HPLeft Politics: Class Warfare and Protectionism Aren't Dead as Political Issues, Just Sleeping

Class Warfare and Protectionism Aren't Dead as Political Issues, Just Sleeping

When Congress approved NAFTA in 1993, the promise made to American workers was that the loss of lower-wage manufacturing jobs would be made up for by the addition of higher-wage service sector jobs. For a while, during the boom years of the late 1990s, that promise seemed to be one that was being kept. Today, however, because of technological breakthroughs introduced during that same period, those better-paying service sector jobs are beginning to head overseas as well.

In the current earnings-intensive Wall Street environment, corporations are increasingly using fiber-optic lines and satellite technology to base back-office technology jobs in English-speaking countries like India – where they can pay a worker a fraction of what they could pay an American worker to do the same job. As reported in the Sunday June 1 edition of the New York Daily News, many brokerages, banks, credit card providers and insurers, including industry leaders like Merrill Lynch, Lehman Brothers, Bear Stearns, Citigroup, JP Morgan Chase and Morgan Stanley have begun to outsource software development, helpdesk, customer support and data management tasks to firms that provide workers in Asia. Technical support jobs for PC vendors like Toshiba and Dell are also finding their way to English-speaking developing nations.

This move to outsource back office and technology jobs presents a tremendous challenge to the American economy, and ironically, eventually to the financial services industry itself. It also has very definite political implications.

Enter Saturn-Neptune
Astrologers often describe the 36 year cycle of aspects between transiting Saturn and Neptune, from conjunction to conjunction, as the cycle of Utopian Socialism. For instance, the last three series of conjunctions in this cycle marked dramatic turning-points in the implementation of Socialist-Communist ideas. Briefly described, the first series in the 20th century, in 1917, marked the onset of the Communist Revolution in Russia. The second series, in late 1952-1953, marked the beginning of liberalization in the Soviet Union, which became possible with the death of Stalin in March of 1953. The final series, in 1989, brought the fall of the Berlin Wall, and the beginning of the end for the Soviet Union. However, the Saturn-Neptune cycle does not just describe Communism or Socialism, but the universal urge within humanity for a more compassionate, idealistic approach to how individuals are related within the framework of any social structure. So, for instance, in June 1935, 18 years after the 1917 conjunction of Saturn and Neptune, at their opposition, the United States Congress passed the bill authorizing the establishment of the Social Security System. In a very real sense, the Social Security System is a free-market, healthy response to the same cosmic impulse that gave birth to the very imperfect expression of the Bolshevik Revolution. Communism may have died as an important historical force in 1989, but the cyclical cosmic impulse behind its original appearance did not vanish. It will likely reappear after an extended hibernation in 2006-07, and in intervals of 18 and 36 years thereafter, until the underlying principles the cycle represents are more perfectly realized – a planet where profit and enlightened economic self-interest, where greed and compassion, are more fairly balanced.

Speaking of balance, the Saturn-Neptune cycle has everything to do with balancing the rights of the voiceless with those of the powerful. 72 years before the passage of Social Security, framed within the historical moments described by a series of Saturn-Neptune oppositions (beginning in November of 1862 and ending in October of 1863), the world witnessed several seminal moments in the spiritual evolution of the United States: 1) in January 1863, the Emancipation Proclamation, which marked the beginning of the end for the "peculiar institution" of Negro slavery; 2) on July 3-4, 1863, the culmination of important Civil War battles at Gettysburg and Vicksburg, which many historians believe fundamentally altered the course of the war; 3) a few days later, the Civil War draft riots. The significance of the first two moments is obvious, and requires no further explanation. The third event, the draft riots in NYC and several other Union cities, recently dramatized in Martin Scorsese's acclaimed film Gangs of New York, bears a bit more attention. The riots erupted in response to the obvious inequity of the Union's Enrollment Act of Conscription, which was announced by Abraham Lincoln on March 3, 1863 – within 10 days of an exact opposition of Saturn-Neptune (March 11, 1863). This act allowed for the wealthy to pay a “commutation fee” that enabled them to literally buy their way out of military service. The riots also highlighted the resentment felt by poor whites against the equally poor African-Americans - a resentment that is tragically still felt today, as witnessed by the ongoing controversy over Affirmative Action. When class resentment becomes a driver of events, human beings often act in mean-spirited, irrational or intemperate fashion. This kind of reaction is almost inevitable, if unfortunate, since class struggle typically only emerges in reaction to an intolerable economic wound that has been allowed to fester.

