ZZ's blog

Theater of the Absurd

2012-01-23T11:57:00.000-08:00

Talented artists are gifted with the ability to take some commonplace belief or unquestioned assumption and reveal underlying nonsense. Still others craft inventive works that expose fatuity lurking behind pomposity and platitudes.

But consider some of the events transpiring over the last few weeks. Reality is indeed stranger than fiction. These events rival any work of literature in illustrating hypocrisy and proud ignorance. And the real-life actors in this public theater know no shame or regret.

The Republican primary medicine show is low entertainment. Its candidates and their stage hands have amused liberal, but spineless commentators and shocked international observers with the primary debate inanities.

Within the arena of right-wing ultimate fighting, Gingrich has assailed Romney’s money making career as “vulture capitalism.” Romney sups at the table of Bain Capital, a private equity fund that preys on vulnerable businesses weighed by debt and burdened by marginally criminal mismanagement. Bain buys these businesses at a heavily discounted price by leveraging their substantial assets and then guts the victims chiefly of their employees, imposing a new draconian labor discipline, and reselling the polished product at an enormous profit. Indeed, "vulture capitalism" is the appropriate term for this parasitic process widely practiced among ambitious capitalists in the US.

But wait! This exposé came from Newt Gingrich? Not from Paul Krugman? Joseph Stiglitz? Or any of the other economists or pundits arrayed around the liberal wing of the Democratic Party? None of the Party’s shrewd operatives rallied around President Obama? Or the President himself?

No, this exposé of vulture capitalism came from one of the icons of the ultra-right. Further, the ultra-right fed on the revelation that Romney only paid taxes at a rate of 15% or less compared to the much higher rates paid by most citizens.

Surely this is class warfare initiated from the right. And just as surely no prominent Democrat – representing the presumed Party of working people – joined the chorus. As David Bromwich noted, in The New York Review of Books (2-9-2012), “Gingrich… fleetingly placed himself to the left of President Obama, who has been careful to portray the financial collapse as a disaster without a villain.” Isn’t this an indictment of the hypocrisy and deception of the two-party circus?

Yes. Exposing a sector of capitalism as illegitimate is beyond the pale, beyond the two-party discourse, even though no one but Romney has rushed to defend it. Everyone knows that private equity firms – that have worked their black magic on over 3,200 firms – engage in wholesale destructive behavior (apologists call it “constructive destruction”) yet no one will say it – except Gingrich.

Similarly, Ron Paul, the only candidate in years with a set of internally consistent principles, has dared to challenge the two-party consensus on aggressive imperialism, arguing that the US should abandon its occupations and wars and let the rest of the world (including Iran) go its own way. Paul, the only Republican right-wing ideologue who believes what he says, stands for an anachronistic Republicanism favored by the Party before the New Deal. The target of liberal derision because of his appearance and mannerisms and discounted by conservatives because of his slender fund-raising, Paul continues to have his campaign energized by poll results and young volunteers impressed with his integrity. And he dares to speak heresy.

Of course those who respect the man’s integrity should consider the consequences of his free market and barely-breathing government principles before jumping on his bandwagon. Nineteenth-century nostrums are not the solution to twenty-first-century problems, regardless of Paul’s honesty.

It is incredible, however, that no one among the left of the Democratic Party’s luminaries has either defended Paul’s anti-imperialism or, at least, used it as a spring board for a tepid critique of US policies regarding Israel, Iran, or the rest of the Middle East. Again, writing in the New York Review of Books, David Bromwich ventures: “In addressing such issues, he has no rival among Republicans, and, after the death of Robert Byrd and the defeat of Russ Feingold, none among Democrats of national stature. On issues of national security and war, he is the American politician who speaks to Americans as if they were grownups interested in their own condition…”

But who speaks for “grownups” on the other urgent issues? Certainly not the Democrats. This is surely a measure of the untenable, unpopular and unsustainable US two-party system and its money-driven pre-election entertainment.

●●●

Hungary has its own Ron Paul in the body of conservative Prime Minister Viktor Orban. A political maverick born of the anti-Communist scramble for power after Hungary’s socialist government crumbled, Orban won election in 2010 representing the right-wing, nationalist Fidesz Party. Lacking Paul’s principles or any principles at all, Orban delights in playing to nationalist sentiments and defying the EU and the IMF. I wrote earlier of the outrage created by Orban when he dared to tax banks to reduce Hungary’s deficit. As I sarcastically noted, austerity programs to lower the deficit on the backs of working people are prescribed by these august bodies, but raising revenue by taxing banks is strictly forbidden, even though the deficit-lowering results would be the same! So much for the independence and objectivity of the EU and the IMF.

