Dwindling exports, government spending, and shrinking markets in the U.S. conspired to produce a withering Gross Domestic Product. Pointing toward another potential recession, the GDP fell by an annualized rate of 1.4% in the first quarter of 2022. Still, U.S. federal authorities want to tighten the economy even more to force down wages for the working class and weaken the effectiveness of what some call the “Great Resignation.”
Inflation and a tight monetary policy are the latest tools in a systemic class war targeting U.S. workers. Since the pandemic produced a massive shift in the economic organization in 2020 and 2021, many workers refused to work except in jobs and professions that provided the best incomes.
As labor activists Sarita Gupta and Erica Smiley write in their recent book, The Future We Need, millions of workers “were able to leverage a tight labor market to simply leave their jobs and not work for anything less than what they deemed fair.”
In addition, more workers found joining or organizing labor unios an excellent choice to strengthen their bargaining position with employers.
Employers and their political allies reacted swiftly. Many corporations drove up prices, and corporate-owned media began to talk about the problem of inflation and budget deficits. They demanded and got a federal monetary policy that would protect their profit margins.
Even before employment rates had reached pre-pandemic levels—which were already showing signs of weakness—U.S. politicians and the Federal Reserve authorities pushed to tighten the money supply with higher interest rates. President Joe Biden backed off promises for new rounds of economic investments—even as the U.S. political system ground to a halt unable to pass new laws to stimulate long-term economic stability.
Promises to forgive hundreds of billions in student loan debt have been kicked down the road. Little action has been taken to push for a higher minimum wage, and new investments in education, infrastructure, and technological research are lacking.
Illustration: Chen Xia/GT
One exception stands out. War. President Biden’s handling of U.S. policy on the Ukraine crisis has seen swift and unanimous action by the political class to provide tens of billions of dollars of new spending for military contracts. U.S. policy has focused on escalating the war by giving Ukraine a seemingly endless supply of weapons. Instead of fulfilling its obligations to call for peace and talks, the U.S. government has promoted a wider conflict.
The U.S. political class—nearly unanimously in both major political parties—has agreed to unified action to boost resources for the military-industrial complex.
This deliberate choice has proven to be beneficial for U.S.-based military contractors. Media reports indicated that Biden administration officials met with representatives of the top 8 military contractors in the U.S. in mid-April to plan its approach to extending the Ukraine conflict. U.S. arms giants, securing promises for $33 billion in new Pentagon arms deals to Ukraine and in loans to European countries to purchase weapons systems.
Top NATO officials seem fixated on extending the alliance to other European countries to foster hostilities with Russia and its allies.
Critics of U.S. policy believe that the goal of this policy, other than funneling more spending into the coffers of the military contractors, aims to destabilize Russia. Even though Russia has not recovered from the “shock therapy” after the collapse of the Cold War, its control over the flow of natural gas and petroleum resources into Europe has given it disproportionate influence over the European economy.
In the 2000s, NATO and the U.S. resisted Russian requests for admittance into NATO and the European economy, fearing a shift in European allegiances to the east.
The longer-term U.S. agenda appears to aim to find whatever means are available to stall or weaken China’s economic growth and global influence. Rather than systematic talks to defuse tensions or develop cooperative, if competitive, forms of engagement, the U.S. political class and its corporate allies seem obsessed with maintaining the U.S. dominance of a unipolar world system.
In the meantime, the people of Ukraine are made to suffer as the U.S. denies real progress at the diplomatic table. Further, the actual investments required to meet the needs of the U.S. people will have to be put off until the next war has ended. The people of both countries have an immediate interest in peace that their rulers have denied them.
The author is an associate professor of Liberal Studies Department at Grand Valley State University in the U.S.
