Austerity as Spiritual Depression: The Current Economic Assault on the Middle Class

Obama White House

Obama reviews his fiscal policy speech with advisers in the Oval Office on April 13, 2011. Credit: Official White House Photo/Pete Souza

The wishy-washy swings in the Obama administration’s approach to job creation and debt reduction reflect a deeper division and debate among U.S. elites about the future of our society and the American empire.

At the moment, the pessimists seem to have the upper hand. As a result, President Obama and other leaders of the Democratic Party are joining Republicans in championing austerity measures under the polite title of “debt reduction.” Obama’s latest plans for generating employment are deeply inadequate when compared with the actual needs of the American people. Comparisons with the more visionary programs developed by FDR in the 1930s render current proposals almost ridiculous. Framed as part of a program of reducing the national debt—and painfully constrained by that goal—Obama’s program for jobs is pathetically deficient.

By accepting the Republican agenda, which puts debt reduction as the highest goal, and by actually repeating the conservative debt reduction mantra for the past several years, Obama has helped create a majority in support of shrinking government services. Even people who will suffer from cuts to government services more than they will benefit from whatever tax cuts are enabled, including Democrats who claimed to be representing middle-income working people, are now voicing support for these austerity measures. If debt reduction is not achieved by a booming economy (as happened in the 1990s under the Clinton administration), and if Republicans hold firm on their commitment to protect wealthy elites from even tiny tax increases, then the debt can only be reduced through dramatic cuts in government expenditures. Such cuts will inevitably cause increased unemployment and the erosion of public education, health care subsidies, social security, state and national parks, environmental protection, food safety, and even fire and police services, all of which are particularly vital to the middle class and the poor.

How is it that the pessimists in our government have gained so much power?

The Capitulation of America’s Rationalist Capitalists

America’s economic elites have always been unified in their desire to preserve the capitalist system and to isolate or crush those who seek fundamental change. Yet they have long debated the best way to achieve that goal.

On one side are the short-term profiteers who argue that the appropriate role of capitalists is to make as much money as possible, as quickly as possible. Capitalists, they say, must disregard the needs of middle-income working people and instead struggle against those who organize themselves to put restraints of any kind on capital. These are the people who have sought to destroy the labor union movement from the start, who fought bitterly against the New Deal legislation that provided federal funding for employment, and who resist the imposition of safety and health regulations at the workplace, in agriculture, in health care facilities, and in pharmaceutical production. These are also the people who oppose or seek to limit unemployment benefits and any form of welfare for the poor, and who fight mightily against serious environmental programs. Traditionally, this group was politically organized around the Republican Party.

On the other side are the rational capitalists who argue that the capitalist system would best be served by accommodating the needs of middle-income workers and offering subsidies to the poor. The goal of this approach is to avoid “class war” and give everyone a stake (however unequal) in the flourishing of the capitalist marketplace. This approach—which shaped the New Deal of the 1930s and the Great Society legislation of the 1960s—has historically found widespread support among the corporate leaders involved in shaping the modern Democratic Party. In their view, it is important to put restraints on the greatest excesses of greed, to create regulatory bodies that make capitalist enterprises more responsive to the needs of middle-income and poor people, and to project the image of a democratic society that supports human rights and is “the best country in the world.” Though the short-term profiteers have always had a foothold in both major political parties, the rational capitalists often predominated in shaping the policies of the Democratic Party.

When elected president, Obama was perfectly situated to promote the agenda of the rational capitalists because the short-term capitalists had been in power for eight years, dismantled restraints on capital, and produced a huge deficit, as well as escalating levels of unemployment. Almost from the first moment in office, however, Obama and the Democratic Congress acted as though they had no mandate or as though they had lost the election: they framed their domestic and foreign policy as though they had an obligation to be responsive to the very forces that had led the country to the brink of disaster.

In light of three disastrous years of this approach, it seems as if the rational capitalist forces have lost their own sense of direction and purpose—they have lost faith in their belief that caring for each other will produce a social good. As a result, the Democrats who represent the rational capitalists have been capitulating to the logic of the short-term profiteers. Rather than believing that they can build a rational future for America, the Democrats now are as likely to mix a rational capitalist perspective with a short-term, selfishness-oriented, capitalist perspective. The outcome is a kind of Tower of Babel in which the Democratic message sounds like meaningless babble.

