The Second or Last, Great Depression?

In one of many notebooks I have from years of reading and research for topics I have written about, I found this on the first page of one of them. The entry is dated May 25, 2007, and is remarkably readable and coherent given that notes I take are usually stuff only I can make out. So this is what I wrote more than a dozen years ago and how it appears:

All indicators of a deepening and pervasive crisis of the American Empire threaten capitalist rule.

The general crisis became acute in 2001, creating unprecedented [word missing, so let’s say “pressure”] on institutions and organs of monopoly capitalist rule

A progressive deterioration of bourgeois society at all levels, personal, communal, institutional, governmental

The contradictions are becoming more exacerbated daily

The war goes badly, more are dying. The Democrats keep putting off “showdown” much to the angst of the majority of Americans

The gap between wealth and poverty widens, while something unprecedented has occurred – gap between the richest and the wealthy [widenend?]

Social degradation fuels irrationalism, religion for money, accommodation to status quo even more

Attack on “working America”

Education system is failing at all levels.

Where is the power, where are the forces to turn this around

If we don’t, what are we facing?

I then drew a line as I often do to draw conclusions or note a related point or points:

Privatization makes convergence point more likely; system becomes more fragile; loss of public power means there’s no recourse within the system.

The notebook is one of several I kept in the years Gregory Meyerson and I worked together and wrote about the crisis of the American empire – Pax Americana we called it in a 2008 essay – and how it sharpened fascist processes toward the plausibility of bringing fascism to power in its particular American form. Our work remains foundational to mine. Greg was the much stronger Marxist at the time. He helped me to grasp fascism as a function and property of capitalist development in its monopoly-finance, imperialist stage, and how inherent contradictions throughout American capitalism were systemic and always leading to a crisis of the system as a whole, and, consequently, the plausibility of a crisis of class rule owing to what Greg called a point of “converging crises” that would make repair and recovery of American capitalism impossible. How’s that for a mouthful and a headache but necessary if truth be known.

This is now what we have. Many have long recognized American capitalism to be in structural and irreversible crisis. Then COVID-19 served up a lowball so toxic and never seen before, a pandemic that has wiped away more than 40 million jobs in eight weeks while Trump & Co. seeks to mask its filthy and corrupt response by stoking up the culture wars. This is pure embrace of American-style fascist politics to carry on the tiresome dance with Wall Street, which brought the crisis and is also the fountainhead of American fascism.

There is more to think about. Almost in a flash, the depression brought by Trump & Co. with its sick and catastrophic handling of COVID-19 has delivered responses in the moment that have damaged severely, and perhaps beyond repair, Trump’s bid for another four years. Who can be sure in such a political maelstrom what he might try to pull off and succeed just as Hitler did when it looked like everything was going to shit? What would Trump & Co., a criminal enterprise led by a brutal boss, do if its so-called legal hold, i.e. constitutional, on power had to be relinquished? As these fascists, these gangsters, or whatever you call them,  lose power on the basis of what we still vainly regard as operational legitimacy in government, a delusion worthy of its own discussion, the more immediate and rather obvious question remains: What will The Boss and his fascist gang do then? Think he’ll go sullenly aboard the plane as Nixon did and then later say they will never have Donald Trump to kick around again? Really? What could The Boss set in motion, consciously or not, if he is convinced that he’s going down to defeat in November? There is no precedent for any of this in American history except in novels and films.

So much to sort out, and I remain steadfast in the belief that it is beyond one person’s capacity to do more than what is reasonable. That’s the best reason why we need a movement for change and progress in the twenty-first century. Whatever is possible for us to move in this direction will require each to recognize boundaries both real and perceived. Most people who think this way would agree that COVID-19 makes this clear from personal experience and ongoing education.

