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The capitalist system may be turbulent, inequitable, and antisocial. But there is no “iron law” of capital standing in the way of a program of economic planning for sake of the climate.

J. W. MASON

A few days ago, Dylan Riley wrote a post on New Left Review’s Sidecar blog that provoked a furious response on left-economics twitter. I largely agree with the criticism made by Alex Williams, Nathan Tankus, Doug Henwood, and others. But I want to try to clarify the larger stakes in this debate.

Riley’s piece starts from the suggestion that the failure of Silicon Valley Bank reflects a larger crisis of overcapacity and lack of investment opportunities. SVB, he writes,

had parked a huge quantity of its deposits in low-yield — but supposedly safe — government-backed securities and low-interest bonds. . . . The bank was overwhelmed by the massive growth in deposits from its tech clients — and neither it nor they could find anything worthwhile to invest in. . . . The SVB collapse is a beautiful, almost paradigmatic, demonstration of the fundamental structural problem of contemporary capitalism: a hyper-competitive system, clogged with excess capacity and savings, with no obvious outlets to soak them up.

This is an elegant framing, but it runs into a problem immediately, involving the ambiguous meaning of “invest.” The depositors in SVB were not venture capitalists, but the firms that they had stakes in. The reason SVB had such big deposits was not because finance was unable to find profitable outlets even in the tech world, but precisely because it had done so. The fact that SVB’s assets consisted of Treasury bonds rather than loans to its depositors reflects the shift in business financing, especially in tech, away from banks toward specialized venture capital funds — an interesting development, certainly, but one that doesn’t tell us anything about the overall population of businesses looking for financing.

Lurking behind Riley’s formulation here seems to be a crude version of commodity money theory, in which money is either out in the world being useful or being left idle in the bank. But money in the real world is always in the form of bank deposits — that’s what money is — regardless of how actively it is circulating.

Read the full article at: https://jacobin.com/2023/04/svb-dylan-riley-green-new-deal-capitalism-socialism

By Zac Hale

It has been a year since the statewide eviction moratorium ended in January 2022, and though the lingering economic effects of the COVID-19 pandemic are still with us, renters are about to lose another crucial protection.  

New York’s Emergency Rental Assistance Program is set to close its application process on Jan. 20, 2023.  This program has been a much-needed lifeline to renters, assisting with the rental debt of over 22,000 tenants across New York. The program serves as an eviction protection, as applicants are protected by a stay that pauses tenants’ eviction proceedings until the state Office of Temporary and Disability Assistance makes a decision on their application. An active stay not only prevents evictions, but postpones court dates, alleviating the strain on judicial resources. The program’s closure comes after months of extensions in hopes of renewed funding. With housing attorneys overwhelmed by the rate and number of eviction cases being pushed through court, and New York City’s homeless shelters under historic strain, the sunsetting of the Emergency Rental Assistance Program will create a gap in tenant protections that governments should be eager to fill.

The pandemic shattered business-as-usual in every facet of public and private life, leading activists and politicians to put forward bold proposals to match the scale of the crises at hand. Government responded to public pressure by expanding unemployment insurance and other benefits, sending out stimulus checks and pausing payments on mortgages and student debt. Struggling tenants pushed for – and won – exceptional interventions including a moratorium on evictions and large-scale funding for payment of rental debt.   

While these measures were controversial, it is crucial for New York’s policymakers and housing advocates to remember that they worked and prevented even greater numbers of New Yorkers becoming homeless or housing insecure. Recognizing the value of safe and stable housing in reducing exposure to diseases, the Centers for Disease Control and Prevention imposed a nationwide ban on evictions in 2020 to slow the spread of COVID-19. Early research has supported their actions, with multiple studies showing increased rates of COVID-19 exposure and deaths in states where eviction moratoriums were lifted. Moreover, even before the pandemic, studies of the impacts of eviction have found a strong link between eviction and poor health outcomes, including substance abuse, more frequent need for emergency care and higher mortality. 

New York provided even stronger protections in the Tenant Safe Harbor Act of 2020, which delayed or prevented evictions for millions of tenants who suffered coronavirus-related hardships. The state extended these protections multiple times while fighting both the deadly virus and the crises that spread in its wake, with the battle to control the pandemic raging alongside battles for racial, social and economic justice. Each potential expiration of protections brought political conflict over renewal, but each successful extension increased the safety and security of New Yorkers who would otherwise face the dire conditions associated with eviction and resulting debt judgments.  

