It is clear we are living through a historic transition in the U.S.

A devastating pandemic has triggered a deep economic downturn which comes only a decade after the Great Recession that already exposed capitalism’s rot. Institutions have lost credibility and political polarization is at unprecedented levels. Beyond this, the clock is ticking towards irreversible climate change. While the defeat of Donald Trump, the racist narcissist in chief, was welcomed by tens of millions here and around the world, the incoming Biden administration has only the most limited answers to this multifaceted crisis. Even the relief felt after Trump’s defeat has been punctured by a relentless assault on the outcome of the election by Trump and sinister elements which points to the dangerous potential for a far-right force to develop in the U.S. in the next period.

The left in the U.S. faces a very real challenge. Enormous protests against racism last summer pushed the right and the establishment back temporarily but failed to win a decisive victory. Bernie Sanders’ platform – including Medicare for All, a Green New Deal and free college – remains enormously popular but his capitulation to the corporate leadership of the Democratic Party has left a dangerous vacuum of leadership. The left and the labor movement needs to look reality in the face if we are to understand correctly the tasks we face in the coming months and years.

The Pandemic Rolls On

The toll of the pandemic in the U.S. may exceed half a million by April 2021 which is staggering. Hospitals are again overflowing in many parts of the country, exposing the complete failure of the health care system in the wealthiest country on earth. Neoliberal cuts to public healthcare, including widespread hospital closures and a massive reduction in beds over the past decades, are literally killing people by the thousands. In New York State alone, 20,000 hospital beds or 30% of previous capacity were cut in the past 20 years.A 2019 report listed 113 rural hospitals closed since 2010, 20 in Texas alone. 

The FDA has now approved two highly effective vaccines. Their rapid development is indeed a “marvel of modern science,” which shows what could be achieved with real global cooperation. Unfortunately, under decaying capitalism, the race for the vaccine has become part of the competition between different imperialist powers, including the U.S., China, Russia and Britain. It is also worth pointing out that the vaccine breakthroughs were based to a significant degree on prior research after the SARS coronavirus outbreak in the early 2000s. But the money to continue this research dried up after SARS receded due to the constant short-term approach of capitalism. With a longer-term perspective this research could have gone further, making it possible to develop the new vaccines even more quickly.

Even with effective vaccines, there are massive hurdles to achieving the rapid immunization of at least 80% of the population, the level which many experts estimate will be needed to end the spread of the virus. Already serious problems have arisen with scaling up production of the vaccine, with states receiving far smaller shipments than originally expected. The stated goal was for 20 million people in the U.S. to receive their first dose by the end of the year. As of Saturday, only 4.2 million people had received their first dose. While the incoming Biden administration says it will make more extensive use of the Defense Production Act to force manufacturers to ramp up production of materials related to the vaccine and protective equipment, as we have pointed out, “there needs to be a national, publicly controlled plan to achieve mass immunity to COVID.” (Socialist Alternative issue 69)

The other obstacle is vaccine skepticism. There are a number of elements to this including the role of the far-right and conspiracy theorists encouraged by Trump who at the same time was pushing for “warp speed” development of the vaccine. There is also a high level of skepticism in the Black population because of racist public health policies and dangerous medical experiments carried out on Black people. A political establishment with almost no authority, operating in an environment of extreme polarization they helped to create, will find it very difficult to overcome this skepticism to the degree needed.

Economy Heading Towards Second Downturn

The second quarter of 2020 was the steepest slump in economic activity on record in the U.S. while the third quarter was the biggest rebound on record. This rebound would not have been possible without an unprecedented level of Federal stimulus, the bulk of which went to bail out big business but also included $1,200 checks for everyone earning less than $75,000; aid for small businesses; the $600 top up to weekly unemployment benefits; and the extension of unemployment benefits to gig workers and “independent contractors,” a growing section of the working class. The stimulus earlier this year amounted to 12.1% of GDP compared to the stimulus provided in 2008-9 which amounted to only 4.9%. It was quite clear to the capitalist class that there was little choice but to put money in ordinary people’s pockets to prop up demand and avoid a complete meltdown of the U.S. economy leading to a catastrophic long-term slump.