Obama’s Lost Opportunity

It was not necessary for Obama to have accepted the position of the Republicans. A serious Democratic president representing the perspective of the “rational capitalists” would have followed the analysis developed by Nobel Prize–winning economist Paul Krugman and former Secretary of Labor Robert Reich. Krugman and Reich have repeatedly argued that the best way to solve the United States’ debt problems is through a massive investment in rebuilding our domestic infrastructure; a reduction in military spending realized by ending the wars in Iraq and Afghanistan, as well as closing the thousand or more U.S. military bases around the world; and the restoration of rational constraints on capitalist greed.

Though faced with implacable opponents in Congress who might have prevented him from winning approval for such a program, Obama has also had daily opportunities to shape public debate and popularize a worldview that could eventually have isolated the Republican obstructionists. If the president tries to revive a populist discourse now, as he nears the next presidential election, he will encounter much deeper resistance than he would have had he consistently put forward a pro-worker, pro–middle class agenda and helped people absorb the intellectual foundation for such a program.

Instead of focusing on how Obama has betrayed his progressive base—whom he is now seeking to win over again in order to win reelection (fool us once, shame on you; fool us twice, shame on us)—we need to look at what has happened to the rational capitalists. What has happened to these rational elites, who have normally sought to protect their long-term interests by urging the government to invest in the country’s infrastructure? These capitalists used to fight for measures to reduce the suffering caused by the normal behaviors of the capitalist system. In the past, they pushed the government to support those hit worst by the system and to expand employment for everyone.

Economic Decline, Neoliberal Hegemony, and Climate Change Paralyze U.S. Elites

Several factors are likely at play in weakening the power and resolve of rationalist capitalists worldwide. First, there is the decline of the American economic and military empire. Instances of successful resistance to American power and control—first in China and Korea, then in Cuba and Vietnam, then later in some Islamic countries, and now in parts of South America—have made it harder for American elites to believe that their economic system, dependent as it has always been on expansion and unlimited access to raw materials and markets, has a bright future.

Second, the globalization of markets and production through neoliberal trade agreements has enabled short-sighted capitalists to exploit the resources and labor of other countries without concern for creating long-term sustainable relationships. As a result, the U.S. economy has become hooked to the instability of other economies dependent on loans that rapacious bankers are not willing to forgive. The IMF, determined to impose austerity in order to ensure that bankers get their interest paid back in an orderly fashion, has created economic circumstances that have generated pre-revolutionary conditions not only in the least developed countries, but also in Europe.

Third, there is a growing recognition, particularly among rational capitalists, that the combination of global warming, expanding populations, declining food supplies, and short-term capitalists’ resistance to rational global environmental planning is likely to produce catastrophic environmental crises sufficient to undermine economic well-being in the advanced industrial societies. It’s hard to believe in a long-term future when it seems more realistic that our children and grandchildren will face the local effects of global environmental devastation.

Finally, there is a growing fear that the short-term capitalists have unleashed fascistic forces in the advanced industrial countries. These forces threaten to manipulate populist and religious yearnings for power. Moreover, they are acting even more irrationally than other right-wing forces the system has seen in recent decades—just listen to many of the current candidates running for the presidency in 2012.

Put these factors together and you get a growing psychological and spiritual depression. It is this dejection that is crippling many rational people’s will to act—particularly the will of rational economic elites in Western societies.

