Fearing Radicalization, Biden Feigns Left
https://socialistaction.org/2021/04/20/fearing-radicalization-biden-feigns-left/
April 20, 2021
By Jeff Mackler
The corporate media hoopla attendant to President Joseph Biden’s
announced $2.5 trillion infrastructure proposal aims at putting Biden in
the Franklin Delano Roosevelt New Deal-era crowd of “progressive”
capitalist social reformers. The “centrist” Biden has been instantly
converted to a “man of the people” whose legislative proposals are
claimed to far exceed his “moderate” pre-election promises. Biden is
said to be aiming his fire at the super rich, who he claims game the
system to avoid paying taxes. The NYT portrays Biden’s new proposals as
representing the greatest social advances in the modern era. The truth
lies elsewhere.
Biden’s instant media conversion is no accident or change of heart but
rather a corporate recognition that past Democratic Party administration
policies had significantly alienated the party’s traditional working
class base, opening the door wide to either potentially broad
independent working class fightback or to the emergence of a Trump-type
reactionary populism that has the potential of undermining the nation’s
image and operation as a stable bourgeois democracy. President Barack
Obama’s bailing out the corporate elite and banking institutions to the
tune of unprecedented $trillions following the 2008-9 recession while
millions of working class families lost their homes has taken a toll on
the Democrat’s credibility. Massive plant closures accompanied by a
generalized de-industrialization policy that sent millions of
high-paying jobs overseas to low wage countries further alienated
working people and fed into Trump’s “anti-establishment” appeal. In the
electoral arena, Hillary Clinton was the first to pay the price.
Ruling Class Closes Ranks Against Trump
But it was only when Trump openly threatened to challenge the 2020
election results and forcibly impose himself as president that the vast
majority of capitalism’s ruling class closed ranks. In a matter of
months, Trump’s top Pentagon generals, his Secretaries of State and
Defense, his Justice Department head, the entire judicial system, even
the Republican-dominated state legislatures, and the heads of the FBI
and CIA all joined with the billionaire corporate elite to leave Trump
isolated and defeated. His coup plans to use all of the above to retain
the presidency came crashing down, ending in the pathetic January 6
events where his supporters were reduced to a riotous mob of Proud Boy
fascist thugs and their ilk with perhaps the timid complicity of some
bullied Capitol Police and a few National Guard tops, who consciously
vacated the Capitol area to allow some 1,000 nutcases to take the
building for a few hours.
It is in this context that Biden’s instant shift in focus can best be
understood. His outlined spending proposals, hyped to the high heavens
by his staff, designated cabinet level sales promoters and “liberals”
across the country – none of which have been concretized in specific
legislation – include $billions in investments in highways to upgrade
and raise their levels in anticipation of climate catastrophe and
funding for mass transit and electric vehicle charging systems. Upgrades
to poisonous lead water pipes, expansion of the electric grid and big
funds for veterans’ hospitals are accompanied by proposed major
increases in federal funds for research and development spending to make
U.S. corporations more competitive on world markets. These are paired
with proposals to provide home-based care to older and disabled people.
Biden’s inclusion of “human infrastructure” language aims at posing his
Democrats as breaking with the formal limited “physical” definition,
that is, upgrading bridges, roads, ports and transportation systems. His
proposals include aid to the poor, paid leave for workers and measures
aimed at reducing the cost of childcare to help women to work and earn more.
Taxing the Rich?
And all this is to be paid for by supposedly taxing the corporate
establishment and the super rich. Janet Yellen’s Treasury Department
released some details of Biden’s proposed tax changes aimed at raising a
projected $2.5 trillion over 15 years. These include raising the
corporate tax rate to 28 percent from the present 21 percent. Former
President Trump’s 2017 tax bill had cut the corporate rate to 21 percent
from 35 percent. Apparently, Biden’s team declined to propose restoring
the previous 35 percent rate. Biden’s new plan would supposedly impose a
“strict new minimum tax” on global profits aimed at corporations that
offshore profits to Cayman Island-type tax havens around the world. But
nothing in the president’s proposals is cast in stone, said Biden,
“Debate is welcome. Compromise is inevitable. Changes are certain… But
inaction is not an option.”
