After years of suffering under Bush/Republican policies, and being on the wrong end of a failing economy, a massive mood of anger had built up in the U.S. This powerful mood for change was successfully channeled by the Obama campaign in his defeat of Hillary Clinton and his election as president.

This was a historic event. In a country where black people were first enslaved, then cruelly discriminated against under the racist Jim Crow laws, and where racism has been embedded into the fabric of U.S. society, for a black man to win the presidency is a massive social event.

Obama was elected with huge expectations. According to a CNN/Opinion Research Corp. poll, a majority of people thought Obama would stabilize the financial markets, improve race relations, make the United States safer from terrorism, lessen dependence on foreign oil, reduce global warming, and withdraw U.S. troops from Iraq without causing a major upheaval in that country.

Obama was elected at a time of unprecedented crisis. He inherited not only the deepest economic crisis since the Great Depression, but a severe crisis of U.S. foreign policy in Iraq, Afghanistan, and Pakistan, and at a time when huge struggles are likely to unfold globally in the wake of the new world recession.

Obama Balancing Act – Appealing to Workers and Saving Capitalism

During the election campaign Obama empathized with those who have suffered under Bush, and who were the victims of foreclosures or bankruptcies. But he offered very limited proposals for dealing with the problems. Since his election he has attempted to further lower expectations.

In the wake of anger at the excesses of the Bush administration and corrupt CEOs, Obama is also trying to straddle two conflicting issues. On the one hand, he is committed to saving capitalism and, on the other hand, he has to convince the working class that he is on their side. This duality will dominate the Obama administration.

He publicly announced the setting up of a “White House Task Force on Working Families” to be headed by Joe Biden. Announcing it, Obama said, “My administration will be absolutely committed to the future of America’s middle class and working families. They will be front and center every day in our work in the White House, and this task force will be one vehicle we will use to ensure that we never forget that commitment,” (The New York Times, 12/22/2008).

This, of course, has to be squared with Obama’s support for capitalism. In his book The Audacity of Hope, Obama lays out his overall philosophy. It is one that embraces capitalism as a successful system:

“Our Constitution places the ownership of private property at the very heart of our system of liberty. . .The result of this business culture has been a prosperity that’s unmatched in human history. . .Our greatest asset has been our system of social organization, a system that for generations has encouraged constant innovation, individual initiative and the efficient allocation of resources.”

In a recent interview on CBS, Obama said, “I think the basic principle that government has a role to play in kick-starting an economy that has ground to a halt is sound. I think our basic principle that this is a free-market system and that that has worked for us, that it creates innovation and risk-taking – I think that’s a principle that we’ve got to hold to, as well,” ( 11/16/08).

All his major policy initiatives and actions have confirmed that Obama sees the good health of capitalism as central to his policies. Obama’s politics place him squarely in the mainstream of the Democratic Party. His candidacy has been embraced by the corporate leadership of the Democratic Party.

In his campaign he vigorously sought campaign dollars from top corporations in almost all industries, including energy, finance, banking and health care. He won the endorsements of countless major corporate newspapers. His cabinet is filled with top financiers, past generals and top politicians who were not only part of the Clinton administration, but also past Republican administrations. These are the factors that most clearly define the corporate nature of the upcoming Obama administration.

That said, the Obama administration will not be a repetition of either the Clinton administration or the Bush administration. As times change, so do the needs of capitalism.

The Clinton administration’s policies in the 1990s were determined by Wall Street and the desire of the largest financial and industrial corporations in the U.S. to win the lion’s share of the profits in a period of expanding global capitalism and a new world situation dominated by the collapse of the Soviet Union. Free trade and neoliberalism were the governing philosophies. Their mantra was: “Let the unfettered free markets rule.”

The Bush administration continued this economic policy to an even greater degree. However, it combined it with an adventurist foreign policy based on the model of the neoconservatives, who believed that bold expressions of brutal U.S. power could subjugate the world. This led to the Iraq invasion blunder. The Bush administration was also dominated by a smaller clique of rapacious capitalists centered on the oil industry. Dominated by cronyism, the blunders and incompetence of the Bush administration severely weakened the U.S. as an influential world power.

Obama’s polices will be dictated by the needs of U.S. and world capitalism in the coming period. Reeling from the failed invasion of Iraq and staring at a serious economic crisis, with the prospect of the possible awakening of the working class into struggle, the majority of the ruling class backed away from the Republicans in this election and supported Obama. The most far-sighted sections of the ruling class were appalled by the reckless and crude policies of Bush, and backed Obama in the election. They saw Obama as a new, dynamic candidate who would listen to competent big business advisors, who could try to repair the image of the U.S. around the world, and who would be flexible enough to put new economic policies into place.

