In the wake of the economic crisis of 2008 the
United States has repeatedly participated in the blame game with immigrants and
with ethnic minorities. Now it is extending domestic scapegoating to still
others. Governors in the US now increasingly attack state employees, their
unions and pensions as if they, rather than the crisis, had suddenly become the
economic problem. Mayors across the country do the same to municipal workers.
Of course, both state and municipal budget problems since 2008 are primarily
the results of high unemployment and reduced consumer spending. In short, it
was and remains the crisis since 2008 that played and plays the key role in
cutting governments' tax revenues and hurting government budgets. Growing and
more effective tax-evasion strategies of business and the rich have had the
same effect. Responding to lowered tax collections, politicians fearful of
damage to their careers refuse to raise tax rates. Instead they embrace
spending cuts that they justify by means of scapegoat economics.
Thus they demonize public employees as lazy, greedy,
overpaid, underworked, over-pensioned, etc. - all remarkably similar to the German
depictions of Greeks. Governors practice scapegoat economics by promising to
protect "the public" from tax increases by "not pandering
to" public employees and their unions, by "reining in" their
pensions, etc. Those politicians act as if public employees and their pensions
were suddenly the problem rather than a dysfunctional economic system. They
similarly miss the stark reality of the dysfunctional political system they
operate: It cuts government help to people in economic crises just when they
need it most. Instead, US political leaders use scapegoat economics to justify
their selective spending cuts.
Capitalism's relocation deepens economic inequality
at both poles.
Scapegoat economics also serves capitalism's global
relocation. For decades, existing factories, offices and stores have been
moving from old capitalist growth centers (western Europe, north America, and
Japan) to new centers (China, India, Brazil, etc.). Similarly, enterprises are
growing more in the new rather than the old centers. Headquarters sometimes
remain in the old centers even as enterprise facilities locate elsewhere. Jet
travel, computers and telecommunications make all this manageable. The
capitalist competition that impels this relocation also means that the old
centers lose many well-paid occupations with ample benefits and job security.
Workers in places like the US are increasingly forced to settle for lower-paid,
insecure jobs with fewer benefits. While jobs and wages grow more quickly in
the new centers, wages there remain so low that huge profits reinforce
capitalism's global relocation.
As capitalists relocate, populations everywhere must
adjust to and accommodate all the usually attendant frictions, sufferings and
costs. In the old centers, unemployment and lower-paid jobs undermine
governments' tax revenues. Given resistance to tax increases, governments turn
increasingly to expenditure cuts in their accommodation to capitalism's
relocation. This often worsens unemployment and wage rates. More importantly it
further depresses mass standards of living. Consumption, household finances and
relationships, marriage and career decisions: All are caught up painfully in
the adjustment process. The same applies, likely more traumatically, to
capitalism's new centers. There, formerly agricultural and rural people are
transformed quickly into industrial and urban populations living in extremely
overcrowded and poorly provisioned slums.
A new politics organized around scapegoat economics
appeals to voters by promising to "protect" them from austerity
policies.
Capitalism's relocation is socially disruptive in
yet another basic way. It deepens economic inequality at both poles. Profits
rise and wages stagnate in the old centers. Employers distribute the rising
profits chiefly to shareholders and top executives and secondarily to upper
management and professionals helping them operate corporations. An often
spectacular growth in income and wealth inequalities afflicts the old centers.
In the new centers, arriving capital needs and makes partnerships with local
capitalists and government officials. The latter become extremely wealthy more
quickly than local wages rise, and so inequalities of wealth and income deepen
in the new centers too.
The gains and losses of relocating capitalism are
very unequally distributed in both its old and new centers. This only
aggravates the social tensions already emerging from the many adjustments and
accommodations people are forced to make. Suffering from personal, financial
and community losses, individuals and groups often feel betrayed by
"their" political and economic organizations. In the US, for example,
many working people believe that the Democratic Party and labor unions had
promised to "protect" them but failed to do so, especially in the
crisis and debt-funded bailouts since 2008. They have come to fear that now
they will be required to absorb the costs of dealing with those debts by being
subjected to austerity policies while "others" get protected from
those policies. Feeling betrayed or abandoned by their traditional political
representatives, many become susceptible to a new politics organized around
scapegoat economics.
As exemplified by new Republican governors in the
upper mid-West sensing electoral opportunity, this politics appeals to voters
by promising to "protect" them from austerity policies (in the US,
unlike Europe, "austerity" is not the name used). This means, first
and foremost, that voters will be spared tax increases. These are demonized as
always and necessarily "bad" economics for everyone. But the
Republican Governors now go further and promise to protect voters also from
spending cuts by making sure that those cuts focus on "others." Enter
scapegoat economics. The governors find "others" to be scapegoated in
response to crisis-driven and capitalist relocation-driven declines in tax
revenues. First of all, those others are - you guessed it - the traditional
targets: those on welfare, in inner cities, immigrants, etc. The often-racist
overtones of such appeals are only too well known. Nowadays, the second set of
those "others" has come to include public employees, their unions,
salaries, pensions, etc. To secure their careers, politicians promise voters to
protect them by cutting government spending on both sets of scapegoated others.
When it works, such politics sets one part of the
population suffering from capitalist relocation, crisis and austerity policy
against another part. This permits big banks, large corporations and the rich,
who own and direct them - those with the most responsibility for causing the
crisis - to escape paying for it. They escape in part because their wealth and
power made sure that they benefited first and most from the government bailouts
in 2008 to 2010. They also escape because scapegoat economics enables them and
their political friends to shift the burden of paying for the crisis onto
certain of its victims while "protecting" other victims from further
victimization. Perhaps capitalism inherited scapegoat economics from prior
economic systems, but capitalism's crises keep renewing that ugly injustice.
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