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Fabricated Crisis: the Government Shutdown and Ruling Class Infighting

Fabricated Crisis: the Government Shutdown and Ruling Class Infighting

By Dennis Loo (10/11/13)

As Robert Parry at Consortium News pointed out on October 9, the crisis in D.C. bears a strong resemblance to the CIA’s engineering of crises such as Chile in 1973 that brought on Gen. Augusto Pinochet’s fascist coup. Socialist President Salvador Allende, legitimately elected by popular vote, stood in the way of big capital in Chile and U.S. imperialist interests. A crisis was created in parliament and various faux populist protests were fabricated to stymie Allende’s policies, creating an economic crisis, paving the way for the “solution” by coup and draconian economic policies – the first implementation of the Chicago Boys (Milton Friedman’s guys at the University of Chicago) neoliberal (free market fundamentalism) policies. Those policies, after being imposed by bayonet and slaughter of thousands, were later brought to Britain and the U.S. and spread everywhere from there. As Naomi Klein famously pointed out, neoliberal solutions are frequently ushered in after crises are purposely provoked.

As Revolution newspaper further points out and analyzes at length, the U.S. government shutdown – not of the NSA or military occupations but of social services (e.g., providing urgently needed medical and other support for the poor and needy such as children), scientific work such as monitoring global warming in the Antarctic, and critical regulation such as monitoring the nuclear reactors for defects and accident - is the result of extortion by a small but heavily financed group within the GOP. While their popularity has taken a tremendous beating in polls, as their culpability is clear to most people, despite the “it’s both sides” rubbish that many in the media are characterizing this fabricated crisis as, this reactionary element has succeeded so far in bringing a crisis on. Its agenda isn't to win votes but to force their agenda down our collective throats.

The Democrats have answered back that if you don’t like a law, then you have to follow the rules to get it repealed. That is, you have to get a majority of both houses to overturn it, and then you have to either get the president to sign that bill or else get a big enough majority to override his opposition to the bill. In fact, the Democrats are right—but the Republicans don’t care. The Republicans can’t win through the actual laws and they haven’t even tried. Instead, they’ve taken something totally unrelated to the health care law (the “continuing resolution”) and blocked it in order to prevent the government from functioning and force the majority to meet their demands.

The result smacks very strongly of extortion. Many government programs vital to people’s functioning—for instance, the WIC (Women, Infants, and Children), from which nine million women and children get nutritional aid—have now shut down, or are rapidly running out of funds. There is worry in the ruling class that the Republicans will persist in this and go further by refusing to pass the resolution that enables the U.S. Treasury to pay its debts. This resolution must be passed by October 17. But nobody knows whether this hardcore section of Republicans are so committed to blocking the health care law that they would be prepared, by defunding it and also possibly forcing the U.S. to default on its debt obligations, to precipitate both a constitutional crisis and a financial crisis and recession that could have severe global repercussions.

This is an extreme situation. In fact, what the Republicans are doing is quite outrageous—it is a very high-stakes, strong-arm move designed to advance an actual fascist agenda. Further, as an article in the New York Times makes clear, far from being the creation of one or two “rogue senators,” this was worked up over the months by very powerful forces, and has included the building up of a whole organized network and mass base, especially among youth. If they get away with this, this will be a serious leap into an even worse situation. (“A Federal Budget Crisis Months in the Planning,” Sheryl Gay Stolberg and Mike McIntire, New York Times, October 5, 2013) At the same time, as we’ll see, the Democrats are NOT the answer.

As a number of Congressional representatives have pointed out, Obama has the power to fund the government through the 14th Amendment, thus bypassing the extortion efforts underway, and ending this crisis forthwith. As Huffington Post points out:

In January, ahead of what was sure to be another budget battle, The Huffington Post filed a Freedom of Information Act request with The Justice Department's Office of Legal Counsel, seeking documents regarding the office's advice to the president on the 14th Amendment option. Last week, the office rejected that request but acknowledged the existence of memorandums on the option -- meaning the Obama administration had at least given the option significant consideration.

Proponents of the option point to Section 4 of the 14th Amendment, which says that the “validity of the public debt of the United States, authorized by law, including debts incurred for payments of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned.” It follows, then, that the president could raise the government's borrowing limit, independent of congressional gridlock -- a potential way forward as the government again approaches a shutdown.

According to his DOJ, however, he refuses to use that power and is instead promising the GOP that he is happy to slash $Trillions in Social Security and Medicare benefits, “just please let’s talk guys!” As pointed out by the World Socialist Web:

Obama’s 2011 proposal, according to documents leaked in 2012, included over $1 trillion in cuts to Medicare and Social Security as part of $2.8 trillion in total cuts.