Crisis/Opportunity in 2006
The mundane economic evidence tells us that while corporate profits are improving (largely due to cost-cutting), and the stock market is recovering, the official unemployment rate (which does not account for the long-term unemployed, and hence understates the extent of the problem) continues to grow – as of July 3, to 6.4% nationally. In technology-employment driven cities and regions like New York, Seattle and San Francisco/Silicon Valley, the unemployment rate is several points higher. What this outsourcing phenomenon describes is a private sector that is choosing greater profitability (which symbolically is described by Saturn) over any obligation to either: 1) more equitably spread the pain across corporate management, shareholders and workers; 2) more fully participate in the hoped for recovery of the American economy by keeping jobs at home. These latter approaches would reflect the symbolism of more idealistic, collectively-oriented Neptune. The irony of our current situation is that any continuation of this trend will create a dangerous situation of long-term structural unemployment that will eventually come to undermine the system itself. How?

Consumers today are carrying a tremendous amount of credit card and mortgage debt, especially in the aftermath of their role in carrying the economy for the past three years. These debts represent a tremendous threat to the health of the American economy. If more American service sector jobs were to find their way to Asia, and national unemployment were to approach levels currently experienced in New York, San Francisco and Seattle, it quite likely that we would begin to see a wave of people unable to pay mortgages - and either forced to sell their homes, or having their mortgages foreclosed on by their lending institutions. This would naturally lead to significantly lower real estate values, and the rapid bursting of the current real estate bubble. Long-term structural unemployment would also impact consumers' ability to pay back credit card debt, even if the long-delayed bankruptcy reform bill were to be passed by Congress. Unemployed or under-employed workers might still be on the hook for their credit card debts, but financial institutions would still not see more than a small percentage of what they were owed, and even then, only see repayment happen over an extended period of time. This cannot be good news for credit card lenders. In the end, it cannot be good news for anyone hoping for a continuation of robust of consumer demand, and continuing growth in the American economy. And, now that Republicans control both Houses of Congress and the Presidency, this dramatic unraveling would be happening under their watch.

The next half-cycle (or opposition) of Saturn-Neptune arrives in the fall of 2006, just in time for the mid-term elections. If free-trade advocates haven't figured out a way to remedy the drain of American service-sector jobs by that mid-term election cycle, it is my opinion that the issues of Protectionism and Class Struggle will return as winning political issues. They might even carry some bite in 2004, but my guess is that baring a dramatic worsening in the employment situation, these two specific themes (as opposed to a more generalized dissatisfaction with the faltering economy) will not begin to gather sufficient weight until well after the next Presidential election.

The Time to Act Is Now
There is still time for appropriate action by free-trade advocates that might slow or reverse this trend, replenish the job base of the American economy, and hence re-frame the context for the next predictable phase of the Saturn-Neptune cycle. In the end, we rise as one nation and one economy, and fall as separate and unequal economic interests. But if class struggle indeed returns as a winning issue, in the aftermath of ideologically-driven, one-size-fits-all, trickle-down economic policies that do nothing to address the true problems that ail the American economy, then this Republican Congress, and any legislator of any party blind to the worsening plight of the American worker, will likely have cut their own political throat. More critically, they will also be responsible for setting in motion an economic mudslide that, once begun, may be exceedingly difficult for any of us to escape.

Matthew Carnicelli © 2003. All rights reserved.

Originally published July 4, 2003; revised May 27, 2004.