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Sharon Smith

Twilight of the American Dream

(Spring 1992)

From International Socialism 2 : 54, Spring 1992, pp. 3–43.
Transcribed by Camilla Royle.
Marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

‘What’s good for General Motors is good for America’ is the slogan which exemplified the American Dream of the 1950s and 1960s, Once the world’s richest company, GM manufactured one out of every two cars bought in the US. But today few people still harbour illusions in the American Dream – least of all GM’s workers. At the end of 1991, after a decade of extracting concessions from its workforce, GM announced plans to cut 74,000 jobs, on top of 130,000 already cut since 1986. The transformations at General Motors have come to symbolise the dramatic changes that have occurred in US society since the heyday of American capitalism. This article is an attempt to explain the nature of these changes and what they mean for the future.

The affluence of the US working class during the post Second World War economic boom is well known: during the same period in which the US rose as the world’s main superpower, American workers achieved wages and living standards that were unmatched elsewhere. Average weekly earnings for US manufacturing workers rose by 84 percent between 1950 and 1965, while prices rose by only 31 percent during the same period. [1] And the American Dream was clearly something to which vast numbers of workers aspired, demonstrated by the large portion of the US population which considered itself to be middle class. In 1964, 44 percent of respondents to a survey saw themselves as middle class or higher, compared with 37 percent in 1952. [2] The economic and political stability of US society in this period prompted many on the right and the left to conclude that US capitalism had discovered a way to buy itself out of class conflict.

In 1951 the editors of Fortune magazine congratulated US capital in finding a uniquely ‘American’ solution to the ‘problems of class struggle and proletarian consciousness’. [3] Sociologist Daniel Bell proclaimed ‘the end of ideology’ in 1960, adding later, ‘Abundance ... was the American surrogate for socialism.’ [4] The left echoed these conclusions, both within and outside US borders. The working class in the heart of the beast was regarded as a part of the problem, rather than a potentially powerful part of the struggle for world socialism. The central tenet of Marxism was thrown out by left wing writers who theorised that the promise of some day owning a house in the suburbs had permanently subverted the class interests of US workers. The German-American philosopher Herbert Marcuse, the guru of many radicals in the 1960s, argued that the system provided a ‘comfortable smooth reasonable democratic unfreedom’ in which ‘“the people”, previously the ferment of social change, have “moved up” to become the ferment of social cohesion.’ [5]

But while the relative affluence of US workers was undeniable, it was by no means uniform. Even in 1959 more than one in five people lived below the official poverty line. [6] Wages for unorganised workers rose much less quickly than for those in unions. And the gap between black and white workers was dramatic. Throughout the 1950s and 1960s, the median income of black workers remained at about 55 percent of white workers’ income. Even in Detroit, the centre for world auto production, the median black family income was only two thirds that of white families in 1954. [7]

Even for those workers whose living standards did not rise, their expectations did. This is perhaps the most important reason why the Civil Rights Movement began in the mid-1950s. Masses of black soldiers returned from fighting in the Second World War to face Jim Crow segregation in the South and de facto segregation in the North. Three million blacks left their farms in the South between 1940 and 1960 and moved to relocate in the ten largest industrial cities in what eventually became known as the ‘rust belt’, in the hopes of finding good paying industrial jobs. But by 1962 about 70 percent of black workers were employed in blue collar and service work, the vast majority in unskilled or semi-skilled jobs. And two thirds of all Northern blacks found themselves living in urban slums. [8]

Unionised white workers in particular experienced dramatic improvements in their living standards, but they paid the price of a drastic rise in the rate of exploitation. Output per worker more than doubled between 1947 and 1972. And while the number of manufacturing workers grew by 28.8 percent between 1950 and 1968, manufacturing output grew by 91 percent. [9] In 1950 US steel mills produced half the world’s steel; US auto companies were responsible for 76 percent of world vehicle production. [10] So the real beneficiaries sat on the boards of directors of the biggest US corporations, willing to grant workers higher wages in order to pre-empt or shorten strikes and other interruptions in production.

Nevertheless, they were not entirely successful at winning labour peace, even among the best paid union members. Even at the height of the boom years, steel workers, for example, struck for 45 days in 1949, for 59 days in 1952, for 36 days in 1956 and for 110 days during a bitter battle in the recession of 1959. And in 1957 a rank and file slate challenged union leaders’ ‘tuxedo unionism’ and demanded more democracy within the United Steel Workers of America (USWA). [11] In the auto industry the 1950s and 1960s were not characterised by amicable relations between capital and labour. United Auto Workers (UAW) officials negotiated a five year contract in 1950 which set the trend for decades to come: in return for higher wages, they agreed to a no-strike pledge and higher productivity. [12] The shopfloor grievance procedure became a bureaucratic nightmare for workers and grievances were left unresolved for long periods by an increasingly remote union leadership. Frustrations erupted in periodic wildcat strikes during this entire period – so much so that UAW president Walter Reuther was forced to shorten the length of the contract to three years in 1955 and even authorised occasional local strikes over working conditions. As Stanley Weir described the situation in 1967:

The General Motors Corporation employs as many workers as all other auto manufacturers combined. In 1955, United Automobile Workers’ president, Walter Reuther, signed a contract with GM which did not check the speedup or speed the settlement of local shop grievances. Over 70 percent of GM workers went on strike immediately after Reuther announced the terms of his agreement. A larger percentage ‘wildcatted’ after signing the 1958 contract because Reuther had again refused to do anything to combat speedup. For the same reason the auto workers walked off their jobs again in 1961. The strike closed every GM and a number of large Ford plants. [13]

The number of strikes across all US industries in the 1950s was only slightly lower than during the strike wave which marked the second half of the 1940s. But strikes tended to be shorter and involved fewer workers in the 1950s, and still fewer in the first half of the 1960s. [14] The resolve which had typified earlier Congress of Industrial Organisations (CIO) picket lines was gradually replaced by passivity, as workers became accustomed to waiting out strikes, rather than playing any meaningful role. This was bound to have an effect on the class consciousness of white workers, who formed a politically conservative block which had little sympathy for either the civil rights movement or the anti-war movement throughout most of the 1960s.

The upsurge of the late 1960s and early 1970s

Stagnation had set in by the late 1960s. This stagnation, combined with growing frustration at speedup and a bloated and disinterested union bureaucracy, coincided with the height of the anti-war and black power movements as well as the wave of ghetto riots which swept across every major City in the late 1960s. The result was a massive shift in working class sentiment against the Vietnam War, and a series of working class revolts which began as the 1960s came to a close. These revolts were led initially by workers who were influenced by the movements and by the atmosphere of radicalisation of the period.

Black auto workers led the most overtly political struggles. But most Importantly, these struggles are significant because black and white workers joined together to fight against racism as well as to raise economic demands. Specifically, black auto workers raised demands against what came to be known as ‘niggermation’ – the combination of speedup and racial discrimination. Black workers were almost completely excluded from the higher paying skilled trades at all of the Big Three auto plants: in 1968 Chrysler had 3 percent blacks in skilled trades jobs. Ford had 3 percent, and General Motors had 1.3 percent. And the union, for its part, was equally racist: while blacks made up a fourth of the UAW’s total membership, they found themselves shut out of its leadership. Only six black delegates attended the UAW’s 1968 convention and of the union’s top 26 officers, only one was black. [15] The Dodge Revolutionary Union Movement (DRUM) was formed by a group of black revolutionaries at the Dodge Main Chrysler plant in Detroit after a wildcat strike in May 1968 led by black workers:

On May 2, 1968, 4,000 workers shut down Dodge Main in the first wildcat strike to hit that factory in 14 years. The immediate cause a/the strike was speed-up and both black and white workers took part, but the driving force was DRUM. The activities and ideas of DRUM were to inspire black workers throughout the United States. No less an authority than the Wall Street Journal took them very seriously from the day of the first wildcat for the Wall Street Journal understood something most of the white student radicals did not yet understand: the black revolution of the sixties had finally arrived at one of the most vulnerable links of the American economic system – the point of mass production, the assembly line. [16]

DRUM’s successes at Dodge Main resulted in a number of spin off RUMs at other Detroit auto plants and even a Black Panther Caucus at the Fremont, California GM plant. The RUMs came together to form the League of Revolutionary Black Workers in 1969. The RUMs maintained a formal policy of discouraging white support which no doubt blunted the real potential which existed for building black and white unity. Nevertheless, a significant minority of white workers supported the strikes led by the RUMs. The United Black Brothers, who led a wildcat strike at the Ford plant in Mahwah, New Jersey, in 1969, is lesser known but in some ways even more impressive than DRUM, because the Mahwah workers understood the need to build solidarity with white workers at the plant. The United Black Brothers was formed out of a wildcat strike in 1967, when 500 black workers walked out after a foreman called a black worker a ‘black bastard’. In 1969, when it organised a strike against racism at the Ford plant, whose workforce was one third black, it issued an appeal to white workers to join the strike:

Why do we ask your support? Because the same thing can happen to you. The company has been laying off men by the dozens, but the lines have not slowed up a bit. You have been given more work, and if you can’t do it, you lose your job or get time off The supervisors are harassing the men and calling them all kinds of names such as ‘Dirty Guinea Bastard,’ ‘Black SOB’ and ‘Stinking Spick; to name a few ... We ask that all of you stay out and support us in this fight! [17]

The number of wildcat strikes across all industries doubled, from 1,000 to 2,000 between 1960 and 1969. The year 1970 witnessed a veritable strike wave. General Motors experienced a 67 day strike. Some 40,000 coal miners struck in three states to demand benefits for disabled miners. New York postal workers led postal workers on strike across the country, closing down the postal service in 200 cities. When the government brought in the National Guard they expressed sympathy with the strikers. After two weeks, postal workers, who are legally prohibited from striking, won a 14 percent wage increase. On 1 April, Teamsters went out on strike and many stayed out for up to a month after Teamster president Frank Fitzsimmons ordered them back to work. [18]

While 1970 was the high point, the rank and file upsurge continued. In 1972 the Miners for Democracy elected a reform candidate for union president. In 1975 the Teamsters for a Decent Contract (which later became Teamsters for a Democratic Union) was formed, and in 1976 a national Teamsters strike paralysed the freight trucking industry. Also in 1972 the 8,000 mostly white workers at the Lordstown, Ohio, GM plant voted to strike by a margin of 97 percent. Led by youthful ‘long-hairs’ and a sprinkling of Vietnam veterans, the Lordstown strike was a result of sheer alienation. Through a combination of automation and speeding up the assembly line, the Lordstown plant raised its output from 66 cars per hour in 1966 to over 100 per hour in 1971. The 29 year old UAW local (branch) president told reporter Studs Terkel in Working:

If the guys didn’t stand up and fight, they’d become robots too. They’re interested in being able to smoke a cigarette, bullshit a little bit with the guy next to ’em, open a book, look at something, just daydream if nothing else. You can’t do that if you become a machine. [19]

The rank and file upsurge of the late 1960s and early 1970s showed the potential for even the highest paid US workers to struggle as part of their class against the employers. But the upsurge came to an abrupt halt in the late 1970s. When the New Left emerged in the late 1960s among a new generation of students who had been radicalised by the anti-war and black movements, the US working class was Widely regarded as ‘bought off’. The ‘old left’ had all but vanished under the impact of the McCarthyite witchhunts and the mass defections of Communists from the party after Russian leader Nikita Khrushchev’s 1956 speech denouncing Stalin. The bulk of student radicals joined various Maoist and Stalinist organisations, which looked prinlarily to the Third World for revolutionary struggle. [20] Thus, while the Maoist left numbered thousands by the early 1970s, it quickly disintegrated along with the Maoist left internationally by the decade’s end.

Even when the upsurge in workers’ struggle began in the late 1960s, the student left largely ignored it, or dismissed workers’ struggles as ‘economistic’. Smaller sections of the left did develop a working class orientation, but the recession of 1973–5 produced a retreat rather than an explosion of struggle, as many had predicted.

