USA-
In the November issue of the British Financial Times Samuel Brittan pointed to the dangers, while trying not to sound alarmist:
"The rising dollar has enabled the US to 'import' a lower inflation rate from the
Reagan's election and world peace rest of the world, via cheap imports and downward pressure on the prices of traded goods. A mere standstill in the dollar could easily add 1 per cent to the US inflation rate: and a modest downturn could have an impact effect of 2per percent taking recorded inflation to 6 per cent....
"All the same, a continued high dollar
The major press around the world that represents the major powers in international politics was quite clear about the fact that the in the US did not represent a mandate for more aggressive imperialist policies. Gerry FOLEY
Izvestia's "political observer," S. Kondrashov, wrote from Washington: elections were held in the heat of the 'new patriotism America first and better than everybody....The 'new patriots' are ready to applaud the crude seizure of Grenada, but at the same time they were quick to accept the withdrawal of American Marines from Beirut after only a couple of hundred of them were killed in a terrorist bombing.
"They love to display American military muscle, but they prefer that this be done without any casualties. They support a policy of peace from a position of strength but they are against this leading to the threat of nuclear war."
The superficial character of big swings, or "landslides," in the context of US bourgeois politics was no secret for Kondrashov:
"As the experience of recent decades shows, even stunning victories are short
Lyndon Johnson had to face that fact when, after his triumph in 1964, he to run in 1968, after having become mired in the Vietnam quicksand.
Nixon was also elected by a landslide in 1972 and after only two years he was sent into an inglorious retirement by the Watergate scandal."
The London Economist, which has expressed nervousness about the triumphalism of the Thatcher government, also found cause for worry in the big Reagan
"Reversals, big or small, have swiftly followed the triumphs of the past four American presidents to be returned to office with smashing majorities....
"History need not repeat itself, but it is not difficult to see how it could. Old age, bad advisers, bad judgment, bad luck, any of these could turn Mr Reagan's second term sour. A recession will not be easy to avoid. Mr Reagan has already presided over the hardest economic times since the great depression, as well as the most spectacular • recovery since the Korean war. Subtler management by the Federal Reserve and by a re-elected Mr Reagan are going to be needed if the free lunch provided by tax cuts and defense spending is not to be found to have been rather expensive after all. Mr ReaInternational Viewpoint 26 November 1984
Reagan win gan's campaign this year has been waged chiefly on his dual claim to have restored the economy and the national esteem. Yet without the economic success, the slogan, 'America is back' would hardly have been persuasive. It would certainly not have been in 1982, when Mr Reagan's standing in the opinion polls was lower than Mr Carter's two years into his pres-
The Economist in an indirect way pointed to some of the underlying weaknesses of the US upturn: "All the secular economic problems that Mr Reagan was able to push under the rug in his first term will re-emerge before his second term is half done. The financing of what America pays to its increasing army of old people, and of its soaring health and defence bills, the propping up of its banking system - these are not tasks which the Europeans, Japanese and poor countries of the third world are going to perform forever for rich America."
This list of problems of course included the international capitalist agenda for mental problem is that the boom has been propelled by deficit spending on arms, which has been financed by bleeding the rest of the world of capital and undermining all sectors of the international capitalist economy. In its November 7 issue, the most prestigious French daily, Le Monde, published the following table showing the evolution of the key economic indicators over Reagan's Unemployment (% of econ- 7% omically active population) Growth in volume of GNP - 03% Consumer prices 13,5 % Budget deficit (in billions of dollars)
- 25,3 Balance of trade Current account (in billions 04 of dollars) Dollar (annual average rate 4,23 against franc * Estimated figures would be still worse. For it could set off a time bomb which would ultimately raise both nominal and real interest rates to scare levels not seen since 1981....The bomb ticking away is the staggering and ever growing US current account deficit."
Brittan went on to explain: "There is nothing inherently wrong with most kinds of deficits if they facilitate additional investment which will pay for their own servicing. In the US case, however, they may also be the symptom of something much less healthy, namely a basic imbalance in internal US policy between a highly stimulative fiscal, and a moderately restrictive monetary policy.
The practical effect is that the US is conducting a raid on world savings, to finance both its budget deficit and its domestic investment....
*The 64-trillion dollar question is how far US indebtedness can grow before overseas holders of dollar assets take fright as they previously did in the case of Latin America."
Basic problems
There were two ways the spiral of debt could be stopped, Brittan wrote, one was by cutting the budget deficit and paying a high political price, the other was loss of confidence by overseas investors. He expressed confidence that some mix of the two would stop the course toward disaster, but that it would not be predicted "whether there will be soft landings or bumpy corrections; and I am not trying to make people's flesh creep with the more pessimistic possibilities."
Interestingly, although Brittan pre1982 198 1984 7,5% 9,5% 9,5% 7,5% * 2,6% -1,9% 3,4% 6% • 10,4% 61% 1,0% 4% • 60 110 195,4 173,3 - 27,9 -34,3 - 69,4 -130• 4,5 -11,21 -41,6 - 90 * 5,43 6,57 7,62 8,61
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sented a detailed and rather narrowly focused analysis of Reagan's economic dilemma, he began his article by mentioning factors that are more political, in the sense that they are not directly or simply product of immediate economic
"It would not be surprising if the real troubles of the Reagan administration were to begin now that the President has
La spectacular victory. Thatcher's banana skins started to accumulate within weeks of her re-election; and in somewhat lower key Helmut Kohl began to reap his full crop of scandals and policy problems after re-election."