At Brooklyn Legal Services Corporation A, we served thousands of clients who faced financial hardships during the early months of the pandemic. These setbacks triggered chain reactions that leave many of our clients vulnerable to this day. Loss of income paired with increased child care and medical expenses led tenants to exhaust what savings they had, taking away not only their means of paying rent but their ability to endure the costs of moving. While many hundreds of these clients received a life raft in the form of Emergency Rental Assistance Program assistance, many more remain on a thin edge of stability. Now, the recent spikes in the cost of living are pushing many families into deeper debt, with households forced to pick between increasingly expensive groceries and payment of rent or other bills.   

While many of the emergency protections designed to address COVID-19 have lapsed, the human impact of the pandemic remains an urgent crisis. This crisis, which already overlapped with other crises and systemic inequities that preceded COVID-19, is now set to be amplified by further economic shocks. Rather than cutting costs and winding down protections, elected officials should push for a renewed commitment to the safety and stability of New Yorkers.  

The Emergency Rental Assistance Program kept renters in their homes, helped landlords make their mortgage payments and saved the scarce resources of our court system. It worked before, and it can work again. Whether New York extends the current program or creates another system that protects and assists renters, the closure of the program’s application signals the opening of new opportunities for bold action. With courage and conviction, we can weather this crisis and the next, together.

Original Article: https://www.cityandstateny.com/opinion/2023/01/opinion-new-yorks-answer-eviction-crisis-triggered-covid-19-needs-successor/381830/

A recent article in the New York Times, “Relief Eludes Many Renters as Fed Raises Interest Rates,” bemoans the current conundrum facing workers with regards to housing. According to realtor websites such as ApartmentList and Zillow, rental prices soared 17.5% between 2018 and January 2022. Harder hit, of course, are young people, single parents, and people of color — all more likely to be renters. High rents are the problem — so what is the capitalist economic solution? They propose we take a step back and watch these high rents push people back into their parents’ homes or into overcrowded roommate situations. Then rental prices will fall because of slowing demand. And yet, we are also to expect that this spike in rental prices will encourage builders to build more apartments, with a subsequent fall in rent because of added supply onto the market.

The NYT report identifies what economists (erroneously) believe is another cause of rising housing costs – rising wages. The resident economist at ApartmentList.com says that “the main thing that could cool down the rental market is a slowing of wage growth,” and “a lot of the lifestyle gains that came with more and better housing are probably going to reverse a bit.”

So here is the pro-capitalist economist’s thinking, as reported in the New York Times: wages are going up, though not as high as inflation. Workers are losing money. Rents are going up, taking more and more of less and less wages. This will force workers into homelessness or crowded housing, which is good because that will result in a higher supply of empty dwellings. Housing will continue being built, though with difficulty; the Fed’s raising of  interest rates has slowed down building because it’s harder for developers to borrow money to pay for the skyrocketing cost of raw materials and, of course, higher wages. Only through further immiseration — lowering wages and increasing homelessness — can the working class ever hope to achieve the basic need of shelter. In this neat little rat’s nest of logic we can see how capitalism drags itself (and most of us with it) to the bottom of the ocean.

Make America Great Again, indeed.

Perhaps the responsible consumer is expected to live with their parents as long as possible, or risk catching Covid several times while in some kind of flophouse situation with several roommates. This brain-dead thinking dovetails nicely with the social reproductive agenda of the far right, who believe that “respectable” youngsters move out of their parents’ homes only when they get married. The rest are doomed to cramming themselves into increasingly expensive apartments or becoming single mothers — who are, incidentally, the most oppressed demographic category for rental cost as their share of income according to the Bureau of Labor Statistics 2020 survey on consumer spending data and other census data. These girls need to behave lest they find themselves unable to abort their fetus and subjected to being labeled bad girls so deserving a lifetime of rental hyper-exploitation. Make America Great Again, indeed.

Nowhere in the NYT article is an alternative proposed. Indeed, the economists who support capitalism seem to be stumped. This is not surprising, as their checks are cut by the class that stands to profit most off the immiseration of the working class — the capitalist class itself. They know which side their bread is buttered, an observation even the most free-market-minded among them would agree with. What is more necessary than ever is input from real economists, those who are turned away from institutions of capitalist power because they say something other than what the capitalists want to hear. We need meaningful, workable alternatives for the people most affected by capitalism’s long march off the cliff.