This depression has been mightily reinforced by a loss of faith in the possibility of counting on each other, trusting each other, and believing in the fundamental decency, goodness, and rationality of others. Ironically, this is the result of a systematic offensive that members of both factions of America’s ruling elites have engaged in ever since the 1960s scared many into believing that they might be in danger of losing their control over politics and the economy. The huge upsurge of hopefulness that is now recalled as “the Sixties” was so threatening to our ruling elites that they have made stamping out its resonance a key strategy to retain their power. As a result they have been willing to undermine the labor union movement, blame social problems on the alleged narcissism of the Sixties, and support cultural offensives against the most hopeful and utopian elements of any liberal or progressive thinking. They have started describing what used to be the political center as “the Left,” thereby renaming the actual Left as “far Left” or even “left-wing extremists”). And they have encouraged people to believe that human beings are naturally selfish, materialistic, and uncaring about each other. In this worldview, people only care about others to the extent that they can be used instrumentally to satisfy their own needs. This worldview also promotes as leaders and sages those who have been successful in the capitalist market, while marginalizing or ridiculing those whose lives were dedicated to caring for others (not least by denying them ways of making an adequate income for living).

Our ruling elites believed that it was necessary to squash all hopeful, prophetic, or visionary discourse. They attacked our ability to imagine people caring for each other rather than focusing narcissistically on themselves. Now, however, the loss of faith in each other that generated our society’s emotional and spiritual depression has managed to cripple the rational capitalists as well. Without the capacity to believe in each other, the rational capitalists became voiceless. Ironically, this happened even as Barack Obama, who has the potential to be a powerful spokesman for this segment of the ruling elite, is positioned to articulate the rational capitalists’ ideals, if only they or he still believed in them.

Time for a Politics of Care

This is an important moment for “spiritual progressives”—those of us who are interested in creating a politically progressive society oriented around universal, spiritual, and ethical ideas of care and love—to enter the political dialogue with a fundamentally different perspective. We ought to hold a progressive convention to draw up a shared platform that speaks to the heart and doesn’t simply repeat the thirty-nine flavors of past coalitions. And then we ought to have progressive candidates running for the Democratic nomination for the presidency, and maybe even for the Republican and Green Party nominations. Different candidates in different states all committed to the same program would make it harder for the media to focus on the flaws of any given person. And since the goal is not to win the nomination but to give voice to a progressive worldview—a perspective that has been silenced by Obama as much as by the media—having several different candidates serves the goal. This could happen if we convince the rest of the liberal and progressive forces to recognize that what is needed most today is a politics that speaks to the hearts of Americans, that regenerates their faith in each other, and that proposes fundamental transformations of orientation. For concrete examples of such a politics, see our Global Marshall Plan ( and Environmental and Social Responsibility Amendments to the U.S. Constitution ( For progressives to reshape public discourse, they must be willing to see the fundamental decency and goodness of all Americans and not write off those who have momentarily been attracted to the Right.

Unfortunately, liberals and progressives show few signs of waking up to the challenge and opportunity facing us. Progressives could raise awareness about what a genuine progressive worldview would entail by launching a challenge to Obama in the Democratic primaries or by creating a new political party that embodies a politics of meaning. But most progressives remain so focused on protecting their own organizational or political turf that they can’t even get together to hold a national convention to determine a shared direction or strategy. Instead, they mouth empty slogans about local organizing without seeming to notice that much of what has been organized or achieved in the past decades is rapidly being dismantled by the emotionally depressed Democrats succumbing to the radical know-nothing-ism of the Republicans. Why? Because all those years of organizing took place without a unifying spiritual/psychological worldview. We’ve been limping along without a way to understand the spiritual and psychological dynamics of hope versus fear and how they actually function in the political world.

All the more reason to revitalize Tikkun’s Network of Spiritual Progressives. We actually have a worldview and a program that could play an important, possibly even decisive, role in giving leadership and direction to secular liberal and progressive forces. But our own members have themselves not been immune to the larger level of emotional/spiritual depression that is paralyzing liberals and progressives. Many of our members shifted their focus from the long-term visions of the NSP to the short-term victory they could achieve by giving their money and time to Obama in 2008. When they succeeded and then Obama turned out to be such a huge disappointment, they began to retreat into the same cynicism, despair, and emotional/spiritual depression that has impacted everyone else. Instead of developing a comprehensive understanding of what Obama’s betrayals meant and what spiritual progressives should do, many NSP chapters folded. Others persisted only by turning inward, becoming more focused on learning communication skills or narrowing activities to a single issue, rather than using the moment to educate people toward a spiritual progressive worldview.