But even with the stimulus and the third quarter expansion, the economy was still significantly smaller than at the start of the year. In November the New York Times Daily podcast summarized some of the key statistics:

  • There has been a net loss of 10 million jobs since February (22 million lost in March/April; 12 million regained since). It is now also reported that 4 million have left the workforce permanently. This compares to 9 million jobs lost in the whole of the Great Recession.
  • There was a 7.2% growth in consumer spending on goods between January and September (this included a boom in auto sales and equipment like laptops). In the same period, there was a 6.1% drop in spending on services (such as restaurant meals), pointing to the precarious position faced by hundreds of thousands of small businesses. 
  • Unemployment is heavily concentrated among service workers, disproportionately women and especially women of color (9 million of the 10 million jobs lost were in the service sector). Mothers in low wage jobs that can’t be done from home have also been disproportionately affected by the lack of affordable childcare as large numbers of children are attending school online.

    The out of control second wave of COVID has led to reimposed restrictions and new lockdowns in parts of the country. This is leading to a rapid economic slowdown which could turn into another contraction. Retail spending declined 1.1% in November while new unemployment claims are increasing rapidly. During the week ending December 12, new claims reached 885,000, the highest level since March. Car sales which were high in the third quarter have now dropped sharply.

For months, despite the warnings of capitalist economists including Jerome Powell, the head of the Federal Reserve, Congress failed to pass any additional stimulus, thus risking undermining the very fragile recovery. Now Congress, at the eleventh hour, has passed an absolutely meager $900 billion stimulus package which extends unemployment insurance for a few months with a lower top up on unemployment insurance ($300) and smaller stimulus checks ($600). As one commentator said correctly it is “too little, too late.” For many, the $600 stimulus check feels like an insulting payout after enduring months of elapsed benefits and additional hardships.

For a few days, Trump threatened to veto the bill, calling for Congress to increase the checks to $2,000. Facing major Republican opposition and with unemployment benefits expiring, he caved. Now a separate bill for $2,000 payments is being blocked by Republican Majority Leader Mitch McConnell in the Senate.

Crucially, the bill contains very little aid to states whose tax base has collapsed and many of which are required by state constitutions to balance their budgets. There is a massive $500 billion hole in state finances projected over the next two years. Already 1.3 million public sector workers have been laid off nationally compared to 800,000 in the whole of the 2008-13 downturn. Without massive federal aid or much higher local taxation there will be hundreds of thousands more laid off.

It has also emerged that, tucked away in the 5,593 page spending bill, is a provision that would essentially be a massive multi-billion dollar handout to the rich and corporate America on top of the hundreds of billions already shoveled in their direction. Essentially businesses would be allowed to keep loans under the Payroll Protection Program as grants and then deduct these amounts from their taxes! Adam Looney at the Brookings Institution estimated recently that $120 billion of this $200 billion writeoff will go to the top one percent. As Looney says “The year 2020 is going to be one the most unequal years in modern history… Part of the inequality is the effect of Covid, which hammered service sectors the most and allowed rich, educated people to work on Zoom. But the government totally compounded these inequities with their response” (New York Times, 12/23/20). In fact the billionaires have increased their wealth by over $1 trillion in the course of the pandemic!

Meanwhile the massive funds provided to prop up financial markets – while staving off a financial crisis in March and April – have also fueled a massive inflation of stock values. A classic stock market bubble is ready to burst in the next period. 2020 was the best year for Initial Public Offerings in 21 years, i.e. since the “dot.com bubble.” Shares of Door Dash jumped 86% in value on the first day after they were first traded in December. Airbnb’s newly issued shares jumped 113% on their first day. Neither company is profitable.

There are a number of other factors internationally that could trigger a crisis in global financial markets to rival what happened 12 years ago. Coming on top of the biggest global downturn in 2020 since the Great Depression, this would truly be the “other shoe dropping” in the economic crisis. In reality, the pandemic has exposed the deep underlying problems of neoliberal capitalism, first exposed in the Great Recession, which were in no way resolved during the very weak recovery of the past decade.

This is the situation that the Biden administration will inherit. Biden has said the new stimulus bill is a “down payment” and that he is committed to “spending money.” However, at every point since March when decisions have had to be made, the Democratic leadership has capitulated to corporate demands for the bailout to be 90% for them and 10% for working people, just as in ’08-’09 under Obama when the Democrats controlled both houses of Congress. The only reason the pathetic $600 checks were even in the new stimulus bill is because Bernie Sanders and populist Republican Senator Josh Hawley said they would withhold their support and force a government shutdown.

