The bankers’ coup: Three flagrant violations of democracy from 2011
DECEMBER 18, 2011
One fact conveniently omitted from most references to the bank bailout of 2008 was that the vast majority of the population opposed it. Congress received an unprecedented flood of letters and calls demanding that it not turn hundreds of billions of dollars over to Wall Street. But the Democratic and Republican politicians did it anyway.
This flagrant violation of democracy was hardly unusual. The bank bailout culminated decades of growing political power among finance capital. It opened up a new period of blatant warfare against labor unions, public education, Social Security, Medicare and social services.
In the bankers’ offensive, still in full swing in 2011, they have occasionally deemed it necessary to entirely eliminate even the pretense of “democracy.” Below we list three cases. We should study these examples; in them, we may not be just viewing history, but the future of capitalism.
The Congressional “super-committee.” The debt deal struck in August was no “compromise.” It is a bipartisan attack launched by the White House and its allies in Congress on behalf of the banks and corporations against the living standards of workers: $917 billion in spending cuts, with no tax increases on the wealthy. A “super-committee” was then tasked with coming up with an additional $1.5 trillion in budget cuts and tax increases, and if it failed—which it did—that would trigger more cuts! The entire “debt ceiling” crisis was entirely fabricated by Wall Street and its lieutenants in Washington, a deliberate act of sabotage to rapidly eliminate decades of hard-won government programs.
Michigan’s “emergency managers.” Several of the poorest cities in Michigan, once industrial powerhouses, are currently subjected to “emergency managers” appointed by the governor. Skipping over the elected officials and legislature, the manager can unilaterally eliminate programs, lay off workers and void contracts, including those made with labor unions. Who are these managers? They are direct servants of finance capital, whose only objective is to cut social spending to restore the “confidence” of financial investors.
The State Senate just passed a law that would allow these managers to remain in place even if voters successfully file a petition to freeze the emergency manager law! If the state appoints an emergency manager for Detroit, a full majority of African Americans in Michigan will be living in municipalities controlled by such emergency managers.
The new European Union treaty. While dealing with our own set of problems in the United States, it can sometimes be daunting to follow the complex political and economic dealings across the Atlantic. But it’s the same problem—a full-scale, bank-directed attack on labor unions and the so-called welfare state. The biggest banks are using their financial leverage to force weaker European economies (namely Ireland, Greece, Portugal and Spain) into drastic cutback measures. That was a prelude to a bankers-directed attack on workers’ rights in the larger economies, including Italy and France. These countries’ elected politicians duly grimace in front of the cameras, but insist there is no alternative. As with the U.S. bank bailout in 2008 and debt crisis in 2011, they announce that the emergency leaves no time for political deliberation, or democratic decision-making.
The proposed European Union treaty is the culmination of this process. It aims to not just “stabilize” the European economies, but impose a new order in which the power of the banks is streamlined and centralized, so that economic decision-making is shielded from the will of the people. The Greek Prime Minister George Papandreou was even forced to resign for having dared to suggest that the Greek people should have an opportunity to vote in a referendum on the bank-imposed austerity plan. The new treaty obliges EU members to change their constitutions to accept a “balanced-budget rule” that will hold down social spending, and those that dare exercise their sovereignty will be brought before the continent-wide European Court of Justice. Debtors’ jails fell out of use a few hundred years ago, but have apparently returned with entire nation-states potentially held prisoner.
The bank bailout
culminated decades of
growing political power
among finance capital. It
opened up a new period
of blatant warfare against
labor unions, public
Security, Medicare and
These examples show the general tendency of capitalism to concentrate economic and political power in ever fewer hands, and in particular the capacity of the world’s major banks to knock down all institutions, constitutions and political traditions that stand in their way.
Capitalism shedding its democratic pretenses
In class societies of the past, there was never a question as to who held political power. Those who possessed disproportionate wealth—the kings, queens, lords and slaveholders—dominated politics openly and without shame. Requiring neither the consent of the governed nor the illusion of choice, they claimed that divine providence or a superior bloodline had granted their place atop society.
Modern capitalism was different—at least in its homelands, but not in its colonies. It established new political ideas and institutions based on the principle that governments would be “of, by and for the people” invested with inalienable rights. It required intense struggle—including the Civil War—to make the country even start to match this rhetoric, as oppressed groups fought for inclusion into the citizenry.
But after all that struggle and sacrifice, and all those reforms, “the people” have never ruled. For as those at the bottom of society achieved formal, civil and political rights, the real power—to determine the shape and direction of the economy—has remained in the hands of a tiny group of capitalists, and within that tiny group an even smaller group of banks. While this tiny group long tolerated the limited practice of “democracy”—indeed preferring it to the open rule practiced by their royal and aristocratic predecessors—they clearly are not married to it.
Real democracy starts with overthrowing the bankers’ dictatorship
The current media spin is that 2011 was the year of the protester, and thus a reinvigoration of democracy. Some even go so far as to say that the Egyptian revolution aimed at copying “the freedoms we have here.” No. 2011 was a year of suppressed democracy, of protesters arrested, pepper-sprayed and clubbed, or worse. It was a year of increasingly open dictatorship of the banks.
But it was also a year of struggle—but not struggle to return to the “democracy” of the past in some golden age that never existed. The people who took to the streets, often risking life and limb, did not come for the vote or formal citizenship. They weren’t demanding a better law here and there. They weren’t demanding to be included in an economic system that is rigged against them, or a better politician to vote for. When they demand democracy, they want something entirely new.
The Egyptian struggle showed that the overthrow of an individual dictator is relatively easy compared to the overthrow of the institutions of the dictatorship. It requires raising the big questions—of what kind of society and economy we want. The Party for Socialism and Liberation is organizing towards the revolutionary replacement of one power, the Wall Street dictatorship, with another power: the vast majority of society. That is real democracy—poor and working people finally taking control of their collective destiny.
Content may be reprinted with credit to LiberationNews.org.