So that task falls upon you, dear reader. But you don’t have to do it by yourself. Now is the time for you to return to the NSP, rebuild or create a chapter in your own location, and adopt a project such as the ESRA, the GMP, or the campaign to urge the United Nations to recognize Palestine while also recommitting to the safety and security of Israel. If those don’t inspire you, create your own project. Run as a candidate in the party of your choice—so what if you don’t get a lot of votes; you can still use the opportunity to put forward a spiritual progressive worldview that most people in your party will have never heard about before. It costs almost nothing to run, and you’ll get invited to forums at which you can present your ideas. Your example will radiate through the community and strengthen others who need such an example in order to get out of their own emotional/spiritual depression. Never seen that happen? Well, just review the recent events of the Arab Spring and you’ll see how a very small group can set off a spark that turns things around against overwhelming odds in ways that no one would have believed to be realistic!

Or try this: call a meeting at your own small apartment or home and invite people who want to be part of a Tikkun discussion group. Use our editorials and other articles in the magazine to spark some energy or to inspire an ongoing monthly study group on American politics and spiritual transformation. If you’re willing to send out a postcard inviting people to such a gathering, and willing to make this as an official Tikkun/NSP group, we’ll put you in touch with subscribers in your area so you can invite them along with others you know who might hunger for a new approach to our bleak political situation. Contact for that information. Don’t worry that you won’t have enough space in your home—the first meeting will likely fit around your kitchen table, even if you send postcards to dozens of people.

Meanwhile, please share this editorial with everyone on your email list, and with other friends and colleagues. Chances are that it might help them better understand the cloud of depression around everyone, and thereby get an idea of what to do next.

(To return to the Fall 2011 Table of Contents, click here. For an attractively formatted, ready-to-print PDF of this article, click here.)


One thought on “Austerity as Spiritual Depression: The Current Economic Assault on the Middle Class

  1. I must confess that the continued focus I see from you on opposing debt reduction is troubling. We are on the edge of bankruptcy as a county by most measures, and even if you don’t agree with “how bad” it is, how does promoting big debt help move us forward? Debt always reduces options, it doesn’t increase options.

    I suggest you stop focusing so much on criticizing those who want to reduce the debt, and instead focus on the ways that public funding already does (and can in an increased way) help our economy and our country. What portion of the tax dollar today goes toward the wages or salaries of folks? I don’t know the answer, but it would be a useful thing to know. You have to count all contracting companies who are funded by the government in the equation, not just strict government employees.

    Looked at that way, it’s a new light on the discussion, isn’t it? What if we said every tax dollar we collect is distributed like this: 55% goes to wages and salaries of people with jobs today, 10% goes to help folks in foreign countries, 15% seems to disappear into a void of waste, 10% is paid to private financiers and shareholders in private corporations, …

    I know that doesn’t add up yet to 100%, and those aren’t the right numbers, but divide the spending pie up into the language that benefits your position, rather than using the language of your opposition, which just makes you continue to be painted in the corner they want you in.

    When talking about Medicare and Social Security, keep the discussions separate from income tax revenue and funding. Make it clear that SS takes in x, and pays out y in retirement benefits to the elderly, leaving a surplus this year of z. We need to make it more plain that Congress has been borrowing this z number every year for decades now to finance tax cuts, and that the income tax equation needs to change dramatically in the near future in order to pay back this z number that we’ve been borrowing from our elderly for so many decades. Of course, we could just tell them that we were lying all along, and that rather than borrowing from them we were really stealing, and we have no intention of paying the money back – that’s the discussion that’s underway. We should be framing it like that.

    Medicare is a little different, in that we do need to increase the income there or cut the benefits. But separate the discussions into their correct buckets.

    Tell me again why I would want to either increase or continue to carry the debt load I have?

    I think we should view the debt and austerity in a spiritual sense. We should be reducing debt, and we should be practicing austerity as part of that process. Notice, I said “we should practice”, meaning we live it. All of us. Do we need to continue to collect taxes? Of course. Should they be higher? Dumb question – of course – how else do we pay the debt we’ve run up? Now, as to reducing our spending, let’s focus on seeing spending through the lens that helps us move forward, not the one that looks backwards.