In particular, they saw Obama as a candidate who would not be dragged down by the ideological baggage that the Republicans carried around with them. This is most important in the area of the economy, where decisive state intervention in the economy is necessary. The large Republican bloc in the House and Senate was incapable of responding with Keynesian measures. Its philosophy, modeled on the interests of small business, was for unfettered free enterprise. Their vote against the original $700 billion bank bailout bill, and their refusal to support the bailout of the auto industry, are reflections of this.

In the last three months, big business has pushed its policies through by establishing a virtual dictatorship in America. Congress has been by-passed, as Treasury Secretary Paulson and Federal Reserve Chairman Bernanke, both unelected officials – with the lukewarm support of Bush – have determined U.S. economic policy. They have spent unprecedented sums of money in an attempt to prop up and nationalize banks and insurance companies in a desperate attempt to prevent the total collapse of the financial system.

The amounts involved are staggering. The New York Times writes: “In the last year, the government has assumed about $7.8 trillion in direct and indirect obligations. That is equal to half the size of the nation’s entire economy,” (11/26/08). This breaks down as $1.7 trillion to buy hard-to-sell securities from companies, $3.0 trillion to buy stock and corporate debt, and $3.1 trillion to guarantee corporate bonds and money market funds. This is taxpayers’ money, and the bill will come due. Clearly, none of this has gone to support workers facing unemployment or foreclosures or trying to find the next hot meal for their families.

Such is the undemocratic way the ruling class acts when its system is endangered. We should remember this when they throw up constitutional objections to public ownership of top corporations or say there is not enough money to fund our needs.

The Republican election campaign ended with Republicans accusing Obama of being a socialist. This was at a time when the Bush administration was nationalizing banks!

Obama’s Economic Policies

Faced with the potential collapse of the financial system, the ruling class in the U.S. and internationally first attempted the traditional methods of stimulating the economy – giving loans to the banks and reducing interest rates. Facing the deepest dark of night, they desperately needed to find a way to revive the economy. Dazed, they staggered away from their beloved neoliberal policies, and step by step have been forced to adopt Keynesian policies.

Even then, sections of the ruling class and their political parties have called these policies “Socialist” and “Communist.” The same was said of Roosevelt when he stepped forward in the Great Depression to use Keynesian policies to save the system that time.

The adoption of public works programs and public ownership, policies that we have had on our program for the last 25 years, is a recognition that the system has failed and is in dire crisis. The market forces are incapable of reviving the system without it being seriously damaged.

However, unlike socialists, who use such policies to strip away power from big business in order to provide for workers and as a step to socialism, Bush and Obama are using these policies to prop up the system. They accept that only by propping up the collapsing corporate giants and using state spending can the economy be turned around.

A New York Times editorial on December 22, 2008, entitled “The Printing Press Cure” spelled out the need for public works programs and printing dollars to deal with the crisis. It argues:

“For Barack Obama, the challenge is one of leadership. As president, Mr. Obama will have to convey optimism without overpromising. He will have to inspire confidence, even in the absence of a dramatic turnaround – which is simply not on the cards.

“To jump start the economy will require getting money to those who will spend it fast and in full. That includes unemployed workers, low- and middle-income families, and state and local governments.”

The editorial ends with the following: “While Mr. Obama must continue to level with the American people – the economy is unlikely to turn up until 2010 at the earliest, and even then it will probably rebound slowly – his near term moves will go a long way towards making the burdens yet to come more bearable,” (my emphasis).

As with Roosevelt, Obama’s main role will be to prevent this anger and coming struggles from sparking a new, powerful movement of the U.S. working class. To repeat the words of The New York Times‘ editorial, it will be about “making the burdens yet to come more bearable.”

We can expect his policies to be wrapped in the language of “national interests” and helping “all Americans.” These jobs programs and the extension of certain social programs will win the support of large sections of workers, preventing them from rejecting the system en masse.

We will see a certain schizophrenia between Obama’s speeches and his actions. His rhetoric will be about creating “change,” “all sharing the burden,” and “all struggling together to rebuild America.” However, the meat and potatoes will go to big business, while the leftovers will be thrown to workers as they see their lives spiraling downward in a deep recession.

His speeches and public statements will be all about reassuring workers and business that he is turning things around. His actions will be to save capitalism at whatever cost. Any gains made by workers will be temporary; to be taken back as soon as the system is stabilized.

This will not go unnoticed by the most conscious workers. Also, it will not put food on the table and a roof over the head of the hardest hit workers and their families, who will have no option but to move into struggle.

Obama’s position on the auto bailout is a good example. Yes, he supports a bailout of the auto industry to save jobs, but the bailout is not to benefit those who work there. It’s to ensure the continuation of the auto industry as a key component of U.S. capitalism.

“We don’t want government to run companies,” Obama said. “If taxpayer money is at stake – which it appears may be this case – we want to make sure that it is conditioned on an auto industry emerging at the end of the process that actually works, that actually functions,” (Associated Press, 12/8/08).

