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Leo Panitch and Sam GIndin PT2: Major structural change or effective short term reforms requires addressing democratic decision making starting with making banks a public utility

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PAUL JAY, SENIOR EDITOR, TRNN: Welcome to The Real News Network. I’m Paul Jay in Baltimore.

For regular viewers of The Real News Network, you’ll know one of my favorite quotations is from George Will, something he said on the George Stephanopoulos show in the last presidential election. Here’s what he had to say.


GEORGE WILL, JOURNALIST AND AUTHOR: Surely in a democracy it’s time for us to quit being sentimental and say, the question we settle in an election is not whether elites shall rule, but which elite shall rule.


JAY: So I’ve always thought that was rather perceptive of George Will and something he said in anger and probably would never say again publicly. But that pretty much is the situation, different sections of the American elite competing to have power. The question is: what would a government look like, what would public policy look like if there was a government that didn’t represent just one section of the American elite or the other?

Now joining us to help us answer that question is, first of all, Professor Leo Panitch. He’s a Canadian research chair in comparative political economy and a distinguished research professor of political science at York University in Toronto. And Sam Gindin, who’s on our left. And he was a former assistant to the Canadian Auto Workers union. And both of these gentlemen have just written a book which is called The Making of Global Capitalism: Political Economy of American Empire. Thanks to you both for joining us again.


JAY: So, Sam, kick us off here. You know, in part one of this interview, we said both quantitative easing and the kind of policies the Democratic Party is proposing and the austerity and tax cuts the Republican Party are proposing, neither of these are really going to deal with these high levels of unemployment. And as we said in the first segment, neither party really wants to deal with these high levels of unemployment if it leads to higher wages, which it in all likelihood would. But if you had a different alignment of political forces and they had control over the government and such, what would they do? So, Sam, what would that look like?

SAM GINDIN, FMR. EXEC. ASSISTANT TO PRESIDENT OF CAW: Well, at one level, you can think about policies that would fix the system so it gets back to some kind of normal. And even that would require massive government spending on infrastructure, progressive—expressed progressively in terms of public housing and the infrastructure that people need in the urban centers.

JAY: Just let me ask: so by “fix the system”, get back to “normal”, you mean capitalism with a 4, 5 percent unemployment rate and not this sort of extreme recession?

GINDIN: Yeah, some lowering of unemployment, some confidence on the part of business that there’s going to be some markets, people being able to begin to think about some kind of wage increases. So just to do that, you’d have to have something that isn’t on the agenda right now in terms of massive public expenditures and the expansion of public services again.

But if you really are talking about—even to do this, you’d have to start thinking about addressing power. You’d have to think about the reaction of the banks and taking over, democratizing the banking system. You’d have to think about not just stimulating the economy, because you’re still dependent on, you know, essentially either bribing the corporations or making them happy by keeping the environment favorable to them. You’d have to think about changing power.

So one example would be in the auto industry, where you don’t want to have more cars, where productivity improvements are reducing the number of unemployed anyways, where restructuring is taking place. Why not think about all the facilities that are being closed actually being converted into useful products that people need? Because the skills are there, the tools and equipment are there. That would require you to start talking about planning, to stop talking about competition, and actually be talking about people’s needs, not to be talking about everything dependent on whether it’s profitable or not.

So you have to start thinking about structural change, addressing power. And especially important is the question of the banks. And I’ll turn it over to Leo, because he’s been speaking a lot about this question of taking on the banks.

JAY: Yeah, go ahead. I mean, at the moment, the competition is between President Obama and candidate Romney about who can get more financing out of the banks, more election financing.

PANITCH: Yeah, and Romney’s doing better, ironically enough, although Obama served them very well. But, you know, if you’re pulling in the kind of money that those bankers are and Romney’s offering you another 20 percent tax cut, you’re going to go for that. And also, Obama had to cover his tracks for [unintel.] by referring to them as Wall Street “fat cats”, and they’ve never forgiven him for that. So he’s not doing as well with them as he did last time.

That said, I actually think that they’re getting a little afraid of the yahoo kind of policies that Romney and Ryan are advocating. You know, they know—I think they know that they’ll be able to rein them in after the election, were they to get elected. But I think the craziness of the supply-side tax cuts and nothing more on the Romney–Ryan ticket is frightening even Wall Street.

That said, again, this takes us back to the fact that, you know, in this kind of a crisis, simply bailing out the banks, providing them with the means of issuing credit, is like pushing on a string. If there isn’t the consumer demand there, if there isn’t the need for corporations to go borrow, if they aren’t investing with a view to finding effective demand, the banks aren’t going to be able to do this. And if—that’s been proven.

But more than that, you are stuck in a situation in which the resources of the society which pass through the financial sector are not open to the democratic decision-making about where they ought to be allocated. So if we pick up Sam’s point about, say, the conversion of auto plants into socially useful production, using the skills of the workers there rather than wasting them, using the equipment that’s there rather than dumping it, you would have to be able to direct the resources that now pass through the banking system to sustain that type of investment. The banks aren’t ready to do it, the existing pension funds and hedge funds aren’t willing to do it. You would need finance as a public utility.