The federal safety net has been torn apart by decades of what Ruth Wilson Gilmore and others call the strategy of neoliberal “organized abandonment.” The aspects of the state they are dismantling were built on the New Deal and Works Progress Administration, and later the civil rights, environment, and women’s and LGBTQ liberation movements. Workers, led in the 1930s by a strong Communist Party and militant labor movement, were able to win economic gains never before seen in the history of the working class. The scaffolding they built enabled further economic and democratic gains during the 1960s. These gains were won in no small part through applying pressure on the federal government, which ultimately has courts, law enforcement agents, and jails that the working class have previously used to help enforce its agenda.

After more than two years of an ongoing pandemic, we stand at a precipice, witnessing the stripping away of our economic and democratic gains. Those we vote into power bolster the cops who regularly repress our First Amendment rights to peaceably assemble, look the other way on police murder, and allow a flood of guns to white vigilantes and channer racists. 

The US government . . . magically has the power to enforce war against Russia [but] is unwilling or unable to pass legislation that would directly benefit more than half the working class.

With the right to abortion eviscerated by the Supreme Court, all eyes are on Congress and the president to pass legislation guaranteeing this right. Yet Joe Biden lashed out at what he called activists for calling his response to abortion bans insufficient. He is either buying into the right-wing lie that access to abortion is not overwhelmingly supported by the majority of this country, or he is admitting that the U.S. government, while magically empowered to enforce war against Russia, is unwilling or unable to pass and enforce legislation that would directly benefit more than half of the working class.

The very structures of so-called democratic governance, from the Electoral College and gerrymandered districts to the filibuster and the undemocratic Senate itself, prevent Congress from advocating for the needs of the working class. The state exists as a tool that the dominant class (in this case the capitalists) uses to further its aims. Capitalism, having become bloated and slow in its quest for ever-shrinking rates of profit, uses the state to immiserate us, to strip away our rights and futures.

If the Dems can’t pass an abortion-rights law, how can we expect them to regulate companies like Uber, BlackRock, Amazon, or Tesla? To manage the pandemic in a way that saves lives? To put shackles on Big Oil to save the planet from global warming? Again, what’s needed are serious approaches to these issues, not fatalistic or cynical bromides. We desperately need solutions — workable alternatives from organizers, trade unionists, activists, and economists alike.

If a strong Communist Party and militant labor movement were necessary in the 1930s, we must — at minimum — struggle to build both today. This means buying time and space to organize, which means, among other things, turning out to push back the extreme right at the ballot box.

We cannot fight for radical reforms, much less socialism, within such a nightmare scenario.

The alternative to lukewarm Democratic control is not favorable to our purposes; indeed, it is the road to fascism. The January 6 hearings remind us that, without the solid, overwhelming democratic majority that voted out Donald Trump in 2020, the brittle republic we seek to build socialism on top of could have collapsed completely and been replaced with fascism, American-style. We cannot fight for radical reforms, much less socialism, within such a nightmare scenario. The extreme right has been building towards this moment for decades, and their anti-democratic tactics are paying off in the most anti-democratic arenas. Decades of fundraising, racist voter suppression, corruption, dirty dealing, and seditious plots are bearing the fruit of draconian court rulings, coup attempts, and demoralization among and immiseration of our class.

Tensions in the electoral arena remain high in the run-up to the midterm elections. While some might roll their eyes and stay home, complaining that Joe Biden has failed to deliver on the PRO Act, Ukraine, women’s and LGBTQ rights, and police accountability, this simply makes way for further legislative deadlock. It gives the extreme right — not us — time and space to organize.

Meanwhile, we cannot simply let the struggle stay at the ballot box. Voting is only one tool at our disposal. Before, during, and after elections, we should dedicate ourselves to building the Communist Party and labor movement through on-the-ground organizing, strikes, boycotts, occupations, marches, education, and other tactics that reflect the diversity of our movement. This necessarily includes pushing both the Party and the labor movement deeper into the struggle for democratic rights, such as the fight against racism, homophobia, and transphobia and for the right to obtain safe and legal abortion on demand, all of which are intimately connected to economic advancement for our class as a whole. Biden’s party will remain asleep unless the working class is there to wake them up and force them into action, much as the Communist Party did with Roosevelt’s New Deal and his aggressive stance towards the reactionary Supreme Court.

This is not a call to return to the strategies and tactics of the 1930s, but for a serious examination of what made them necessary in the first place, as well as their successes and failures. There is no space for nostalgia, idealism, or dogmatic thinking. We don’t have the time.

The opinions of the author do not necessarily reflect the positions of the CPUSA.
Image: Housing Is a Human Right (Facebook).

*Original Article: https://www.cpusa.org/article/we-need-solutions-not-slogans/