Thu, Nov 07, 2013 - Page 9 News List

US Republicans making the poor pay to balance the budget

The impetus to cut food stamps is ideological, not fiscal, and the right’s move to drive down wages means work provides no guarantee against hunger

By Gary Younge  /  The Guardian, LONDON

During a discussion at the University of Michigan in 2010, Charles Munger, the billionaire vice chairman of Warren Buffett’s Berkshire Hathaway, was asked whether the government should have bailed out homeowners rather than banks.

“You’ve got it exactly wrong,” he said. “There’s danger in just shoveling out money to people who say: ‘My life is a little harder than it used to be.’ At a certain place you’ve got to say to the people: ‘Suck it in and cope, buddy. Suck it in and cope.’”

However, he said, banks need our help.

It turns out that moral hazard — the notion that those who know the costs of their failure will be borne by others will become increasingly reckless — only really applies to the working poor.

“You should thank God” for bank bailouts, Munger told his audience. “Now, if you talk about bailouts for everybody else, there comes a place where if you just start bailing out all the individuals instead of telling them to adapt, the culture dies.”

In the five years since the financial crisis took hold, people have been sucking it in by the lungful and discovering how pitiful a coping strategy that is. In Michigan, the state where Munger spoke, black male life expectancy is lower than male life expectancy in Uzbekistan; in Detroit, the closest big city, black infant mortality is on a par with Syria (before the war).

As such, the crisis accelerated an already heinous trend of growing inequalities. Over a period of 18 years, the US’ white working class — particularly women — have started dying younger.

“Absent a war, genocide, pandemic, or massive governmental collapse, drops in life expectancy are rare,” Monica Potts wrote in the American Prospect last month.

However, this was a war of the poor.

“Lack of access to education, medical care, good wages and healthy food isn’t just leaving the worst-off Americans behind. It’s killing them,” Potts wrote.

This particular crisis has also accentuated the contradictions between the claims long made for neoliberalism and the system’s ability to deliver on them. The “culture” of capitalism, to which Munger referred, did not die, but thrived precisely because it was not forced to adapt, while working people — who kept it afloat through their taxes and now through cuts in public spending — struggle to survive. Given the broad framing of economic struggles in the West exacerbated by the crisis, this reality is neither new nor specific to the US.

“Over the past 30 years the workers’ take from the pie has shrunk across the globe,” an editorial in the latest edition of The Economist said.

“The scale and breadth of this squeeze are striking ... When growth is sluggish ... workers are getting a smaller morsel of a smaller slice of a slow-growing pie,” it said.

A few days before the bailout was passed, I quoted Lenin, who said: “The capitalists can always buy themselves out of any crises, as long as they make the workers pay.”

What has been striking, particularly recently, has been the brazen and callous nature in which these payments have been extorted.

On Friday last week, 47 million Americans had their food stamp benefits cut. These provide assistance to those who lack sufficient money to feed themselves and their families. Individuals lose US$11 a month, while a family of four will lose US$36. That will save the public purse precious little — bombing Syria would have been far more costly — but will mean a great deal to those affected.

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