Obama reiterated that the Democrat-controlled Senate has already passed a budget at funding levels demanded by Republicans, and that “we’re willing to have conversations about anything.” He added, “I will sit down and work with anyone of any party, not only to talk about the budget; I’ll talk about ways to improve the health care system … I’ll talk about ways that we can shrink our long-term deficits.” This is Washington-speak for cutting social programs.

Obama added, “If anybody doubts my sincerity about that, I’ve put forward proposals in my budget to reform entitlement programs for the long haul and reform our tax code in a way that would ... lower rates for corporations.”

This shows dramatically, once the air is cleared to see clearly what’s afoot, that the Democrats and the Republicans, despite their differences, are united around the desirability of slashing what they both refer to as “entitlement” programs – the people’s needs – while expanding their coercive and surveillance apparatus and giving big corporations even more subsidies.

What is this fight over?

Again, from Revolution:

In part, but only in part, this is about “Obamacare,” or the Affordable Care Act (ACA). Health care in America is capitalist—it is set up to turn a profit for the capitalists who invest in insurance companies, hospitals, the drug industry, etc. In recent decades, this industry has been extremely profitable—but this has come at the expense of other capitalists and the overall functioning of the economy, and has hurt the international position of the U.S. capitalist-imperialist class as a whole.

At the same time, tens of millions of people have no access to health care. Thousands have died each year of curable conditions, and others have been forced into crushing debt or homelessness through lack of insurance. Meanwhile, billions have gone to build up the already-massive military. This glaring injustice gave rise to big questions and growing anger among people: What does it mean when the ability to provide everyone with good health care exists, yet tens of millions of people have to go without it, thousands of whom needlessly suffered and died each year, with millions more living seriously diminished lives?

As a result, a consensus emerged among powerful sections of the capitalist class that something major had to be done to contain health care costs and expand coverage. Obama moved to deal with this by an act which maintained the profitable position of the capitalists in the health care industry while aiming to “bring down costs”—to other capitalists. He also expanded insurance coverage for many lower- and middle-income people—in part by forcing people to buy insurance, with subsidies depending on income, in exchanges coordinated by the government. But this is far from “universal coverage.” To take two examples: businesses are not required to provide coverage to those working less than 30 hours; and undocumented workers and their families (numbering in the millions) are not allowed to purchase coverage on the health insurance exchanges. At the same time, most of the things people hate about the way that health care is delivered in America are very unlikely to change.

The Supreme Court, which today is dominated by justices with extremely reactionary views, upheld most of the law—with one important exception. The ACA had originally mandated that the states expand Medicaid coverage—which is very basic health coverage—to the millions and millions of poor people who were not covered by insurance. But the Supreme Court ruled that this part of the law was unconstitutional—on the basis that it violated “states’ rights” (a rationale which, by the way, was used for decades to uphold segregation in the Jim Crow South and, before that, slavery itself).

As a result over 68 percent of the poor people who were supposed to have been covered by this law now will NOT be. That means, according to the New York Times, that two out of three of African-American poor people and single mothers, and more than half of low-wage workers, in the U.S. will STILL have no health care coverage! (See “Millions of Poor Are Left Uncovered By Health Law,” Sabrina Tavernise and Robert Gebeloff, October 3, 2013.) Obama and the Democrats went along with this—they “played by the rules.” Meanwhile, the Republicans totally ignored the fact that this same Court, which again, is made up of extremely reactionary justices—could find nothing unconstitutional about the law as a whole; instead, they continued on their path of ignoring those laws and rules which do not suit their agenda. (Emphasis added).

This fight, in essence, is between two wings of the U.S. ruling class over how best to pursue the interests of the U.S. Empire. The Republican wing (it doesn’t break down precisely according to party affiliation, but it does roughly) wants to aggressively strip away the social services of government and openly embrace as the leading and solid core of domestic political power the primacy of male, white, and Christian privileges and all of the hoariest aspects that come along with that – nativism, overt racism, male supremacy, know nothingism. The Democratic wing believes that the most effective way to pursue U.S. imperialist interests is to offer some concessions to the masses, especially those marginalized by U.S. history and the present day: minorities, women, immigrants, homosexuals, etc. But both parties, again, agree on the primacy of the empire’s role in the world and the undesirability of unleashing the oppressed politically. Obama’s role is to placate and reassure the oppressed, even as he sticks the knife in their back and extends a hand to the lunatic fascists.

We have no interest in siding with either side in this fight. The work that those who understand what’s really going on lies in exposing the true nature of this fight so that people can arouse themselves and struggle for a dramatically different future.

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