Orban struck again late last year securing a parliamentary law that slightly limits the powers of Hungary’s Central Bank. Like most Central Banks, Hungary’s enjoys a special status buffering it from any popular or governmental influence. In essence, capitalist Central banks are enormously powerful economic actors that are isolated from any kind of democratic control, pressure, or oversight. And the EU, the IMF, and capitalism, in general, want to keep it that way. It is capitalism’s ultimate economic tool immunized from the will of the people.

Orban’s parliament would place a government minister on the Bank’s monetary council, seemingly a small step towards democratizing the Bank, as well as requiring the Bank to share its meeting agenda with the parliament, another small step towards transparency. The move was met by righteous indignation from the European Commission (threatening to sue), the IMF (threatening to withhold funds) and the entire global financial hierarchy. They charged indignantly that the new law compromised the Central Bank’s “independence”.

Of course the question is independence from whom. Currently the Bank is independent from any sort of Hungarian popular governance, but it is hardly independent from outside influence, particularly the IMF, the EU, and financial markets. This is a strange sort of independence advocated and protected by foreign financial forces. To quote the famed philosopher, Humpty Dumpty: “When I use a word… it means just what I choose it to mean—neither more nor less.” Financial elites occupy the same fantasy world created by Lewis Carroll.

●●●

US workers can breathe easier. The wholesale destruction of their living standards, benefits, and wages, coupled with a dramatic increase in the rate of exploitation over the last decade is paying dividends. But not dividends for them.

Recently Caterpillar Inc locked out its Canadian workers in London, Ontario, contending that the workers need to cut their pay dramatically. They point to the fact that Caterpillar pays its workers 50% less in Lagrange, Illinois. Quoting The Wall Street Journal (US: A Cheaper Labor Pool 1-6-2012): “…[B]ut instead of pointing to the usual models of cheap and pliant labor, such as China and Mexico, it is using a more surprising example: the US.”

So the tables are turning and today we find that US workers are setting miserable standards of pay and benefits against their Canadian and European counterparts. They, in turn, could repeat the same sad misguided tactic popular in the US by blaming poorly paid “foreigners” – in this case US workers or their government’s policies -- for the pressure on their living standards. US hourly compensation costs in manufacturing rose only 39% over the last decade, while average comparable labor costs grew by 74% in OECD countries and 91% in Canada.

Put differently, labor costs per unit of output in the US are 13% less than they were in manufacturing a decade earlier. In Germany they rose 2.3%, the Republic of Korea 15%, and Canada 18%. These figures are most telling because they reflect—assuming roughly similar levels of productive force development – differences in the relative rates of exploitation. Clearly US workers have surrendered far more than their international brothers and sisters while being squeezed much harder in the work place.

Instead of the divisive and diversionary tactic of blaming foreign governments or foreign workers for job losses or pay cuts – typically China – it’s time to target the trans-national corporations that exploit labor cost differentials to increase profits. Like the machine-breakers of yore, workers and their trade union leaders must correctly identify the enemy and embrace class struggle unionism if they have any hope of stopping this destructive game of competition to see who can offer the best wage deal to rapacious corporations.

●●●

Speaking of China, the Western media reported on January 17 an ominous drop in fourth quarter GDP in the Peoples Republic of China; quoting Reuters: “Growth of 8.9% over a year earlier was slightly [my emphasis] stronger than the 8.7% forecast by economists in a Reuters poll, but the data on Tuesday raised concerns about the immediate outlook and how much support China can offer a struggling global economy… Growth for all of 2012 slipped to 9.2%, a pace last seen in 2009… from 10.4% in 2010."

While it is true that the PRC GDP growth dropped slightly (5%) from the 3rd to the 4th quarter, it meant that that the PRC GDP would double, at that rate, in a little over eight years rather than a bit more than seven and a half – not a bad performance either way for the world’s second largest economy. Put into perspective, the OECD estimates that from 2011 through 2013 the collective OECD states (including PRC) will only average less than 2% growth. At that rate, it would take the entire OECD over 37 years to double its economic output!