For me and many others, this crisis, this depression, is essentially capitalist and ecological. COVID-19 is one form of deadly payback when the movement of capital disrupts, modifies, alters, degrades, mutates and destroys natural processes around us and within us while shaping our thinking to accept all of it without alternatives. A century ago, capitalists relied on public relations gurus and psychologists to achieve the latter by generating processes that consciously aimed at subordinating human needs to profit and which took two distinct forms: those that coerced, punished and brutalized people who dissented or who were not considered white, Christian and American; and those conceived and designed to assuage and comfort the same intended cohort to believe they must have things and services sold in the marketplace to feel assuaged and comforted in having the things they believed they must have to feel good about themselves. These are terrorist and non-terrorist fascist processes, as I have explained elsewhere.

This helps us to understand why a century later we must at least recognize the plausibility that this is the last great depression of the American Empire given historic forces, objective and subjective, real and perceived, structural and ideological, that defines this crisis compared to its predecessors. In the process more is revealed to us about who we are, where we are going, and the choices we have made and decisions that await us daily and are so pressing.

Why the last depression?

Last month, I suggested that we have entered the Second Great Depression in our history. After pointing out some similarities and differences, I wrote: “This depression is the result of a protracted and unique crisis of the American Empire in decline and decay.” I’ve thought about this ever since Al Brilliant said it was too confusing to think of two great depressions, and especially since we agree that this one is worse. I had two other possibilities, also validated by Al, one which he initially suggested as the “final” depression, and then jumped on the other of the two I actually preferred. And so in quite skeletal form here and to be developed in my next book is why I’m now thinking of it as the last depression of Pax Americana in terminal decline.

First and foremost, this is a depression of the American Empire in structural and permanent crisis for which there is no solution other than fascism in the immediate and long term. It is an empire that can no longer take from the rest of the world what it once could while all the time squeezing its own people. Meanwhile, American Behemoth has come to maturity by preying on nature and humanity in a ways more monstrous than ever, a veritable holocaust of its own in world-historical terms. Closer to home, it is profoundly greater than what most Americans think or call the economy and that, friends, is a deadly serious problem.

Historically, it is even worse than what the great Marxist economist and writer Lewis Corey thought in 1934 when he saw the decline and decay of American capitalism as irreversible and leading to either fascism or revolution in the United States. The Decline of American Capitalism was wrong only in its precociousness. What Corey thought was happening then is happening now and for reasons that can only be grasped in the present. This is a depression of an empire not in the state of becoming one and adjusting to the changing conditions of world capitalism in the 1920s and 1930s. Such was the global setting for the Great Depression that brought fascism to power in Germany, another world war, and genocide.

The depression we have now entered is of greater magnitude and consequence. COVID-19 has made a structural and irreversible crisis of American and world capitalism, I shudder to say, terminal. This system cannot be repaired within the framework of monopoly-finance capital unless the whole system goes fascist – and that is no repair but a disaster in the making. This is the only card Trump can play to convince enough white people and Wall Street that only he can save capitalism as they know it.

The Trump dance with Wall Street is in full swing now as The Donald does what he can to stay on the floor, always hoping what he or his gangsters do publicly and in the shadows will win back the audience, or at least enough of it. Yet it appears Joe Biden will defeat Trump in November. Maybe even Mitch and just enough of his fellow henchmen in the Senate also will go down to defeat.

What a Biden victory will mean in the short term is indeed the end of a nightmare but far from eliminating conditions that created it. At the moment, there is no true social-democratic compromise in Biden’s politics. The olive branches extended to Sanders are meaningless because the latter capitulated to capitalist forces, ultimately discrediting himself as any kind of a socialist who, more importantly, gave up his great call to all workers to make the “political revolution.” I sure as hell tried as did many people I know. When that happened out went the only real social-democratic alternative needed for the counterattack against fascism and a truly a dark night for socialism.

All this questioning leads nowhere except if we anchor ourselves in facts, most of which affirm the skeletal views I had of a coming crisis in 2007. It is amazing how quickly things happen now and how important it is to still be grounded in the recent past. We never recovered from the Great Recession of 2008. Obama saved Wall Street but not Main Street. We know this. But how much of Obama’s failure, which is the failure of neoliberalism, do we attribute correctly to Trump becoming president? If we do, we might know more about why this is a depression, what caused it, and why we would never want another.