And, you know, the irony of this is that the current chief economist of Citibank, when he was an economist teaching at the London School of Economics when the crisis hit, very explicitly said there really isn’t a case for a private banking system insofar as it’s dependent on state support to stay in business. The volatility of finance today is such that it generates economic crises. States then who are committed to private accumulation bail them out and get the whole thing rolling again. And it’s really scandalous. It’s essential that we be able to do this.

Now, why we don’t has everything to do with the great quote you began with on electing two wings of the American elite. And your old friend and the now much-lamented and recently passed Gore Vidal 50 years ago said that the United States was a one-party system. It had one party, the property party, with a left wing and a right wing of the property party. That’s very largely the case. And I was sickened as I watched the Republican and Democratic conventions and you could see that they were both appealing to working-class voters, and they were appealing to working-class voters by saying—astonishing, even Romney saying, we have roots in the working class, my grandfather, my parents, what have you.

JAY: Yeah. On the other hand, I was really struck by a quote at the Democratic Party convention. I didn’t make out who was saying this, but it was—one of the speakers was bragging about someone who works at the Jeep factory, and he said, this guy’s so happy, he’s working 60 hours a week and, he says, he eats, sleeps, and Jeeps. I mean, what happened to the fight for the 40-hour workweek?

PANITCH: Exactly. Unbelievable. And then they also very quickly get in. But, of course, even though my dad was a worker all his life, as Michelle Obama said, he never resented that the wealthy were wealthy. He just wanted his kids to become wealthy. So you have this appeal to the working class, but it’s an appeal which doesn’t mobilize them to support the kinds of measures that involve class struggle. It’s quieting them even while trying to say, we identify with you, rather than teaching them how to engage in the type of politics that would allow people to change the system. It’s an appeal to the working class. They’re both engaged in it. But they’re engaged in it in ways that is fundamentally counterproductive to the type of change that’s needed.

JAY: Yeah, go ahead, Sam.

GINDIN: I was just thinking that, you know, if you compare things to the late ’70s and the situation that capitalism found itself then, they were worried about workers militancy—and there was militancy. They were worried about higher wages, inflation, what was going to happen to the dollar, low profit rates. And now what you have is the back of labor’s been broken. There’s nothing for them to be worried about in terms of higher inflation. The dollar is doing well. Money is flowing in. There’s no inflation. And yet you get all the same arguments about just hammering labor more and how you can’t do anything.

And it just shows you how important it is to have the kind of base that can expose those things and build on them, you know, ’cause the opportunities are there. You know, the banks and the corporations are sitting on all this money. What possible reason is there to argue that they should be given more and that somehow that’ll change things?

JAY: Right. Just let me—one final question, Leo. What we’re saying they’re—the parties represent different sections of the American elite. There is a debate in the United States on the left and certain sections of the left whether or not there’s some difference and it’s enough of a difference that when push comes to shove, people do need to elect Obama. And then the question is—one is: do you think that’s true that there’s enough difference between the two that it does matter who’s in office? If you think that’s true, is there a way to do that without creating illusions about what the Democratic Party is and who it represents?

PANITCH: That’s the great paradox of politics, and not only in the United States but in a great many places. Yes, there is a lesser evil. There’s absolutely no doubt about it. And to say it doesn’t matter which of the two of them gets elected I think is mistaken. That’s not to say that the Republicans would be quite as raw in the tooth as they look when they’re appealing to their most far right-wing base.

But that said, obviously there’s a difference, and I understand completely the logic of wanting Obama to get elected. I do myself. Unfortunately, however, insofar as it proves impossible to go on and build alternative political organizations which would become the basis for a breakthrough in the party system, so that you weren’t stuck with these very limited alternatives, then you’re really cutting off your nose to spite your face. It’s understandable in the short term, but one needs to have a long-term politics that goes beyond merely organizing the next protest, however useful protests are, and begins to lay the organizational basis for a different type of political party. That’s a long-term process.

But, you know, for me to sit here and talk about the need to turn banks into public utilities, or for Sam to call for the conversion of plants that are now being closed down into meeting collective social needs, that cannot happen unless there is an organized political force that would win people’s support for it and develop their capacities to engage in the class struggles that would be needed to see it through.

So it’s not a matter of coming up with the policy. It’s a matter of speaking of a certain vision that might help develop those types of political organizations that will take many years to develop. And, sure, in the interim we’ve got to choose the lesser evil, but the crucial thing is not to get distracted from that larger and longer task.

GINDIN: But just to reemphasize, it’s—our problem isn’t the alternative policies; it’s alternative politics. That’s the dilemma. And the dilemma at election time is: how do you say, as Leo said, that it does matter who wins in the election, but not give people any illusions about what it means to support the Democrats?

JAY: Great. Thank you both for joining us.

PANITCH: Good to be here, Paul.

JAY: And thank you for joining us on The Real News Network. If you want to see more discussions like this, there’s a “Donate” button over here. If you don’t click on that, we can’t do this.


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