We have to see what is behind the present plan for a bailout. The last bailout in the auto industry was of Chrysler Corporation in 1979. In this deal with the Democratic Carter administration, the UAW leadership agreed to an estimated $203 million in concessions for the workers. This paved the way for major concessions in wages and benefits for workers in other industries.

Former Bill Clinton Commerce Secretary Bill Daley, now a transition economic advisor to Obama, was on NBC’s “Meet the Press.” He said, “They have to do it. . .The responsibility is on the auto industry and the unions to come back with a plan.”

This analysis can only sketch out the main outlines of Obama’s economic policies. We will have a better handle on them as they start to emerge in practice. We will need to review these on a regular basis. We cannot rule out events forcing Obama to go much further in the direction of state intervention or even nationalizations. He could even outdo the free market Bush!

Based on this brief review of Obama’s economic policies, we can see that his policies are aimed at preventing the economy from collapsing into a deep depression. In this they will most likely be successful. But even in this “best case scenario,” U.S. capitalism faces its deepest economic crisis since the 1930s. While this is the more likely perspective, there is a real risk that a major collapse of banks or other economic upheavals could still send the economy into a deep downspin. With the present global crisis of the system and the massive debt overhead of the U.S., there is no basis to believe that Obama can rebuild the U.S. economy to create a new period of sustained growth.

Foreign Policy

It is Obama’s proposed foreign policy that most clearly exposes his capitalist loyalties.

The Democrats have always been a reliable defender of the imperialist aims of big business. Democratic presidents started World War I, World War II, the Korean War, and the Vietnam War. They are also the only political party to drop the atomic bomb – twice. Their foreign policy clearly demonstrates them to be one of two corporate parties in America. They are an integral part of America’s corporate two-party system.

Their differences with Republicans over Iraq, Iran, and Afghanistan are not related to the final objective – to defend U.S. imperialist interests – but how to do it. The Democrats have always been willing to go to war for corporate interests. However, the U.S. invasion of Iraq was an unnecessary and disastrous action.

For the Democratic Party, the reckless Bush neoconservative policy in Iraq was a blunder. By failing to build strong alliances to provide political cover for U.S. policy through the involvement of major allies and the United Nations, the Bush administration exposed the predatory national interests that determine U.S. foreign policy. Bush’s reckless invasion of Iraq wasted world sympathy for the U.S. after the bombings of 9/11, isolated U.S. imperialism from its fellow NATO allies, and severely overstretched the U.S. military. Rather than strengthening U.S. imperialism, the war in Iraq has weakened it.

The U.S. ruling class sees the election of Obama as offering a chance to draw a line in the sand from Bush’s policies and to begin to repair the damage. However, the situation is not easily redeemable. Obama’s mission is to reassure the world that the U.S. will plan its military actions in concert with other world leaders.

That does not mean that the U.S. will suddenly change its spots and find itself loved around the world. The Democrats and Obama will follow the imperialist interests of the U.S. as determinedly as Bush. The problem is that Obama has inherited one of the most difficult international situations ever faced by an incoming U.S. president.

In an editorial entitled “A Military for Dangerous World,” The New York Times writes:

“As president, Barack Obama will face the most daunting and complicated national security challenges in more than a generation – and he will inherit a military that is critically ill-equipped for the task.

“Troops and equipment are so overtaxed by President Bush’s disastrous Iraq War that the Pentagon does not have enough of either for the fight in Afghanistan, the war on terror’s front line, let alone to confront the next threats.

“The United States and its NATO allies must be able to defeat the Taliban and al-Qaeda in Afghanistan — and keep pursuing al-Qaeda forces around the world. Pentagon planners must weigh the potential threats posed by Iran’s nuclear ambitions, an erratic North Korea, a rising China, an assertive Russia and a raft of unstable countries like Somalia and nuclear-armed Pakistan. And they must have sufficient troops, ships and planes to reassure allies in Asia, the Middle East and Europe,” (11/16/08).

To confront these major challenges, Obama has built a hawkish foreign policy team: Hillary Clinton as Secretary of State and Jim Jones, four star general and former NATO commander, as National Security Adviser. He is retaining Bush appointee Bob Gates as Defense Secretary, who is a Republican and a former CIA chief.

Jeremy Scahill, writes in The Guardian newspaper: “What ultimately ties Obama’s team together is their unified support for the classic U.S. foreign policy recipe: the hidden hand of the free market, backed up by the iron fist of US militarism to defend the America First doctrine,” (12/1/08).

David Rothkopf, a scholar at the Carnegie Foundation for International Peace said: “I don’t think there has been a stronger foreign policy team or one composed of more established, leading players in the national security community since the Second World War.”

