Obama and the Weimar Republic

History does not repeat itself, but it can rhyme (attributed to Samuel Clemens (Mark Twain))

Whether the signing of the deficit limit bill will “calm bond markets” is open to question, given the ravenous speculative appetite of the lords and vassals of high (and low) finance.  Aided and abetted by their cooperative colleagues in the “rating agencies”, financial speculators can and do create their own profitable game: create instability, then literally capitalize on it.

While the impact on predatory finance may be unclear, the political consequences of this deficit “compromise” are easier to anticipate. The US Tea Party movement has a dream, a white America under the despotic rule of capital.  The deficit “compromise” brings that dream closer to fulfilment.

The route by which that dream would be realized has been obvious since mid-2009 during the fight in Congress over reforming the appalling “health” system in the United States.  It matured to a clear and consistent strategy during the deficit limit conflict.  The strategy is to render Congress and other formally democratic institutions as dysfunctional as possible, thereby casting doubt upon the credibility and viability of representative government and the electoral process.

Elections in the United States are far from free and fair, but they have in the past, and might in the future, produce legislative majorities for progressive reform, however mild.  This occurred in 2008, and the agents of capital moved quickly to weaken and undermine reform measures.  The two years of large Democratic majorities in the House and Senate were characterized by missed opportunities, but more important, half measures easily discredited:  medical reform without a public option, a fiscal stimulus too small to be effective, financial regulation with major loop-holes, insubstantial gestures of withdrawal from Iraq and Afghanistan, to list the most obvious.

While the very short term effect of some of these was to prevent the bad from becoming worse (e.g., the fiscal stimulus), they quickly became clubs by which the Far Right would bludgeon progressive reform and the democratic process itself.  The inadequate fiscal stimulus discredited the brief return of countercyclical fiscal policy.  The debt limit agreement formalizes this dis-accreditation, by legislating a decade of fiscal austerity.

Through the purposeful intervention of the capitalists of the “health” industry, a medical reform bill was passed that is so flawed that in several states even its implementation is in serious doubt.  The lesson the bill seems to convey to people in the United States is that even Democrats shun the prospect of health care delivered by the public sector, and what “the government” can design is clumsy, narrow and ineffective.

In December 1924 Germans elected fourteen members of the Nazi Party (National Socialist Workers Party) to the Reichstag out of a total of 493.  From the moment they entered the Reichstag the Nazi tactic was to disrupt normal operations of the legislature in order to demonstrate the decadence of democratic institutions.

The Tea Party Republican Congress members, as with the Nazis eighty years ago, are not creatures of compromise.  They are “high-stakes rollers” whose grasp on power will be achieved through extreme tactics or not at all. The possibility that the conflict over debt and deficit might “back-fire” causes them no anxiety.  Like the Nazis, their existence depends upon their own outrage, extremism and, if you will, “nuttiness”.

The agreement accepted by President Barack Obama to temporarily resolve the debt limit conflict revealed him, in the eyes of the Tea Party Republicans, as a weak opponent unable to match them in a straight fight, much as Heinrich Brüning, German Chancellor 1930-32, was viewed by the Nazis.

Having chosen not to fight on the strong ground of a fairer tax burden across classes and no budget cuts that harm the majority, Obama will be forced to fight on weak ground.  It will be weak, indeed.  By election time 2012, the majority of Americans will suffer from the cuts in social programs to which he agreed.  Lower public expenditure will depress the present meager rate of growth, ensuring that unemployment remains at nine to ten percent. Far from smaller, the public debt will increase as a stagnant economy undermines revenue growth, perpetuating the fiscal deficit and ensuring repeated, debilitating battles over the public debt limit.

A president running for re-election with double-digit unemployment, defending cuts in social expenditure and having demonstrably failed to deliver on his promise to reduce deficit and debt is the fulfillment of the greatest hopes of the Tea Party Republicans.  They will fight on their ground, against a self-weakened opponent in the White House and Democrats in Congress who with few exceptions are weaker still.

After falling from 14 to twelve representatives in 1928, the Nazi’s became the second largest party in the Reichstag in 1930 with 107 out of 577 seats.  At that point the tactics of disruption became a strategy for power.  The next US election could be the Tea Party’s Reichstag-1930 moment.

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