Most Presidents preside over one or more capitalist downturns (recessions, depressions, crises, etc.). Every President since at least FDR generated a "program" to respond to the downturn — as demanded by citizens and businesses. FDR and every later President promised that his program would "not only extricate the US from the present economic troubles but will also make sure neither we nor our children need face such downturns in the future." Obama is only the latest to do so.
No President has been able to keep that promise. The current capitalist crisis, now halfway through its fifth year with no end in sight, proves that preventing future capitalist downturns has eluded every past President and all his prestigious, high-priced economic advisers. Since President Obama's program is not basically different from earlier presidential programs, there is no reason to expect him to succeed either.
Failure to prevent capitalist crises has condemned millions of our fellow citizens to the repeated ravages of lost jobs, job benefits, and job security plus foreclosed homes and bleak job prospects for our children. The personal, family, and economic costs of the failure to deal with capitalist crises are staggering. Tens of millions of Americans today either have no work or must accept part-time jobs when they need and want full-time work. According to the US government, roughly 30 percent of the economy's tools, equipment, factory, office, and store space, and raw materials stand idle. This capitalist system deprives us all of the output and wealth that could be produced if the people denied jobs were combined with the idled means of production.
That output could rebuild our industries and cities, could convert them to environmentally respectful institutions, and could alleviate poverty in the US and beyond. If employed, those now without jobs could lead better lives, keep their homes, and be productive. We could all benefit enormously but for capitalism's abject failure to combine the people who want to work with unused means to produce the output we need.
Nor does the basic problem lie with government policies and programs. After all, the chief political parties, politicians, lobbyists, and their allies in the media and academia have all performed in unison to celebrate capitalism. They have insisted over the last fifty years that criticism of capitalism, no matter how poor its performance, was silly, unfounded, absurd, disloyal, or worse. Their mantra has been "capitalism delivers the goods."
Behind the protective cover of a near total ban on criticism, the US capitalist system deteriorated (the usual result when public criticism of a social institution is disallowed). Since this crisis began in 2007, capitalism has been "delivering the bads" to most of us. It increasingly threatens to deliver still worse in the years ahead. Capitalism's uncritical boosters are now pressing the government to cut back public services just as the mass of Americans need them more than ever. Their basic slogan and program remain: economic "recovery" for the few and austerity for the many.
In the 1950s and 1960s, the top individual income tax bracket on the richest Americans was 91%, while today it is 35%. In 1977, the tax those people paid on "capital gains" (when they sold assets like stocks and bonds at prices higher than they paid for them) was 40%. Today that rate is 15%. The mass of people never enjoyed such massive tax cuts. Those cuts made the wealthy still richer while forcing the government to borrow money to replace what it no longer got from taxes on the rich. How grotesque that the rich now use government debts as the excuse to cut public services for the mass of Americans!
The solution for capitalist crises like the one plaguing us today is not another President's program of reforms, regulations, economic stimuli, and deficit budgets. We have been there and done that. It has never worked to prevent this economic system from condemning people to endlessly repeated "hard times." It is long overdue to subject capitalism to the kind of serious, open, and free public criticism and debate that should never have been repressed in the first place. We need to examine whether and how the US might do better than capitalism.
Economic systems are born, evolve over time, and pass away — like all human institutions. Out of the deaths of slavery and feudalism, capitalism was born. It promised, in the words of the French revolutionaries, "liberty, equality, and fraternity." It made some genuine progress toward those goals. However, it also erected some serious obstacles to ever actually achieving them. Chief among these was the organization of production inside capitalist enterprises.
In the capitalist corporate enterprises that dominate economies today, their major shareholders and the boards of directors they select are in the undemocratic, exclusive position of making all the key decisions. Major shareholders and boards of directors constitute a small minority of those directly connected to capitalist enterprises. The majority are the enterprise's workers and the populations of communities dependent on those enterprises. Yet that minority's decisions (about what, how, and where to produce and what to do with profits) impact the majority — including bringing crises — without permitting that majority any direct role in making those decisions. It is hardly surprising then that the minority seeks and is in the position to take the lion's share of income and wealth for itself. It likewise buys control of politics to block the majority from using government to rectify its economic disadvantages and deprivations. That's why we now have government bailouts for the rich and austerity for the rest of us.
Unless society moves beyond the capitalist organization of production, economic crises will keep happening and generating politicians' false promises to prevent them. It is naïve to expect the minority in charge of a system that still works well for them to democratize the economy and politics. That is a central task of the 99%.
Richard D. Wolff is Professor Emeritus at the University of Massachusetts in Amherst and also a Visiting Professor at the Graduate Program in International Affairs of the New School University in New York. He is the author of New Departures in Marxian Theory (Routledge, 2006) among many other publications. Check out Richard D. Wolff’s documentary film on the current economic crisis, Capitalism Hits the Fan, atwww.capitalismhitsthefan.com. Visit Wolff's Web site atwww.rdwolff.com, and order a copy of his new book Capitalism Hits the Fan: The Global Economic Meltdown and What to Do about It. His weekly radio program, "Economic Update," broadcasts on WBAI, 99.5 FM in New York City every Saturday at noon for an hour; it can also be heard live and in podcast archive on wbai.org.