The Economist writes: “Mr. Obama has made the point that he is no lefty peacenik. With a rival who supported the war, a lifelong warrior and a Republican Secretary of Defense in his top three foreign-policy jobs, the new young president wants the world (and critics at home) to see that he is no pushover,” (12/1/08). USA Today says Obama’s “decision to keep Robert Gates as Defense Secretary reflects a pragmatic approach to wars in Iraq and Afghanistan and a step back from campaign rhetoric, according to military observers,” (12/1/08).

Obama’s foreign policy objective is to strengthen U.S. imperialism in the Middle East by attempting to extract itself from the day-to-day policing of Iraq, to massively increase U.S. troop strength in Afghanistan, to prevent the crisis in Pakistan from boiling over into conflicts in the area, and to prevent Iran from procuring nuclear weapons. The problem is that none of these problems has an easy answer.

A Socialism Today editorial states: “Soft power has always been used in conjunction with economic power and military might. In the first period of his presidency, Obama will undoubtedly have a great fund of goodwill to draw on internationally. He may well be a more intelligent, flexible representative of U.S. imperialism than his predecessor. But, ultimately, he will be the representative of U.S. imperialism, and will not hesitate to use its economic power and military force to safeguard its interests,” (December, 2008).

The dire situation in Iraq was glossed over during the election campaign. Over the last period, U.S. military power, backed by massive funding, has managed to paper over the underlying national and social strains that threaten to pull Iraq apart.

In the coming year, local and national elections are planned for Iraq. With the scramble for power developing in anticipation of the U.S. exit, the U.S. will find itself drawn into trying to maintain a sustainable political central power as the centrifugal forces threaten to tear the country apart. Not only are Kurdish and Sunni interests involved, but the weak government of al-Maliki is threatened by an open revolt by the more powerful Shi’a parties: the Islamic Supreme Council of Iraq and the powerful forces around Moktada al-Sadr.

Any serious attempts by Obama to withdraw U.S. forces will threaten to expose the house of cards that the U.S. has created, and to collapse the whole U.S. experiment. Obama could be threatened with facing a defeat in Iraq, not something U.S. imperialism will accept lightly.

The chances of U.S. success in Afghanistan are even bleaker. The new plan announced by Obama in December is to build up powerful regional bodies based on tribal structures to help support a weak president, Hamid Karzai. Members of these tribal structures will receive bribes of money. Some have already been given Viagra as an incentive for information about Taliban activities.

The Economist described the failure to create a national police force: “The Afghan National Auxiliary Police, a local force raised by tribal elders, was scrapped this year when it turned out to be a divisive ragtag militia, often biased towards a particular tribe and packed with drug addicts and petty criminals,” (12/20/08).

As The Economist says, “Balancing local factions is notoriously difficult.” It quotes a member of parliament from the area of Ali Khail, who says, “The government is weak and people are losing faith,” (12/20/08). The defeat of British imperialism and the Soviet Union in Afghanistan is a severe warning to Obama about this new attempt to subjugate Afghanistan to foreign interests.

The U.S. is not intervening in Afghanistan to benefit their people. It’s there to promote its own interests of defeating the Taliban, which is rooted in Afghanistan and the border areas inside of Pakistan. To defeat the Taliban means waging war and manipulating local leaders. Indiscriminate bombings and attacks have caused countless casualties, turning the local populations against the U.S. and the U.N., and have weakened both the Afghani and Pakistani governments.

There is not time to cover all the possible conflicts that could face the Obama administration at a time of global economic downturn. Obama will attempt to do this with an army that is exhausted. The New York Times editorial states:

“To protect the nation, the Obama administration will have to rebuild and significantly reshape the military. We do not minimize the difficulty of this task. Even if money were limitless, planning is extraordinarily difficult in a world with no single enemy and many dangers.

“The goal is a military that is large enough and mobile enough to deter enemies. There must be no more ill-founded wars of choice like the one in Iraq. The next president must be far more willing to solve problems with creative and sustained diplomacy.”

It calls for “65,000 additional Army troops and 27,000 additional Marines” to make up a total of “759,000 active-duty ground troops.” Obama has supported such a military buildup.

With Obama facing “the most daunting and complicated national security challenges in more than a generation,” he has clearly shown that he will be guided by foreign policy spokesmen who have been tried and tested as defenders of U.S. imperialism. We can expect no champion of the interest of the working class and poor whether they are in the Middle East, Asia, Africa, or Latin America.

While the crude Bush/Cheney administration believed that brute force and U.S. unilateral action would be enough to pacify the world, the Obama administration will attempt to sell these actions under the slogans of “humanitarianism” and “democracy.” The outcome will feel the same for those workers and poor who attempt to stand in the way of U.S. foreign policy interests.

Domestic Policy

We will probably need to wait a few more months to see how exactly Obama’s domestic agenda develops. The first item of business will be the stimulus package. This will be followed by the auto bailout.

