sinking economy with a massive infusion of government deficit financing — a remedy largely based on the theories of the late English economist John Maynard Keynes that were followed to an extent by President Franklin D. Roosevelt during the Great Depression. President Barack Obama has won approval of a $787 billion spending plan to revive the faltering economy (to be discussed in Part II).

While it is entirely possible American capitalism may hit bottom and stay there for a decade, as occurred in the economic meltdown of 1930s, the probability is that our country will emerge from this recession in two to five years — atrociously in debt, and weakened internationally, but back in business.

Our question — and the subject of this two-part article — is, what then? What will happen after the deep recession impoverishes tens of millions of American working families, and many millions more suffer the loss of their material assets and their houses, the value of their pensions, savings, and paychecks?

So far it is estimated that American workers have lost 30% of their net worth in the last 20 months, and it’s going to get worse as more workers lose their jobs and millions more families are ejected from their homes. Retirement assets have been reduced by at least 20%. The value of all U.S. housing will fall by a third during the recession — a drop of $4.5 trillion from a high of $13 trillion in 2006. It is going to take a long time, if ever, for these values to be recovered by the individuals affected.

As of Feb. 6, 11.6 million American workers are unemployed, or 7.6% of the workforce — but that’s only part of the story. Some 7.8 million workers in need of full-time jobs can only locate part time work. Further, some 2.1 million jobless workers are not included in the Labor Department figures. They are defined as “discouraged” workers who may have been looking for jobs for a year or so but simply gave up four or more weeks before the February survey. All told there are 21.5 millions workers who are unemployed, underemployed or jobless by “discouraged” — 14% of the labor force.

Nationally, patronage at free food banks increased 30% last year, and this too is increasing. In a front page article Feb. 20 reporting from a food bank in Morristown, N.J., the New York Times described the newer recipients as “the next layer of people — a rapidly expanding roster of child care workers, nurse’s aides, real estate agents and secretaries facing a financial crisis for the first time.”

The pain inflicted by the crisis upon the working people of our country cannot yet be calculated because it is increasing by the day and no end is in sight. So far there have been no significant domestic protests against millions of housing foreclosures, increasing unemployment and other derivatives of the capitalist recession, unlike militant worker and student actions in scores of countries around the world.

Internationally, much of the blame for the economic meltdown is sensibly directed at the American model of reckless neoliberal capitalism and its greedy practitioners and complicit government overseers. Within the US, the mass media, Washington and the business community seem not to direct a word of criticism toward the economic system itself, which is like being mauled by an obviously vicious dog but not blaming the nearby owner for letting it off the leash.

When the economy finally recovers, the American people — as President Obama picturesquely noted in his inaugural speech — will pick themselves up and dust themselves off, and return to the good old days of pre-recession America. But they were also days of the ever-widening rich-poor gap; of growing poverty and decades of stagnant wages for the working class and lower middle class (productivity has grown 70% since 1980 but wages have only increased 5%); of pitifully inadequate social services for working people; and of preposterously large government investments in militarism and wars.

This could change. Candidate Obama, in response to the electoral mood of the American people, repeatedly promised to promote “change” when elected, though far too vaguely for the White House to be held to account.

But it seems to us that objective conditions are ripe for progressive change in our country. Such conditions include:

• the deep recession;
• the recent electoral defeat of the right wing;
• public unease over endless wars and erosions of civil liberties;
• the mountainous national debt;
•long-delayed essential social needs;
• urgent problems such as the environmental crisis and a crumbling national infrastructure requiring major government intervention;
• a world in transition away from U.S. hegemony; and
• the erosion of America’s superpower status with the exception of its military might.

The demand for change should be raised anew, but with progressive and at least left-of-center goals.

Real progressive change does not materialize by simply going to the ballot box and voting for the candidate of the political center/center-right against the candidate of the right/far right. It’s a step in the correct direction, but other steps are needed, even if the goal is limited to reforms associated with modest social democracy, such as single payer healthcare, paid family leave, genuinely progressive taxation, affordable rental housing, and the like.

In the absence of mass left parties, such as those in most of Europe and elsewhere, the galvanizing agency for the attainment of progressive reform in the U.S. political system is based upon diverse and mass social movements, unified and activist in a national campaign demanding a specific package of programmatic reforms. No such campaign exists today, but it could tomorrow were there a will to do so.

Specifically, great pressure must be applied to the recession-era Obama Administration to go beyond the centrist Democratic agenda and to stop compromising with the right wing when it is possible to enact better legislation without them. The times call for a national government in Washington that will use its abundant persuasive power to lead the nation toward acceptance of a seriously progressive agenda and then fight to get it through Congress. President Obama promised change, big time. Hold him to it.

