Letter from the US: Inequality, greenhouse gases on the rise

In his State of the Union address on January 28, United States President Barack Obama highlighted growing inequality in the US. He also pledged to take steps to cut greenhouse gases in the atmosphere.

So what has the Obama administration done recently on both counts?

First, it has agreed to a new budget with the Republicans that does not renew benefits for the long-term unemployed. This will immediately impoverish 1.3 million workers. Every day a new batch of the jobless becomes part of the long-term unemployed.

Even if these benefits were to be enacted, Obama was only asking that they be extended for three months. But an extra three months would not make a dent in what has become a hallmark of the weak recovery — the growth of the long term unemployed.

There is no chance they would be extended beyond three months.

Obama’s solution? He recently called together a group of CEOs of major corporations and pleaded with them to hire more of the long-term unemployed. They promised to think about it.

Hitting the poor

The new budget restored some of the sharp social spending cuts directly affecting workers that went into effect under the bipartisan “sequester” agreement last year. But not all, so many of those cuts remain.

Second, a new bipartisan farm bill continues huge subsidies to Big Agriculture, while cutting food aid (known as “food stamps”) for the poorest section of the working class by nearly US$9 billion (about A$10.5 billion). This comes on top of the sequester cut to the program of $5 billion, which was not restored in the new budget.

These cuts in already inadequate food aid will hit 1.7 million people, many of them children. It will hit Blacks and Latinos especially hard.

One example of those affected is Raymond Garza, who had a good job as a plumber but became disabled a few years ago. On January 29, he had to go to a church charity in Oakland, California, near where I live, for a free bag of food.

Garza’s food stamp ration of $176 a month had just run out. “Every day I wake up, I’m struggling to eat,” he said. “I got my food stamps on the 10th [of January]. Today’s the 29th. I got another ten days before I can go buy some food again.”

Before the sequester cuts, his food stamp allotment was $206 a month. Now it will be cut even further, despite already being less than $6 a day. This is about enough for one cup of coffee and a pastry at Starbucks.

The new cut was reached in a “compromise” between Republicans who wanted to cut $39 billion, and Democrats who wanted to cut “only” $4-5 billion.

This shows how politics works in the US today. Republicans make outrageous proposals to impoverish workers, Democrats look good by seeking less extreme impoverishing measures, and then they “compromise”.

Minimum wage

Walmart, which caters to working-class customers, complained of a loss of revenue in January because the earlier sequester cuts to food stamps meant poorer workers had less money to spend in its stores.

It was the Occupy movement in 2011 that raised public awareness of growing inequality. One movement that has come out of Occupy is the struggle to raise the minimum wage.

This has two aspects. One has been strikes and demonstrations at Walmart and fast food outlets for a minimum wage rise. The other is demonstrations and ballot measures at the city and state levels to raise the minimum wage by law.

Some Democrats have supported such efforts, but not all. Republicans are opposed.

It is not only the capitalists in the low-wage sector who resist raising the minimum wage, but the business class as a whole. Raising the minimum wage will create pressure to raise all wages.

The federal minimum wage is now $7.25 an hour, well below its historic level. Obama proposes a minimum wage raise to $10.10 an hour, still below the historic level.

Obama makes the proposal knowing full well it will not pass Congress. The two-party shell game goes on.

Carbon emissions

On Obama’s promise to cut carbon emissions, there are two things to note. Shortly after his State of the Union address, a report was issued by the State Department stating that the proposed X-L pipeline to bring tar sands oil sludge from Canada over 1000 miles down to the Gulf Coast for refining would have no impact on carbon emissions.

The report’s reasoning was that even if the pipeline was not built, the tar sands oil would be sent anyway, by truck or train, so there would be the same effect on carbon emissions if the pipeline was built or not.

The whole process of extracting oil from the tar sands sludge adds to pollution to water and air, and to carbon emissions in particular. Tar sands oil is especially dirty.

Even after the process of liquefying it so it can be transported, it is so dirty that the refining process produces more pollution.

Whether it comes by truck, train or pipeline, there will be leaks, fires and explosions to boot.

The tar sands oil should be left in the ground, and not transported across the US or Canada by any means. Obama will not issue such a ban.

It would be a partial victory if Obama was forced to not approve the pipeline, but the struggle would have to continue.

Obama’s real program was contained in another key portion of his address. There was triumphal boasting that US production of natural gas and oil had reached new levels, and would continue to expand, due to new technology.

That technology is fracking, although he did not use the word as it has become associated with water pollution and the triggering of earthquakes.

What Obama promised was greater reliance on and production of fossil fuels — bad news for the planet.

Growing inequality between the capitalists and workers has accelerated since the Great Recession began in 2007. But it has been developing over decades under both Democratic and Republican administrations.

This is the result of the workings of the capitalist system itself, which is based on inequality. It has been made worse by the erosion of the labour movement in recent decades. It has been unable to counter the capitalist offensive against workers, either economically or politically, as it remains tied to the capitalist Democratic Party.

The slow but sure destruction of the environment has also proceeded apace. Obama’s boast about new oil and gas production in the US means it has a leg-up on its imperialist competitors. Energy costs for industry in the US are only half what it is in Europe.

The imperatives of capitalist competition drive growth in fossil fuel production and weaken environmental regulations. Already there is talk in the European Union of cutting back on such regulations.

Multibillionaire Warren Buffett, who sometimes tells the truth, said way back in 2006: “There’s a class war, all right, but it’s my class, the rich class, that’s making war, and we’re winning.”

The editors of Monthly Review wrote in January’s issue: “What should the response of the U.S. working class and the working class in the rest of the advanced capitalist world [be]? …

“The only possible answer to capital’s unlimited decades-long assault on labor is to unleash a class struggle from below in response.

“But economic resistance alone is never sufficient; and all the less so in those cases where workers are economically hemmed in as at present.

“The ‘very necessity of general political action,’ Marx wrote in Value, Price and Profit, ‘affords the proof that in its merely economic action capital is the stronger side.’

“The revolt of the underlying population therefore must take the form of a general political offensive against what is an unequal and irrational system. If the future of humanity and that of capitalism can be said to have coincided at one time, this is certainly no longer the case today.

“All reality and all hope demand a new system of production and consumption, beyond capital and beyond mere wage labor.”

[Barry Sheppard was a long-time leader of the US Socialist Workers Party and the Fourth International. He recounts his experience in the SWP in a two-volume book, The Party — the Socialist Workers Party 1960-1988, available from Resistance Books. Read more of Sheppard's articles.]


Seattle socialist councillor Kshama Sawant, elected last year on a platform including raising the minum wage to $15, responds to Obama's State of the Union speech.

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