We can also expect him to move quickly on some of his low-cost campaign promises. These will probably include closing Guantanamo base, ending some of Bush’s more outrageous executive orders, and some low-cost actions to address the crisis of the environment.

The troop buildup in Afghanistan has already begun. We can expect Obama to make some high profile announcements of some troop reductions in Iraq. We can also expect him to take steps to begin a discussion on health care. However, we can expect the issue of health care to be a long process of compromises and battles.

Based on his statements and his cabinet choices, it appears that Obama has decided to attempt to rise above the label of “Democrat” and embrace sections of Republicans in order to pass his legislation. The problem for Obama is that the Republican Party is more conservative than in recent memory and may be more interested in redefining itself for the next election rather than passing legislation. This will become clearer as Obama moves to build support for his health care reorganization.

Health Care

We have to be very skeptical about the ability of Obama to deliver any meaningful reform of health care. Every Democrat elected to the presidency in recent memory has promised to deliver universal health care. Each has failed.

Unlike Clinton’s aborted attempt in 1992, Obama’s project at least has begun with some kind of an outline. However, the same forces and complications that ditched Clinton’s plans are likely to ensnare Obama’s.

There is a simple way of providing universal health care for all. It’s called single-payer health care. To include the 45 million without health care and the tens of millions with substandard health care into a health care system costs money. The simple way to fund it is to remove the huge insurance companies, who offer no health care, and cost the system an estimated 30% of its costs.

Of course, the massive funding of both Democratic Party presidential candidates – Clinton and Obama – by health industry companies was an insurance policy in case either candidate should adopt policies diametrically against their interests. The refusal of Obama to embrace single-player health care leads him into an impossible maze of finding the money to pay for health care for those shut out of the present system.

In fact, Obama is not even promising to provide health care for all. He has only promised to provide health care for “all children.” The rest of his proposals are attempts to provide funding for most of the rest of the people. In the end, those who cannot afford it will still be without health care.

His policy boils down to the following:

  1. Expanding eligibility for existing public programs, including both Medicaid and the State Children’s Health Insurance Program (SCHIP);
  2. Creating a National Health Insurance Exchange to serve as a federal regulator of private insurance plans that would compete alongside a new National Health Plan;
  3. Providing income-related subsidies for those without employer-sponsored health insurance while mandating that children have coverage; and
  4. Requiring that medium and large employers provide coverage or pay a tax, while extending tax credits to small businesses and creating a government reinsurance program to cover businesses’ catastrophic health costs, (The Heritage Foundation).

The problem is that Obama has to find a way to pay for all this. He had planned to fund it by ending Bush’s tax cuts for the rich. But he has now dropped that idea until the end of 2010. Compounding this is a recent Congressional Budget Office (CBO) estimate of the cost of these plans. It states: “Serious concerns exist about the efficiency of the health care system, but no simple solutions are available to reduce the level or control the growth of health care costs.” The New York Times said: “Many health care proposals that President-Elect Barack Obama and congressional Democrats have proposed, CBO found, ‘would carry a high price tag and would generate only modest savings,'” (12/19/08).

Apart from the issue of how to reduce costs, there is the issue of the resistance of the big insurance companies, pharmaceutical companies and other private medical companies. Obama’s plan is to use the bully pulpit of the federal government to make these big corporations conform to a national plan. Obama has decided to solve the health care crisis by cutting costs, including cutting into the super-profits these industries make. The plan is to create a health care body which will create new rules for the health care industry. It will prescribe many rules on costs and procedures in order to keep down costs. But cutting costs either cuts into profits or workers’ wages.

By appointing Tom Daschle to head his heath care efforts, Obama has deliberately chosen an individual who has worked in the past with Republicans. Obama believes that the big corporations will collaborate in this project while clipping the super-profits of some of their members. We will need to see if this can be achieved, especially since the effort will be hit by a massive broadside of propaganda not only from these huge medical companies, but also small businesses and the Republicans.

Obama has also announced a huge series of discussions on health care around the country to hear what constituents think on the issue. Since participants are not required to disclose their interest in the issue, health care corporations have begun mobilizing for the discussions to get their interests heard.

We can expect a fierce rear-guard action by the powerful health care corporations. They will most likely be backed up ideologically by the Republicans. The worried faces of small businessmen and women being “overtaken by a big government bureaucracy” will be beamed into the living room of every American. There are billions of dollars in profits at stake in this venture.

Obama’s plan seems to be to offer enough concessions to siphon off a few “moderate” Republicans to support his plan, while attempting to keep as much as possible of his original objective of close to universal health care.

Another complicating issue for Obama will be the spiraling federal budget deficit, estimated by some to reach $1.2 trillion in the next year without even counting Obama’s stimulus plan. While big business is fine about a one-time boost in spending to prevent a depression, they will be more concerned about creating a new unending program that will further increase the ballooning budget deficit. We can expect a massive debate on this issue.

