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After Obama's victory, what next?

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When all the votes had been tallied, it was clear that Barack Obama had won quite comfortably. Romney and the Republicans stared on in amazement, baffled at how an incumbent president, struggling to pull the economy out of stagnation, could pull off such a decisive victory. A more important question is, what will four more years of his presidency mean for the United States and the working class?

For some, there was not too much difference between the political platforms and policies of the candidates. For many others, the difference was as clear as night and day. Beyond policy differences over healthcare, immigration, women's rights, education and workers' rights, this campaign was marked by struggles over what role government ought to play in both the economy and society.

On the campaign trail, Obama's message was continually repeated: keep moving forward, no return to the policies that led to the financial crisis and subsequent recession. More regulations, more state intervention were described as necessary to boost GDP, put people back to work, and rebuild public education so that future job-seekers can find employment and thrive in the hi-tech, modern American economy.

However, like his opponent, Obama also believes in the need for austerity. In fact, he is calling for upwards of $4tn worth of social cuts that disproportionately punish the working class and poor. A sprinkling of modest increase in taxes on the super-rich, the closing of some tax loopholes, and the shutting down of international tax havens will not change that. In fact, despite all the squabbling with the Republicans and posturing for the public, Obama has made it known that balancing the budget via cuts to the welfare state is one of his highest priorities. That is a position both he and his party share with their colleagues across the aisle.

Although agreement is expected between Democrats and Republicans to tackle the, “fiscal cliff”, that is, the cuts and tax increases that will otherwise automatically kick in at the end of the year, there will not be much more bipartisanship than we have seen since the Republicans recaptured the House in 2010. In fact, what the American people can expect is more of the same.

More miserable continuity with the past two years

The American political system is fractured enough already to make governing difficult even with everyone on the same page. It is doubly hard when the corridors of power are packed with individuals split seemingly down the middle on how best to secure the present and future interests of US capital.

The factional heat, political ineptitude and legislative gridlock that characterized the past two years are likely to continue. The Republicans maintained – albeit with minor losses – their control over the House; the Democrats increased their majority in the Senate and Obama is back in the White House. What this means, more or less, is that each party can cancel outright the initiatives of the other. Alternatively, all lawmakers will have to dilute their bills, to the point where they do not satisfy the interests of any of their constituents, just to get them to the floor for a vote. Fear of a long, drawn-out war of attrition explains Wall Street's unconcealed displeasure at how the election turned out.

Major corporations and financiers had pulled heavily for Romney, providing millions and millions to the Republican ticket, confident that it would obliterate any barriers to investment and ensure taxes would not rise. Obama, by contrast, had them worried that new taxes would be on the way. He spoke about the issue at length during the campaign, and it figured prominently in his election platform. More than that, Obama was talking of ways to punish those companies that off-shored jobs, eliminating the tax credits that went with it. This really got them spooked. That fear, together with the victory of Obama and a number of “progressive” Democrats, such as Elizabeth Warren from Massachusetts, came to a head the morning after the election, when the major US stock indices all found themselves in negative territory – and the markets remain ever skittish.

Damned if he does, damned if he doesn’t

If Obama does try to pressure Congress to pass laws in line with the policies outlined in his election platform, the country may face a “revolt” by the capitalist class. Already struggling to find sufficient profits and holding back on investments, the ruling class may just consciously withdraw investment to send the president a message: “conduct affairs the way we want, or else.” A bosses' strike to render the presidency ineffective is not inconceivable as America’s long-term debt problems worsen with each passing day. Obama will attempt to prevent such a development at all costs, even if that means dropping – once again – any and all campaign promises.

From his point of view, Obama has to tread a careful path. He cannot enrage the capitalist class as a whole too much. As a bourgeois politician, he must govern in their interests, his position of power and career depends on it. If he pushes too hard, if he raises too much in taxes from the bosses, then they will compensate for the deductions made from their profits by laying off workers and shelving production. This would damage an already weak economy and drive down GDP – something his new administration will want to prevent at all costs.