Jack A. Smith is the editor of the Hudson Valley Activist Newsletter. He can be reached at Read other articles by Jack.

9 comments on this article so far ...

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  1. Max Shields said on March 3rd, 2009 at 9:07am #

    Obama used the word “change” (as is the case with all non-incumbant candidates) but holding him to what? He’s pretty much doing what he said he was going to do and that’s as centrist as hell.

    This is the kind of delusional talk that keeps us with a pathological war machine. Falling for this Obama “change” crap (99% MSM marketing) and then “demanding” or “holding” the elected official to some self-induced principle of change is really arse-backwards.

    The change we need is not TOP down Fed rule. That’s clearly been in place since before 1776, believe me.

    There are a set of problems, very critical problems, which can best be addressed from a national perspective: demilitarizing the military industrial complex, pulling out of the 800 world-wide bases by a time certain, collaboratively eliminating all nuclear arsenals, significant reduction in developed countries consumption attributing to climate change and energy depletion, while shifting resources to poor developing areas. Those are a few that come to mind that cannot be done locally.

    The hierachical structure of the government needs to be challenged. The old notion of power-concentration to assure stable governance need to be rethought. Elimination of all monopolies by placing them in the public domain should be job 1. Economics should be based on real day to day relationships and a monetary system which is tied to the clear concept of balance of trade at the most local levels rather than the aggregate of all localities which creates a pathological response to markets needs to be transition to.

    We need to harmonize federal, state and local governments based on clear understanding of sustainability. Here’s a definition from Herman Daly: “(D)evelopment without growth beyond environmental carrying capacity, where development means qualitative improvement and growth means quantitative increase.”

    Call it neo-Marxist-Leninist-Georgist whatever if it makes more sense to you, but it is real and necessary change.

  2. Doug Page said on March 3rd, 2009 at 10:01am #

    I choose to try to start where we are. None of the contributors or commentators of Dissident Voice hold office. We can only beat our pots and pans and put pressure on those who do hold office. To fail to do this, for me, is self-destructive and lacking in mental health.
    I believe a strategic place to focus would be the reform of our money system. He who controls the money controls the nation. The banks are bankrupt, and hopefully now lacking some of their erstwhile political power. If we all acted instead of writing, and enlisted our friends and neighbors, we might get somewhere. I am supporting the American Monetary Act. Disappointing as Obama is, he may soon have no choice when his Wall Street nostrums fail.

  3. mike said on March 3rd, 2009 at 5:38pm #

    Doug wrote: ”

    “We can only beat our pots and pans and put pressure on those who do hold office. To fail to do this, for me, is self-destructive and lacking in mental health.”

    Some people would say that one is completely wasting their time by trying to “put pressure on those who do hold office” because most of them don’t give a damn what any of us think, unless our name is Halliburton, Bechtel, Boeing, et al. What evidence is there that those in office—at least those who call themselves a D—don’t care what we think? The last 8 years where the Bush-accomplice Dems served as an accomplice to Bush and helped him achieve his agenda despite all the international and national protests, faxes, phone calls, visit, e-mails, petition and you-name-it. “We” tried it all and nothing worked, because these politicians don’t care what “we” think. I don’t see these politicians “changing” (and caring what “we” think) just because messiah is in the White House.

    “If we all acted instead of writing, and enlisted our friends and neighbors, we might get somewhere. ”

    All 20 of us is going to do something? Have you tried to talk “politics” with people lately? I have (I live in a major city) and the usual response is: a distracted look as in “I don’t care about this stuff,” a bored look, turning off as if the person is thinking “I don’t want to talk about this stuff.” Many, if not most people, don’t have the attention span needed to talk about politics. With most people, I have found that I have to talk as quickly as possible and get what I’m trying to say out in as few words as possible, otherwise the person will turn me off. Their attention span is about 5-10 seconds and that’s it. Otherwise, they turn you off. I’ve have friends tell me that this is their experience too.

    For anything major to have the possibility of changing, it will require millions and millions of people in the streets in all major cities, including the District of Columbia. Honestly, I don’t see that happening…at all.

    What’s my solution? (That’s usually the question asked at this point). I don’t know that there is one. I would say stop voting for D and R “celebrity” politicians, but that’s not going to happen either. Most people are indoctrinated with D and R politics and they are not about to “change.” It is The People who need to change and I don’t see that happening. Most will continue in the same rut of voting for D and R politician. Most can’t conceive of voting for a so-called “third party” candidate. It’s just not in their programming. Most people are not going to do anything until they have no food, no access to food, can’t get any money out of any bank (because they don’t have any) and have no television to lay in front of, no home and no vehicle to live in.

