A close review of the S&P’s document [PDF] outlining its rationale (at least its publicly given rationale) for the downgrade of US debt may reveal conclusions made by the S&P about the stability of the American political system and the potential for open class conflict in the United States over the coming period.
The document begins as follows: “We lowered our long-term rating on the U.S. because we believe that the prolonged controversy over raising the statutory debt ceiling and the related fiscal policy debate indicate that further near-term progress containing the growth in public spending, especially on entitlements, or on reaching an agreement on raising revenues is less likely than we previously assumed and will remain a contentious and fitful process. We also believe that the fiscal consolidation plan that Congress and the Administration agreed to this week falls short of the amount that we believe is necessary to stabilize the general government debt burden by the middle of the decade.”
That is to say, the S&P is confident neither in the government’s ability to contain costs (through the slashing of social programs) or raise revenue (through the raising of taxes). Moreover it thinks that the group of 12 won’t be able to cut deeper than the amount that has already been established, presumably because of political stalemate, but also possibly due to other political reasons.
The document continues in paragraph two that the S&P’s “lowering of the rating was prompted by our view on the rising public debt burden and our perception of greater policymaking uncertainty, consistent with our criteria (see “Sovereign Government Rating Methodology and Assumptions,” June 30, 2011, especially Paragraphs 36-41).”
Reviewing paragraphs 36-41 reveals more than is perhaps intended, which may explain why such high-profile members of the bourgeoisie like Warren Buffett and representatives like Treasury Secretary Tim Geithner have publicly reprimanded the S&P for its “foolishness” and “bad judgment”.
As outlined in this document [PDF], the S&P’s methodology relies on a scoring system of 1 to 6 in relation to what it terms the “Political Score” of a nation-state reflecting its ability to predictably repay its debts and maintain its fiscal “obligations,” with a score of (1) meaning that a nation-state predictably manages its debts and is reliable and a score of (6) meaning that a country cannot predictably manage its debts and is unreliable. One must assume, since it is stressed by the S&P in the above document, that the US scores badly on such a scoring system.
According to the document, a score of 5 out of 6 on the S&P’s system indicates a nation in which “Policy choices likely will weaken capability and willingness to maintain sustainable public finances and thus timely debt service” or “High risk of challenges to political institutions, possibly involving domestic conflict, due to demands for more economic or political participation by parts of the population [...]” or “Future policy responses are difficult to predict due to a highly polarized political landscape, highly centralized decision making, or an uncertain or untested succession process.”
A 6 out of 6 in “Political Score” by the S&P is earned by nations which have “Weak political institutions, resulting in an uncertain policy environment in periods of stress, including diminished capability and willingness to maintain timely debt service,” or “Considerable risk of breakdown of political institutions, including significant domestic conflict”.
It is likely that the S&P’s downgrade of US debt will be used as a political reference point in which to call for even more savage cuts to social spending in the United States, especially if the US economy begins to rapidly deteriorate. Perhaps this is why US debt was downgraded in the first place.
But the bourgeoisie is always mindful of the moment when the American working class comes into open struggle against the political establishment. The events in Madison, Wisconsin demonstrated that the agents of the American bourgeoisie in the unions and the Democratic Party cannot reliably contain the working class and that a huge effort was required to get that situation under control. Madison is a precursor to the struggles to come. And I think the bourgeois economists know it and are saying so here.
Best regards,
Charles G
Michigan, USA
8 August 2011
On “The US budget cuts and the fight for socialism”
So S&P damages the United States with the intent of affecting the political process and changing public policy towards their dictates. Yet no one calls this terrorism. I guess the elite really can get away with anything.
Mike C
California, USA
6 August 2011
* * *
Unfortunately, as we have all witnessed, the economy has come to a point of virtual stagnation. The “stimulus plan” that was imposed was a catastrophic blunder which only served to benefit the bourgeoisie and, yes, unemployment temporarily decreased, but that seemed more of an orchestrated plan by the financial elite to gain the trust of the masses by allotting a fraction of the capital that was allocated to them for the creation of jobs.
The new “plan” involves drastically slashing spending in areas of social assistance, higher education, and even more absurd, corporate regulations. Haven’t the corporate elite benefited enough at the burden of the working class and working poor? It would seem the logical approach to close any budget deficit would be to apply a progressive taxation policy, increasing the taxation percentage collected from the elite. Furthermore, statistically, the bourgeoisie are not even a major driving factor in the economy as a whole; it has been proven time and time again that the working class and working poor do more to drive the economy than the elite. The proletariat and the working class must move away from the comfort zone of complacency if there is any hope for real change.
Richard T
6 August 2011
* * *
The last Democrat in office tore out the welfare system; today, with millions of people essentially working bottom-wage temp jobs, resulting in an unemployment insurance system that exists for only a portion of US workers, losing a job can mean losing absolutely everything, including your children (welfare “reform” states that social services can “take indefinite custody” of children when families fall into poverty, while stripping away their legal right to appeal that decision—a choice that Americans made). Welfare once provided just enough to keep families intact, fed and sheltered, which made it possible for them to get back on their feet.
We feared that electing another Democratic president would put Social Security in danger. We saw how the American people were glad to turn their backs on the poorest, so we knew that America was embracing the Nazi belief that only those who could be of use to the powerful should live.
DHF
Wisconsin, USA
6 August 2011
On “43,000 strike telecommunications giant Verizon in Northeast US”
The demands being made by Verizon sound suspiciously like the conditions at France Telecom that resulted in the suicide of one of their employees recently. The demand to work a long distance away from home, to change job titles or positions, in addition to the cuts in pensions, the increase in costs for health care, etc., were proved to be part of a deliberate campaign on the part of FT to discourage its employees and drive them either to quit or to become completely obedient in order to save their jobs.