Our position is that providing quality health care is not compatible with corporate profit-making. How can corporations interested in maximizing their profits also maximize the quality of the health care they offer? We demand an end to the corporate-based restrictions that working class people increasingly face as they attempt to get decent health care. These restrictions include disqualification due to pre-existing conditions, outrageous co-payments, and the refusal to treat a patient.

We defend public ownership of pharmaceutical companies and private hospitals, and we advocate the elimination of the private health insurance companies as a necessary step to create a not-for-profit health care system which can provide quality universal health care for all.

The best offer on the table at present is a single-payer system, which takes the important step of eliminating the insurance companies as a step to universal health care. A conference of unions, notably including the California Nurses Association, plans a conference on single-payer in January in St. Louis. We need to be absolutely firm in rejecting any policy that leaves insurance companies in place and does not create universal health care. We need to expose the massive funding from the big medical and insurance companies to Obama’s campaign, and call for Obama to adopt single-payer insurance as an alternative.

There are a number of possible scenarios. But, in the end, one scenario that may well emerge is a partial reform which will include children and some others, while leaving large sections of workers with only promises of further reforms in future years, and a huge section of the working class dealing with the severe restrictions and add-on costs of their existing health plans.

Obama’s Policies on the Environment

Obama calls for a big increase in spending on green technology and for the U.S. to support the carbon trading system that was created by the global Kyoto summit. This indicates an end to the insane Bush/Cheney doctrine of ignoring the evidence of global warming. However, this new approach of Obama will not reverse the trend of environmental destruction.

The idea that these policies can end the role of the U.S. as the world’s largest polluting nation is not feasible. Investment in green technology is obviously an improvement on investment in oil production. Green technology will provide growth opportunities for some green environmental corporations. It can develop some new environmental industries and new technologies. However, this will not turn around the massive CO2 output from the U.S. factories and automobiles. We need to consider that part of Obama’s plan is to provide new investment in the nuclear power industry, which is hardly an improvement on coal and oil since it produces the most devastatingly toxic material known to the human species, material whose shelf life could actually outlast that of our species.

Carbon permitting has also proved a failure internationally. This idea, that nations would voluntarily reduce their carbon emissions, has not led to a cut in carbon emissions. The new idea that introducing carbon taxes to penalize polluters will protect the environment is also flawed. It may lead to corporations paying more taxes, but we can also expect them to go into feverish activity to pay lawyers to find loopholes in these regulations.

If there is one issue that cannot be solved under capitalism it is the environmental crisis. Capitalism does not value the environment, since it has no cost. It treats it as a resource to exploit, like it exploits labor. Any attempt to protect the environment will be seen as something that cuts into profits. This is especially true as we enter this economic crisis. Cost-cutting measures will see environmental protection sidelined. Only a socialist society, where profit-making is removed as the engine of human society and production is rationally and democratically planned, can introduce methods of production that have the short-term and long-term interest of humanity and the planet as their guiding force.

Union Rights Bill

Another important issue will be the Employee Free Choice Act. The union leaders have gone out on a limb supporting this legislation. It will be an important test of their strength and character to see how much they fight for this and the kind of leverage they are willing and able to put on Obama to win it.

Apart from increased penalties against management who victimize workers trying to organize a union, the main thrust of the legislation is to facilitate union organizing. If a majority of workers declare they want a union, then that would be a legal statement of intent. A 90-day period would open up for management and the union to negotiate a first contract. If they were to fail for whatever reason, the process would go into federal mediation. If there was no solution after 30 days of mediation, the issue would go to federal binding arbitration.

If this legislation passed, it would lead to an increase in union organizing and would weaken the employers’ ability to fight unions. For this reason, overall, we support this legislation.

However, our support should be critical support. This legislation fits into the business unionist model used by the union leadership. The reliance on federal binding arbitration to force the boss to sign a first contract bypasses the workers completely. Also, it leaves the interests of workers dependent on federal government appointees, who have never had the interests of workers at heart.

This top-down model of organizing used by the union leadership leaves out the crucial players: the workers themselves. The power of the working class is based on the willingness of its members to struggle. Our alternative is to build up workers’ consciousness and power on the job. It is only their ability to withdraw their labor that makes workers powerful on the job.

Overall, despite its weaknesses, the most likely effect of the legislation, if passed, would be to increase organizing into unions. Because of that we should give it critical support, and we should actively support any active campaigns organized around it.

Obama has said he supports this legislation. However, it is one thing to “support” it, and another thing to fight for it. The Democrats have never supported any progressive union legislation. In fact, a majority of Democrats in the House and Senate voted to pass the infamous Taft-Hartley Act, a bill that severely weakened the ability of unions to fight. In the 1980s, the Senate voted 96-0 to deny the right of railroad workers to strike, ordering them back to work.