    A friend of mine who listens to NPR (National Pentagon Radio) said that yesterday when the Dow dropped below 7 that NPR used the word “depression.”

  4. Tennessee-Chavizta said on March 3rd, 2009 at 5:48pm #


    First of all, what people need in this country is to create a united-front composed of the plethora of alternative socialist parties that exist in USA (The Green Party, The Socialist Equality Party, The Democratic Socialists of USA, The Socialist Party of USA, The Revolutionary Communist Party of USA, The Workers World Party of USA, The Marxist-Leninist Party of USA, and other alternative socialist parties) which would be a real vehicle in which the masses, the majority of americans who are pissed off with the capitalist-system, would have an answer out of this mess. to caste their votes every 4 years.

    However there is a catch-22 with a creation of a United-Socialist-Front composed of small socialist parties. The catch-22 problem is that the USA corporate fascist system thru the media and its other evil things it has, will not let that united-front succeeding, The media apparatus would denounce it as a cult or an evil organization, and would spread dirty propaganda against it, just like it did and it has done many times against Ron Paul, Howard Dean and even against Obama.

    Second: An educational-propaganda campaign

    In order to create a third united socialist party we would also need an educational campaign in order to spread knowledge to the masses about the evils of capitalism, fascism and imperialism and the only alternative to it is participative democratic socialism. The American masses are real confused and ignorant about how the world works. Trying to wake up the masses from their delirium would pose us as a threat. I read the biography of Hugo Chavez and that’s how he started his political program in order to change Venezuela. He first tried to wake up Venezuelan poors about the evils of neoliberalism, he talked about the importance of teaching the masses about capitalism vs. socialism. And then when Venezuelan’s poors learned about capitalism, Chavez started to do his thing (To overthrow the fascist capitalist venezuela system)And here in USA we gotta do the same thing that Chavez did, teach the US poor for some months or years what is capitalism and what is socialism before trying to do form any political party. Almost nobody in USA have taught the masses the evils of neoliberalism, not even Kucinich, Ron Paul or any other candidate. Ron Paul was the only one who talked about the US constitution and nobody listened to him, but he didn’t teach the masses about the evils of capitalism, because of the fact that Ron Paul was a capitalist, not a real alternative for poor people.

    Only socialist parties can be a real alternative for victims of this corporate bailouts and socialist parties don’t have access to TV and the press in the USA and that’s why most americans don’t know the ideology of socialism,ge in TV. So before starting a third party, i suggest to spend some months or years trying to teach the poor people of America about the evils of capitalism and the wonders of a participative democratic socialist system, a people’s system. In fact socialism is so good, that it is the only ideology in this country that proposes a minimum wage of 15 dollars an hour. No other ideology proposes 15 dollars for minimum wage: 3. We call for a minimum wage of $15 per hour, indexed to the cost of living. 5. We call for all financial and insurance institutions to be socially owned and operated by a democratically-controlled national banking authority, which should include credit unions, mutual insurance cooperatives, and cooperative state banks. In the meantime, we call for re-regulation of the banking and insurance industries

  5. Deadbeat said on March 3rd, 2009 at 9:37pm #

    T-C writes…

    And here in USA we gotta do the same thing that Chavez did, teach the US poor for some months or years what is capitalism and what is socialism before trying to do form any political party. Almost nobody in USA have taught the masses the evils of neoliberalism, not even Kucinich, Ron Paul or any other candidate. Ron Paul was the only one who talked about the US constitution and nobody listened to him, but he didn’t teach the masses about the evils of capitalism, because of the fact that Ron Paul was a capitalist, not a real alternative for poor people.

    Very astute analysis. You are right, education is very much needed but the biggest problem is the MISEDUCATION not only from the “mainstream” but from posers on the so-called “Left” who goes to great length to confuse people and stymie solidarity.

  6. Andres Kargar said on March 4th, 2009 at 2:23am #

    The American ruling class clearly understands the role and use of class warfare in protecting its interests. Even today with the capitalist system in shambles, ruling-class senators are fighting tooth and nail to divert the booty (i.e. our tax dollars) to such things as tax cuts for the rich and away from what they call “government spending” which refers to any funds allocated for the well-being of the working class.

    It is our stupid liberals and some on the left who are still in denial of the critical role that class struggle plays in shaping the social and political contours of our society. I understand the stench of the culture of slavery lives up to this day and might be responsible for some of our servile attitude and behavior, but there is a limit to everything. There is a limit to how long we remain content with Democratic Party politics and remain silent, for example.