The Democrats hope to pass their eventual financial proposals in a 50-50
deadlocked U.S. Senate via a parliamentary maneuver called budget
reconciliation, allowing them to bypass the 60-vote requirement to
overcome a likely Republican filibuster with a simple majority, that is,
their own 50 votes plus one more from V.P. Kamala Harris, who presides
over the Senate and is allowed to cast a deciding vote in the event of a
tie. But the Democrats have no guarantee of their own 50 votes, with
West Virginia congressman Joseph Manchin III, for example, as well as
other Democrats, politely defined as “centrists” or “moderates,” already
indicating that their votes were far from assured. Indeed, Biden’s
originally announced $2.5 trillion infrastructure package, one week
later was described as a $2.3 trillion proposal, if not a $2 trillion
proposal. It apparently took less than a week for Biden’s pressured team
to eliminate some $200 billion, or perhaps $500 billion from their
original blueprint proposal.
The Casino Capitalism Stock Market
As with Biden’s recent $1.9 trillion COVID-19 stimulus plan, his “$2.5
trillion” infrastructure proposals are to be funded today by deficit
spending, that is, paid for by revving up Washington’s printing presses
and printing money/bonds with abandon as was the case with the Trump and
Obama administrations. Most of that printed money was pocketed by the
corporate elite and/or pumped back into the stock market and/or related
speculative ventures that today define the nation’s “casino capitalism”
operations. In today’s crisis-ridden capitalist world where average
profit rates are ever declining, few serious U.S. corporate enterprises
invest in new U.S plants when fierce global competition and near-slave
labor workers toiling at super modern factories owned by multi-national
behemoths in far off places bring in profits far beyond any new
U.S.-based factory. Better to invest the government’s near zero interest
“loans” in the sky-high stock market and pocket the capital gains
profits with virtually no tax liability! This “financialization” of
capital, wherein unprecedented amounts of diminishing capitalist profits
are invested in speculated financial ventures rather than in upgrading
or expanding capitalist plants defines a key element of the system’s
present crisis.
Corporations Paying Zero in Taxes
Over the next 15 years, according to Biden’s plan, those who have for
decades or generations been “legally” exempted from paying taxes will
now be slated to foot the bill! In truth, few if any U.S. corporations
today pay a federal corporate tax rate at 28 percent, not to mention the
previous rate of 35 percent or Trump’s revised rate of 21 percent. Armed
with endless “deductions” imbedded in the tax codes by the favored
“lobbyists” of the corporate elite, Biden, who knows better than most
who pays what in taxes, blurted out that many profitable corporations
can afford to pay a tax rate higher than zero given that many paid no
taxes at all over the past several years.
“You have 51 or 52 corporations of the Fortune 500 that haven’t paid a
single penny in taxes for three years,” said Biden. “Come on, man. Let’s
get real,” he added.
But just what is “real” regarding corporate tax rates in the U.S. today?
According to a 2018 study by the Institute on Taxation and Economic
Policy, of the 379 companies from the Fortune 500 list that were
profitable in 2018, 91 paid an effective federal tax rate of ZERO
percent or less – “less” meaning that these profitable corporations
received a government rebate in some form. Included among these
profitable Fortune 500 corporations that paid zero percent or less in
federal taxes were Amazon, Chevron, Dow-Dupont, U.S. Steel, Eli Lilly,
Goodyear Tire & Rubber and General Motors.
General Electric, Boeing, Priceline.com, Verizon and 22 other profitable
Fortune 500 firms paid no federal income taxes from 2008 through 2012,
according to Citizens for Tax Justice.
While Trump’s tax law lowered the statutory corporate tax rate to 21
percent, the 379 Fortune 500 corporations studied paid an average rate
of 11.3 percent. Worse still, a recent report from the congressional
Joint Committee on Taxation documented that multinational corporations,
that is, U.S.-dominated corporations that operate in other countries,
paid an average U.S. tax rate of less than 8 percent on their income in
2018, down from 16 percent in 2017.
Today, Biden proposes to remedy this situation by imposing a tax rate of
15 percent on corporations based on the profits they report to their
investors – “book income” – and not the profits or lack of they report
to the Treasury Department. Here we have a classic example of two sets
of books, both “legal” under the tax law. But Biden’s proposed 15
percent corporate tax would apply only to 45 corporations, that is, only
those whose annual earnings are $2 billion or more. Apparently Biden’s
team forgot his 2020 election campaign pledge to impose the 15 percent
mandatory tax on corporations with annual profits of $100 million!
U.S. has Lowest Corporate Tax Rates
Treasury Secretary Yellen touted Biden’s corporate tax hike proposals
stating, “Our tax revenues are already at their lowest level in
generations. If they continue to drop lower, we will have less money to
invest in roads, bridges, broadband and R&D.” Yellen neglected to note
that as a share of the economy U.S. corporate tax levels are at the
lowest level since World War II. The Organization for Economic
Cooperation and Development reports that the U.S. raises less corporate
tax revenue as a share of its GDP than almost all other advanced economies.