The decline in workers’ struggles and the end of the mass movements of the 1960s produced a crisis in the ranks of the left. A section of the left disintegrated completely, while others refused to acknowledge that any significant developments had taken place to merit a change of perspective and orientation. The lesson drawn by many of the 1960s radicals who had been convinced of the need to build a revolutionary party (albeit of a Stalinist/Maoist variety), now rejected such efforts. In the decade that followed, they built single issue campaigns and ‘movements’, abandoning revolutionary change for reform and eventually rejecting Marxism altogether. The main beneficiary of the left’s ‘new realism’ was the Democratic Party – largely via the Jesse Jackson presidential campaigns.

Layers of the left maintained a political commitment and orientation to the working class, but all too often believed that dropping socialist politics was a precondition for success in the trade union movement. As the years of retreat of the late 1970s stretched into a decade of Reaganism, trade union reformism had replaced revolutionary politics for the bulk of the left.

Reaganism before Reagan

Ronald Reagan and the Republican Party have received most of the credit for implementing tax cuts for the rich and slashing social spending for the poor which have greatly increased inequality inside the US in the 1990s. But, while Reagan certainly deserves any amount of contempt slnng his way, these policies originated years before Reagan took office.

The ‘Great Society’ of the 1960s, during which Presidents Kennedy and Johnson increased welfare spending to attract black votes, was short lived. In inflation adjusted terms, welfare (known as Aid to Families with Dependent Children, or AFDC) payments fell by 29 percent between 1969 and 1981, the year Reagan took office. [21] Taxes followed a regressive route over roughly the same period: between 1965 and 1975 corporate income taxes declined as a percentage of gross federal receipts from 21.8 percent to 14.6 percent, while personal income taxes for the bottom tenth of the population tripled and the next lowest tenth more than doubled. [22]

Wages had risen steadily throughout most of the 1960s. The gap between rich and poor had continued to close throughout the boom until 1967, when wages began to stagnate and trends started to reverse. [23] In the early 1970s this process began to accelerate. The US ruling class had reached a turning point. Having just been defeated in Vietnam and humiliated by a massive anti-war movement at home, the recession of 1973 signalled the onset of decline and long term economic crisis for US capital:

While it was highlighted by the 1973–75 recession, the economic deterioration that drove this process began before, and continued after, that catastrophic event ... At the bottom line, profits of US firms declined after 1965 and failed throughout the next 15 years to regain their early 1960s levels. Annual net investment in plant and equipment followed suit, falling from an average 4 percent of GNP during 1966–70 to 3.1 percent over 1971–75 and 2.9 percent over 1976–80 ... Productivity suffered in turn, as the annual growth of output per worker employed in non-residential business fell from 2.45 percent over 1948–73 to 0.08 percent over 1973–79. [24]

Internationally, the US share of world trade and world GNP continued to fall throughout the 1970s. The US trade balance moved into negative territory in 1971 for the first time since 1893, marking the beginning of a trade deficit that would grow to mammoth proportions during the Reagan administration. By 1979 US auto companies produced only 28 percent of world car output. By 1981 the US share of world steel production dropped to 15 percent. [25] Jimmy Carter, a Democrat, took office in time to oversee the first stage of the employers’ offensive. In many ways Carter’s presidency followed the familiar course of Democrats in the White House since Roosevelt. During his campaign he sincerely pledged to look out for the interests of blacks, workers and the poor, and then proceeded to thumb his nose at them once he had taken office.

The so called ‘New Deal Coalition’, a block of Southern segregationists (‘Dixiecrats’), and banking and capital intensive business interests had provided the backing for the Democratic Party since the 1930s. Since the New Deal the Democrats had succeeded in containing social upheaval by promoting certain reforms and implementing still fewer. By the late 1970s there were no social forces to contain, and the Democrats joined forces with their Republican counterparts in clamouring for a new social programme: one which would sharply attack workers’ living standards and organisation. During Carter’s presidency the ruling class united on the need to reverse the gains made by sections of the working class in the 1960s.

Thus during his tenure Carter instituted key policies which set the stage for Reagan’s more draconian measures. For example, Carter, not Reagan, took the first stab at deregulation, which in the 1980s would leave big business and banking unencumbered by environmental or other ‘social’ restraints, such as worker safety. In 1978 he signed legislation deregulating the airline industry and in 1980 he began deregulating trucking. Carter also began the military build up which was completed by Reagan, especially after the fall of the Shah of Iran, when he made a trade off between military and social spending, authorising a whopping 5 percent annual increase in military spending coupled with massive cuts in poverty programmes. [26]

In 1978 Congress passed a tax reform bill which cut the top capital gains rate for businesses by more than 40 percent, from 48 to 28 percent, while the social security tax, a regressive tax in which the same rate is paid by everyone, no matter what their income, increased dramatically. [27] Meanwhile, Carter did nothing to intervene on behalf of workers when employers began union busting in earnest in the late 1970s. The number of charges of unfair labour practices filed against employers swelled by 750 percent between 1957 and 1980, at a time when union representation elections had increased by only 54 percent. [28] During this same period union membership fell to 23 percent of the labour force – a drop of 10 percentage points since the mid-1950s. The AFL-CIO estimated that more than 1,000 union busting consultant firms were operating across the US in 1979. According to the Economist they were collectively making over 100 million dollars a year, issuing promises like these to employers:

we will show you how to screw your employees (before they screw you – and how to keep them smiling on low pay – how to manoeuvre them into low-paying jobs they are afraid to walk away from – how to hire and fire so you always make money. [29]

In 1979 the Carter administration intervened to rescue the smallest of the Big Three auto makers, Chrysler, from bankruptcy. Although the UAW agreed to concessions amounting to 200 million dollars, Congress refused to give Chrysler its 1.2 billion dollar loan guarantee unless workers gave concessions totalling 462 million dollars. This included a wage freeze and giving up 17 days paid vacation. But a year later Chrysler chairman Lee Iacocca was back demanding further concessions, which this time totalled 673 million dollars, and involved a pay cut of 1.15 dollars per hour and the loss of three more vacation days. Yet by 1985, when Chrysler had been restored to profitability, Iacocca had risen to the second highest paid US executive, with a salary of 11.4 million dollars. [30] The Chrysler bail out marked the beginning of a new era in collective bargaining.

In addition, during the Carter administration the ruling class was able to score two important ideological victories against the right to abortion and affirmative action. These fired the opening shots in what would become a relentless attack on all the victories of the movements of the 1960s and early 1970s. [31] No sooner had Carter taken office than he endorsed a recent amendment passed by Congress which cut off federal funding for poor women’s abortions. Carter’s response?

there are many things in life that are not fair, that wealthy people can afford and poor people can’t. But I don’t believe the federal government should take action to try to make these opportunities exactly equal, particularly when there is a moral factor involved. [32]

In 1978 the US Supreme Court made its landmark Bakke decision, which set in motion a decade of attacks on affirmative action programmes. The Court ruled that Allan Bakke, a white male, had been denied a place at the University of California at Davis medical school due to ‘reverse discrimination’ policies which victimised white males. The medical school’s policy of setting aside 16 of its 100 annual openings for non-white students was found to be discriminatory against ‘better qualified’ whites. But several important facts about the Bakke case never surfaced in the mass media. The first is that the medical school at Davis also set aside a certain number of places each year for the sons and daughters of wealthy (white) alumni. Secondly, 36 of the 84 white students admitted the year Bakke applied had lower test scores than Bakke. Bakke, moreover, had been turned down by ten other medical schools. [33]

But most importantly, as late as 1948, 26 of the 27 medical schools in the US openly practised racial segregation. In the year that Bakke applied to medical school, blacks made up about 12 percent of the US population, but just over 2 percent were doctors and under 3 percent were medical students. Racial quotas were needed because segregation was alive and well. [34] Nevertheless, the Bakke case firmly established ‘reverse racism’ as the basis for undermining affirmative action programmes.

By the time he left office, Jimmy Carter had achieved the shift necessary to pave the way for Ronald Reagan’s success.

The looting decade

In 1981, just as the economy entered a new recession, the employers’ offensive took a qualitative leap. Business interests set aside their differences and united as a class in order to make Reaganism work for them. The Business Roundtable, which brought together both Republicans and Democrats, including most of the top officers of the biggest US companies, was an organisation dedicated to this process. Formed in the 1970s, the Business Roundtable played an activist role in shaping the policies of Reaganism.

Unemployment broke the 10 percent barrier at the height of the 1981–2 recession. But that was part of the plan. As Reagan’s Budget Director David Stockman explained to a Chamber of Commerce breakfast meeting in 1982, a period of sustained unemployment was ‘part of the cure, not the problem’ for the US economy. [35] By 1983 more than 15 percent of the population was living below the official poverty level. [36]

But Reagan was throwing a party for the rich, and the poor weren’t invited. Behind Reagan’s ‘trickle down’ theory was an economic plan for a massive arms build up, an attack on social spending and working class living standards, and huge tax breaks for the rich. One of Reagan’s first moves upon taking office in 1981 was to announce plans for major tax cuts for corporations. As Thomas Ferguson and Joel Rogers describe in Right Turn:

big business mobilised rapidly. Immediately after the Administration’s announcement, the Business Roundtable called an emergency meeting. Executives of America’s top firms descended on Washington in droves, for an orgy of lobbying that became known as the ‘Lear Jet Weekend.’ [37]

Democrats and Republicans set out on a bidding war, each party trying to outdo the other in inventing tax breaks, including special breaks for oil, real estate, and high tech firms, to ingratiate themselves to the business leaders. As David Stockman later described the scene, ‘The hogs were really feeding. The greed level, the level of opportunism, just got out of control.’ [38] Business tax rates were effectively halved, from 33 percent to 16 percent between the Economic Recovery Tax Act passed in 1981 and the 1982 Tax Equity and Fiscal Responsibility Tax Act. These reforms were widely supported by Democrats in both Houses of Congress. More than half of Honse Democrats voted in favour, as did more than 80 percent of Democrats in the Senate. [39]

Meanwhile the capital gains tax was capped at 20 percent, down still further from Carter’s cuts. The 1986 Tax Reform Act cut tax rates for the richest individuals from 70 percent in 1981 to 28 percent for 1988 – a low not seen since the Roaring Twenties. Yet between 1982 and 1984 the working poor, those earning under 10,000 dollars, saw their taxes rise by 22 percent. [40] As Kevin Phillips put it in The Politics of Rich and Poor:

By the middle of Reagan’s second term, official data had begun to show that America’s broadly defined ‘rich’ – the top half of 1 percent of the US population – had never been richer. Federal policy favoured the accumulation of wealth and rewarded financial assets, and the concentration of income that began in the mid-1970s was accelerating ... No parallel upsurge of riches had been seen since the late 19th century, the era of the Vanderbilts, Morgans and Rockefellers. (his emphasis) [41]

According to official government figures, the number of US taxpayers reporting more than 1 million dollars gross income increased fourteen-fold between 1980 and 1989. As a group, their total income grew by 1,630 percent. And the number of taxpayers reporting more than half a million dollars rose more than tenfold. [42]

Reagan, again with barely a peep from the Democratic Congress, massively increased military spending. Under Reagan, like Carter before him, defence spending rose commensurate with falling social spending. Social spending went down from 28 percent of the federal budget to 22 percent between 1980 and 1987; military spending, on the other hand, rose from 23 percent to 28 percent in this period. This was not how Reagan explained it, of course. He conjured up images of ‘welfare queens’ driving around in fancy cars as he dropped millions from welfare rolls and slashed programmes for pre-natal care for poor women. He argued that the government should only fund programmes for the ‘truly needy’ while his administration cut millions of poor children from school lunch programmes. To reduce costs further, Reagan’s Food and Nutrition Service even reclassified ketchup as a vegetable in poor children’s school lunches. [43]