Inequality, Inequality, and More Inequality

Here’s one fact and its consequences to think about. In an essay they wrote as part of a collection in a 2011 book (Consequences of Economic Downturn: Beyond the Usual Economics: Palgrave Macmillan), Jon D. Wisman and Barton Barker compared the causes of the Wall Street crash of 1929 and the Great Recession 2008 and concluded that among all similarities and differences the most important feature common to both was rising inequality. The statistics they provide are convincing and if you’re really interested you should check them out for yourself.

What I found more compelling for purposes here was how Wisman and Barker treated income, wealth, capital, etc., not as things but as relations that make up a giant force field of thought, behavior, impulse, reflection, you know, the whole mix we call life. Anyway, they discuss how rising inequality generated what they call “three dynamics” that exacerbated already existing trends leading to the Wall Street Crash in 1929 and the onset of The Great Depression, and the period of roughly 1978 to 2008 that ultimately resulted in the Great Recession. 

Here’s my summary of what they wrote with some additional comments. People who worked hard in the 1920s worked even harder to keep consuming in ways they believed were necessary to maintain what Wisman and Barker term “their relative social status” but always “decreasing saving and augmenting their indebtedness” as they did. Meanwhile, their compulsion to consume was driven by elites whose share of income and wealth increased and who increasingly turned their profits toward speculation by flooding financial markets with credit that kept interest rates low while stimulating the creation of new credit instruments. Finally, as the rich continued to take larger shares of wealth and income, they gained more command over ideology and politics and as a result, managed to get politicians elected who reduced taxes on corporations and the wealthy, gutting government and thus its spending, deregulation, etc. Then they turned to their gurus and operatives who convinced enough of the public to believe that the gap between rich and poor was narrowing because everyone had the power to be a capitalist himself.

Sound familiar? Think of how what emerged in the 1920s to bring about a depression was already developing here, given the failure to recover from a crisis in 2008 that admittedly was the worst since the 1930s. When will we begin to grasp the real impact of COVID-19 as the killer virus bringing down an already crumbling and anarchic society, governed now by fascists in the service of capitalists who are themselves ruled by capitalist imperatives of accumulation, investment, and profit in the same way a deadly coronavirus emerges in an organism or ecosystem that spreads by killing healthy human cells?

You get the picture. The tragedy is that we don’t see how bad things are. Objectively, rising inequality is masked by the perpetual belief that there is no alternative other than to fix a system that can’t be fixed. This is highly suggestive of the role each of us plays in the making of this depression and the possibility that we can recognize and then realize through our actions that it is necessary to create something better for the vast majority and the only way to do this is by breaking with capital in some meaningful way. Here is how we can halt the steady and ominous march to fascism, to create democracy by eradicating all forms of white supremacy, and then possibly toward re-imagining the world along socialist lines. To do this requires that we confront this demonic idea that we must work harder to sustain our relative social status, thus bending to the dictates of capital. This is the hold of the market and belief that there is no alternative to it or the thing that even rules of it, which is money. This is the kind of thinking in the face of disaster that makes this the last depression under capitalism in the United States. This is our test.

Scientists want us to do the right thing about COVID-19 and the most conscious and responsible of us are listening to these scientists. There is another science we need to recognize which can help us live more fully and in happiness, individually and collectively. It is a science that we must make central in the education of our children and grandchildren who we hope will remake the world in their own image, one that offers more than ours ever did in our best moments. This is the science of political economy: to understand how laws that define the movement and function of capital can be understood with as much a degree of difficulty as required, and when grasped as essentially inimical to human life and the life of the planet. This is a time when Marx’s general law of capitalist accumulation would be regarded with the same respect as Darwin’s principle of natural selection.

When based on the science of political economy operating in the realm of decency and respect for humans and nature alike, we can then cry out that this will be the last depression in America under capitalism because we can never put an end to inequality without its 

Posted in The Week in Black and White.