We have to ask, what pressure does the union leadership have to force Obama to go out on a limb to pass this legislation? Obviously, the biggest one would be to threaten to build a new workers party if Obama did not sign this. However, we cannot expect them to use that powerful card.

The Chamber of Commerce and the majority of big business are totally against this. So are the Republicans. Democrats will support it verbally, but we can also expect them to use it as way of tying labor to the Democrats in the next election by blaming Republican opposition for not passing it.

We should remember the actions of the Clinton Administration. From 1992 to 1994, the Democrats controlled the presidency and both houses. They promised to pass legislation making it illegal to permanently replace workers who were on strike. While they passed NAFTA, GATT, and the WTO, they failed to even bring the pro-worker legislation up for a vote. Instead, they blamed its demise on a possible Republican filibuster.

Obama has already thrown one important bone to labor in the appointment of Ms. Solis as Labor Secretary. We can expect to see some executive decisions and appointments to the NLRB which are more favorable to labor than in the recent past. The labor leadership will herald such decisions as evidence that their strategy of throwing millions of dollars at Democrats has worked. However, the appointment of one labor-friendly individual in a cabinet full of Clinton corporate veterans and hawks will not make this a labor-friendly administration. As The New York Times puts it: “Most members of his economic team are veterans of the Clinton Administration who tilt towards Wall Street. In the Clinton era, financial issues routinely trumped labor concerns,” (12/29/08).

We can expect the Democrats to dangle the Employee Free Choice Act as a possible reward for union concessions in the auto industry. It is likely it to get lost in the shuffle of other legislation. At a time when pushing this legislation will create a huge battle with the Republicans and big business, and create complications for other legislation where Obama is looking to find common ground with Republicans, it seems that the only reason the Democrats would pass it is if the Obama administration felt the need to throw a bone to labor. Even then, we can expect the legislation to be severely watered down.

At the same time, a section of the ruling class sees passing this legislation as part of the overall stimulus package. The New York Times has come out in favor of it. For this reason, we need to leave the door open that some form of the legislation might be passed. The opposition of the majority of big business, of small businesses and the Republicans will need to be stared down. Also, Obama will need to invest a lot of political capital for it to pass.

Already, union leaders are running ads and creating a campaign to fight for this legislation. The timidity of the present union leaders and their unswerving belief that Obama and the Democrats are their friends knows no end. However, in the present period, with Obama making pro-worker statements, the union leaders are desperate to have their Democratic “savior” deliver them new members. A spirited campaign could actually spark some increased interest in unions. We have the example of Roosevelt’s pro-worker statements sparking a move into unions in the 1930s.

Should the Democrats fail to deliver on this key labor issue it could have huge repercussions. The failure of Clinton to deliver worker replacement legislation while he aggressively pushed through NAFTA was decisive in the 1990s in sparking a layer of more class-conscious workers to reject the Democrats and move towards the creation of the Labor Party. We cannot rule out a similar kind of scenario if Obama fails to deliver on the Employee Free Choice Act. The Democrats’ cries about a possible Republican filibuster would have as little impact as they did back then. This could start to create serious cracks between the union leadership’s support of Democrats and the most class-conscious union members.

Obama and the Mood of Workers

We do not have a crystal ball, and we cannot project Obama’s policies on all the important issues that will be coming up: education, racism, housing foreclosures, employment, extra funding for states, veterans benefits, etc. We will need to review these as they occur.

While Obama will face the public with policies of providing jobs, behind their backs he will continue to prop up big corporations and bail out rich investors. These conflicting pressures of defending the system and restoring the profitability of big business, while at the same time appearing to be a president of the people, will stretch Obama’s skills as a communicator.

But what is clear is that Obama will enjoy an extended honeymoon. By moving quickly on a stimulus package, by passing some small, important early reforms, and by blaming the Republicans for the mess he has inherited, he will be given an extended period of grace by most of the public.

The fact that Obama has raised expectations is a very positive thing for perspectives. Time and again, history has shown that movements begin with the public having their expectations raised. Already, Obama has mobilized millions into political action around his candidacy. What will be important is the extent to which people actually get politically involved. The expectation of millions attending his inauguration is a sign of how seriously people take this presidency and how much they feel engaged with his success. This is especially true for young people and African Americans.

Obama has made many pronouncements about how change can only come by the people stepping forward. This could well set the stage for a layer of people stepping up into a new level of activism. We cannot possibly quantify this or describe how extensive it will be. This will be shown by future events. However, the explosive movement against Proposition 8 and the plant occupation in Chicago are indicators that such a scenario is possible. The majority of those active in the Proposition 8 protests were Obama supporters.

Start of Opposition

The most important aspect of the upcoming period will be Obama’s having an extended honeymoon. This can last one year, two years and more. Many working-class people who voted Republican will also come to support Obama’s helping hand.