By the end of the 1980s, while the US was still the richest nation in the world, by a number of measurements it was also among the most unequal, leading among major industrial countries in the gap between the richest and the poorest fifths of the population. A recent report on salaries in ten leading companies showed that, while the average CEO earned 34 times more than the typical worker in his employ in the mid- 1970s, that figure had jumped to 110 times by the late 1980s.In February 1992, Business Week reported that, on average, US executives earn 160 times the pay of their employees and three to six times the salary of their European and Japanese counterparts. [44]

But the rich didn’t get richer only because of tax breaks. They gambled their money. Even after the economy had been pulled out of recession in 1983 and productivity began to rise, the temptation was to use profits for speculation, which was much more lucrative than investment. Nowhere was this more true than in the savings and loan (S&L) industry. Here again the stage was set during the Carter administration. In 1980 Congress voted to provide federal insurance to any and all S&L deposits up to 100,000 dollars apiece, up from a 40,000 dollar cap voted in 1974. In 1982 Congress did the S&Ls another favour: they deregulated, removing all limits on interest rates. This meant that corporations and wealthy individuals could divide up their fortunes into 100,000 dollar deposits and park them in S&Ls all over the country, at exorbitantly high interest rates-all of it completely insured with taxpayers’ money:

To complete the felonious scene, the new law (1) permitted [real estate] developers to own S&Ls and (2) permitted the owners of S&Ls to lend to themselves. In short, the vault was not only opened to the crooks, it could be owned by them. No wonder, then, at the Rose Garden signing of the bill, President Reagan, with his customary talent for the unconscious confession, chortled, ‘All in all, I think we’ve hit the jackpot.’ [45]

If the S&Ls had been shut down as soon as they became insolvent, there would have been no need for a colossal bail out. But federal regulators waited years, while insolvent thrifts went on losing billions of dollars before they stepped in. By the end of the process, which will be years from now, the working class will have spent an estimated 300 billion dollars bailing out the savings and loan industry. And many of the same problems which brought down the S&Ls also plague commercial banks.

Charles Keating’s fairy tale existence at the helm of American Continental and Lincoln Savings gives an accurate picture of the wealth and power enjoyed by the crooks running the savings and loan industry. Over a period of five years Keating paid himself and his family almost 39 million dollars, not including stocks and options. The whole family flew to Europe 15 times in a corporate jet which had gold plated trim, leather seats, a wet bar and the best audio and video equipment money could buy. One Christmas the family planned a celebration for top corporate employees, for which they flew in an entire orchestra from New York. Meanwhile, when American Continental and Lincoln Savings became insolvent, 17,000 bondholders, most of them elderly depositors, lost 200 million dollars. Many of them were thrown into poverty. [46]

Bush’s own son Neil is one of the crooks. Neil Bush sat on the board of the Silverado, a Denver S&L, which will cost taxpayers 1 billion dollars to bail out. A phone call from the White House to federal examiners in mid-1988 convinced them to hold off from seizing Silverado’s assets until after the 1988 presidential elections. They did, and Silverado was seized on 9 December, just one month after Bush was elected President. [47]

The fruits of the S&L swindle extended far beyond those running the S&Ls. The fate of the S&L industry was closely bound to that of junk bonds: by 1989 S&Ls owned 14 billion dollars worth of junk bonds. [48] And in both Houses of Congress generous campaign contributions (read ‘payoffs’) kept Congress from blowing the whistle. The ‘Keating Five’, the five senators accused of fronting for Charles Keating, represent only the tip of the iceberg. It has been estimated that members of Congress officially received 11 million dollars, and unofficially twice that amount, from S&L interests in the 1980s. [49]

The working class under attack

For many years the government tried to cloak statistics on rapidly falling real wages by focusing on the fact that median family incomes had remained stable in the 1980s. But median measurements can be extremely misleading, especially when you have the likes of Charles Keating weighing down one end of the spectrum. Family income statistics are further misleading because they hide the fact that most families now have two adult earners rather than one, due to the huge influx of women into the workforce since the 1960s. In 1989, nearly 60 percent of women were in the labour force, compared with under 40 percent in the 1960s. The figures are similar even for married women with children under age 6, whose labour force participation rose from 36.7 percent to 58.4 percent in 1989. But even two earner families couldn’t keep pace; a recent Joint Economic Committee report showed that adults in 80 percent of two-parent families with children worked longer hours in 1989 than in 1979, but their incomes didn’t rise commensurately. Real hourly pay for husbands fell in 60 percent of families, while women’s wages average only 65 percent of men’s. Only families in the top income quintile showed ‘clear gains in their standard of living.’ [50]

But even median family incomes have dropped for those under the age of 30. Families in this age group had a median income in 1991 that was 13 percent lower in inflation adjusted terms than such families earned in 1973. And more than one third of all single parent families, which made up one in every four families in 1987, live below the poverty line. For the nearly one in two black families headed by women, two thirds live in poverty. [51]

The ‘working poor’ multiplied during Reagan’s two terms in office. The minimum wage of 3.35 dollars an hour remained the same from 1981 until 1989, a drop in real income of 36 percent. In 1986 workers received the same disposable income as in 1961, and 20 percent less than in 1972. Real hourly wages in constant dollars were no higher in 1989 than they had been in 1966. [52] And, thanks to the cuts of the Reagan era which halved the duration of unemployment benefits from 52 to 26 weeks, only one in three of the unemployed were entitled to collect benefits in 1990, compared with two in three in 1981. But even these statistics don’t describe the drastic decline in working and living standards that has taken place. Close to 40 million Americans have no health insurance coverage whatsoever. But these are not the poorest of the poor: more than 85 percent of the uninsured are workers or their dependants. The US government provides only two forms of medical care: Medicaid, for those on welfare (although Medicaid covers fewer than half of all the poor); and Medicare, which covers those over the age of 65. Employers, moreover, are not required to provide medical coverage to their employees – an option exercised by fewer and fewer firms in the last decade. [53] Thus, while health care spending amounts to more than 12 percent of the GNP in the US, the highest rate in the world, the US still ranks twenty second in infant mortality internationally.

Like the S&L debacle, the sorry state of health care in the US is the story of greed gone mad. For decades a conglomeration of insurance companies, drug companies, doctors and hospitals that make up the nearly 700 billion dollar a year medical industry have ensured that neither the laws of competition nor state intervention will interfere with profits. And, like the S&Ls, the health care giants are willing to pay Congress generously not to meddle. More than 200 political lobbying groups (known as ‘political action committees’, or PACs) representing the various wings of the medical industry together contributed more than 60 million dollars in campaign contributions to members of Congress between 1980 and 1991. [54]

The results have been catastrophic for millions of workers. Insurance companies are given a free hand to choose who they will and won’t cover and to refuse to pay for ‘pre-existing conditions’. Most insurance companies, for example, are allowed to test for the HIV virus and to exclude those who test positive on the grounds that they have a ‘pre-existing condition’. In other words, health insurance companies may reject people who are sick. Other companies put a cap on how much they will pay towards treating AIDS – some as low as 5,000 dollars towards a disease which costs an estimated 32,000 dollars per year to treat. Occupational safety and health also deteriorated in the 1980s. Workplace injury rates doubled thanks to speedup: more overtime, smaller work crews and faster assembly lines are all the ingredients for workplace accidents. Today the US has by far the highest occupational fatality rate of any Western industrialised nation. A 1991 fire at a poultry processing plant highlighted the turn of the century working conditions experienced by factory workers all over the country. When fire broke out at a North Carolina poultry processing plant in September 1991, the 90 workers inside rushed to the exits, but only one of the nine doors would open. The owner had blocked or padlocked the other doors to prevent workers from stealing his chickens. [55] The plant had only one fire extinguisher and no sprinkler system. Passers by reported hearing workers screaming and beating on plant doors, but it was too late. Of the 90 workers, mostly black women, 25 died in the fire, and 53 more were injured. There was no union. After the fire an agricultural inspector told a Congressional committee that he had received phone calls from colleagues in the poultry industry from as far away as Texas ‘going around with bolt cutters the day after the fire unlocking doors’ in their own plants. [56]

It was also revealed in the aftermath of the fire that North Carolina has only enough occupational safety inspectors to visit each workplace once every 75 years. Nationally, there are only 1,200 inspectors for 5 million workplaces. But it is questionable whether safety inspectors, who routinely call ahead to employers to warn that they are coming, make much difference at all. [57]

Race and class

Ever since slavery, racism has been the key division inside the US working class. In exploiting this division, the US ruling class has historically resorted to the most vicious racism itself in order to deflect class solidarity on the part of black and white workers. Jim Crow laws which segregated blacks from whites across the Southern states during the first half of this century, for example, were a result of ruling class fear of a multi-racial sharecroppers’ revolt.

There have, however, been important glimpses of racial unity during the 20th century especially at high points of class struggle. Thousands of black and white workers fought side by side during the CIO strike waves in the 1930s, and the US Communist Party claimed black membership was 9 percent of its total in the late 1930s, representing a small but significant step towards building a multi-racial working class party. And, as described earlier, the black auto workers’ revolts such as DRUM got real support from a minority of white workers ill the late 1960s upsurge. Reaganism as practised by both political parties aimed to deepen the wedge between white workers and those of all other races, blacks in particular. The degree of racism emanating from the White House was frequently staggering. Reagan courted the while racist vote in 1980 by repeatedly assuring audiences that he had consistently opposed civil rights and even resurrected the slogan of Southern segregationists, ‘The South will rise again! [58]

Nearly every social spending cutback was justified with a racist stereotype. ‘Welfare’, ‘drugs’ and ‘crime’ have been the racist code words scapegoating poor blacks for over a decade. Despite the fact that two thirds of welfare recipients are white, the welfare cheats Reagan complained about were always depicted as black. When Bush ran for President in 1988, he ran a television advertising campaign against crime which consisted of a police photograph of a black convict, Willie Horton. In a 1988 survey of blacks which asked whether the Reagan administration ‘tended more to help blacks or ... to keep blacks down’, an overwhelming 78 percent answered ‘keep blacks down’. [59]

Every aspect of life got worse for the vast majority of black Americans under Reaganism. Whereas in 1975 the average annual income of blacks was 63 percent that of whites, by 1991 the figure had fallen to 56 percent – the same as before the ‘Great Society’ programmes of the 1960s. One in every three blacks lives below the poverty line. The poverty rate for all Latinos stands only slightly lower, at 26.8 percent, but more than 40 percent of Puerto Ricans live in poverty. Black infant mortality rates are double that for white children. Black unemployment has remained double that of whites for decades but unemployment rates for young blacks have skyrocketed in recent years – the national rate stood at 34 percent by 1987 and ranged as as 50 percent in some cities. [60]

In 1988 life expectancy for US blacks fell for the fourth year row. The homicide rate among young black men nearly doubled between 1984 and 1988 and in some areas exceeds the casualty rate among US soldiers in the Vietnam War. The New England Journal of Medicine recently reported that a young black man in Harlem has less chance of living to the age of 65 than a man in Bangladesh. The homicide rate was the leading cause of death. [61] While racial segregation doesn’t legally exist any more in any part of the US, de facto segregation by neighbourhood and by suburb exists almost everywhere. In fact 86 percent of suburban whites live in suburbs that are less than 1 percent black. Police brutality and harassment are a fact of life in black neighbourhoods all across the country, and even affluent blacks find themselves routinely stopped and searched when they are in white areas. More than 8 percent of the black population is arrested each year. The sheriff of Jefferson Parish, Louisiana, an all white suburb of New Orleans called a press conference in 1986 specifically to announce that he was instructing his police force to arrest any young black males seen in the area after dark. [62] And once arrested the US ‘justice’ system does the rest:

someone poor and black tried for stealing a few hundred dollars has a 90 percent likelihood of being convicted of robbery with a sentence averaging between 94 and 138 months. A white business executive who has embezzled hundreds of thousands of dollars has only a 20 percent likelihood of conviction with a sentence averaging about 20 to 48 months. [63]

Largely because of statistics like these, the notion of a black ‘under-class’ has caught on in recent years. But the idea that a growing proportion of blacks belong to a substratum of society, permanently removed from the job market is wrong. Most importantly, it is unduly pessimistic about the possibility for blacks to win real gains in the future. For while blacks suffer grossly disproportionate poverty and unemployment levels, the vast majority of blacks are a key part of the working class.