On top of this, any discussion about possible “bold action” by Biden is immediately conditioned by whether the Democrats win control of the Senate in the Georgia races. While Republican divisions may help the Democrats in Georgia, victory is far from certain. And of course the idea of mobilizing working people to pressure Congress to act on progressive demands if the Republicans retain control is anathema to the Democratic leadership. As in the past this will just be used as an excuse for why change can’t happen.

Trump and the Fraying of Democracy

Besides the ongoing pandemic and the worsening economic situation, the most significant recent political development has been Trump’s relentless effort to reverse the outcome of the November 3 election, which gave Biden a very clear seven million vote majority in the popular vote as well as a clear Electoral College majority. Trump’s team filed 60 lawsuits challenging the outcome, most of which were laughed out of court and none of which succeeded in reversing any of the state outcomes. Ultimately, the Supreme Court, with its reactionary majority and three Trump appointees, refused to even hear team Trump’s half-baked judicial challenges.

More seriously, Trump sought to bring direct pressure to bear on Republican election officials to refuse to certify results in key swing states he lost. He pressured Republican state legislators to choose their own slates of electors and thereby overturn the popular vote. 

On December 16, the Electoral College met and certified the result. But this is not the end. Trump has huddled in the White House with QAnon linked figures like lawyer Sidney Powell and former general Mike Flynn who claim a massive conspiracy led to the theft of the election. They are urging that Trump invoke the Insurrection Act or declare martial law, seize the voting machines and have a revote at gunpoint.

This will not happen, but Trumpist members of the House of Representatives are pushing to try to block the final certification of the Electoral College outcome by Congress on January 6. This will not work either, but it has created a major headache for the Republican leadership in Congress.

While many aspects of Trump’s attempted coup have been farcical, objectively it is the most brazen assault on bourgeois democracy in the U.S. since 1876 when white supremacists drove Black people away from the polls by force, the beginning of the end of Reconstruction. When the Attorney General of Texas filed a lawsuit to reverse the election results to the Supreme Court, with the support of Attorney Generals in 17 other states and 126 GOP members of Congress, the New York Times (12/11/20) described it as “the most coordinated, politicized attempt to overturn the will of the voters in recent American history.”

It is striking that key elements of the ruling class have made clear their opposition to Trump’s shambolic coup attempt. This includes key capitalist media outlets which have relentlessly attacked Trump’s claims of fraud as “baseless” and “unfounded.” Even Fox News called the election for Biden quite quickly. Important sections of the state apparatus have not entertained Trump’s claims, including Republican-appointed and Trump-appointed judges. The corporate elite also made it very clear that they do not want further undermining of capitalist institutions. Anything other than a “peaceful transfer of power” would be very bad for business. Even the New York Post, which endorsed Trump has recently called on him to “Stop the Insanity” and concede, warning that he will undermine his “legacy.”

We have pointed out that U.S. imperialism has historically benefited enormously from its image as a “liberal democracy.” Much of the corporate elite were fine with Trump when he was cutting their taxes and removing environmental regulation. But a coup and full-scale civil unrest would directly undermine their interests both in the short and medium term. This is especially true as they are now engaged in a long-term conflict with rising Chinese imperialism led by the Xi Jinping/ “Communist Party” dictatorship. They will only support a move towards authoritarian rule in the U.S. if they are faced with a serious threat to their power or a complete breakdown in civil order. But this situation is also not completely under their control.

Developing Conflict within the Republican Party

Trump’s campaign to overturn the results may be failing to change the actual outcome but it has clearly been very successful as a way of keeping Trump’s base on his side and as a weapon against the Republican establishment. Tens of millions have accepted the Trump narrative of a stolen election. According to a mid-December poll by CBS/YouGov, 82% of Trump voters say they don’t consider President-Elect Joe Biden the legitimate winner of the presidential election. The same poll indicated that almost half of all Trump voters believe the president shouldn’t concede even after the Electoral College voted for Biden. Given the scale of the media campaign to discredit Trump’s claims, this single fact shows the level of political polarization in U.S. society.