But the Reuters report, like so many other media accounts of PRC 4th quarter GDP performance, masks two implicit points:

1. The Chinese economy is vigorous even in the midst of world wide economic turmoil (2009, for example, and now).

2. Most importantly, economic wizards concede that the health of the global capitalist economy depends critically on the continued vigor of that economy.

So it’s not the future of the Chinese people that so worries the pundits, but the impact of the Chinese economic engine on capitalism’s future. At the same time, they continue to demonize the policies that fuel that powerful engine. Strange, indeed.

Zoltan Zigedy
zoltanzigedy@gmail.com

REVIEW: Post-Modern Imperialism—Geopolitics and the Great Games, by Eric Walberg

2012-01-16T16:40:00.000-08:00

I confess that I cringe when I see the word “post-modern.” This word has obscured more discussions, confused more gullible readers, and conned more writers than any word since “existential” and its “-ism.” For the most part, it has served as a kind of fashionable linguistic operator that signals something radical and profound will follow. Almost always, what follows disappoints.

Eric Walberg’s book, Post-Modern Imperialism (Clarity Press, 2011), doesn’t change my general opinion of the word, though what follows the title certainly doesn’t disappoint.

Walberg has offered a welcome taxonomy of imperialism from its nineteenth century genesis until today; he has given a plausible explanation of imperialism’s contours since the exit of the Soviet Union and Eastern European socialism from the world stage; and he has convincingly described Israel’s unique role in the continuing reshaping of imperialism’s grasp for world domination.

One of the disappointments of recent Marxist thought is a neglect of the theory of imperialism. It is not that imperialism is questioned by Marxists; it would be hard to find an advocate who denied its existence or historical significance. Indeed, few Marxists dispute (since the Lenin-Kautsky debate) the fundamental elements of imperialism as outlined by Lenin and presaged by Hobson; but its historical trajectory -- deflected by wars (hot and cold), shifting balances of forces and alliances, and economic upheaval – has received only cursory attention. All acknowledge that the dominant imperial center of power has shifted from Britain before World War I to the USA after the Second World War. Outside of the bizarre pseudo-Marxism popularized in the post-Soviet period (Hardt and Negri’s Empire and theories of the decline of the nation-state and ascendancy of the trans-national corporation, for example), most left-of-center political thinkers would concede that imperialism – especially, as expressed by US imperialism -- is alive and well today. Yet, Marxist studies have yet to provide a full, overarching account of the material forces that have shaped imperialism’s evolution over the last century and a half. We see this failing in the world-wide confusion and tepid resistance to NATO’s Balkan aggressions, the various contrived color “revolutions,” and the wars and interventions in the Middle East and Central Asia.

It is to Walberg’s credit that he attempts to provide this account. While expressing respectful homage to the Leninist tradition, Walberg writes in an eclectic style that expropriates the terms of the agents of imperialism, both old and new. Following Lord Curzon in 1898 and Z. Brzezinski today, imperialism becomes the Great Game, an exercise in aggressive national self-interest that engages economic coercion, political manipulation, subversion, alliances, and, of course, war. And behind the curtain of “national self-interest” proclaimed by the ideologues of imperialism lies the real interests of monopoly and finance capital.

In Walberg’s account of the classic era of imperialism – dubbed Great Game I (GGI) – European powers and the US competed for the economic and political domination of the world, its resources, and its people. In this competition, the British Empire stood triumphant. This small island, thanks to its industrial might, its dominant navy, and its highly developed colonial apparatus, imposed its will globally. Other powers sought to undermine this dominance, resulting in the tensions and conflicts that climaxed in the Great War, World War I.

The Great War, in turn, spawned an anti-imperialist movement centered in revolutionary Russia, nascent Communist Parties, and nationalist movements aroused and supported by the liberated Euro-Asian power, the USSR. For Walberg, this event – the Bolshevik revolution—became the central event determining the course of imperialism. The crisis of imperialism identified with the unprecedented slaughter of 1914-1918 unleashed a new era of counter-revolution – or counter-anti-imperialism – with the locus of anti-imperialism to be found in the USSR.

Walberg calls this new era “GGII: Empire Against Communism”.

It is this assessment, this correct analysis, which separates him from the conventional view popularized on the left, center and right. Walberg is emphatically correct on two crucial counts.