The ruling class has tried to use black workers both as a cheap labour pool and to foster racist divisions within the working class in order to drive down the living standards of all workers. It was a deliberate policy of many employers, especially from the 1880s through the 1910s, to recruit black workers from the South to replace striking white workers in the North. Employers also hired newly-arrived European immigrants in efforts to divide and rule. While some employers refused to employ blacks and insisted on an all white workforce, others like the Ford Motor Company as a policy made sure that blacks were at least 5 percent of the workforce in an effort to fuel racial friction. The antagonisms between blacks and whites created by such divide and rule tactics was one of the factors behind the wave of race riots that swept the US in 1919. Racism is used for the same purpose by the ruling class to this day. The legacy of racism and low unionisation in the South is that wages for both black and white workers are lower there than in the North. And while ‘anti-welfare’ agitation is a racist rallying cry of the right wing, the reality is that two thirds of welfare recipients are white.

Black unemployment rates remain steadily double those of whites, but they rise and fall in the same patterns as whites, in synchronisation with the business cycle. According to a recent study on work patterns among young black men, the group with the highest unemployment rate, half of black male teenage unemployment is concentrated within 7 percent of this population. Thus, while the layer of chronically unemployed undoubtedly grew during the 1980s, chronic unemployment, which leads young blacks to resort to a lumpen existence of petty theft and drug dealing, is still the exception rather than the rule. ‘The pattern among young blacks is to have short term employment followed by long spells of being out of work. In fact, among central city black youth, a year of non-employment is not unusual.’ The same study showed young black workers are less likely than young whites to voluntarily quit a job. [64]

But all blacks have not suffered equally. The black middle class grew in size and income in the 1970s and 1980s, thanks mainly to the gains of the civil rights movement, like affirmative action programmes. Before affirmative action the black middle class consisted of a small number of small business owners and professionals who oriented mainly to the black ghetto. Affirmative action programmes opened the doors for blacks to enter businesses and professions outside the black ghetto economy. By and large, blacks continue to be shut out of the ruling class – as of 1985 no black owned business had made the Fortune 500 list, and only one black businessman, John Johnson publisher of Ebony and Jet, had made it onto the lower end of the Forbes 400 List. [65] Still, class polarisation among blacks has surpassed that of whites. As Manning Marable wrote recently:

Now, in the post civil rights era of the 1980s and 1990s, even the definition of the term ‘black community’ is up for debate. The net result of affirmative action and civil rights initiatives was to expand the potential base of the African-American middle class, which was located primarily outside the neighbourhood confines of the old ghetto. By 1989, one out of seven African-American families had incomes exceeding 50,000 dollars annually, compared to less than 22,000 dollars for the average black household. Black college educated married couples currently earn 93 percent of the family income of comparable white couples. [66]

The gap is more than financial. There is a gap in consciousness as well. Although middle class blacks experience racism in their daily lives, as a group they have chosen to make a deal with the system rather than fight against it. So, while the black middle class has been the main beneficiary of the civil rights movement, It has moved far to the right since then. This even includes veterans of the civil rights movement. In part, the growing conservatism of the black middle class simply mirrors the trend of the entire US middle class – regardless of race – during the 1970s and 1980s. But it is also a reflection of the profound changes that have taken place since the days of the civil rights movement. Prior to the 1960s, the small black middle class that did exist had an interest in joining the fight for civil rights. So while the vast majority of participants in the civil rights and black power movements were black workers, its leadership was middle class – and the aims it set for the movement reflected this. The black middle class joined with black workers to demand the right to vote and an end to legal segregation in the 1960s, but they sought to remove the barriers to their advance within the system, not to transform it.

So while the demand for the right of blacks to vote was at the centre of the struggle, the election of thousands of black politicians since then has achieved little for black workers. While working class blacks became increasingly alienated from the Democrats during the Reagan era, the black middle class threw their weight behind the Democratic Patty throughout the 1970s and 1980s.

But the Democratic Party route has been spent as a strategy for social change. By January 1990 there were 7,335 black elected officials: the vast majority of them Democrats, across the country. Most major cities have black mayors, who have found themselves carrying out the very same programmes as their white counterparts, with the same net result: greater poverty and unemployment for the black population, a continuation of segregation and police brutality.

This has been the record of all black mayors since Carl Stokes became the first mayor of a major city in 1967. While solidly Democrat, the National Conference of Black Mayors went so far as to support a 1985 Reagan proposal to reduce black youth unemployment through the establishment of a sub-minimum wage for teenagers. Explained Johnny Ford of Tuskeegee, Alabama: ‘If 2.50 dollars an hour is all we can go with at this time, we’ll take whatever we can.’ In some cases, black mayors were able to carry out attacks on black workers which would have produced explosions if implemented by a white mayor. The most shocking example came in 1985, when Wilson Goode, the black mayor of Philadelphia, ordered a bomb dropped on a residential neighbourhood. The victims were members of a counter-cultural black group, MOVE, who refused to allow city officials into their homes. From the tragic to the comic, Tom Bradley, mayor of Los Angeles, posed for photographs by the South African Digest – presenting the key to the city of Los Angeles to the South African General Consul. [67]

Even Jesse Jackson’s Rainbow Coalition, which gave the Democratic Party a left wing cover, was dissolved by Jackson after the 1988 election. Unlike many on the left who saw the Rainbow Coalition as a springboard to a ‘new movement’, Jackson made clear his loyalty to the Democratic Party – and to US capitalism. His aim was to increase black representation within the system, not to challenge it. Meanwhile black voter turnout dipped to new lows in this same period. Recent evidence suggests that the presence of a black candidate on the ballot is no longer enough to guarantee a strong black turnout for an election. As a result, the black middle class can lay no claim to leadership of the masses of blacks, even in a limited, formal sense. The NAACP, the traditional middle class black organisation, saw its membership plunge from 550,000 in the mid-1970s to about 150,000 ten years later. [68]

But this is nothing to worry about for some of today’s black politicians. Typical of the new ‘post-black’ politicos is Douglas Wilder, the governor of Virginia. He declares proudly: ‘I never viewed myself as an activist ... Of course, everybody says they marched on Washington now. I was not there. I didn’t even participate in pickets here in Richmond, but I felt I had to make my contribution in other ways.’ As black sociologist Manning Marable has noted:

These charlatans rely on the old nationalist rhetoric of racial solidarity, but lack any progressive content because they are detached from any social protest movement for empowerment or resistance ... Most of us have not anticipated an ideological shift among many African-Americans or Latino politicians, using racial solidarity to ensure minority voter loyalty, but gradually embracing more moderate to conservative public policy positions, especially on economic issues. [69]

Some sections of the black middle class have even become Republican – as have a larger number of black voters. In 1990, Republican candidates received the highest percentage of black votes Republicans have received since the late 1950s. Fully 22 percent of black voters voted Republican in 1990. Thirty two percent of blacks between the ages of 45–59 voted Republican.

This vacuum of leadership left by traditional black civil rights leaders has yet to be filled. It has allowed less mainstream figures, like Rev. Al Sharpton, a black nationalist with. no coherent programme, to step in and lead some important anti-racist struggles since the mid-1980s. Sharpton’s somewhat dubious past (he was once an FBI informant), combined with his sharp nationalist rhetoric, had kept him outside the black middle class establishment. Sharpton took the lead in organising protests involving thousands of blacks after two young blacks were murdered by white racists in New York. In late 1986, 23 year old Michael Griffith was killed when racists chased him into a moving car in the all white Howard Beach neighbourhood in Queens. Then in 1989 another young black, Yusuf Hawkins, was murdered in Bensonhurst, another all white neighbourhood. If Sharpton hadn’t organised the protests, which included angry marches through the all white neighbourhoods, in all likelihood no mass protests would have taken place.

At the same time, however, the vacuum of leadership had important negative consequences at the beginning of the 1990s. Just as frustrations with day to day poverty and racism pushed many living in black ghettoes to the boiling point, expressions of anger sometimes turned into misdirected explosions. During the long hot summer of 1991 in New York, for example, a car driven by a Hasidic Jew hit several small black children, killing a seven year old boy in Brooklyn’s Crown Heights section of New York. After clashing with the police all summer, hundreds of outraged blacks rioted against the police, but also against Crown Heights’ Jews. In ‘retaliation’ for the child’s death, a group of young blacks murdered a Hasidic Jewish rabbinical student. Al Sharpton led a march through Crown Heights on the Sabbath, with clear anti-semitic overtones. Legitimate outrage against racism had been channelled towards the nearest visible targets – Hasidic Jews – while the real enemy, the New York Police Department, used it as yet another excuse to storm a black neighbourhood.

The labour movement in retreat

Within a few months of taking office Ronald Reagan came to a showdown with the labour movement for which the working class was ill prepared. He even chose one of the very few unions which had supported his candidacy for President as his first target. The 12,000 members of the Professional Air Traffic Controllers Organization (PATCO) walked off their jobs on 3 August 1981. Within four hours, President Ronald Reagan was on national television, warning the controllers that if they didn’t return to work within 48 hours, they ‘will have forfeited their jobs and will be terminated’. Reagan was perfectly ready to carry out this threat. Jimmy Carter had planned ahead: 12 months before the PATCO contract was due to expire, Carter set up the Management Strike Contingency Force, which prepared a plan to run air traffic without the controllers if they went on strike. [70]

The union leaders talked tough, but did nothing to build solidarity with the PATCO strikers. AFL-CIO president Lane Kirkland called Reagan ‘harsh and vindictive’, and then sent out a letter to all AFL-CIO locals urging them not to join in a nationwide job action to support the strike. Kirkland wrote, ‘I personally do not think that the trade union movement should undertake anything that would represent punishing, injuring or inconveniencing the public at large for the sins or the transgressions of the Reagan administration.’ [71] The president of the International Association of Machinists (IAM), the union representing airline machinists, refused to call his members out on strike to support PATCO, arguing, ‘It should be recognized the IAM has a no-strike clause with the airlines’. [72]

Thns, although US labour unions had already planned a massive ‘Solidarity Day’ march in Washington, DC, a few weeks after the strike began, PATCO barely got a mention in speeches to the half million workers who marched. Instead speaker after speaker urged workers to vote for the Democrats next time around. Left to fight alone, the 12,000 striking air traffic controllers lost their jobs. PATCO had been crushed.

The PATCO strike represented a turning point from which the labour movement has yet to recover. Reagan’s crushing of the air traffic controllers’ union, played out on national television, signalled a go ahead to business to engage in union busting on a massive scale. But the labour unions, with their bloated union bureaucracies, had no intention of fighting back. Years of conservatism had made them believe they could negotiate a deal with employers and rely on the election of ‘friends of labour’ to Congress. They feared the prospect of rank and file activism more than they feared the employers’ attacks. Rather than lead any kind of fightback, they searched for ways to salvage the comfortable relationships they had nurtured with the employers for decades.

Ties between the US labour bureaucracy and the government date back to the 1930s Depression when the leaders of the CIO, which would grow into the main industrial union federation, threw their support behind Roosevelt and the Democratic Party. Thanks to the bankruptcy of Stalinism, at the height of the CIO sitdown strikes the Communist Party also endorsed Roosevelt, drawing in thousands of the most militant workers behind them. The best possibility in US history for workers to form their own political party had been lost.

