Americans find their anti-war voice and throw Obama into disarray

President Obama’s volte face on launching an attack on Syria has little to do with his desire for a peaceful solution to the country’s civil war and everything to do with the ongoing crisis of his administration, which is marked by a lack of public support for military action.

Obama must have thought he had appointed a seasoned veteran as secretary of state when John Kerry, a former presidential candidate and a fluent French speaker, succeeded the experienced Hillary Clinton. But Kerry’s bungling last week saw Obama’s war plans unravel at a rate of knots.

Support in Congress for military action was already in doubt when Kerry said in London that a strike would be “unbelievably small” by comparison with Iraq’s “shock and awe” onslaught in 2003. Republicans prepared to give Obama the benefit of the doubt on Syria, rapidly backed away from lending him their votes in the Senate on the grounds that such an attack would make America look weak and stupid.

Before that, the House of Representatives was showing an overwhelming majority against an attack, driven on by opinion polls showing over 60% of the public against military action. By all accounts, Kerry bungled a second time when he suggested that if Syria destroyed its chemical weapons stocks, a deal could be reached with the Assad regime.

While the State Department and the warlike UN ambassador Helen Rice – she was for “regime change” in Syria – desperately tried to dismiss Kerry’s remarks, Obama breathed a sigh of relief. He quickly took up Russia’s support for the idea and, as we know, a deal of sorts has been struck and the vote in Congress abandoned.

The fact that the autocrat Putin, who runs a ruthless regime in a Russia dominated by oligarchs, where opponents often find themselves jailed, could embarrass Obama politically by writing an opinion piece in the New York Times about the need for “consensus” and referring to the Founding Fathers of the US constitution, only rubbed salt in the wound.

More about that later. Just to say, however, that the latest poll shows that just 36% say they approve of Obama’s handling of the Syria situation, while 53% disapprove. There is overwhelming support for the US-Russia deal, however.

Meanwhile, the sense of crisis surrounding the administration deepened when Obama accepted former US Treasury Secretary Larry Summers' withdrawal from the race to be head of the US central bank. He was among the front-runners to succeed Ben Bernanke as head of the Federal Reserve.

Summers was known as Mr Deregulation under president Clinton, with some now holding him responsible in part for the financial collapse of 2007-8. He was also in favour of switching off the Fed’s printing of money sooner rather than later, which sent markets into a spin. Democrats also opposed his nomination because in 2005 he suggested that women had less innate ability in maths and science than men. Ironic, then, that the job looks likely to go to current Federal Reserve vice-chairman Janet Yellen. She would be the first woman in the role.

Back to Syria. The Putin-Obama deal is intended to reinforce the status quo while putting any political solution to a destructive civil war on the back burner. Russia can keep its ally Assad in power, ridiculing any suggestion that the regime would use chemcial weapons when it is quite capable of doing so and the UN report suggests it did. Moscow can keep selling arms to Syria and retain its naval base, while maintaining its historic sphere of influence in the region which dates back to Tsarist times. Obama is relieved that he didn’t suffer defeat in Congress for a military adventure that could have easily sparked a wider Middle East war.

In all this, the right of the Syrian people to self-determination, free from the malign influence of Russia, the United States, Saudi Arabia and other states with their own agendas, is never mentioned. Major power politics has prevailed once again over the interests of ordinary people. However, as the events in Washington show, the American people have found their anti-war voice which makes you optimistic that the old order can be challenged.

Paul Feldman

Communications editor

Global economy heading from contraction to destruction

It’s no wonder that prime minister Cameron now sees no prospect of a “recovery” in the foreseeable future. He’s just stating the obvious.

Twelve European countries are in recession – meaning they have suffered at least two consecutive quarters of contraction: Belgium, Cyprus, the Czech Republic, Denmark, Greece, Ireland, Italy, the Netherlands, Portugal, Slovenia, Spain and the UK.

Germany, the so-called European economic powerhouse, contracted by 0.2% in the first quarter of 2012, after two quarters of less than 1% growth. In France, the growth rate has been less than 1% for four years. In the last three quarters it was 0.0%, 0.3% and 0.2%.

Recession is declining production. It finds its expression in rising unemployment.

The global employment situation is already alarming and shows no sign of recovery in the near future, according to the International Labour Organisation in its World of Work report 2012, optimistically sub-titled “Better jobs for a better economy”.

How do you even begin to comprehend the meaning of 25% unemployment in Spain, rising to 50% amongst its young people? 

These rates are already comparable with those the 1930s Great Depression when while unemployment in the US never rose above 25% in some countries of Europe it soared as high as 33%. In Germany the unemployment rate reached nearly 25% in 1932. In the UK in the same year it peaked at just over 22%.

And what of the future? The evidence shows that the contraction has hardly begun.

A survey out today shows that the eurozone's manufacturing sector slipped further into decline last month. Firms cut workers at the fastest pace in more than two years in April after new orders fell for the 11th straight month.

The ILO report shows that soaring unemployment is going hand-in-hand with a prolonged investment deficit – another sign that the crisis has entered a new phase.

With no hope of increasing consumption, large firms, seeing no possibility of profits from investment, are holding on to unprecedented levels of cash. In some economies, more optimistic small firms have difficulty accessing credit that would allow them to invest and create jobs, because banks, seeing no hope of a profitable return, aren’t lending 

As the effects of only recently adopted austerity programmes begin to bite, even taken together with monstrous injections of further credit from the European Central Bank, and their cumulative effects are seen, voices of alarm are beginning to predominate in the pro-growth camp.

Lawrence H. Summers, former US treasury secretary, knows a thing or two. This week he warned:

Once again European efforts to contain crisis have fallen short. It was perhaps reasonable to hope that the European Central Bank’s commitment to provide nearly a trillion dollars in cheap three-year funding to banks would, if not resolve the crisis, contain it for a significant interval. Unfortunately, this has proved little more than a palliative. Weak banks, especially in Spain, have bought more of the debt of their weak sovereigns, while foreigners have sold down their holdings. Markets, seeing banks holding the dubious debt of the sovereigns that stand behind them, grow ever nervous. Again, Europe and the global economy approach the brink.

The brink of what he doesn’t say.

This inevitable self-feeding spiral of contraction was triggered in 2007 when the capitalist economy reached the limits of five decades of growth funded by clouds of fantasy finance. But these five decades started from a low level. The tidal retreat of the 1930s left a mountain of surplus capacity exposed.

The BBC’s Stephanie Flanders economics editor quotes economists at Citi who say “it's been the worst four years for the UK economy in at least 100 years: worse than what happened in the 1920s and 1930s, and worse than anything in the 1970s and 1980s”. “Leaving aside the war”, she told viewers recently.

Since there’s no prospect of a recovery, and austerity is making a bad situation worse, the turn from contraction to destruction is next on the agenda for global capitalism. We need to learn the lessons from history about the political consequences of slump and depression – and quickly – to block the process through mass action aimed at a transfer of power to the 99% asap.

Gerry Gold

Economics editor