The fact is that aggressively rightwing regimes in general suffer from some inherent political disadvantages. that since they are normally more directly connected to big business than liberal bourgeois or Social Democratic governments, they tend to be more subject to financial scandals, as in the case of the Flick bribery affair in West Germany.
Secondly, a hard-line rightist course, while it may score temporary victories, tends to build up the potential for unexpected and uncontrollable as happened, most notably, under the de Gaulle regime in France, and is now threatening to happen under Thatcher.
such governments, because of their need to demonstrate "toughness" are prone to adventures with unforeseeviously need rightist personnel, and in the world such types tend to be people with pretty strange notions of political reality, as Nixon learned to his
This species, including one individual who consciously tried to live up to his image of a Renaissance mercenary, got him into the Watergate scandal.
Fifthly, rightist regimes today depend on, and foment obscurantist, retrograde movements, such as the bible-pounding demagogery that is a conspicuous part of Reagan's new right. This development seems already to have cost him the vote of the Jewish community, which was apparently more worried by the shrill cries preachers than comforted by Reagan's support for a strong Zionist Polarization nationwide
In fact, the size of Reagan's victory in the electoral college is in the long term an indication of weakness rather than strength, because what it reflects is greater national polarization, the fading of regional differences. His majority in terms of the popular vote was, in reality, less than that of Lyndon Johnson in 1964 or Richard Nixon in 1972.
The achievement of basic civil rights for Black people in the South has led to the replacement of the "solid" South by a stark racial polarization of the vote, with the overwhelming majority of Blacks voting Democrat and the overwhelming majority of whites voting Republican at the national level. In the short run, that led to Reagan carrying every Southern state, but in the long run it could pose some fundamental problems for the US bourgeois political system.
the national Democratic Party does not have a lot to offer Blacks, and they are the hardest hit by capitalist austerity. In the Democampaign, for instance, the Black politician Jackson made foreign policy statements and moves that brought a howl from the entire bourgeois political establishment. A few figures show the sort of pressures there are now even on Black leaders with bourgeois loyalties and aspirations.
Since 1981, the number of those officially classified as "poor" in the US has increased from 25 million to 35 million, the latter right in the middle of what the Economist hailed as the greatest boom since the Korean War period. The rate of poverty among the Hispanic population, which is historically placed in the position of a racially mixed people in the context of the US racial caste system, 28.4% officially according to 1983 statistics. Among Blacks, the rate
The rate for the society as a whole is 15.2%
Notably, leading organs of public opinion in Western Europe expressed more worry about the effects of Reagan's victory on US foreign poliey than Pravda
For example, in its editorial on November 8, Le Monde wrote:
"For the allies of the US, the message is clear. The Americans have given a manegotism is a component part of patriot-
Europe cannot expect any favors or special attention. Today, as yesterday, it will be listened to only to the extent that it demonstrates strength and reSpiegel interpreted Reagan's election as a go-ahead for the "Star Wars Plan," the scheme for winning a nuclear war in space
FIRE!
through the new electronics technology. From this, it drew two conclusions: One, the US would proceed with a longterm strategy of preparing for war. Two, this would condemn its capitalist allies to perpetual subordination. In the latter regard, it quoted Hans Mark, former US air force minister:
"Japan is an example. economic conflicts, we have maintained a certain influence over it because the Japanese know that their security...depends on our nuclear shield. goes for Germany. If the Germans or the Japanese thought that they could defend themselves against nuclear attack, a completely new situation would arise."
Der Spiegel commented: "So, the implication is that the 'Star Wars' system is to be built up to defend the US's great power position toward its allies."
immediate international sequel to Reagan's election was stepped-up threats against Nicaragua. vember 13 Financial Times, and other major capitalist papers interpreted this as a calculated bluff.
On the other hand, the sort of government Reagan heads, like the other rightist governments that have come to power in this phase of the economic crisis, has by its nature a more unsteady finger on the trigger than the capitalist governments of more stable times. The underlying threat to peace
In this respect, while it is important to understand the limitations of Reagan's victory, that does not mean that the result of the US elections is not a danger to peace. The fact that in a period of capitalist crisis there is still no mass alternative to the bourgeois parties in the world's most powerful country is an increasing danger to all humanity. This point was notably lacking in the Soviet press coverage, for which the only issue was "peace" as such, in isolation from the general dangers created by the crisis of the world capitalist economy.
However, at the same time as the US elections-without-an-alternative, was an election with an alternative, a real choice in Nicaragua. And the Nicaraguans demonstrated that, even facing economic hardship and the threat of war, the great majority of working people will give enthusiastic support to a leadership that has proved its genuine devotion to their interests and its respect for their
By the same token, the Nicaraguan elections were the most effective answer to growing US military threats. When the masses of American people see their society decaying around them, their economic security increasingly precar ious, their standard of living dropping and a looming threat of nuclear war - they had not alternative in these elections - how can Reagan get them to accept war against a people that did have an alternative and freely and courageous-