Collaboration between labour and capital was strengthened during the Second World War when, except for the United Mine Workers, all major unions, including again all the CP led unions, agreed to a no strike pledge for the duration of the war. Since the war the union leaders’ loyalty has never wavered, despite occasional rhetoric to the contrary. It continued even after the 1947 Taft-Hartley Act became law. Taft-Hartley gave the government the right to delay or prevent workers from striking, and to send in the National Guard if workers went on strike anyway. No Congress since has seen fit to repeal Taft-Hartley, as it has come in handy plenty of times. Democratic President Harry Truman used the Taft-Hartley Act 12 times to break strikes during his presidency.

The CIO demonstrated its support for the McCarthyite anti-communist purges by expelling 11 CP led unions in 1949, which together accounted for over 500,000 union members. By the time the two rival federations of the union movement, the American Federation of Labor (AFL) and the CIO, merged to form the AFL-CIO in 1955, business unionism was already entrenched in the executive suites of the. Federation’s top officials. As George Meany, the AFL-CIO’s first president said, ‘We believe in the American profit system.’ [73] In the 1950s and 1960s the AFL-CIO extended its allegiance to US imperialism’s aims abroad. In 1985 the AFL-CIO had operations in 83 countries, with a total international budget of 43 million dollars. [74]

All union bureaucrats share interests separate from the members they represent, because they are relieved of real contact with the shop floor and because their own jobs are unaffected by layoffs and contract language. But the US version, though not qualitatively different, is a somewhat unique breed. For example, Meany once bragged to the National Association of Manufacturers, ‘I never went on strike in my life, never ran a strike in my life, never ordered anyone else to run a strike in my life, never had anything to do with a picket line.’ [75]

One difference is that US workers have never formed a major labour or social democratic party. With workers themselves providing a mass voting base for the Democratic Party, the AFL-CIO feels no organised pressure to the left of the Democrats. The AFL-CIO’s expansive bureaucracy and close ties to the US government only increase the pressure toward conservatism. Since it was founded in 1955, the AFL-CIO has had only two leaders: George Meany and Lane Kirkland. The AFL-CIO presidency is more a coronation than an election.

And while union membership has been in steady decline since the mid-1950s, the AFL-CIO felt no urgency to shift its strategy. Through the mid-1980s it maintained its dues base at a steady 13 million members. As Meany aptly put it in 1972: ‘Frankly, I used to worry about the membership, about the size of the membership. But quite a few years ago, I just stopped worrying about it, because to me it doesn’t make any difference.’ [76] The union leaders’ only response to the employers’ offensive was more of the same. Labour unions’ financial contributions to political candidates’ election campaigns increased more than threefold between 1974 and 1982. The AFL-CIO supported Democrats while the Teamsters and a few others supported Republicans, but the strategy was the same: collaboration, rather than any form of confrontation. The full implication of this approach was revealed when, after UAW president Doug Fraser agreed to massive concessions in the 1979 Chrysler bail out, he was awarded a seat on Chrysler’s board of directors. One local UAW official had warned workers who hesitated to grant concessions, ‘Those of you who don’t want to take a wage cut, go out and find another job. No one’s stopping you from leaving this organisation.’ [77]

While initially firms claimed they needed concessions to stay afloat, once Reagan had crushed PATCO in 1981, concessions and union busting became the order of the day. In a 1982 Business Week survey of 400 executives nearly one in five said, ‘Although we don’t need concessions, we are taking advantage of the bargaining climate to ask for them.’ In 1983, one third of all workers with new contracts had agreed to wage cuts. By 1987, in the midst of the Reagan boom, almost three quarters of all contracts covering 1,000 or more workers included concessions. For manufacturing workers the figure was 90 percent. [78] After extracting huge demands from workers desperate to save their jobs, many plants closed down anyway. In fact, employers often used the savings they squeezed out of workers to finance their plans for rationalisation. As Kim Moody put it:

In 1983, the same year that it received concessions from the USW, US Steel announced plans to close one third of its remaining steel capacity as well as various finishing and fabricating mills. Chrysler, of course, closed several plants as part of the bail out operation and continued closing plants after returning to profitability. In March 1987 Chrysler announced that it would buy AMC (American Motors Corporation) from Renault for 1 billion dollars; in that same week, it also announced that it would close a parts plant in Indiana. [79]

Gone were the days when industry standards were negotiated into a single industry wide contract. Here too union leaders allowed contract negotiations to set groups of workers in competition with those from other plants, companies and other countries. Union leaders’ only response when plants closed down in search of cheaper labour was to clamour for protectionism. Many employers forced their workforces on strike with proposals for drastic wage cuts, and then hired scabs as permanent replacements as soon as the strikes began. In US law after 12 months the scabs could legally have an election to decertify the union. About 200,000 workers became non-union thanks to decertification elections in the 1980s. Other employers chose to simply lock out their workers, effectively forcing them to strike. [80] By 1989 union membership had fallen to 16 percent of the workforce. Current estimates for private industry put unionisation rates at just under 10 percent.

Strike levels in 1987 had fallen to their lowest point since the Second World War no-strike pledge. This figure is an important gauge of the level of demoralisation felt by most workers, but it tells us little about those workers who did struggle. Groups of workers fought back against the employers’ offensive in the 1980s, but they often found themselves engaged in long term, bitter disputes which pitted them against their own union leaders as well as their employers. Evidence suggests that, while the number of strikes fell in the early 1980s, the number of workers involved and the workdays lost actually rose, indicating longer walkouts. [81] Rather than lasting days or weeks, many strikes lasted months or even years during the 1980s, and, with few exceptions, ended in defeat. [82]

Union leaders deserve little or no credit for the few examples of workers’ militancy and solidarity in the 1980s. For example, machinists’ union president William Winpisinger pledged his support to the machinists at Brown and Sharpe during their 1981 strike. When they battled with police on their picket line, he proclaimed, ‘Labour history is being written’ in Rhode Island. Yet in two years he never even bothered to visit the picket line of one of the longest strikes in US labour history. [83] In fact, union leaders consistently played the role of discouraging, forbidding or even sabotaging militancy and solidarity.

The Hormel meatpackers’ strike which began in 1985 and stretched into 1986 brought the most bitter clash between striking workers and their union leaders during the Reagan era. Workers at Hormel’s Austin, Minnesota, meatpacking plant had already agreed to an eight year concessions contract in 1978. The profitable Fortune 500 company wanted more, and unilaterally imposed a wage cut. But when the 1,500 members of Local P-9 of the United Food and Commercial Workers (UFCW) finally voted to strike in August 1985, their national union wasn’t behind them. In fact, UFCW leaders did everything they could to undermine the strike. In a perverse twist of logic, UFCW president William Wynn argued, in a letter sent to every AFL-CIO local in the country, that because P-9 workers were demanding wages higher than the concessions contracts UFCW had negotiated for the rest of the industry,

The P-9 story is not one of ‘solidarity’ in action. It is the converse of that honoured union principle. Local P-9’s leaders refused to act in solidarity with other Hormel workers. Instead of acting together with other Hormel workers to accomplish the most good for the greatest number of Hormel workers, Local P-9 leaders sought a better deal for Austin alone. [84]

When P-9 organised roving pickets to call out nearby Hormel plants in solidarity, Wynn sent out a telegram to union locals, urging them to have no part of the ‘plague’ from P-9. Finally, after eight months on strike the national union revoked even its formal sanction of the strike and stopped all strike benefits. Meanwhile, the company forced the city of Austin, a company town, to declare martial law and call in the National Guard. [85] Although the Hormel strikers continued to fight on for another six months, the national union took over their union local and negotiated a contract for the scabs who stole their jobs.

Workers who attempted to defend their living standards in the 1980s had neither a political party nor a labour movement to bolster their struggles. Wages in 1990, which stood at 346 dollars per week before taxes were almost 20 percent lower than in 1972 when adjusted for inflation. Average hourly wages of US production workers in manufacturing are now surpassed by workers in Germany, Norway, Switzerland, Sweden, Netherlands, Denmark, Belginm, and Finland, and are nearly matched by those in Japan, Canada, France and Italy. [86] As Vicente Navarro described:

The average worker in the US, for example, works longer hours and has less paid vacation than workers in the majority of advanced capitalist countries. The average workweek for full time US workers in 1986 was 42.3 hours, compared with 37 in Denmark, 37.5 in Norway and Finland and 39 in France and Britain and 37 in West Germany ... The level of disposable income of US workers is lower than that of workers in the majority of advanced capitalist countries. Disposable income as percentage of gross earnings is 78.9 percent in the US, lower than in France (98.72 percent), Japan (89.10 percent). Canada (88.03 percent), Italy (86.19 percent). West Germany (7922 percent), and the United Kingdom (78.98 percent). [87]

The party’s over

As the 1980s came to a close so did the Reagan boom. George Bush was sworn in as president in 1989, when the economy first hit the doldrums. But as the economy again buckled for what turned out to be the longest recession since the Second World War, there was little fat left on the system. Millions of workers are only a paycheck away from poverty. Millions more are already there. The vast majority of workers long ago figured out that, although Reagan had promised that wealth would ‘trickle down,’ instead it flooded in the other direction.

To the chagrin of the ruling class, Reagan’s supply side boom bad been built upon quicksand: in order to fund the tax cuts for the rich and the massive military build up, the Reagan administration needed to borrow huge sums of money at high interest rates. In 1985, the US became a debtor nation for the first time since 1914. The annual deficit had already reached the 200 billion dollar range when he left office. Just funding the interest on the debt cost 129 billion dollars in 1983, 178 billion dollars in 1985 and 216 billion dollars in 1988. [88] Furthermore, the Reagan boom had failed to prevent the continued global decline of US capital. Voices of dissent began emanating from sections of the ruling class by the decade’s end. They argued that Reagan’s policies had actually contributed further to declining US hegemony. Kevin Phillips, a Republican and former chief political analyst for Richard Nixon’s Presidential campaign, lamented in The Politics of Rich and Poor:

the Reagan years, and especially the President’s debt ridden second term, saw an indisputable shift of comparative wealth and economic leverage away from the United States: assets began to migrate along a pathway blazed by debt. Friedman and other economists acknowledged that the implications for the future might have been different if Americans had productively invested most of these foreign borrowings. But much of the borrowed money wound up in financial restructuring, paper entrepreneurialism and lavish consumption, as well as in millions of attendant low-productivity service jobs. These and other dislocations within the late 1980s US domestic economy only aggravated the global redistribution of wealth. [89]

Rising right wing criticisms of the US’s relative share of world military spending grew in the 1980s and rose to a feverish pitch during the 1991 US war against Iraq. The complaints centred around comparisons between the US share of military spending and that of its main economic competitors, Germany and, with particular acrimony, Japan. Among the top five most advanced economies in 1983 (the US, Britain, France, West Germany and Japan), the US share of combined defence spending amounted to 56.7 percent, while Japan’s stood at only 3.3 percent. [90]

In 1987 a Wall Street Journal article summarised the gloomy outlook for US imperialism:

The US now sits in the bottom corner, where Britain was from 1926 to 1944. Such nations live on past credit, suck in foreign capital and can’t save enough to finance domestic investment. Two rankings higher stands Japan: a strong country with a trade surplus, saving more than it spends and sending excess money abroad. That puts Japan among other nations at the height of their strength, including the US from 1946 to 1970 and Britain from 1851 to 1890. [91]

The Reagan Revolution is over, but Bush hasn’t found anything to replace it. His administration has pursued familiar supply side policies. With the result of an even bigger deficit, which is expected to reach 350 billion dollars in 1991. [92] At the same time the scale of poverty has reached crisis proportions in the second recession in a decade. A recent Florida study reported that among 16 percent of families there at least one family member goes to bed hungry. Unemployment topped 7 percent in December 1991, and by 1989, total consumer credit had risen to 775 billion dollars, equal to almost one fifth of total personal income. The number of personal bankruptcies in 1991 was triple the annual rate during the 1981–2 recession. Yet Bush wondered aloud why ‘consumer confidence’ was so low during the 1991 holiday shopping season, since the 1981–2 recession was ‘deeper’. [93]

