Monday, February 20, 2012

U.S.-from "second slump" to "recovery" ?

More scintillating on-the-one-hand-but-on-the-other-hand analysis from Alex Callinicos:

Obama’s recovery is far from certain

by Alex Callinicos

“It's halftime in America, too… This country can’t be knocked out with one punch. Our second half is about to begin.”

Thus said Clint Eastwood in what has proved to be a hugely controversial TV advert for Chrysler shown during the halftime break in the Super Bowl match a couple of weeks ago.

Karl Rove, the Republican Party’s arch-plotter, has accused Chrysler of making party-political propaganda for Barack Obama.

Chrysler, along with General Motors (GM), the one-time titan of the global car industry, was forced into bankruptcy by the Obama administration early in 2009. The US Treasury took majority control of both firms and bullied the United Autoworkers Union to accept a brutal programme of plant closures and the slashing of wages and benefits for new workers.

Now both GM and Chrysler are enjoying a recovery in output and sales. This is part of a much broader revival in the US manufacturing industry, which has added 400,000 factory jobs—more than any other big developed economy—in the past two years.

The Financial Times reported last Saturday, “A steady stream of US and foreign-owned companies is announcing plant openings and expansions. General Electric, for example, which makes products from jet engines to medical scanners, also advertised during the Super Bowl to promote its US job creation record.

“Japanese car group Toyota said this week it would spend $400 million and hire about 400 more people in the US as it transferred production of its Highlander SUV from Japan to Indiana. Companies have even been ‘reshoring’ factories from China, which has undergone a huge manufacturing boom but has been made less competitive by rising wage costs.”

Sluggish

More broadly, output and employment are expanding in the US, albeit at a sluggish rate. This is good news for Obama, whose terrible approval rate in the opinion polls has been driven by economic stagnation and high levels of joblessness.

His re-election prospects in November are also being helped by the increasingly farcical Republican primaries. The supposed frontrunner—the Mormon private equity multi-millionaire Mitt Romney—can’t seem to shake off his rivals.

These are the shop-soiled Newt Gingrich, Catholic homophobe Rick Santorum and Ron Paul, who has spoken in defence of the Southern Confederacy in the American Civil War.

It’s hard to imagine that the US ruling class would prefer any of this bunch to Obama. After all, he has been sounding awfully imperial of late, declaring in his State of the Union speech last month that “America is back”.

The political philosopher Andrew Levine commented, “There are indications of late that Obama has taken on board [the neoconservatives’] main contention—that American power is not in decline; that, quite the contrary, we are on the threshold of another glorious American century. The plain implication is that there is no hard crash in the offing, and therefore no need for the empire to change course. American world dominance isn’t over yet, and won’t be for the foreseeable future.”

Now it’s certainly true that the recent proclamations of US decline have been greatly over-stated. But it’s a bit premature for Obama, like Ronald Reagan before him, to announce, “It’s morning in America again.”

The improvement in the US economy is relative—both to its own recent dismal performance and to the condition of its rivals. The two great export machines of China and Germany are currently slowing down. The US looks good in comparison.

But the world economy remains stuck in the doldrums of a crisis that could easily get worse. And bushfires are spreading in precisely the part of the world where Obama wants to cut down US military commitments—the Middle East. Look at Egypt, Syria, and Iran.

If any of these begin really to blaze, then the US ruling class will soon be brutally reminded of the limits of its power.


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