— The Editors
THE CREDIT CRISIS rocketing through the global financial system in August and September is the leading indicator of serious economic turbulence. The stock market’s 1000-point roller-coaster slide, down when the shock hit and back up when the Federal Reserve cut interest rates by a half percent, was the first wave. As of late October, globally and in the United States, markets were falling again as analysts warned that the credit and housing market crunch could pull the U.S. economy into recession — though when is not really predictable.
First question: What will be the immediate impact of the housing crunch and, looking down the road, the timing, length and depth of the downturn to come? Speculation on such matters is what economists are for. Elsewhere in this issue we present informed commentary by Nomi Prins on subprime mortgages and the bailout of the banks; here we’ll focus on possible political implications.
Second question: If pressures of economic failure begin pressing in on a presidency entering its final year, will the Bush regime tend to back away from, or on the contrary intensify, its international adventurism? In particular, will it reluctantly give up, or carry through to the insane end, its war plans against Iran?
Given this last question’s life-or-death implications for millions of people and possibly the future of humanity, it’s important to give a clear and firm answer, so here’s ours: We don’t know. We’ll explain why we think that the outcome is not inevitable, and that the actions of people in this country and globally can still affect it. But since predicting the future is so much harder than analyzing the past, we’ll start with some recent historical precedents that are worth considering.
From Watergate to Iran-Contra to Iraq
Richard Nixon’s presidency, by 1973, was mired in scandals and criminal misconduct, blatant violations of the Constitution and a brutal unpopular war. Yet the full-scale collapse of his administration, leading to ultimate impeachment and resignation in August 1974, began when the full force of the “stagflation recession” hit in the wake of the October 1973 Middle East war.
A decade later, the administration of Ronald Reagan would be caught redhanded, not only in arming murderous contra mercenaries in violation of explicit Congressional bans but in financing these operations with illegal secret arms sales to the Islamic Republic of Iran. During these same years, the administration was also “fighting Communism” by arming Osama Bin Laden in Afghanistan, helping to bring us al-Qaeda; and it was also supplying the makings for chemical weapons to Saddam Hussein in Iraq. But it was an economic downturn in 1986 that set in motion the process leading to the purge of Reagan’s White House and his own reduction to a figurehead (although shielded from formal impeachment and potential prosecution due to the early signs of his senile dementia).
Fast forward to today’s George W. Bush presidency. This regime has combined all the illegal conduct, abuse of power and war crimes of the Nixon and Reagan eras, and as the saying goes, “taken them to the next level.” Nonetheless, like its predecessors, this administration has presided over a great capitalist success story — the spectacular enrichment of the wealthiest Americans and the enhancement of corporate power at the expense of working-class people. So long as the prosperity party for the rich and powerful continued, even Bush’s catastrophic war in Iraq, a debacle whose legacy will haunt U.S. imperialism longer than the defeat in Vietnam ever did, was of secondary importance.
Now we come to find out that the Bush regime’s management of “prosperity” was as competent and far-sighted as its strategies for “rebuilding” Iraq and New Orleans. Rampant deregulation has created a credit system that’s really an Enron-type casino, and not only in the housing market but throughout the banking and corporate borrowing sectors. Tax cuts for the wealthy (to say nothing of Bush’s obscene war spending), and throwing the federal budget back into massive deficit, have cancelled the possibilities for fighting off recession with the standard “Keynesian” methods of deficit spending.
If the shocking 100,000 employment decline in the August figures is followed by serious consequences of the credit crunch this fall, the final props under this most destructive of presidencies may be knocked away. The Federal Reserve’s bold cut in short-term interest rates stabilized the stock market panic — indeed, the expectation of further rate cuts may be producing a new stock market bubble. But these moves also had the effect of raising longterm interest rates and kicking the stuffing out of an already-declining U.S. dollar. All this can also affect the willingness of foreign investors and governments to buy the bonds that fund the U.S. debt.
Once again, we don’t know exactly where this leads or, more importantly, how long it could take to get there. But how ironic it would be if the economy succeeded in bringing down Bush after Abu Ghraib and Guantanamo, lying about Iraq and abandoning New Orleans never did so.
Coming Disasters Foretold?
Certainly the administration’s attempt to create an anti-Iranian hysteria around Tehran’s nuclear development program (real), supply of sophisticated explosive devices to Iraqi Shia militias (alleged), and connections with “al-Qaeda in Iraq” and the Taliban in Afghanistan (ridiculous) is in full swing. All this was to be expected after the reports that the office of Dick Cheney would be rolling out the anti-Iran propaganda drive in September.
We keep hearing that, for example, Cheney and the neocons are pushing for war before Bush leaves office and maybe plotting an “incident” to trigger it; that the mystery Israeli air strike inside Syria may have been a provocation toward this end; that an absolutely massive air campaign with thousands of targets to destroy Iran’s infrastructure and shatter its cohesion as a viable nation-state, is all ready to roll.
