Obama seeks bloc with Republicans against unions

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THE State of the Union speech by President Obama was all about the theme that the only thing that can save the crisis-ridden US ruling class and US capitalism was cooperation between Democrats and Republicans.

In doing so, he served notice that his period of flirtation with the trade unions, who financed his election campaign and the recent half-term election campaign, was over.

He said of his new friends: ‘We will move forward together, or not at all – for the challenges we face are bigger than party, and bigger than politics.

At stake ‘is whether new jobs and industries take root in this country, or somewhere else’. Further, it is about whether US capitalism can maintain itself in the world. ‘It’s whether we sustain the leadership that has made America not just a place on a map, but the light to the world.’

He added: ‘We are poised for progress. Two years after the worst recession most of us have ever known, the stock market has come roaring back. Corporate profits are up. The economy is growing again.’ So what’s the problem?

The problem is that the US working class is extremely angry that what has not come roaring back are the jobs that fed its families, and paid its mortgages and for its health care.

Obama added that the world had changed. ‘And for many, the change has been painful. I’ve seen it in the shuttered windows of once-booming factories, and the vacant storefronts on once-busy Main Streets. I’ve heard it in the frustrations of Americans who’ve seen their paychecks dwindle or their jobs disappear. . .

‘Meanwhile, nations like China and India realised that with some changes of their own, they could compete in this new world. . . So, yes, the world has changed. The competition for jobs is real.’

He continued, on the way forward: ‘We need to out-innovate, out-educate, and out-build the rest of the world. We have to make America the best place on Earth to do business. We need to take responsibility for our deficit and reform our government.’

He recalled an earlier crisis. ‘Half a century ago, when the Soviets beat us into space with the launch of a satellite called Sputnik, we had no idea how we would beat them to the moon. The science wasn’t even there yet. NASA didn’t exist. . . This is our generation’s Sputnik moment.’

So what is to be done to save American capitalism. ‘I’m asking Democrats and Republicans to simplify the system. Get rid of the loopholes. Level the playing field. And use the savings to lower the corporate tax rate for the first time in 25 years – without adding to our deficit. It can be done.

‘To help businesses sell more products abroad, we set a goal of doubling our exports by 2014 – because the more we export, the more jobs we create here at home. . .

‘To reduce barriers to growth and investment, I’ve ordered a review of government regulations. When we find rules that put an unnecessary burden on businesses, we will fix them.’

On the new ‘health care law’ the message to Republicans is: ‘If you have ideas about how to improve this law by making care better or more affordable, I am eager to work with you.’

He continued: ‘Now, the final critical step in winning the future is to make sure we aren’t buried under a mountain of debt. . . So tonight, I am proposing that starting this year, we freeze annual domestic spending for the next five years. . . This freeze will require painful cuts. Already, we’ve frozen the salaries of hardworking federal employees for the next two years. I’ve proposed cuts to things I care deeply about, like community action programs. . . I recognise that some in this chamber have already proposed deeper cuts, and I’m willing to eliminate whatever we can honestly afford to do without.’

Obama added: ‘Now, most of the cuts and savings I’ve proposed only address annual domestic spending, which represents a little more than 12 per cent of our budget. To make further progress, we have to stop pretending that cutting this kind of spending alone will be enough. It won’t. . . This means further reducing health care costs, including programs like Medicare and Medicaid, which are the single biggest contributor to our long-term deficit. . . Still, I’m willing to look at other ideas to bring down costs, including one that Republicans suggested last year – medical malpractice reform to rein in frivolous lawsuits.

‘So now is the time to act.’

It is clear that restoring the US ruling class’ position in the world, will require a class war at home against the working class and a trade war and other wars abroad.

Under these conditions, the US working class will be forced to break from the Democratic Party and build a Labour Party. This will argue that if state ownership of GM was necessary to save it from bankruptcy, then the expropriation of the US bosses and bankers and the foundation of a socialist United States is necessary to save the US working class from the horrors of the crisis of capitalism.