Yellen’s pipe-dream plan, with no specifics for sure, includes using
U.S. financial leverage worldwide to press for a global minimum
corporate taxation system. Here’s a recent New York Times description of
Yellen’s proposal. “The tax plan emphasizes that the Treasury Department
will continue to push for global coordination on an international tax
rate that would apply to multinational corporations regardless of where
they locate their headquarters. Such a global tax could help prevent the
type of ‘race to the bottom’ that has been underway, Treasury Secretary
Janet Yellen has said, referring to countries trying to outdo one
another by lowering tax rates in order to attract business.” Yellen’s
“race to the bottom” language here refers to the worldwide capitalist
problem, inherent in the functioning of the system itself, of an
ever-declining average rate of corporate profit. Capitalism’s remedy for
this inherent defect has been to make workers pay via every mechanism
available. These include lowering wages, cutting pensions and fringe
benefits, workplace speedup, union busting, and offshoring jobs to low
wage nations. This is the real meaning to tens of millions of working
people the world over who are ever pressed in the real “race to the
bottom.” Yet Yellen appropriates the term to decry the dilemma facing
the billionaire corporate elite, the capitalist exploiters.
Needless to say, Yellen fully understands that while the formal U.S.
corporate tax rate is already among the lowest on earth among the
developed nations, few if any corporations pay at this rate, given the
innumerable loopholes, deductions, and exclusions readily available.
There is little or nothing in the present U.S. tax code that prevents
giant corporations like Apple, which employs some 1.2 million workers in
China at wages less than one-third the U.S. minimum hourly wage of
$7.25, from avoiding U.S. taxes outright, not to mention the countless
other corporations that have “relocated” via the “inversion” scenario,
their corporate headquarters to far off places to do the same. Treasury
Department officials estimate that Biden’s proposed tax code changes
restricting offshore tax evasion would raise some $700 billion over 10
years – a pittance slap on the writ when compared to the overall untaxed
earnings. We will soon see if there is a slip between the government’s
proverbial cup and its lip, that is, whether even this figure is
whittled down to further insignificance.
Climate Catastrophe
Gone from Biden’s tax proposals are any serious measures to combat the
ongoing and catastrophic consequences of fossil fuel induced climate
change. The president’s plan would cut back government subsidies for
oil, gas and other fossil fuels over a period of ten years and
supposedly replace them with incentives for clean energy in a promised
transition to “100 percent carbon pollution-free electricity” by 2035.”
The estimated ten-year “savings” from ending some of these subsidies to
the fossil fuel corporations is $35 billion! I used an exclamation mark
here to note that previous and inadequate “Green New Deal” proposals
presented by Bernie Sanders and again by the AOC gang were estimated at
$15 trillion over the same period or an average yearly expenditure of
$1.5 trillion. By comparison, Biden’s 10-year climate infrastructure
proposal, including funds for research and development of battery
storage and power transmission lines to address the impending climate
horrors, comes to close to nothing. Incredibly, Biden’s proposal does
address the issue of resurfacing and raising the level of some roads to
build them up to three feet higher in anticipation of a rise in sea
levels! “While Rome burns, Biden-Nero fiddles!”
Biden’s History of “Infrastructure” Hype
President Biden is no newcomer to the legislative game of bait and
switch. In September 2009, then-Vice President, Biden visited a closed
General Motors plant near his hometown, Wilmington, Delaware, where he
announced a $528.7 million government loan to Fisker Automotive to
manufacture hybrid and electric cars. The funding was to come from
President Obama’s American Recovery and Reinvestment Act, a $787 billion
“economic stimulus” plan touted to lift the nation out of the Great
Recession, in part by creating “green jobs” with $90 billion for wind
and solar energy, a “smart” power grid, weatherized homes and the
electric vehicle industry. Four years later Fisker declared bankruptcy
without producing a single car. The government’s $526.7 loan disappeared
into the pockets of its grantee corporate recipients.
Similarly V.P. Biden touted a $535 million loan guarantee to Solyndra, a
would-be California solar panel company that went bankrupt, claiming
that Chinese competitors were undercutting its proposed price structure
for solar panels. And again, in 2012, A123 Systems, an advanced
battery-making corporation, declared bankruptcy after receiving an Obama
stimulus loan of $249 million. In essence, the Obama-Biden
administration’s stimulus plans ended up contributing near nothing to
improving the nation’s infrastructure, not to mention fostering new jobs
and a “green economy.”