This plan also has been revealed to be standard operating procedure within companies in the United States. HR personnel are actually being trained in these techniques of oppression. Lists of progressively onerous tactics against employees are followed like business plans. In fact, they are business plans.
This is occurring within the company I work for, as well. The HR staff carry out these operations of intimidation as a type of psychological warfare on workers who they know can be replaced at the drop of a hat due to the number of unemployed people in the country. And the HR personnel are completely without scruple in enforcing these tactics with a smile.
Carolyn
California, USA
8 August 2011
On “New Orleans police found guilty in post-Katrina killings”
“These troops are fresh back from Iraq, well trained, experienced, battle tested and under my orders to restore order in the streets. They have M-16s and they are locked and loaded. These troops know how to shoot and kill and they are more than willing to do so if necessary and I expect they will.”—Louisiana Governor Kathleen Blanco (Democrat), September 2, 2005
I stared in amazement at the TV screen as then-Governor Blanco, uncritically parroting breathless media reports of “looting” (later learned to have been exaggerated or even fabricated), made this brazen threat against the poor working population of New Orleans. Now there was a warning to the working class if ever there was one!
It was only two days later that the Danziger Bridge atrocity unfolded.
As the governor of Louisiana, she had the authority to call out National Guard troops stationed in her state. In this capacity, her words would have carried enormous weight among the “special bodies of armed men,” i.e., the police, military and National Guard forces in the employ of the state who are tasked with protecting the property of the wealthy. The troops she refers to were National Guard personnel who had been quartered in Iraq before being rotated back to the US and deployed on the streets of New Orleans.
To my knowledge, Blanco has never been taken to task by any part of the bourgeois press or the political establishment for her supremely irresponsible and inflammatory words, uttered in a Southern state with a execrable history of violence against its own black population.
The extreme silence maintained in the media following Blanco’s remarkable outburst made clear the degree to which the ruling elites expect to receive double value out of their professional standing army by dispatching them to take good care of the social disturbances that they know will be coming in the near future.
Charles H
Texas, USA
8 August 2011
On “Robert Motherwell and the Abstract Expressionists”
This is an interesting political analysis of the rise of the New York School. Unfortunately, the MoMA curated exhibition has presented an important exhibition without an obsolete context, at least as far as Rothko goes. Rothko is undergoing a major revision. The Mark Rothko Southwest History Project has developed Rothko’s unreported, but now well-documented experiences in the American Southwest which began in 1938. Rothko was observing and sketching Native American ceremonies as late as 1949. These experiences were transformational.
The National Gallery of Art, MoMA, and the Rothko family are aware of this revision but have chosen a course of suppression, unwilling to acknowledge Rothko’s indebtedness to indigenous. This is oddly ironic considering that in 1941, MoMA presented “American Indian Art in the United States” which was attended by probably all the players in the New York School.
Noah G. Hoffman
Director, Mark Rothko Southwest History Project
8 August 2011
On “Einstein’s theory of gravity confirmed by NASA probe”
Dear William Whitlow,
As a regular reader of the WSWS, I read your article on the NASA experiment GP-B which was published a few months ago with great interest. I think, however, that you are making an error at the end of the article. In the third to last paragraph you identify the naïve conception that progress in science is attributable solely to the work of some great men with the one Thomas Kuhn developed in his work. You write, “There is widespread belief that science develops purely on the basis of individual genius. This distorted conception was reinforced by the work of sociologist Thomas Kuhn who argued that science underwent periodic paradigmatic shifts as a result of the work of outstanding individuals who happen to develop new theories.”
First of all, I think it is not correct to dismiss Kuhn’s conceptions in just one sentence. After all, Kuhn is still quite popular among serious scientists and this is certainly due to some insights he had into scientific praxis and the history of science. Second, it should be noted that this synopsis of Kuhn’s conceptions is quite wrong. In his influential book The Structure of Scientific Revolutions Kuhn devotes a significant part exclusively to what he calls “normal science” (three of thirteen chapters which comprise 35 of 190 pages in my edition expand on the character of “Normal Science”). This kind of scientific work, to put it briefly, is concerned with solving puzzles within a set of a more or less clearly formulated set of rules given by the currently acknowledged paradigm.
After what you wrote, it might surprise you that the details of the experiment which you explained in the first part of your article fit quite well Kuhn’s description of normal scientific work: The scientists are working in the framework given by current paradigm (General Relativity) of their scientific specialization (Astrophysics). This framework gives rise to lots of puzzles. The team is working on the puzzle of measuring the structure of space-time near the earth and verifying some effects of General Relativity which were conjectured on the basis of theoretical calculations and they solve these problems by ingeniously applying a whole range of technical instruments like gyroscopes, telescopes, superconducting materials and so forth.
Kuhn was far from reducing scientific progress to the achievements of a few individuals. In addition, one of the main points of the mentioned book is to show that scientific revolutions are not coming out of the blue but are developed (and accepted by the scientific community) in response to a crisis which exposes the weaknesses of the current paradigm. It is well known (and one of the many examples treated in Kuhn’s Essay) that the discovery of General Relativity followed such a crisis which developed when it became more and more difficult to resolve the many contradictions arising in the area of overlap of the theories of electromagnetism and classical mechanics. I am sure that there are many weaknesses in Kuhn’s conceptions. However, I think that a more differentiated assessment of his work is necessary.
Yours sincerely,
David
Germany
5 August 2011