At the same time, there will also be a smaller layer of more far-sighted workers and young people who will more quickly see through Obama’s policies. We have seen early indications of this in the anger at Obama in the protests against the Israeli assault on Gaza, Obama’s cabinet picks, his selection of Rick Warren, etc. As Obama begins to rule and carry out policies, this layer will tend to grow. It is vital that socialists reach these people to build our movement, educating them in how to reach, in a skilful but principled way, the broader mass of workers and youth who still have illusions and hopes in Obama.

Obama will not be able to put food on the table for every American, nor can he prevent the savaging of jobs and living standards by the bosses that will accompany the recession. He will also not be able to balance the state budgets.

Workers will get hit hard in the next few years. Obama’s rhetoric will be begin to seem hollow for layers of workers and young people who will compare the billions of dollars being handed out to corporate America with the dimes and nickels that are available for workers and the unemployed.

The so-called safety net has been shredded in the U.S. over the last 20 years. Welfare has gone. Millions will not qualify for unemployment. Others will not be able to afford a roof over their head due to low wages and the lack of steady work. Millions will be without jobs and without a home. The homeless population will explode. Unemployment lines will grow. Shelters will be overwhelmed. A mood of anger will grow among those shut out of U.S. society.

Hardest hit will be African Americans, Latinos and other minorities. Having fewer resources to fall back on, they will often be the most visible of the poor. Women will suffer disproportionately. Demand will grow on Obama to deliver – especially to those who voted for him. We can expect to see sizeable protests demanding relief from the federal government.

Out of this anger we can expect to see movements. At this stage, we cannot tell the size of these protests and around which issues these protests will develop. Some will be spontaneous and chaotic. Some will be planned. Even if the number of struggles in the workplaces is low due to workers fearing losing their jobs, this will not stop movements developing in the streets. In fact, this is exactly how events have started in other, similar periods of history.

Of course, criticism of Obama will come not only from the Left but also furiously from the Right. Already, right-wing talk radio is preparing to mount an opposition to Obama. We can expect criticisms to come from within and from without the Republican Party. As we explain elsewhere, attacks from the right will provoke a radicalization of the Left. A polarization of society will be the result.

Perspectives for the Obama Administration

Facing a deep recession he is not responsible for, and offering an aggressive spending program to create jobs and put more money into the pockets of working-class people, we can expect Obama to have a considerable honeymoon.

But Obama’s polices cannot cure the problems inherent in capitalism. Committed to making big business more profitable, we can expect a growing layer of workers and young people to see though his rhetoric and view him as a front man for a Democratic Party committed to protect the interests of big business.

We can expect anger at the Democrats to start to sharpen at a state and city level. Independent coalitions and candidates could well emerge in time for the 2010 election. At a certain point, and it is hard to estimate exactly when, a mood will start to grow that Obama is not a friend of working-class people and the poor, and that he is really delivering for big business.

Exposing the Democrats in Power

This will open up a really important period in U.S. history. Since the founding of our socialist organization in 1986, we have explained that while the Republicans are in the White House the Democrats can appear blameless for the crisis. Any opposition to the Republicans can be scooped up by the Democrats in the subsequent election.

What is needed to break this cycle is for a liberal Democrat to be elected to power in a campaign that increases expectations that they can deliver for the working class. Conditions need to exist that can expose the class nature of the Democrats. This can then create a rift between the Democrats and their base of support in the working class and progressive movements, especially in the union movement. Only by making the Democrats carry out the dirty work of big business while in power can their false progressive promises to be exposed on a broad, mass scale.

Such a scenario is now opening up. The Democrats are incapable of defending capitalism without supporting big business’s attacks on the working class.

On the local level, where Democrats will preside over major budget cuts and other anti-worker policies, the possibility of important defensive struggles emerging is quite present, even in the relatively short term. These types of struggles will present opportunities for us to make the case for building independent left, pro-worker electoral initiatives to challenge the Democrats locally well before widespread disillusionment in Obama present similar openings on a national scale.

On the other hand, national questions will continue to be followed by wider layers of workers and youth. Events like further bank bailouts, the escalation in Afghanistan, and other questions will stir up opposition to Obama and the Democrats, producing ideological ferment and openness to our ideas among an important layer, even if struggles on the big national issues remain held back by continued illusions in Obama.

At a certain point, anger will change into action as a layer of workers and young people openly break from Obama and the Democrats and look to build a movement that represents the real interests of workers. Of course, how quickly this unfolds will also greatly depend on the existence of socialists and other organizations and movements: political forces who can act as a catalyst and leadership in this process. Unfortunately, at this stage, such forces are still very weak.

It is very possible that, despite growing opposition to Obama during his term in office, he could win a second term. The process of a layer of society breaking from Obama can also be combined with a renewed vote for Obama and the rejection of a return of the Republicans back into power. In fact, such a scenario would probably be quite helpful in allowing a more complete break with the Democrats.

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