Whereas the federal government slashed social spending ten years ago, local city and state budgets are doing so now. The newest trend has been for individual states to cut welfare spending, removing the last cushion available to millions of the poor. Sixteen of the 50 states have made cuts already. Michigan completely eliminated its general welfare programme in the autumn of 1991, leaving 90,000 of the state’s poorest citizens without an income. Homeless organisations expect Detroit’s homeless, who numbered about 50,000 before the cuts, to double. The first casualties of Michigan’s cuts came in November. Two men died of carbon monoxide poisoning in an abandoned building where they were using a charcoal grill for heat. A spokesman for Michigan’s governor issued this icy statement in response to the deaths: ‘They had a shelter available to them. Instead, they chose to remain in this abandoned home. Any death is tragic.’ [94]

New York, which has suffered massive job losses, now has an estimated 90,000 homeless, one third of whom are HIV positive. Mayor Dinkins’ response? Periodic police sweeps to remove them from subways, so commuters can be spared undue unpleasantness. New York has seen a resurgence of tuberculosis, a disease supposed cured long ago. Yet due to poverty doctors reported in 1991 that roughly one in seven New Yorkers has developed tuberculosis, including a new drug-resistant strain. By early 1992, federal health officials had declared the spread of tuberculosis ‘out of control’ as they reported outbreaks in 12 states. [95]

Many of the cuts have been justified with vicious scapegoating of the poor. The typical California welfare family lives 30 percent below the poverty line. But California’s governor, Pete Wilson, claimed the state’s welfare payments, which are the highest in the nation, are ‘not fair to the working men and women of California’. He has proposed a ‘Taxpayers’ Protection Act’, which would immediately cut payment by 10 percent, and would be followed by a 15 percent cut in six months. Women on welfare who have any more children would be denied any additional payments. Teenage mothers would be required to live with their parents. [96]

The overconfident ruling class

When Bush was running for President in 1988, he promised to be a ‘kinder, gentler’ president. He fooled no one. Within his first two years in office he invaded Panama and carpet bombed Iraq-ostensibly to rid the world of two ‘madmen’, Manuel Noriega and Saddam Hussein. Through strict control over the news media, who gave their full co-operation, Bush managed to keep the public from finding out about the thousands of Panamanians and hundreds of thousands of Iraqis killed in these two wars. Even the 150,000 anti-war protesters who marched in Washington, DC, during the war against Iraq never appeared on the national news.

For the US ruling class, the war against Iraq wasn’t just another war. It was the largest US military intervention since its defeat in Vietnam. US planes dropped more explosives onto Iraq each day than were dropped on Hiroshima and Nagasaki. Bush could proclaim at the end of the war, ‘The Vietnam Syndrome is over.’ Moreover, Bush’s triumph over Iraq showed that, even if US imperialism was slipping as the world’s main economic superpower, it still remained the world’s main military power. As he said towards the end of the war, ‘When we win, and we will, we will have taught a dangerous dictator, and any tyrant tempted to follow in his footsteps that the US has a new credibility, and that what we say goes ...’ [97]

As wars have been known to do in the short term, the six week triumph against Iraq sent Bush’s popularity soaring to 90 percent. But it soon became apparent that the long term US aims in the war were unsatisfied: Saddam Hussein remained in power, stability was not forthcoming anywhere in the Middle East and, most importantly, the massive military victory over Iraq did nothing to arrest the US’s continued economic decline. At the height of his popularity, Bush made a miscalculation, a not uncommon one among rulers. With the balance of class forces skewed decisively in favour of capital, he got carried away and tried to push things a step too far. No sooner had the war ended overseas than Bush resumed the war at home. Having made great strides towards eliminating the Vietnam Syndrome, he set his sights on finishing off the other reminders of the 1960s social movements, escalating attacks on blacks, women, and lesbians and gays under way since the late 1970s.

But Bush’s strategy backfired. His own overconfidence caused him to overlook the possibility of provoking a response from below. After the unification of Germany and the collapse of Stalinism, he didn’t predict that his own chest beating about the wonders of the free market would focus Americans’ attention on the S&L bail out or the lack of health care. And, in his efforts to finally erase the nation’s memory of the 1960s era of struggle, he merely set the stage for the next period of social upheaval, by straining social relations to the breaking point. Bush launched his new attack when he made a speech, excerpts of which were later televised, to a University of Michigan graduation ceremony. The new enemy, he told students, was ‘political correctness’:

political extremists roam the land, abusing the privilege of free speech, setting citizens against one another on the basis of their class or race ... The notion of ‘political correctness’ has ignited controversy across the land. Although the movement arises from the laudable desire to sweep away racism and sexism and hatred, it replaces old prejudices with new ones. It declares certain topics off-limits, certain expressions off-limits, even certain gestures off-limits. [98]

Nothing could have been further from the truth. Since the late 1970s all the gains won by the movements of the 1960s, abortion and affirmative action in particular, had been severely eroded. But that didn’t stop Bush from jumping on the bandwagon of right wingers who were already leading a crusade against feminists, black activists and gays in the name of stamping out the tyranny of political correctness. Thanks to cover stories in Newsweek, Time and other major news sources echoing Bush’s sentiments, ‘political correctness’ (‘PC’) had become a household word by the summer of 1991. Bush’s diatribes against political correctness were completely transparent, for those who cared to look. Abortion funding for poor women has never been restored since it was cut in the late 1970s. It has been estimated that since funding was cut 20 percent of poor women have been forced to bear unwanted children. [99] The government renewed its attack on abortion in 1989, beginning with a Supreme Court ruling that allowed individual states to severely restrict abortion within their borders. A Missouri law, for example, now bars any publicly funded facility from either performing abortions or providing abortion counselling. Other states have passed laws which challenge the very right to legal abortion. Pennsylvania passed a law in 1989 requiring married women to notify their husbands before they could have an abortion. In 1991 Louisiana and Utah passed laws which virtually ban abortion.

It is now up to the Supreme Court, stacked with Reagan and Bush anti-abortion conservatives, to decide the future of legal abortion During the summer of 1991, as if to give a sneak preview of what might be in store, the Supreme Court upheld a law from the Reagan era which forbids any employee in federally funded birth control clinics from even mentioning the option of abortion. For this reason, It has been called the ‘gag’ rule. Even if a woman asks where she can get an abortion, clinic staff are required to repeat this phrase: ‘This project does not consider abortion an appropriate method of family planning.’ Four million poor women will be affected by this new law. Their confidence boosted by the tum of events, Operation Rescue an~d abortion protesters appeared at abortion clinics all around the country in the summer and fall – only to find themselves outnumbered by pro-choice supporters in most cities.

Lesbians and gays have fared no better during the Reagan and Bush years. In 1986 the Supreme Court upheld archaic ‘sodomy’ laws, stating that there is no fundamental right to homosexual sex. In their written decision, the Court compared gay sex to ‘adultery, incest and other sex crimes.’ [100] In September 1991, cashing in on the anti-PC atmosphere, California Governor Pete Wilson vetoed a gay rights bill that would simply have extended anti-discrimination protection to lesbians and gays. He said the legislation would unfairly burden businesses. Californians had approved of the bill by a two to one margin. The response was immediate: thousands of lesbians and gays took to the streets the night of the veto in mass protests. The next night 7,000 gay rights activists marched through San Francisco, many throwing rocks and breaking windows, chanting, ‘Gays bash back.’ [101]

But racism has been at the centre of Bush’s attacks. Affirmative action programmes were effectively gutted by 1989. It was no coincidence that Clarence Thomas was picked to be Bush’s nominee to the Supreme Court last year. Thomas, a black conservative opposed to affirmative action, had earlier proven his loyalty to Reaganism as head of the Equal Employment Opportunity Commission (EEOC), the federal programme set up to rectify job discrimination. During his years as chairman of the EEOC whites complaining of ‘reverse racism’ got more of a hearing than blacks and other minorities. In 1989 a series of Supreme Court decisions wiped out affirmative action as a tool for black workers. This didn’t stop Bush from taking one last swipe at affirmative action. In 1990 he vetoed a civil rights bill aimed at restoring some aspects of affirmative action because it required ‘quotas’. He vowed to do the same thing to the 1991 civil rights bill, which was a watered down version of the 1990 bill.

But Bush was stopped in his tracks. In the fall of 1991 Bush’s own racist code words, ‘welfare’, ‘crime’ and ‘drugs’ began emanating from the ultra right. Neo-Nazi David Duke had entered the fray, running for Governor of Louisiana – as a Republican. Duke did not become Governor of Louisiana in November 1991, but he did win 55 percent of the white vote. And within weeks he announced that he would be running for President in 1992, again as a Republican. Duke, a long time Nazi and former Ku Klux Klan leader, now leads the National Association, for the Advancement of White People (NAAWP), which is, in Duke’s words, ‘more of a high class thing’ than the Klan. The NAAWP, for example, calls cross burnings ‘illuminations’ and his own title is ‘national director’ rather than the Klan’s preferred ‘Grand Wizard’. But in all crucial respects, Duke’ s world outlook comes directly from Hitler. Duke’s only criticism of apartheid in South Africa is that it doesn’t go far enough because blacks are allowed to live within South Africa’s borders. [102]

Like Bush and Reagan, however, Duke has zeroed in on affirmative action and welfare as campaign issues. Duke also opposes affirmative action quotas. And carrying Bush’s attacks on welfare recipients a step further, Duke has argued, ‘There’s no reason why we shouldn’t give incentives to welfare recipients, criminals, and the mentally defective to go childless.’ [103] The comparisons were obvious, even though Bush denounced Duke as a ‘charlatan’. He quickly signed the 1991 civil rights bill in the hope of distancing himself from Duke. But Vice President Dan Quayle botched the effort when he stated on national television:

The message of David Duke is ... anti-big government, get out of my pocketbook, cut my taxes, put welfare people back to work. That’s a very popular message. The problem is the messenger ... [104]

Then another right winger jumped into the 1992 Presidential race. Pat Buchanan, who had opposed the US war against Iraq from the right, is campaigning on an ‘America First’. isolationist platform, in which he calls for protectionism, an end to foreign aid, and closing US borders to Third World immigrants. Buchanan has no hopes of winning the Presidency, but he raises the pressure on Bush from the right Bush’s popularity plunged to 46 percent by November 1991. Moreover, only one in four approved of Bush’s handling of the economy, a level of discontent not approached since the final days of Jimmy Carter. [105]

More polls further jolted the Bush administration. Health care was the main issue on voters’ minds – an issue which Bush had all but ignored, claiming that the US health care system didn’t need reform because it was the best in the world. In a Time/CNN news survey, 91 percent of the respondents said, ‘our health care system needs fundamental change.’ And 70 percent said they would be willing to pay higher taxes to guarantee that all Americans have health coverage. Another survey showed a majority opposes further capital gains cuts for the rich, something Bush proposed to Congress. In yet another poll 71 percent agreed with the statement that the US government is run by ‘a few big interests’. [106]

In the face of a deepening recession Bush faced comparisons With Herbert Hoover the Republican President who refused to acknowledge the Crash of 1929. Bush finally admitted that the recession wasn’t over. With pressure coming from both the left and the right, Bush was forced to backtrack at the end of 1991, but he couldn’t figure out in which direction he should go – giving the White House the appearance of panic and disarray. Bush signed a bill temporarily extending workers’ unemployment payments by 20 weeks – the same bill he’d vetoed only a month earlier, claiming workers didn’t need additional benefits because the recession would be ‘short and shallow’. Then, after opposing tax cuts called by Democrats and many Republicans, Bush did an about face and announced that he liked the tax cuts ‘enthusiastically’. [107] He then prepared his own set of proposed tax cuts.

