Two reports in Daily Maverick were highly significant.
Lord Peter Hain admitted that his British Labour Party has lost connection with its working-class base, and Daily Maverick’s Declassified UK reported that Britain provides massive, systemic support for repressive regimes which the British media fails to question. They came in the same week we saw confirmation that the American president cannot recognise or manage a global pandemic, and even the famed British civil service did little better.
To understand these developments, I look first to the United States, the country I know best after South Africa. I was posted to Washington as a foreign correspondent in June 1980, in time to cover the rise of Ronald Reagan to his victory over President Jimmy Carter. The shift in resources from the majority to the rich had already begun. As early as 1964, the top tax rate came down from 91% to 64%.
It’s now in the low 30s, and loopholes and tax havens are so prolific that the richest man and richest company in the world, Jeff Bezos and Amazon, pay no US federal income tax. How can that be right?
Travelling in the US today, there are facilities that would look almost natural in the third world. I’ve been in US airports that were crumbling and dirty, on bridges that had been declared unsafe. There is an obvious reason for this: the government does not have the money to maintain American infrastructure while providing endless tax cuts and high military spending across 140 countries.
Lord Hain is right to criticise the outgoing British Labour Party leader, Jeremy Corbin, whose career was spent serving a left-wing constituency and attending every domestic and international protest without ever needing to reach beyond his narrow comfort zone.
Younger activists are starting to criticise that form of politics as surrendering broader working and middle-class interests to the whims of an educated, professional, suburban liberal class that seems more sympathetic to identity issues than to the economic collapse of significant sectors of American life.
That seems to account for the tide of youth support for Senator Bernie Sanders, whose second run at the US presidency is now on the edge of defeat. But an interesting thing happened after his setback this week, when primary results left his 710 delegate count trailing former Vice President Joe Biden’s 861.
While much of the press, already distracted by the rising coronavirus pandemic, interpreted his post-defeat media statement as signalling his determination to carry on the fight to be president, long-time Bernie watchers saw something different.
The nine-minute statement laid out his strategy for the first-ever one-on-one debate between Sanders and Biden, set for Sunday 15 March. Remember that Trump managed to avoid any two-person debates; his swagger and abuse could only succeed on a crowded stage.
Sanders laid out seven or eight questions he will pose to Biden, each going to the heart of the consequences of a half-century of tax cuts and distractions that have disconnected politicians in both major parties from the travails of their voters.
The questions highlight what outsiders should easily identify as absurd conditions for significant populations of the richest country in the world — issues like declining longevity, rising suicide, world-record incarceration, hundreds of thousands of bankruptcies resulting from medical debt, and graduates who do not marry or leave home because of six-figure student debt. He will also point to the deadline for climate correction in less than 10 years.
Sanders’ self-identification as a “democratic socialist”, probably a result of decades-old loyalties he is reluctant to sever, has hurt his brand while the agenda that his two presidential campaigns, in 2016 and 2020, espoused has gained majority support.
More than half of America’s population support his health policy of national free medical care; condemn prohibitive college and technical training costs; are shocked that the US has a higher jail population than Communist China; and object to the three richest Americans being worth the same as the bottom 165 million.
These are the questions Sanders will put to Biden on Sunday night. I think he will do it less to win the Democratic nomination than to affect the agenda of the Democratic Party under the presumed banner of Biden. Sanders already has majority popular support for many of his issues, which he did not have in 2016. He also knows he is 78 and suffered a recent heart attack. On the other hand, his cognitive skills seem as good as ever, whereas 77-year-old Biden shows clear signs of decline. His verbal gaffes are worse than they used to be, only protected by comparisons with President Donald Trump, whose tweets and abuse have lowered the bar of acceptable public demeanour.
If Biden can’t perform in this intense, two-hour joust, it’s better to know it now, rather than in a debate against Trump in six months’ time. If Biden performs well, he will almost certainly have to take some of Sanders’ positions on board. He might well do that.
But what has any of this have to do with us here in South Africa? Actually, quite a lot, because reform of the global tax system and a crackdown on tax havens is the only way to reform ours. As I write, the tax haven of United Arab Emirates is foot-dragging on South Africa’s request for extradition of at least one State Capture fugitive, assumed to be one of the Guptas.
Under President Thabo Mbeki, tax rates fell, and perhaps they needed to if we were to be competitive with rival investment destinations. But the fact is that the top rates are too low. Too many South African billionaires are able to spend lavishly. Thomas Picketty has suggested that $38-million is the most any very rich person could possibly need. That’s a mere three-quarters of a billion rand, give or take.
Policy reform is necessary, but too many “reforms” proposed by our politicians take no account of what can really be achieved and how important is the global environment in which we make policy. A change in tax policy in major economies is necessary so we can change ours.
Britain’s misdirected military spending is more than matched in the US. Republican President Dwight Eisenhower’s 1960 warning against the growing power of the military-industrial complex has exceeded his wildest fears. And the decline of media revenue and power have made militaries less accountable.
Clearly substantial structural reforms are needed, and Sanders may have one last shot at persuading his country to read the writing on the wall. I have no doubt that is more important to him than being a 79-year-old president. Opinion polls show an overwhelming number of the young support him, but they failed to come out and vote in large numbers, as the young notoriously do.
Biden’s campaign has been light on substance. A campaign speech this week was only seven minutes long. Perhaps Sunday night’s debate will provide a clue to whether structural reform is on the horizon, or whether endless military adventurism, expanding inequality and declining social conditions remain the norm for another decade. DM