Trump has used this support to put GOP politicians and officials under intense pressure to keep in line or risk retribution. Most Senators refused to take a position on the election outcome for a month and a half but after the Electoral College voted,  McConnell publicly congratulated Biden and is now working to avoid anything other than a pro-forma approval of the results by Congress on January 6. In this he definitely represents the overall will of the ruling class. However, it appears Josh Hawley will join with hardline Trumpists in the House to demand a vote forcing the Republicans to side with Trump or be put on the shitlist.

After McConnell’s deputy, Senator John Thune, declared that any attempt to overturn the election result in the Senate “would go down like a shot dog,” Trump pushed back hard, calling him a “RINO” and “Mitch’s boy” and saying “He will be primaried in 2022, political career over!!!” Trump has also echoed calls that the Republican Governor of Georgia, Brian Kemp, should be jailed for failing to overturn the results. Meanwhile the far-right, including the Proud Boys, has played a prominent role in “million MAGA” marches in Washington.

We cannot be sure what Trump’s next move will be as he may not know himself. He may declare that he is running for President in 2024. He may launch a new media operation on the right, which is indicated by his increasingly sharp attacks on Fox News. But at least part of what he is doing points to creating a new far-right party in the U.S. Trump clearly hankers after an organization where he can give orders to officials at all levels and mobilize people to take action in the streets. This is not how the capitalist parties in the U.S. have operated historically. And while the GOP establishment overwhelmingly and cravenly capitulated to Trump over the past four years as he effectively captured control of the party, this may be about to change.

The creation of a new far-right party would mean a split in the Republican Party. This may not be immediately on the cards, but a period of sharp internal conflict has begun. The emergence of a far-right party with a mass base would both reflect the deepening of the political crisis of American capitalism and also point to further turmoil and instability.

So while the institutions of bourgeois democracy may be holding at the moment, they are seriously creaking. When the Army Secretary, Ryan McCarthy, and the Army chief of staff, James McConville, feel it necessary to issue a statement, as they did recently, saying “There is no role for the U.S. military in determining the outcome of an American election,” this should be seen as a serious warning.

Crisis Looms in the Democratic Party

The potential development of a mass far-right party is clearly dangerous from the point of view of the working class and all oppressed people in the U.S. We have warned that a Biden presidency will, like Obama’s presidency, tend to fuel this development rather than slow it down. In the short term, however, growing divisions in the GOP creates a certain opportunity for the Democratic Party but it is not at all clear to what degree they are capable of capitalizing on it. While Biden won the overall vote pretty convincingly, the Democrats lost ground in the House and now have a very narrow majority. Control of the Senate depends on the two runoff races in Georgia on January 5. In order for the Democrats to gain control they have to win both races which will give them 50 Senators with Kamala Harris, in her constitutional role as president of the Senate, holding the tie-breaking vote.

The Democratic Party establishment, as was clearly evident in the recent presidential election, no longer even pretends to fight for the interests of working people. They have completely failed to fight for the scale of stimulus needed while at state and local level they prepare to oversee massive cuts. Meanwhile, Trump, the billionaire populist, does pretend from time to time to represent working-class interests, referring to the GOP as a “workers’ party.” The Democrats instead use identity politics to cover their total servility to corporate donors with a fake “progressivism.” 

It is remarkable that most of the internal squabbling among Democratic interest groups over the composition of the Biden administration has been over the “degree of diversity” of Biden’s appointments and very secondarily on the policies they will actually fight for. In fact the Biden cabinet is largely made up of retreads from the Obama years whose adherence to neoliberal “free market” ideology and mythical “bipartisanship” during the Great Recession helped to create the space for Trump in the first place.

The scale of the crisis and mass pressure may well force Biden and the Democrats to go further than they intend with stimulus and other measures directly intervening into the economy. Comparisons are frequently made to the Great Depression in the 1930s when Roosevelt and the Federal government adopted “Keynesian” measures to put money in people’s pockets and boost demand. But, Keynesian measures only partially alleviated the situation facing working people and did not solve the underlying issues that created the Depression. Significant reforms, like the creation of Social Security, were a response to the massive union organizing drive and strike wave that began in 1934. Today, as in the ‘30s, real change will only come as a result of a mass working-class centered movement that is not under the control of the Democrats.

