August 24, 2015
Mark Weisbrot
Al Jazeera America, August 24, 2015
View article at original source.
As the ever-lengthening U.S. election season begins to heat up, it is interesting to compare the U.S. and Europe regarding the evolution of their politics since the world financial crisis and recession (2008-09). In Europe, there has been quite a bit of political upheaval, with center-left parties often losing a large part of their voters. In Greece, to take the most dramatic example, the Panhellenic Socialist Movement (PASOK) is now polling just 3 percent of the electorate, after decades of wining around 40 percent or more of the vote. There have been significant losses of popularity for similar center-left parties in Spain, Italy, France and other countries — although some have yet to materialize in elections. In Greece, the leftist Syriza party has gotten most of the disaffected voters and took power this year; in Spain, the newly created leftist Podemos party shot up to the top quickly, although it has fallen some in polls recently. In France it has been the extreme right National Front that gained most, and in Italy, the new populist Five Star Movement.
The U.S. is an oasis of political stability by comparison, partly because of our different political system. But the main reason for Europe’s political turmoil, to mangle political strategist James Carville’s over-used slogan for the 1992 election: It’s the stupid economy. The Eurozone is one of the dumbest arrangements ever to be inflicted on a modern capitalist economy. This curse is the most obvious reason that the Eurozone economy has more than twice the unemployment rate that the United States has today, with Spain and Greece suffering from four to five times the unemployment rate of the U.S. Support for the center-left parties in Europe has fallen mainly because of their collaboration with the macroeconomic policies, including fiscal austerity, that have brought this unemployment and other unnecessary punishment to millions of Europeans.
There are a number of ironies here. First, Europe, with its much larger and more influential organized labor movement, more advanced social safety net, and long-dominant political parties that are called socialist, followed the Great Recession with far more right-wing economic policies than those of the United States — whose Congress is currently controlled by a party of climate-deniers, creationists, flat-taxers, deficit hawks and … well, you get the picture. This was because the Eurozone countries ceded control over their most important economic policies to an unelected, unaccountable group of officials who had their own political agenda — and have proved to be quite ruthless in implementing it.
It is also ironic that in Greece, where economic disaster brought the leftist Syriza party to power, the new government has so far been unable to win any reversals in the European officials’ slash-and-burn policies. This has caused a split in Syriza, with Prime Minister Alexis Tsipras losing the support of 29 percent of the party’s parliamentary representatives. On Thursday, Tsipras announced his resignation in order to call new elections in September.
So, while the anti-democratic and economically destructive nature of the Eurozone contributed to the rise of left movements, there is little progress that they can deliver, so long as they remain within the Eurozone. Of course the battle is not over yet: Because of the damage inflicted by the European Central Bank since Syriza was elected, and the three years of austerity that Greece has signed on to, European officials are projecting that the Greek economy will continue to shrink in 2015 and 2016 — making this one of the longest depressions in modern times. It seems unlikely that the Greek people will put up with this; there will be more turmoil ahead, and something will have to give.
Back to the United States: Unlike Europe, we had only 18 months of recession, until June of 2009. Unemployment is currently at 5.3 percent, far below its peak of 10 percent in October 2009. The economic recovery under the Barack Obama administration, barring any collapse over the next 14 months, will probably be enough to carry the Democratic nominee into the White House. But the economy is not as strong as it looks. Since labor force participation is far lower than it was before the Great Recession, we are still down about 3 or 4 million jobs from where we should be.
Furthermore, the U.S. has suffered from a massive, unprecedented upward redistribution of income over the past 35 years. Since the recovery began in 2009, 58 percent of the income gains from growth have gone to the top 1 percent of families. As in the case of failed economic policies in Spain and Greece, these gross inequities have spawned some grassroots movements that changed the political debate here. The Occupy movement made inequality a mainstream political issue for the first time in decades. Movements by fast-food workers and others fighting to raise the minimum wage have also won local victories and gained national support.
These changes have also shown up in our national electoral politics in the insurgent campaign of U.S. Senator Bernie Sanders of Vermont, an Independent who is vying for the Democratic Party presidential nomination. He is currently polling even with the vastly more heavily funded and politically powerful Hillary Clinton in the New Hampshire primary, and attracting huge crowds at campaign rallies. In the most recent national polling, he has 29 percent of primary voters, to Hillary Clinton’s 47 percent. The main points from his stump speeches — campaign finance reform, regulating and taxing the financial sector, raising the minimum wage, lifting the cap on social security taxes for those with high incomes, Medicare for all, free tuition at public colleges and universities, and other measures to reduce inequality — are also popular with the general electorate. Some have even appeared to influence other candidates, e.g. Hillary Clinton’s $350 billion proposal to reduce student debt.
Of course economic issues are not the only ones that will influence this election. Americans’ disgust with the Iraq War was a major factor in the 2006 and 2008 elections, and foreign policy issues such as the Iran deal could influence the current race. (Hillary Clinton’s support for the Iraq War was one of the main reasons she lost the 2008 Democratic nomination, but it took 11 years for her to acknowledge that this was a mistake.) And the struggle against racism and police violence, led by groups such as Black Lives Matter, has already influenced the campaign and will probably do so more over the next year.
But economic issues are often decisive, and that will likely be the case in the 2016 elections. For decades, most Americans have lost out on many opportunities to improve their living standards, as a result of a set of policies that redistributed income upward. Ironically, these are the policies that the European authorities are trying to implement in order to transform Europe into a society that is more unequal, like the United States. No wonder there is resistance on both sides of the Atlantic.
Mark Weisbrot is a co-director of the Center for Economic and Policy Research in Washington, D.C., and the president of Just Foreign Policy. He is also the author of the forthcoming book “Failed: What the ‘Experts’ Got Wrong About the Global Economy.”