    The essence of democracy is accountability, not faith, hope, or trust. We cannot witness business as usual when it comes to war or the continued deception on the part of the banksters, politicians, and corporations and complacently remain silent.

    Real change requires non-compliant, mass protests (see Naomi Wolf at We need to protest the ongoing destructive wars in Iraq, Afghanistan, and now Pakistan. We need to massively protest the ongoing political-economic policies geared predominantly to benefit the rich corporate power structure. We need to demand accountability and punishment of those responsible for war, torture, and economic destruction of this country.

  7. Barry said on March 4th, 2009 at 7:03am #

    I’ve just come across this regarding the health of the public. Our new master’s plan for keeping us healthy and sane is quickly taking shape.

    Obama to Single Payer Advocates: Drop Dead (Corporate Crime Reporter, March 3, 2009)

    President Obama’s White House made crystal clear this week: a
    Canadian-style, Medicare-for-all, single payer health insurance system
    is off the table.

    Obama doesn’t even want to discuss it.

    Take the case of Congressman John Conyers (D-Michigan). Conyers is the leading advocate for single payer health insurance in Congress. Last week, Conyers attended a Congressional Black Caucus meeting with President Obama at the White House.

    During the meeting, Congressman Conyers, sponsor of the single payer
    bill in the House (HR 676), asked President Obama for an invite to the
    President’s Marchy 5 health care summit at the White House. Conyers said he would bring along with him two doctors — Dr. Marcia
    Angell and Dr. Quentin Young — to represent the majority of physicians
    in the United States who favor single payer.

    Obama would have none of it.

    This week, by e-mail, Conyers heard back from the White House — no invite. Why not?

    Well, believe it or not, the Obama White House is under the thumb of the health insurance industry. Obama has become the industry’s chief enforcer of its key demand: single payer health insurance is off the table.

    Earlier this week, Obama named his health reform leadership team — Kansas Governor Kathleen Sebelius and Nancy-Ann DeParle. Single payer advocates were not happy.

    Since leaving Medicare, DeParle cashed in as a director at major for
    profit health care corporations, including Medco Health Solutions,
    Cerner, Boston Scientific, DaVita, and Triad Hospitals.

    Now, what does the health insurance industry make of the Sebelius/DeParle team?

    Here is Karen Ignagni, president of the lead health insurance lobbying group, America’s Health Insurance Plans:

    “Today the President is putting in place a team that is ready on day
    one to provide the leadership necessary to achieve health care reform.
    Governor Sebelius is the right person to move the President’s health
    care agenda forward. She is a proven leader with extensive knowledge of
    health care issues and a long history of working effectively across the
    political aisle. As a former CMS
    administrator, Nancy-Ann DeParle brings considerable experience and a
    strong track record working on all of the health care issues facing the

    Karen sounds really upset, right?

    Dr. David Himmelstein is a founder and spokesperson for Physicians for a National Health Program.

    Himmelstein’s take — Obama is caving to the insurance industry.

    “The President once acknowledged that single payer reform was the
    best option, but now he’s caving in to corporate healthcare interests
    and completely shutting out advocates of single payer reform,”
    Himmelstein said. “The majority of Americans favor single payer, and
    it’s the most popular reform option among doctors and health
    economists, but no single payer supporter has been invited to
    participate in the administration’s health care summit. Meanwhile, he’s
    appointed as his health reform czar Nancy-Ann DeParle, a woman who has
    made her living advising health care investors and sits on the board of
    many for-profit firms that have made billions from Medicare. Her
    appointment — and the invitation list to the healthcare summit — is a
    clear signal that the administration plans to propose a
    corporate-friendly health reform that has no chance of actually solving
    our health care crisis.”

    Obama to single payer advocates: drop dead.

  8. Tennessee-Chavizta said on March 4th, 2009 at 9:54am #

    Many people in USA are smart, they hate politics and stay away from party-politics because they know that political activism in USA is waste of emotional energies, because USA doesn’t have a political party for the defranchised and poor, both parties Democrats and Republicans are parties for middle class and upper class folks. note how both parties preach about “strenghtening our middle class” as if middle classes are sacred cow and more important than the lower classes

  9. MrCynic3 said on March 4th, 2009 at 4:43pm #

    To Tennessee-C,
    You wrote:” note how both parties preach about “strenghtening our middle class”

    Both parties claim that they care about the middle class, but this a big lie and a trick to keep the middle class voting for them.
    Both parties are beholden to big Money/Business and serving it is
    their primary objetcive, and in reality they don’t give a shit about the
    middle class or the poor.