“Honeymoon” for Biden/Harris?

In the short term there will be some degree of a “honeymoon” for Biden and Harris. Expectations are very low and Biden can immediately reverse many of Trump’s anti-environment measures as well as some of his anti-immigrant policies. If the level of Covid vaccination increases quickly, Biden will benefit from the hope that finally we are heading back to “normal” life. In fact the previous “normal” can’t be restored and in any case much of what had become normal – massive inequality, structural racism, increasingly extreme weather events – are no longer tolerable for tens of millions.

In terms of foreign policy, the Biden administration’s promised “re-engagement” with capitalist and imperialist institutions like NATO will also be presented as a return of “U.S. leadership.” But the postwar global order is fundamentally broken and, despite changed rhetoric, the U.S.-China conflict will continue; de-globalization will continue; and the global economic, social and climate crises will continue to worsen.

Biden will bring the U.S. back into the World Health Organization, the World Trade Organization, and the Paris Climate Accord. Rejoining the Accord will be celebrated in the corporate media as a step towards addressing climate change but even when it was signed in 2016 it was a completely inadequate framework for a rapid transition away from fossil fuels.

However, the “honeymoon” scenario for Biden assumes that things don’t get significantly worse. In fact the economic situation could easily deteriorate by the time Biden enters office. If adequate measures to address the crisis are not implemented in his first months in office, discontent could grow quickly. Young people who supported Biden with very little enthusiasm will be the first to demand more.

The next two years will not be a rerun of the 2008-10 period after Obama’s first election when there was no resistance from the left or the labor movement as his administration bailed out the banks and millions lost their homes. Any attempt by Biden to repeat the Obama neo-liberal playbook in the middle of another downturn will lead to ferocious resistance. A lot has happened since 2008: Occupy; the first wave of BLM; #MeToo; the global youth movement to stop climate change; the teachers’ revolt; Bernie’s two presidential campaigns; and the massive growth of support for “socialism.” The mass protests after the police murder of George Floyd are fresh in everyone’s minds.

As Naomi Klein recently said about the relationship of the American elite to the masses now compared to twelve years ago, “They may be the same but we’re different.” Ten years ago, the polarization on the right was reflected in Congress with the growth of the Tea Party and then the Freedom Caucus. Since 2016, the polarization on the left is reflected, both in the growth of the Democratic Socialists of America to 85,000 members but also in Congress. AOC and the Squad have now been joined by Cori Bush and Jamaal Bowman. Along with progressive California Congressman Ro Khanna, they effectively hold the balance of power in the House.

It is already evident that AOC and the Squad can quickly come under significant pressure to stand up to the cynical and corrupt leadership of Nancy Pelosi. YouTube comedian and political commentator Jimmy Dore recently called on AOC to withhold her support for Pelosi as Speaker unless she agreed to hold a floor vote on Medicare-for-All. This was echoed by Chargers’ running back Justin Jackson on Twitter. AOC’s response was that there’s no point to staging a vote on Medicare for All only to lose it, and that progressives’ focus should be on “winnable” measures like a nationwide $15 minimum wage, which Biden has said he will support. In the end, despite growing support for #ForceTheVote, the Squad caved and voted for Pelosi.

This is a very weak response but is not the end of the discussion. To remain relevant, AOC and the Squad will have to be prepared to take Pelosi and co. on in sharper battles. But what is really needed is a strategy to build a mass movement to win Medicare-for-All and other essential reforms, centered on mobilizing the social power of working people. Meanwhile Pelosi’s lieutenants have let it be known that any Democrat who’s “not with her” is “supporting QAnon.”

Biden and the Democratic leadership have made amply clear that they feel no need to include progressives in a meaningful way although their pick for Secretary of Education, Miguel Cardona, is certainly a change from Arne Duncan, Secretary of Education under Obama, who relentlessly attacked teacher unions and pushed privatization schemes. But picking someone who says he opposes these policies reflects the reality of the massive rejection of the neoliberal agenda for education by educators and parents that even the corporate Democrats have had to acknowledge.

Biden and others have repeatedly blamed “socialists” and calls for “defunding the police” for their losses in House and state level races. While it is certainly possible that progressives can win more races as Democrats, the impossibility of transforming this corporate owned party into a tool of working people to achieve meaningful change is increasingly exposed to millions.