These rumors of imminent war must be set against countervailing real-world facts finally imposing themselves on the wishes of an administration that believed for so long in creating its own “reality.” It’s reliably leaked that the U.S. military command, except for the Air Force which believes it can bomb reality out of existence, will resist if not openly revolt against the insanity of a new war. Hence, reportedly, a backup plan for “surgical strikes” against the facilities of Iran’s Revolutionary Guard. Right: Remember the “surgical precision bombing” of Baghdad?
Under whatever pretext this war may be packaged, there are no U.S. troops available for even a partial post-bombing occupation of Iran; the consequences in Iraq for U.S. forces and Iraqi politics would be absolutely incalculable; the immediate effect on oil prices and the world economy would be horrendous, and the longterm implications unknown; there is practically no U.S. domestic support for war with Iran (although almost no active opposition from leading Democrats either).
The potential hysteria over “an imminent Iranian nuclear weapon” is fading; after the exposure of all the lies about Saddam Hussein’s “WMDs,” this time the Bush-Cheney propaganda machine cannot control the flow of information showing that Iran’s uranium-enrichment program is far below the levels claimed by the Armageddon-mongers or, for that matter, the extravagant boasts of Iranian president Ahmedinejad.
On the military side, the Rumsfeld doctrine of cost-free lightning wars of conquest has been discredited along with the demise of its author. On the political side, the power of the neoconservative war party has been declining for the past two years, all the more so since the failure of the Israeli-U.S. assault on Lebanon in 2006.
The war advocates remain entrenched of course in Dick Cheney’s bunker, and in the dominant Likudnik wing of the powerful Israel Lobby. However, the warmongering politics of these so-called “supporters of Israel” are coming under increasing public scrutiny and criticism, and it’s also becoming clearer that they don’t represent the sentiments of the Israeli public either. It’s very likely that Arab governments would be delighted to see the United States hit Iran — but the anger of populations of Middle East countries over such an outrage, on top of their own social grievances, could provide the spark for an explosion.
Movement Makes a Difference
We think that the strategic decision for war with Iran was probably made by the Bush-Cheney regime three years ago, when they thought the conquest and occupation of Iraq were a big “success.” But the failure in Iraq and the collapse of international as well as domestic support, we believe, made it impossible to implement the plan. Today’s open pleas from the likes of Norman Podhoretz to “bomb Iran before it’s too late” look like cries of weakness rather than confidence; if the neoconservatives really believed war was imminent they’d probably not openly advertise it.
That doesn’t mean the threat is past — far from it. The capos in Washington may feel that the French government of Nicholas Sarkozy may be ready to play the poodle role of Britain’s Tony Blair in the Iraq disaster. Suddenly, however, Sarkozy’s government has been hit by public-sector strikes and looks much less strong than when he swept into office.
There’s still a very real chance for ideology and imperial delusion to win out over rational risk-benefit calculation. But we think the antiwar movement can affect the balance, and here’s why: Domestic and world politics are different now than they were in early 2003, before the invasion of Iraq.
At that point — under the influence of 9/11, the appearance of “success” in Afghanistan and the general illusion of overwhelming U.S. dominance — American political and military elites and the capitalist class had all been lined up for the war. The combined temptations of getting rid of Saddam, intimidating all potential adversaries and controlling Middle East oil overwhelmed elite doubts and resistance. Under those circumstances, the magnificent outpouring of demonstrations internationally and in the United States — the largest antiwar mobilization in world history — couldn’t prevent the war.
Today, the elites are seriously divided in the wake of an impasse in Afghanistan, bloody and chaotic failure in Iraq, the U.S.-Israeli failure to crush Islamist-national resistance forces in Palestine and Lebanon, rising Iranian influence and the Latin American revolt against the ravages of the neoliberal market and “free trade.” The Bush administration’s confident appearance of political control and competence is gone.
As we go to press, another factor has suddenly emerged, which is not directly related to war or credit crises but must affect ruling-class calculations of how far down the U.S. working class can be shoved. Workers at Chrysler, against all expectations, almost rejected the national contract (see Dianne Feeley’s report in this issue). Despite the contract’s apparent narrow ratification with its dire consequences, this expression of rank-and-file anger shows that the magic of cutting wages in half, establishing a two-tier work force, taking away health benefits and replacing fulltime jobs with “permanent temporary” workers will not create a stable environment for profitable operations in corporate America.
The fight over the tentative agreement at Chrysler may not signal the beginning of a mass labor upsurge — on the contrary, it’s more an attempt to halt a massive series of retreats and defeats. But this development, added to severe uncertainty about the stability of the U.S. and international credit system and possibly the future of the world economy, will further affect ruling-class confidence. We suspect the scales are tilting against a discredited administration being allowed to embark on its most dangerous adventure in its final year of existence.
For the antiwar struggle, that means that the job now is not only to observe, but to mobilize — to re-energize the struggle for immediate U.S. withdrawal from Iraq, and also to put rejecting the war drive against Iran at the top of the movement’s agenda.
This is not only a struggle for today and the next year, but beyond 2008 as well. No one should be deluded that the threat of war with Iran, the horror of Iraq, or the imperial effort to crush the Palestinian people will be over when and if Hillary Clinton or Barack Obama occupy the White House in January 2009.
from ATC 131 (November/December 2007)