$Trillions for Corporate Bailouts
Instead, Obama-Biden pioneered a “quantitative easing” stimulus system
wherein the nation’s failing banks and major corporations were bailed
out to the tune of unprecedented $trillions while unprecedented millions
of working people lost their homes to record foreclosures. The
Obama-Biden “quantitative easing” program consisted in the Federal
Reserve making available monthly $billions in “loans” to the corporate
elite at near-zero interest rates to be used for so-called new
job-creating manufacturing industries. Instead the elite invested this
near free money in unprecedented stock market speculation that raised
the various indexes to unprecedented heights in the middle of an
unprecedented recession/depression.
Biden’s Third Economic Stimulus Package
No matter, in early April, Biden’s team announced yet another
$multi-trillion economic package, this one to focus more exclusively on
aid to working people. No doubt, the game of insider negotiations,
maneuver, hype and camouflage will ensue as the ruling rich decide once
again, how and how much to make working people pay. The combination of
all Biden’s touted programs have their base largely in “trickle down”
economics, that is, the notion that the capitalist economy prospers, and
along with it working people, if federal funds are first granted to the
corporate elite on top who will then, supposedly, invest in new plants
that create new jobs for workers. In short, the vast proportion of
Biden’s proposed expenditures are aimed at funding the capitalist elite,
not working people. Had the latter been the case, Biden’s proposals
would have begun with fulfilling his campaign pledge to raise the
federal hourly minimum wage to $15.00, a broken promise that reflects
the reality of capitalism’s limited capacity for serious reforms – for
any serious gains “trickling down” to the working class. Biden has
similarly rejected all Single Payer health care proposals, not to
mention proposals for a nationalized free health care system for all
working people akin to what exists in most advanced capitalist nations.
The realities of life in capitalist America today includes a real labor
participation rate of just 60 percent – 40 percent of the working people
who are available to work have no jobs. Sixty percent of the presently
unemployed are not eligible for unemployment insurance and some 50
million face eviction.
The Biden team hopes to placate those who increasingly see the Democrats
as co-equal practitioners with the Republicans of anti-working class
politics. Yet their margin for maneuver is limited by the increasing
weakness of U.S. capitalism and hence its continuing drive to resolve
its contradictions at the expense of working people at home, not to
mention the endless resource extraction wars perpetrated on poor and
oppressed nations around the world. Imperialist war, based in the U.S.
on the most highly monopolized industries, is the most profitable of all
capitalist enterprises! The maxim, “War is good for profits,” has never
been more accurate. Biden proposes not a cent decrease in the U.S.
$trillion annual war budget! Indeed, the Democrats, when Trump held the
presidency, never failed to propose boosting the military budget beyond
Trump’s requests.
The coming months and years ahead portent massive working class
mobilizations, as was the case with the 20 million who joined in
solidarity with the Black Lives Matter movement last summer. In the
absence of a serious alternative, however, that movement was momentarily
corralled by its BLM NGO-type misleaders and associated Democratic
Party-dependent “reformers” into the reactionary electoral apparatus of
the “graveyard of social movements” – again, the Democratic Party. The
fight to organize future mobilizations via independent and fighting
organizations of the oppressed and exploited stands as the most critical
task facing serious social and political activists today. The same with
the need to break the present “business union” labor movement from
functioning as a virtual appendage of the Democratic Party. The road to
class struggle class unionism includes not only the democratization and
qualitative expansion of the present movement but the interconnected
formation of an independent fighting labor party in alliance with all
the oppressed. To achieve these fundamental objectives, the construction
of a mass revolutionary socialist party with deep roots in every fight
where workers take the field of action is critical. Join us! Join
Socialist Action!
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Carl Sagan “It seems to me what is called for is an exquisite balance
between two conflicting needs: the most skeptical scrutiny of all
hypotheses that are served up to us and at the same time a great
openness to new ideas. Obviously those two modes of thought are in some
tension. But if you are able to exercise only one of these modes,
whichever one it is, you’re in deep trouble. If you are only skeptical,
then no new ideas make it through to you. You never learn anything new.
You become a crotchety old person convinced that nonsense is ruling the
world. (There is, of course, much data to support you.) But every now
and then, maybe once in a hundred cases, a new idea turns out to be on
the mark, valid and wonderful. If you are too much in the habit of being
skeptical about everything, you are going to miss or resent it, and
either way you will be standing in the way of understanding and
progress. On the other hand, if you are open to the point of gullibility
and have not an ounce of skeptical sense in you, then you cannot
distinguish the useful as from the worthless ones.” ― Carl Sagan