Perspectives for Struggle and a New Party

The next period will see many social struggles develop as workers and young people experience new attacks on their interests. This will include the threat of millions of evictions, which have so far been staved off by Federal and state moratoriums. At some point these protections will be lifted. Meanwhile, there are massive cuts to social services looming in many cities and states. Key cities, mostly run by the Democrats, are facing a much more serious downturn than the national average and levels of mass unemployment comparable to the Depression. The demand to tax the rich to pay for social services will continue to grow in popularity.

It is clear that the new phase of the Black Lives Matter movement has reached a certain impasse because of a lack of coherent leadership, strategy, and program. But the issues that brought millions on the streets in 2020 have not gone away. Nor have the Democrats at local or state level enacted anything beyond the most meager reforms of policing. The renewed struggle for Black freedom is central to the political identity of a new generation. We have argued that the multiracial working class and the labor movement must also take this up as a strategic task.

The disastrous effects of climate change are already changing life in many parts of the U.S., including the West where devastating wildfires appear to now be a yearly recurrence and large parts of the Midwest and the South where devastating storms and floods are becoming ever more frequent. The demand for decisive action will grow. Contrary to the corporate Democrats, the Green New Deal is massively popular.

Even with Trump gone, the Supreme Court, now with a solid reactionary majority, is likely to engage in further attacks on women’s rights, especially abortion rights as well as LGBTQ rights. The Democrats will oppose such attacks rhetorically as they have in the past but will they fight to build a movement to finally enshrine the right to abortion in federal law and thereby overturn all the anti-abortion measures that have been brought in at state level by Republicans? Don’t count on it.

Finally, but by no means least, we have the disastrous state of healthcare in the U.S., which Covid has fully revealed including the effect of massive cuts to public hospitals in the past twenty years. Medicare-for-All is massively popular. No candidate for the House who supported it lost their race. Nevertheless, Biden repeatedly promised he would veto Medicare-for-All if it ever made it to his desk!

But while the issues that will provoke struggle are clear enough, it is much harder to say how things will develop in the short term. One very important recent development is the wave of strikes and threatened strikes by nurses and other healthcare workers in a number of states in the past weeks. These center on unsafe working conditions made far worse under the pandemic. Despite enormous exhaustion, these workers are fighting back, pointing to what can be unleashed once the pandemic is tackled.

There are two critical and intertwined questions: the rebuilding of a fighting labor movement and building an independent political force to represent the interests of the multiracial, multigender working class. Objectively we have the most favorable situation for the formation of a party on the left independent of corporate interests since the 1970s because of the massive disillusionment in neoliberal capitalism and capitalist institutions generally. The ruling class does not have a coherent narrative for how to take society forward although there are certainly forces pointing to how to take it backward.

The question is where the leadership to build a new party will come from? The role of radical educators and healthcare workers who have spearheaded labor struggle in recent years is crucial. So is the potential role of young BLM and climate activists as well as prominent individuals like Nina Turner, former leader of Sanders’ Our Revolution who is on record saying a new party is needed. Turner appears to be planning to run for Congress, a potentially significant development. 

The DSA also has a key role to play. They have grown significantly and helped elect people to Congress, state houses, and city halls. They have formally committed themselves to the idea of helping build a workers party although many prominent members are still wedded to the idea of reforming the Democrats or “using” the Democratic Party’s ballot line while waiting for developments toward a new party without a clear plan.

Currently we see an offensive against socialism from the political establishment, both Republicans and Democrats. Seattle independent socialist councilmember Kshama Sawant is facing a recall effort driven by big business interests including Amazon. These interests know that major struggles are coming and they want to behead our movement before it becomes stronger.

Corporate America will do whatever is necessary to protect their system no matter how destructive it is to the interests of the overwhelming majority. If necessary, they will also give support to a far-right party despite the current pretense of many corporations to care about racial oppression and social justice generally. We must be under no illusions that defeating the corporate elite and creating a future worth living in will be anything other than an enormous and very complex task. But it can be accomplished if we begin by drawing the correct lessons from the developments of recent years and the necessary conclusions for the type of movement we need to build in the coming period.

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