Then Bush sent the stock market reeling when in a speech to a Republican fundraising luncheon he suggested that banks should lower credit card interest rates from their present 18 to 20 percent charge. The very next day the Senate took Bush at his word and passed legislation capping credit card interest rates at 14 percent. Two days later the Dow Jones index plunged 120 points, the fifth largest point drop in Wall Street history. Bank lobbyists swarmed to Congress, threatening that if the law were enacted, as the New York Times put it, ‘shaky banks might go under and millions of Americans whose credit ratings are less than ideal would have their credit cards recalled.’ Bush’s own staff denounced him. Treasury Secretary Brady said the proposal was ‘wacky’. Richard Darman, Director of the Office of Management and Budget, said it was ‘preposterous’. Even Dan Quayle thought it was stupid. Bush had no choice but to request that Congress reject his request. [108]

Bush’s blunders did not sit well with business interests, to whom it was apparent that he had no plan for jump starting the economy. Corporate giants, saddled with rising health care costs, raised the demand for a national health care plan. GM, for example, claims that for every car produced on its assembly lines, management pays out 600 dollars in health care costs. Business Week announced, ‘We’re for a Universal Health Care System’, and issued a six page proposal for one. [109] When Bush loaded up a plane with corporate executives to barter With Jupan, he was likened to a travelling salesman. The business weekly Barron’s quipped, ‘Bush returned from his arduous undertaking With nothing to show but bad publicity and solemn promises (which, close inspection revealed, were dated 1987).’ [110]

The Republocrats

Although the winds of change are blowing, the vacuum to Bush’s left has yet to be filled. The most obvious possibility, of course, is that the Democrats will come forward. But while a host of unknowns joined the presidential race, those with name recognition, like New York’s Governor Cuomo and even Jesse Jackson, decided to sit this election out. Even with the writing on the wall, the party which dissolved its ‘New Deal Coalition’ during Reagan’s first term has forgotten how to mouth the rhetoric. Besides, the Democratic Party’s leadership abandoned Its appeals to blacks and workers otherwise known as ‘special interest groups’, after the Democrats,’ responding defeat to Reagan in the 1984 Presidential election. Democratic leader Robert Strauss put it bluntly:

Women, blacks, teachers, Hispanics. They have more power, more money than ever before. Do you think these groups are going to turn the party loose? Do you think labour is going to tum the party loose? Jesse Jackson. The others? Forget it. [111]

The prospects for a major shake up in 1992 are slim. None of the major Democratic candidates, for example, has called for a national health service even as minimal as the Canadian plan. One Democratic candidate, Tom Harkin, was touted as a ‘populist’ when he dec1ded to run. Dubbed the ‘working man’s friend’, he does call for the federal government to set up a Works Project Administration to create jobs, modelled after Roosevelt’s New Deal. But Harkin mixes in a strong dose of xenophobia: he considers the ‘real enemies’ of working people to include the Japanese, along with rich Republicans and big corporations. And, however low Bush’s popularity has dipped, few consider the Democrats to be an alternative. According to a December 1991 Newsweek poll, while only 31 percent of US adults approved of Bush’s ‘economic management’, only 28 percent believed the Democrats would do a better job. In fact, some opinion polls show Congress, which is dominated by Democrats, is held in even greater disdain than Bush: 49 percent blamed Congress for major problems, while 29 percent held Bush responsible. [112]

Thus the majority of workers sit out most elections. In a typical presidential election half of the voting age population participates. And turnout rates have been in steady decline over the last three decades. Reagan and Bush could each boast a ‘mandate’ from about 26 percent of eligible voters. The chronically low voter turnout rates are are unmistakable expression of alienation. When asked recently whether they agreed with the statement, ‘I don’t think that public officials care much about what people like me think’, 59 percent agreed. [113]

The bottom line for Bush is the state of the economy. As one White House aide said of his re-election prospects in late 1991, ‘If the economy comes back in six months, nothing else matters. If it doesn’t nothing else matters.’ [114] And whether or not Bush IS re-elected, his problems are not likely to go away: The factors underlying the economic crisis for US capital remain in place. Most importantly, the rate of growth has not exceeded 1.7 percent since Bush took office compared with an average of 3 percent under Reagan and an average of 2.1 percent during the 1930s Depression. Even after the recession ends, mainstream economists paint a gloomy p1cture. for the 1990s. In early 1992 a survey of 48 US economists predicted growth of only 1.6 percent this year-revised downward by a full percentage point from what they predicted three months earlier. Unemployment is expected to hover around 6 percent for years to come. [115]

The manufacl1rring sector restored its productivity during the 1980s, in some fields surpassing even the rates of Japan. But even after more than a decade of concessions and layoffs, US manufacturing has not been able to reverse its global decline. Moreover, productivity in the service sector has remained stagnant. Many are now predicting that a new ‘white collar recession’ is in the offing. Already at the end of 1991, with unemployment ranging higher than 10 percent in some white collar non-supervisory job categories, IBM, the personal computer giant, announced it plans to cut 20,000 jobs. [116]

And from workers’ point of view, even a period of extended recovery only promises a further sharpening of class contradictions. After all, the Reagan boom produced the biggest transfer of wealth upwards since the Roaring Twenties. Recovery or not, the only hope for US workers is to begin to shift the balance of class forces, and that can only happen through struggle.

The way forward

One of Reagan’s aims had been to restore the dominance of US imperialism on a world scale, primarily through a massive military budget and slashing social spending. The collapse of the Eastern European regimes convinced many that Reaganism had achieved its aims. And to many on the left Bush’s success in the Gulf War confirmed the view that the US was at the beginning of yet another period of global domination. But this view is clearly mistaken. It ignores the significant problems facing the ruling class internationally, and-what has been the focus here-the domestic price of Reaganism. US employers have been successful in forcing workers to pay the cost of restructuring. But in the process they have also greatly increased the bitterness and anger of millions of working class people. No longer can it be said that US workers think of themselves as middle class. That is the reality behind all the opinion polls.

The US working class is not what it was in 1950. For most workers then, expectations of higher living standards were in part matched by reality. The US ruling class claimed conditions would only continue to improve and that the ‘American way’ stood in the face of ‘totalitarianism’. Workers today have been stripped of such illusions. Whether black, white or Latino, male or female, employed or unemployed, conditions for all workers have declined markedly. The economic expansion of the 1980s added hundreds of thousands to the ranks of the working class, but 85 percent of the jobs created were in low pay, part-time service work. Almost 20 percent of all workers have no health insurance, and 40 percent have no pension coverage. Those workers who have a job are unlikely to belong to a union, and two thirds of those who don’t have a job get no government assistance. For the first time since the end of the Second World War, this generation of American workers faces a lower living standard than that of their parents. Already 22 percent of children in the US live in poverty. Bitterness and anger has been building for close to 20 years among every section of the working class. For most workers, the election of either the Democrats or the Republicans is an event not worth participating in.

But this anger and bitterness will soon find political expression. The evidence that it exists is easy to find. In February 1991, 58 percent of those polled believed the US was headed in the right direction, with 39 percent saying it was on the wrong track. By October, the proportion of Americans who said the country was headed in the right direction had dropped to 26 percent. The shift in working class consciousness – and what this represents – has not been lost on some of the more astute political analysts of the ruling class. Kevin Phillips, whose 1969 book The Emerging Republican Majority was described by Newsweek as ‘the political bible of the Nixon era’, now worries that the past decade has laid the basis for an explosion of class conflict. This, he argues, has been the historical pattern of the US – a period of unrelenting ruling class assault on workers followed by an eruption of working class resistance, as happened in the 1890s–1910s and 1930s. He quotes the warnings of one sociologist: ‘When you talk to people, you get an awful lot of this kind of generalised anger. From a political point of view, I think the potential for a lot of very difficult and dangerous things is there, but it hasn’t been happening yet.’ [117]

It will probably take years for US workers to rebuild their confidence to struggle after two decades of retreat. But there are signs that the tide may be starting to turn. While the number of strikes has remained low, some strikes which have taken place in the last two or three years have ended in partial or outright victory. The Pittston miners’ 11 month strike of 1989–90 is the most notable: after a three day occupation and solidarity strikes, which at one point involved 30,000 miners from seven states, the miners kept the company from busting their union or getting major concessions. And workers scored an important victory in 1991. For the first time in the history of the Teamsters union, the rank and file democratically elected its leadership; and an entire reform slate was voted in. The Teamsters, with 1.5 million members, has a long history of embezzlement, corruption, and mafia involvement with its top officials. For example, three of its last five presidents wound up in prison. A fourth, Jackie Presser, died before his case was tried. Finally, in 1989 the US government – no doubt for dubious motives – used racketeering statutes to intervene in the union, setting up, among other things, elections.

In the past, Teamster conventions, held once every five years, were mainly restricted to fulltime union officials and, usually held in Las Vegas, were known mainly for their lavish social gatherings, which typically began around 4prn. At the last convention Joseph Trerotola, a New York Teamster leader, threw a party costing 648,000 dollars. [118] But at the 1991 convention union delegates booed outgoing union president William McCarthy. They also booed George Bush’s videotaped message. Discontent has been brewing inside the Teamsters for many years. The reform slate, headed by New York Teamster official Ron Carey, also includes members of the Teamsters for a Democratic Union (TDU), a union reform organisation that has built a presence inside the union for 15 years. And, while Carey himself is no left winger (he is a former Republican), he at least breaks the trail of corruption stretching back for generations of Teamster leaders.

But the most important aspect of this reformer’s victory is the effect on the morale of rank and file workers inside and outside the Teamsters. Only hours after news of Carey’s victory, former UAW president Doug Fraser stepped forward to emphasise that the Teamsters union is a special case, and denied that the Teamster victory could set an example for workers in other unions. [117] Fraser’s response is evidence enough that it well could. In fact, the New Directions reform caucus inside the UAW is already planning to run its own candidate, Jerry Tucker, for union president.

There are more than a few parallels between the balance of class forces today and that which existed in the late 1920s. Then also, union membership had fallen to skeletal levels, working class struggles were largely defensive, and the left was quite small. Yet with the onset of mass struggle in the mid-1930s the left was able to grow massively. The key weakness of the US left since that time has been the dominance of Stalinism in its various forms. In the 1930s Stalinists led workers into the Democratic Party at the high point of struggle. In the 1960s and 1970s Maoists either discounted the working class or were pulled toward reformism. In the 1980s Maoists and ex-Maoists entered the Democratic Party en masse via Jesse Jackson’s Rainbow Coalition. The collapse of Stalinism internationally, along with the overwhelming US victory against Iraq, demoralised the tiny fragmented socialist movement which still existed at the beginning of the 1990s.

Revolutionary socialists are in short supply in the US. But the left is finally free of Stalinism, leaving open the real possibility that the socialist movement can be reborn in the 1990s. Our numbers are small, but the potential is huge. The myth of the American Dream is over.


Thanks to John Rees, Ahmed Shawki, Alan Maass, Bill Roberts and Lance Selfa for comments on the first draft.

1. K. Moody, The American Working Class in Transition, International Socialism (Old Series), October/November 1969, p. 13.

2. F. Levy, Dollars and Dreams (New York 1987), p. 59n.

3. Quoted in M. Davis, Prisoners of the American Dream (London 1986), p. 102.

4. D. Bell, The End of Ideology (Illinois 1960), p. 84. D. Bell, The Cultural Contradictions of Capitalism (New York 1976), p. 251.

5. Quoted in S. Aronowitz, False Promises (New York 1973), p. 327, and C. Harman, The Fire Last Time: 1968 and After (London 1988), p. 3.

6. F. Levy, op. cit., p. 47.

7. J. Jacobson, The Negro and the American Labor Movement (New York 1968), pp. 218–219. P. Foner, Organized Labor and the Black Worker 1619–1981 (New York 1981), p. 295n.

