The Shirley Sherrod affair, the case of the black US Department of Agriculture (USDA) official fired July 20 because of an allegedly racist remark, is profoundly discrediting to every wing of the American establishment.

What happened last week is indisputable: the extreme right media organized a provocation and a spineless White House fell for it hook, line and sinker.

The attempt by sections of the liberal media to turn this now into a new chapter of “the national discourse on race” or an additional “teachable moment”—phrases that should be put out of commission forthwith—is simply a hypocritical diversion.

On July 19, Andrew Breitbart, an ultra-right commentator, posted a deliberately misleading excerpt from a speech Sherrod delivered this past March. She appeared to be explaining how, 24 years earlier, while working at a non-profit organization, she had not exerted herself on behalf of a white farmer because of her own racial preconceptions. Sherrod’s father was murdered by a white man in 1965 and his killer was never punished, despite the testimony of witnesses, because of endemic racism in rural Georgia.

Breitbart’s posting, and the threat that other right-wing media outlets, especially Fox News, would take up Sherrod’s remarks, threw the Obama administration into a panic. An official from the USDA harassed Sherrod as she was driving back to her office with several phone calls, finally insisting that she pull over to the side of the road and send in her resignation on the spot, “because you’re going to be on Glenn Beck tonight.”

Beck hosts a right-wing program on Fox, where he regales his audience nightly with his unhinged, anti-communist conspiracy theories.

Agriculture Secretary Tom Vilsack, former Democratic Party governor of Iowa and a candidate for the 2008 Democratic presidential nomination, immediately accepted Sherrod’s resignation, denouncing her remarks and citing a “zero tolerance” policy against discrimination. The NAACP chimed in, adding its own excoriation of Sherrod, rushing a press release out late at night.

A reading of the full transcript of Sherrod’s remarks March 27, along with the well-publicized comments of the white farm family involved in the incident two-and-a-half decades ago, makes clear the absurdity of the accusations. Sherrod used the occasion of the speech to advance her view that racism was deliberately fomented by the American elite to divide blacks and whites, and to explain how she had devoted her life to helping poor people of every color.

Everyone had egg on his or her face. The Department of Agriculture apologized and offered Sherrod a new job. Robert Gibbs, the White House spokesman, acknowledged July 21 that “everybody involved made determinations without knowing all the facts and all the events.” The following day, President Barack Obama telephoned Sherrod.

What do these facts demonstrate?

The Obama administration and its hangers-on rushed to judgment on the basis of a two-minute video clip posted by a thoroughly disreputable source.

Breitbart functions in the foul world of ultra-right blogs and web sites. This is a disoriented and deranged petty-bourgeois layer, which identifies any criticism of American free-market capitalism with Bolshevism. They will say and do anything, no matter how unprincipled or violent, to achieve their ends.

Fox News, owned and operated by billionaire Rupert Murdoch, is a source of never-ending political provocation. Lying and distortion is a way of life for its stable of slick reactionaries, engaged primarily in whipping up the basest and most backward sentiments. Racism and anti-Semitism simmer just beneath the surface.

Breitbart, his attempted set-up of Shirley Sherrod exposed as a fraud, was entirely unapologetic. These bullying, neo-fascistic elements are not held back by any of the internal constraints that once operated within the American political system and the mainstream media. They have been set in motion by the immense social and economic crisis, and nurtured within an official environment in the US over the past several decades pervaded by ideological reaction.

This extreme-right element represents the views of a small portion of the American population, yet it dominates at Fox News, major newspapers and has important representatives at virtually every media outlet.

The Obama administration closely monitors the right-wing web sites and cable television programs and reacts more sensitively to their thrusts than to any other single source of political criticism. The watchword of this administration is that it will not be outflanked on the right. Meanwhile, it is impervious to mounting popular economic distress and opposition to the Wall Street pay bonanza, government inaction over the Gulf oil disaster, and the war in Afghanistan.

