No Tranquility

ALEJANDRO ITURBE GABRIEL MASSA

Anemic growth The background of this is the difficult economic situation that the country is living in, given the context of the continuation of the international crisis. This crisis started in the U.S. in 2007, and after the bankruptcy of Lehman Brothers, where the country had the worst falls in GDP and industrial production in decades. There was the threat of a new Great Depression, as initiated in 1929, and the financial-banking system was on the verge of bankruptcy. The huge packages of money for financial markets, first launched by Bush and then augmented by Obama, totaling 13 billion dollars (almost the country's annual GDP), managed to avoid the bankruptcy of the financial system and cut the dynamics of the "inclined plane" of the economy. In the same way as before the US had been the major driver of financial speculation, the US State now acted as an "insurance company" for the financial system at the expense of over-indebtedness of treasury bonds. A fragile recovery period was initiated, whose peak was in the first quarter of 2010 (+2.9%). But momentum slowed rapidly and led to what economists call an "anemic growth" and in decline: the economy grew 1.9% in the first quarter of 2011 and 1.3% in the second. Recall that Paul Krugman estimated that it takes 2.5% annual growth in order for unemployment not to increase. This dynamic creates a hopeless situation for the 14 million unemployed (more than 9% of the workforce, according to official figures), the more than 10 million underemployed and the over 40 million people who depend on state subsidies. And it shows that big companies and banks in the country are not investing to boost production within the U.S., although they have seen their profits rise by increasing the exploitation of workers through low wages and the harsh working conditions achieved in the last period (like the restructuring agreement of General Motors). The bourgeoisie continues its speculation in the various domestic and international "financial markets". A "vacuum" in trouble Thanks to its economic, political, and, military hegemony and that its currency is the international "reserve currency", the U.S. acts as a "vacuum" of the wealth in the world. Some mechanisms of this "vacuuming" are fairly straightforward: looting of raw materials and natural resources, and profit remittances/consignments of multinational corporations. Others are more indirect, such as the sale of Treasury bonds guaranteed by the federal government. Major exporting countries of the world, including China, Germany, Japan, India and Brazil, buy US currencies for its own reserves. This large amount of money obtained through bond acts as "fuel" for the U.S. economy to finance imports, covering the budget deficit, and essentially, feeding the markets of financial speculation. Since the outbreak of the economic crisis and the situation of near-bank bankruptcies, the issuance and sale of Treasury bonds had a dramatic increase. The money paid was used in huge packages that filled the "holes" of the banks and big companies.

At the same time, this increase took the total government debt to the limit of what was authorized by legislation and a new law was necessary to raise that limit. This debate expresses and, in turn, worsens the political crisis that U.S. imperialism now lives in and of imperialism in general. The crisis comes from before It is necessary to see that this crisis has deep roots. The failure of "Project Bush", with its political and military defeats in Iraq and Afghanistan, created a relationship of forces unfavorable to imperialism and fueled the outbreak of the economic crisis. The American bourgeoisie, in the 2008 elections, bet on Obama as their new "change of face" and adopted new tactics to gain time and, in turn, seek a way out while navigating these difficult domestic and international waters. Of these goals, Obama got some results, like negotiating an orderly and partial exit from Iraq, at the international level, and to pass agreements such as the GM (General Motors) restructuring without social upheaval, at the internal level. But the international revolutionary situation continues and Obama has clearly failed in the attempt to curb the economic crisis worldwide and in America. This failure expresses the lack of finding a solution to the most pressing problems of the American people, especially in unemployment. Obama was defeated in the legislative elections of 2010 and now suffered a setback in the parliamentary bodies (i.e. Senate, House). Does this mean that important sectors of the American bourgeoisie consider the "change of face" of 2008 to be exhausted and that Obama has done all he could for them? Several factors seem to indicate yes, but it is a question that will only be answered in the next year as it is still not yet clear that the Republicans have a real alternative for the bourgeoisie. How to deal with the economic situation? Within this framework, the legislative debate on debt put the U.S. on the brink of default and showed the eyes of the world of the political crisis on the main imperialist bourgeoisie. The crisis can be analyzed on two levels. The first is conceptual: what policy to apply given that the evidence economy was slow and was in a recessive dynamic? Until last year, Obama implemented the policy of expanding the monetary base without limits (and continuing to sell Treasuries to support it) to power the economic circuit. Even after his defeat in the 2010 legislative elections, he made a last stand in this regard: the issuance of 600,000 billion dollars so the government can buy Treasury bonds and thus devalue the dollar to increase exports and decreasing imports. But the U.S. trade balance deficit not only did not improve but worsened. Obama's policy had failed. Paul Krugman was arguing that the stimulus came from mega-packets had been "insufficient" and another was needed. But his proposal was now completely isolated. Republicans, on the other hand- while using the Tea Party as a battering rammaintained the policy that to extend the debt limit, each new dollar must have its counterpart in federal budget cuts, all the while keeping tax exemptions on corporations and the rich. Obama accepted the cuts, but with an eye toward re-election, called for an end to some tax breaks and to give him some budgetary room to give some concessions.

The bill that passed showed that the Republican proposal triumphed in its essence and this means a policy change of the U.S. imperialism to deal with the crisis: its abandoned Krugmans position and now moves on to a much more restrictive policy : in the next two years, the federal government will have to cut spending by 900 billion dollars. This is something that will surely have recessionary effects in the U.S. and in the world. The political crisis enters the scene The second factor is much more political. As we said earlier, the debate on debt expressed, and, in turn, aggravated the political crisis that U.S. imperialism lives in today. The whole U.S. political system, based on the interplay between the two bourgeois parties (Democrat and Republican) and the balance of powers between the president and Congress, has gone very bitter and damaged. In turn, this political crisis exacerbated the economic perspectives because of the "mistrust" that it generated. Obama and the Democrats, who were already weakened by its defeat in the legislative elections of 2010 have further weakened, losing all his electoral base, which considers that the president "betrayed its promises." Increasingly becomes what they call a "lame duck" (lame duck), with little real power and whose chances of being reelected in 2012 seem to be receding. The Republicans have gained weight while voting, also live in their million underemployed and over 40 million people who depend on state subsidies. And it shows that big companies and banks in the country are not investing to boost production within the U.S., although they have seen their profits rise by increased exploitation of workers through low wages and the hardening of working conditions achieved in the last period (remember the restructuring agreement of General Motors). The bourgeoisie turned over to the speculation continues tion in the various "financial markets" domestic and international.