Of all the problems the Clinton administration faces, one might think the most worrisome for the president and his principal advisers is another scandal of the Whitewater type. But that is not the conclusion to be drawn from an examination of the really formidable difficulties facing the administration.
It is economic problems that must inevitably concern any administration of the capitalist state, since they get translated all too quickly into political problems.
It is often said that if the advisers of Herbert Hoover had found a way to extend the economic boom in his administration and fend off the impending crash until after he had left office, it would have been a great boon to the Republican Party for years to come.
However, no capitalist administration has been able to utilize the resources of the state in such a way as to really extend capitalist stability and avoid a crash coming down on their heads.
If one were to take seriously a report in the New York Times of May 8, one would think that what worries the Clinton administration is not an economic downturn or a collapse, but an ever-lasting capitalist prosperity.
The headline tells us that the "U.S. shifts stance in effort to slow economic growth." We are told in this report that the Clinton administration is trying to slow economic growth, to dampen the economy rather than invigorate it.
Is the economy in such a great upturn? Is the recovery of such a phenomenal character as to require the administration to deliberately slow it? It seems to us, as it must to any worker, that the existence of 8 million to 9 million unemployed (official figures) makes it self-evident that this is not a period of what would normally be called capitalist prosperity but is one of stagnation, to put it mildly.
And how do they hope to slow the economy down? Are they going to order General Motors to cut its production of autos? General Electric to cut down on diesel engines? Or Boeing to cut down the number of planes?
What they propose to do is instruct the Federal Reserve Board, the U.S. government's bank, to slow down its lending process by raising interest rates charged to prospective borrowers.
Considering the many new and imaginative young men and women in the Clinton administration, this is not a novel idea. It's an old hoary one. The assumption is that if the government stops lending money at cheap rates, and instead charges higher interest rates, it will exert control over the economic process.
But experience over the decades, ever since the Wall Street crash of 1929, shows that manipulating interest rates — and this is all it amounts to — does not vitally affect the capitalist economic cycle. It may slow the economic process down here and there, or accelerate it somewhat, but it doesn't basically change the process of capitalist production. That must run its course, regardless of whatever manipulations the government may resort to.
Of course, the capitalist government has tried all too often to divert the economic process by redirecting the economy into military channels. But after all is said and done, and the Pentagon has become as bloated as a blimp, forcing upon humanity countless casualties at home as well as abroad, the capitalist nature of production remains the same. It is impossible to have orderly growth of the economy. That entails large-scale planning along with a conscious effort to direct the economy so as to improve the living conditions of the masses.
The Clinton administration is not unaware of the staggering problems it would confront were there to be an economic collapse. It is interesting to note that Clinton's principal advisers in the cabinet, such as Secretary of the Treasury Lloyd Bentsen, maintain more than a discreet, comfortable distance from him.
So does the head of the Joint Chiefs of Staff, John Shalikashvili, who though he comes from a military family that collaborated with the Nazis in Poland during World War II, had no difficulty being confirmed in the post.
Only poor Lani Guinier, a faithful adherent of Clinton's, got gored in the middle of the process without Clinton's raising so much as a finger in her defense.
All in all, the Clinton administration is poorly situated to defend its tenure in office. If a swift new economic downturn were to develop suddenly, it is hard to see where Clinton would find any defenders.
However, that should be no cause for concern, let alone sympathy, for this president, who probably more than others is willing to do the bidding of Wall Street.
For the moment, the largest and most powerful imperialist monopolies seem most concerned with positioning themselves so as to avoid the consequences of an economic collapse. Some will resort to mergers with competitors where that is possible, as they have in the past. Others will seek out secret agreements on dividing up existing markets while pledging not to invade each other's territories. There's nothing new in that.
It is at least theoretically possible for two large companies to unite in some form of collaboration so as to sink a third one in the process. Certainly there have been enough amendments and court decisions to prevent the growth of monopolies. The passage of the Sherman Anti-Trust Act in 1890 was greeted with much hullabaloo, but it did not prevent the growth of monopolies. But neither does monopoly seriously hamper competition, which is the basis for capitalist development as long as the working class remains tied to the capitalist class as the owners of the means of production.
In this connection, it is worthy of note that the press has opened a scathing attack on Venezuela's banking system, which is in a state of collapse. The purpose is to throw the burden of the economic collapse onto the shoulders of Third World countries.
Let's not forget the 1991 collapse of the Bank of Commerce and Credit International, which came in the midst of the developing recession. The collapse was the result of the economic processes characteristic of imperialism. The U.S. government, however, tried to throw the onus of the collapse onto Middle Eastern operators and investors rather than on the operators in the U.S., who were later shown to be deeply involved.
This was not the first time that the U.S. monopolies and the capitalist press had tried to orient public opinion here against Third World countries in order to throw onto their shoulders the onus of economic collapse.
Now they are trying to do the same thing again with regard to Venezuela, and are treating it as though it were a fully independent country. This is an outrageously false assertion. Of course Venezuela is politically and diplomatically an independent country. But like many others in Latin America, its economic lifeline — in this case Venezuela's vast oil riches — is under the control of U.S. monopolies.
For this very reason, the banking crisis there has great significance for the processes of capitalist development inside the U.S. imperialist colossus itself.
Last updated: 14 January 2018