In effect, the right-wing media, bankrolled by Murdoch and others, largely sets the agenda for the Obama White House. Their programs may not formally coincide, but they may as well. The initiative remains, for reasons bound up with the decline of American capitalism and the collapse of liberalism, with these aggressive reactionary types.

In this incident, as in every other one, the pundits reveal their own bewilderment. Maureen Dowd in the New York Times makes the point that “Obama lacks advisers who are descended from the central African-American experience,” and proceeds to cite the comments of a series of black Democratic Party politicians as privileged and as distant from American social reality as she is.

The Times’ Frank Rich argues, “This country was rightly elated when it elected its first African-American president more than 20 months ago. That high was destined to abate, but we reached a new low last week. What does it say about America now, and where it is heading, that a racial provocateur, wielding a deceptively edited video, could not only smear an innocent woman but make every national institution that touched the story look bad? The White House, the NAACP and the news media were all soiled by this episode.”

Well, what does it say?

Speaking of Vilsack, Rich comments, “an executive so easily bullied by Fox News has no more business running a government department than Ken Salazar, the secretary of interior who let oil companies run wild on deepwater drilling until disaster struck. That the White House sat back while Vilsack capitulated to a mob is a disgraceful commentary on both its guts and competence.”

Relatively strong words, but Rich draws no conclusions except that “While America’s progress on race has been epic since the days when Sherrod’s father could be murdered with impunity, we have been going backward since Election Day 2008.”

Implicitly at least, Rich identifies the fake populist demagogues on the right with popular opinion. What evidence can he muster to make such an assertion?

The Washington Post’s E.J. Dionne Jr. insists that “The mainstream media and the Obama administration must stop cowering before a right wing that has persistently forced its propaganda to be accepted as news by convincing traditional journalists that ‘fairness’ requires treating extremist rants as ‘one side of the story.’”

But why do they cower?

None of the liberal columnists can answer that question, because it goes to the heart of America’s social reality. In the end, the human trash on Fox and the right-wing blogs are merely the most naked and brutal face of a crisis-ridden, predatory and essentially criminal American capitalism. The Obama administration and the Democrats serve the same social interests, but in an unconvincingly and half-heartedly liberal guise.

There is a division of labor. Fox News and company proceed to stir up whatever filth they can, while the White House and the pundits assert piously that the country must rise above its alleged preoccupation with race.

But the real story here says something very different. It speaks to the fact that there are two Americas, divided sharply along class lines. The political and media establishment could so seriously misread the Sherrod case in part because it is insulated by a hundred layers of wealth and privilege from the reality of the working class and the poor, and the sentiments of millions of working people about American life, even if they are not yet fully articulated.

Sherrod, married to a prominent figure in the civil rights movement, explained in March that working with Roger Spooner, the white farmer, “made me see that it’s really about those who have versus those who don’t, you know. And they could be black; they could be white; they could be Hispanic.”

She further attributed racism to the desire of “the people with money, the elite” to divide whites and blacks. “There is no difference between us. The only difference is that the folks with money want to stay in power,” she said.

Sherrod spoke about the experience of black and white indentured servants in colonial America, apparently referring to events in Maryland and Virginia in the late 1600s. She noted that the indentured servants “didn’t see any difference in each other. Nobody worried about skin color. They married each other, you know. These were poor whites and poor blacks in the same boat, except they were slaves. But they were both slaves and both had their opportunity to work out on the slavery.”

Then, she commented, the black and white servants began to organize and protest against their conditions. “Well, the people with money, the elite, decided, ‘Hey, we need to do something here to divide them.’… That’s when they put laws in place forbidding them to marry each other. That’s when they created the racism that we know of today. They did it to keep us divided.”

The history lesson is over-simplified, but it contains an element of profound truth. Racism is deliberately incited in America for the purpose of dividing the working class and tying each race or ethnicity helplessly to “its” fraction of the ruling elite. Of course, the lesson remains hollow unless it is translated into political action—the independent mobilization of the working class breaking free from both big business parties. This is something carefully censored and banned in public discourse.