8. J. Jacobson. op. cit., pp. 212–213.

9. T. Ferguson and J. Rogers, Right Turn: The Decline of the Democrats and the Future of American Politics (New York 1986), p. 49. K. Moody, op. cit., p. 13.

10. N. Harris, The End of the Third World: Newly Industrializing Countries and an End of an Ideology (London 1986), pp. 106, 111.

11. S. Weir, USA: The Labor Revolt (Boston 1967), p. 284. J.R. Green, The World of the Worker: Labor in Twentieth Century America (New York 1980), p. 213.

12. Until 1948 the standard UAW contract lasted only one year. In 1948 the UAW agreed to the employers’ demand for a two year contract.

13. S. Weir, op. cit., p. 280.

14. K. Moody, An Injury to All: The Decline of American Unionism (London 1988), p. 68.

15. P. Foner, op. cit., pp. 411–412.

16. D. Georgakas and M. Surkin, Detroit I Do Mind Dying (New York 1975), p. 24.

17. P. Foner, op. cit., p. 423.

18. K. Moody, An Injury to All, op. cit., pp. 86–87.

19. S. Terkel, Working (New York 1972), pp. 261-262. See also J. Green, op. cit., pp. 219–220, and S. Aronowitz, op. cit., pp. 21–50.

20. The Maoist organisations’ success at recruitment during the anti Vietnam War movement can also be partly explained by the weakness of the two wings of Trotskyism in the US during this period. See C. Harman, op. cit., pp. 177–181.

21. K. Stallard, B. Ehrenreich, H. Sklar, Poverty in the American Dream: Women and Children First (Boston 1983), p. 31.

22. T. Ferguson and J. Rogers, op. cit., p. 67.

23. P. Matera, Prosperity Lost (Reading, Massachusetts 1990), p. 15.

24. T. Ferguson and J. Rogers, op. cit., pp. 79–80.

25. J. Cohen and J. Rogers, Reaganism After Reagan, in Socialist Register 1988 (London 1988), p. 390. N. Harris, op. cit., pp. 106 and 111.

26. T. Ferguson and J. Rogers, op. cit., p. 111.

27. Ibid., p. 109.

28. P. Matera, op. cit., p. 107.

29. M. Goldfield, The Decline of Organized Labor in the United States (Chicago 1987), pp. 109, 193.

30. K. Moody, An Injury to All, op. cit., pp. 155 and 165–166.

31. The right to legal abortion was granted in the US Supreme Court’s Roe v. Wade ruling, issued in January 1973. Affirmative Action programmes were established to redress racial discrimination in employment and education in the wake of the 1964 Civil Rights Act. Quotas were established in many firms and government agencies to set guidelines for minimum compliance, but have rarely been adequately enforced.

32. See L. Tribe, Abortion: The Clash of Absolutes (New York 1990), p. 154. Federal funding for abortion for poor women has never been restored. By 1990, only 13 of the 50 states provided for poor women’s abortions, and 32 states denied funding even to victims of rape or incest.

33. A. Pinkney, The Myth of Black Progress (Cambridge 1984), pp. 153–154.

34. J.H. Wilkinson III, From Brown to Bakke – The Supreme Court and School Integration: 1954–1978 (New York 1979), pp. 267 and 275.

35. T. Ferguson and J. Rogers, op. cit., p. 119.

36. K. Phillips, The Politics of Rich and Poor (New York 1990), p. 53.

37. T. Ferguson and J. Rogers, op. cit., p. 121. See also K. Moody, Reagan, the Business Agenda and the Collapse of Labour, in Socialist Register 1987 (London 1987), pp. 165–166.

38. Ibid., p. 122.

39. J. Cohen and J. Rogers, op. cit., pp. 395–396.

40. K. Phillips, op. cit., p. 80. T. Ferguson and J. Rogers, op. cit., p 123.

41. K. Phillips, op. cit., p. 10.

42. Washington Post Weekly Edition, 4–10 November 1991.

43. K. Phillips., op. cit., p. 87. K. Stallard, B. Ehrenreich, H. Sklar, op. cit., p. 42.

44. Ibid., pp. 8 and 180. Chicago Sun Times, 1 January 1992. See also Labor Research Association, Economic Clips, November–December 1990. Business Week, 3 February 1992, p. 29.

45. R. Sherrill, The Looting Decade: S&Ls, Big Banks and Other Triumphs of Capitalism, in The Nation 251 : 17, 19 November 1990.

46. Chicago Tribune, 5 January 1992.

47. R. Sherrill, op. cit., pp. 609–610.

48. Ibid., p. 599.

49. The five Democratic Senators who made up four of the “Keating Five” include Senators Alan Cranston of California, Donald Riegle of Michigan, Dennis DeConcini of Arizona and John Glenn of Ohio. The Republican Senator is John McCain of Arizona. R. Sherrill, op. cit., p. 590.

50. US Dept. of Commerce, Bureau of the Census, Statistical Abstract of the United States, 1991 (Washington DC 1991) p. 391. Wall Street Journal, 21 January 1992.

51. Business Week, 19 August 1991, p. 80. P. Matera, op. cit., p. 139. M. Marable, Black Politics in Crisis, in The Progressive, January 1987, p. 20.

52. V. Navarro, op. cit., p. 437. P. Matera. op. cit., p. 18.

53. Business Week, 7 October 1991, p. 59.

54. Washington Post Weekly Edition, 28 October–3 November 1991, p. 28.

55. M. Feinberg, Warning: Work is Hazardous to Your Health, in The Progressive, January 1992, p. 26.

56. M.L. Kerr, Chickens Come Home to Roost, in The Progressive, January 1992, p. 29.

57. Chicago Sun Times, 1 January 1992.

58. M. Marable, Race and Realignment in American Politics, M. David, F. Pieil, M. Sprinker (eds.) in The Year Left (London 1985), p. 19.

59. L. Sigelman and S. Welch, Black Americans; Views of Racial inequality: The Dream Deferred (Cambridge 1991) p. 36.

60. M. Marable, Black America in Search of Itself, in The Progressive, November 1991, p. 22. Los Angeles Times, 16 December 1989. J.T. Gibbs, Young, Black and Male in America: An Endangered Species (Westport 1988) p. 7.

61. The Washington Post, 18 December 1990.

62. D.R. Judd, Segregation Forever? in The Nation, 9 December 1991, p. 742. M. Marable, How Capitalism Underdeveloped Black America (Boston 1983) p. 127. J.T. Gibbs, op. cit., p. 3.

63. Ibid., p. 127, quote from former director of the National Conference of Black Lawyers.

64. J.T. Gibbs, op. cit., pp. 100, 102.

65. Landry, The New Black Middle Class (Berkeley 1987), p. 229.

66. M. Marable, Black America in Search of Itself, op. cit., p. 22.

67. L. Brenner, The Lesser Evil: The Democratic Party (Seacaucus, NJ 1988) pp. 278–279, 188.

68. M. Marable, The Contradictory Contours of Black Political Culture, in The Year Left 2: Toward a Rainbow Socialism, M. Davis, M. Marable, F. Pfeil, M. Sprinkler (eds.) (London 1987), p. 6.

69. Quoted in The Crisis in Black Politics, in Socialist Worker (US), October 1990.

70. K. Moody, An Injury to All, op. cit., pp. 139–141.

71. Editorial, Socialist Worker (US), September 1981.

72. Solidarity Forever, ibid., October 1981.

73. K. Moody, An Injury to All, op. cit., p. 56.

74. A. Weinrub and W. Bollinger, The AFL-CIO in Central America (Oakland 1987), p. 16. With a budget that is 90 percent paid for by the US Government the AFL-CIO has worked with the US State Department to set up anti-Communist unions through Latin America, Asia and Africa.

75. A. Preis, Labor’s Giant Step (New York 1964), p. 85.

76. K. Moody, An Injury to All, op. cit., p. 125.

77. Ibid., pp. 148, 154, 166.

78. P. Matera, op. cit., pp. 112–113.

79. K. Moody, An Injury to All, op. cit., p. 185.

80. Ibid., pp. 116–117.

81. M. Goldfield, op. cit., p. 46. Statistics are much harder to measure for the 1980s, since during the Reagan administration, the Bureau of Labor Statistics stopped including strikes involving fewer than 1,000 workers in its strike statistics.

82. An important exception is the Watsonville Cannery strike which began in 1985. Of the 1,000 workers who struck against Watsonville, most of whom were Latino women, not one union member crossed the picket line during the entire 18 month strike. The company did not succeed in busting the union.

83. Brown and Sharpe: How Not to Win, in Socialist Worker (US), February 1983 and November 1983.

84. Victory to the P-9 Strike! in Socialist Worker (US), April 1986.

85. War in Austin, in Socialist Worker (US), March 1986.

86. Labor Research Association, Economic Notes, May–June 1991, January–February 1990.

87. V. Navarro, op. cit., p. 429.

88. K. Phillips, op. cit., pp. 89–90.

89. Ibid., p. 142.

90. Ibid., p. 133.

91. Ibid.

92. Business Week, 25 November 1991.

93. St Petersburg Times, 26 December 1991. Matera, op. cit., p. 22. Chicago Tribune, 5 January 1992.

94. C. Colastosi, Governor Shreds Michigan Safety Net, in the Guardian, 4 December 1991, p. 3. Newsweek, 2 December 1991, pp. 26–27. Wall Street Journal, 11 December 1991.

95. B. Day, Drug-Resistant TB Strains NYC Health, Guardian, 4 December 1991, p. 7. Chicago Tribune, 24 January 1992.

96. Wall Street Journal, 11 December 1991. New York Times, 18 December 1991.

97. J. Jacobson, Pax Americana: The New World Order, in New Politics III : 3 (New Series), Summer 1991, p. 18.

98. L. Selfa and A Maass, What’s Behind the Attack on Politically Correct? (Chicago 1991), p. 2.

99. This figure is from the Alan Guttmacher Institute. Quoted in S. Smith, Abortion: Every Woman’s Right (Chicago 1987), p. 5.

100. Defend Gay and Lesbian Rights in Socialist Worker (US), August 1986.

101. See California Lesbians and Gays Take to the Streets, in Socialist Worker (US), October 1991.

102. See Setback for Master Race, Socialist Review, December 1991, p. 22.

103. L. Hill, The Influence of National Socialist Political Theory in the Contemporary Political Thought of David Duke (unpublished paper, distributed by the Louisiana Coalition, 1990), p. 16.

104. Socialist Worker (US), December 1991.

105. Newsweek, 9 December 1991, p. 45.New York Times, 26 November 1991.

106. Time, 25 November 1991, p. 36. Business Week, 2 December 1991, p. 32. Washington Post National Weekly Edition, 11–7 November 1991.

107. Newsweek, 9 December 1991, p. 45.

108. Quoted in H. Gold, Bush’s Credit Bulimia: Gorge Big Banks, Starve Customers, The Nation, 23 December 1991, pp. 807–808.

109. Business Week, 7 October 1991.

110. Barron’s, 13 January 1992, p. 31.

111. T. Ferguson, J. Rogers, op. cit., p. 9.

112. Newsweek, 9 December 1991, p. 45. Washington Post National Weekly Edition, 11–17 November 1991, p. 8.

113. Washington Post National Weekly Edition, 11–17 November, p. 7.

114. New York Times, 22 November 1991.

115. Wall Street Journal, 13 January 1991. New York Times, 2 January 1992.

116. For productivity comparisons, see Monthly Labor Review, May 1991, p. 98. New York Times, 2 January 1992. Newsweek, 9 December 1991, p. 50.

117. Washington Post National Weekly Edition, 20–26 January 1992. K. Phillips, op. cit., p. 209.

118. W. Serrin, The Teamsters’ Toughest Contract, The Nation, 29 July/5 August 1991, p. 51.

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