However, if the new government does not tax enough, then the requirement to balance the budget will mean yet more cuts in social spending. That would drive down GDP for the opposite reason: a swathe of society being made poorer, consumer spending would be likely to drop. As such, Obama and the representatives in Congress have to walk – from the perspective of being bourgeois politicians – a very fine line between revenue increases and social cuts. What we can expect is that the administration will make policy on a sort of trial-and-error basis.

The capitalists know full well how to play this game, and Obama himself. Aside from an investment strike, they know they can count on Obama caving in to political pressure from the Republicans when they choose to resist with all the weapons at their disposal. The president will not get backing from Wall Street or the US Chamber of Commerce – and he certainly will not counter them by mobilizing the working class or those who voted for him in the last election.

The bosses may decide that all they have to do is set the stage, wait things out and watch Obama backslide, knowing his party will need their financial support in the next elections. In essence, despite millions of workers voting for Obama as a symbolic rejection of the Republican program and the interests of the super-rich, the bosses have all sorts of ways to get their way, taking full advantage of all the contradictions in the Democratic Party in the present social circumstances.

Trials and tribulations await the working class

The far-reaching economic stagnation that has bedeviled the USA over recent years will continue. So also will the miserable way of life that has meant for working people trying just to survive under a precarious capitalist regime. New investment, increasing production, hiring more people, all remain big problems that the market has proven itself unable to remedy. Any significant increases in taxes, or the withdrawal of exemptions for those companies that move jobs overseas, may just exacerbate the tendencies at play.

No amount of patriotic rhetoric, no mere jingoism, could compel the bosses to spontaneously bring manufacturing jobs back to America if that meant a significant loss of profit. They will demand substantial tax breaks and incentives as compensation. Obama and the Democrats essentially agree with that and, with a little help from the pro-bourgeois, reformist labor bureaucracy, they will attempt to cajole the working class into accepting such a deal.

The main thrust of the collaboration between Obama, the Democrats, and the labor bureaucrats is to reduce the cost of human labor-power in the USA, for the benefit of capital. In their minds, this is the only way to create new jobs and convince the bosses to take advantage of a beleaguered American workforce. Both the Democrats and the labor bureaucrats expect to strengthen their own positions, and even gain financially, by this plan, despite it being at the great expense of their constituents. They will both attempt to sell the lie to the workers that if they want jobs, they not only have to accept a lowering of the standard of living they've struggled so hard to get: cuts in pay, pensions and benefits, but also “flexibilization” in the workplace.

Thus, not only does the working class have to prepare for cuts to the welfare state; it has to get ready for attacks on working conditions that will not be automatically repelled by the entrenched bureaucracy. The latter may even help in bringing them on, as we've seen in the case of the United Auto Workers. Either way, as things stand, when the attacks come, the working class will have no leadership capable of meeting them with a firm and sustained challenge.

Faced with such circumstances, with a party that leans on them for support but serves the capitalist class, and a bloated, servile union bureaucracy that cares more about benefiting capital than defending its own constituents, the working class faces an uphill battle that will require its independent action in order to be successful.

The workers can only rely on themselves and their own fighting strength. They will have to develop their own democratic structures and forms of organization in order to assert themselves effectively and protect and secure their needs. Rank-and-file movements in the unions should become generalized and developed further in the form of new leaderships to counter the class-collaborationist policies of the bureaucracy and to win the labor movement in general to struggle against austerity, capitalism, and the state.

Even more importantly, the working class needs both genuine political independence and revolutionary leadership in the form of a workers' party that can lead the class with a strategy that links the disparate, discontented, and fragmented struggles against austerity taking place now to a struggle for the overthrow of capitalism and the establishment of a workers' democracy. A strategy, a programme, that will not only resolve the crisis at the expense of those who caused it – the capitalists – but begin the process of transition to communism.