First, he identifies the imperialist project as targeting the role of the Soviet Union in inspiring, supporting and sustaining the anti-imperialist movement after World War I. Those honest enough to recognize the decline of the anti-imperialist movement since the demise of the Soviet Union surely must recognize this point. From China’s liberation to the independence of the former African Portuguese colonies, from Egypt’s national movement to the Vietnamese victory over US aggression, from Cuba’s revolution to the destruction of apartheid in South Africa, the Soviet Union had devoted generous material and moral support to anti-imperialism. Because of this support, anti-Communism became the ideological, political and military pillar of imperialism.

Second, he discounts the view advanced by imperialists and the ultra-left that the Soviet Union was itself an imperialist power. While he voices criticisms of the USSR, he stops far short of characterizing its policies as imperialistic, a conclusion that he argues persuasively.

Between the two World Wars, the imperialist countries were saddled with a profound economic crisis that challenged the very viability of capitalism and strengthened the anti-capitalist and anti-imperialist movements. In many countries, this challenge generated a ferocious and violent movement, fascism, expressing a new, more virulent, and aggressive strain of anti-Communism. Both in Europe and Asia, the primary goal of these movements, when securing power, was to remove the obstacle of Communism and anti-imperial nationalism in furthering their imperialist goals. In all cases, the Communists and anti-imperial nationalists were the backbone of domestic resistance to these aggressions.

After the Second World War and the defeat of fascism, the US engaged its economic and military might to lead the imperialist powers. At the same time, it organized and launched a new, more sophisticated attack on the strengthened, world-wide Communist and anti-imperialist movement. The lengthy Cold War, while proclaimed as a struggle between democracy and tyranny, was simply a continuance of imperialism in a new context. At stake was the economic exploitation of the resources and people of the world outside of the imperial club.

Walberg does a thorough job of demonstrating the role of the US dollar nexus in cementing the anti-Communist alliance, as well as describing the international institutions enabling and enforcing this dollar domination of world economic activity. He equally exposes the political and military institutions and alliances, such as NATO, created to both maintain US imperial goals and confront Communism and anti-imperialism.

Walberg’s narrative masterfully exposes the imaginative, but unscrupulous tactics devised to further the imperial goals. From engineered coups to CIA-backed intellectuals, from surrogate insurgents to phony human rights campaigns, Walberg dissects the tactics and reveals the hypocrisy behind imperialist intrigues. Most impressively, Walberg knits together the long standing, but seldom acknowledged, imperialist tactic of exploiting purist Islamic movements -- with its latent hostility to secular leftism and nationalism -- to oppose, divert, and even exterminate socialist and anti-imperialist movements in the Middle East and Asia. Of course this is not a new tactic; imperialism similarly used Christianity, especially Catholicism, to disable trade union movements and left parties in Europe and the US. But, Walberg brings much detail and historical continuity to the story of religious manipulation in the Islamic world. And he reveals Israel as a key player in this maneuver.

With the departure of the Soviet Union, a new phase of imperialism emerged, dubbed “Great Game III” by Walberg. The consequent triumphalism of the US and other imperialist powers was disguised as the promise of a global paradise based on economic fundamentalism, free trade, “democratic” governance and human rights. But in truth, this disguise masked a commitment to economic aggression, imperial intervention, and unfettered domination. A massive array of new or transformed institutions – the UN, NAFTA, countless NGOs, etc—eagerly aided the imperial program. And after September 11, 2001, imperialism found its alien scapegoat in Islam, the excuse to vigorously and openly mount military adventures, especially in Asia, the Middle East and Northern Africa.

To Walberg’s praise, his deep understanding of the shifting currents of imperial aggression along with its historical continuities allows him to identify the anti-imperialist actors in each phase of imperialism’s development. He clearly understands that resistance to imperialism, regardless of its religious, ideological or political underpinnings, is objectively anti-imperialist. This is in sharp contrast to many on the left in Europe and the US who sided with imperialism or demonized the Islamic fighters who met the US on the battlefield. Blinded by their cultural distaste for what they saw as obscurantism, social backwardness, and intolerance, they betray anti-imperialist unity and objectively take the side of imperialism. Like previous supporters, seduced by Britain’s “civilizing mission,” they accede to apologists who portray the resistance as “Islamo-fascists.” This shallow understanding of imperialism accounts for the failure of many to recognize and reject the recent Libyan regime change and the current foreign interventions in Syria and Iran as imperialist actions. Leftist “purists” prefer standing on the sidelines to siding with the “tainted” Islamists who now militantly oppose imperial power.

Walberg places much emphasis on Israel’s role in the imperial project. His position as a Middle East-based writer for Cairo’s Al Ahram newspaper, coupled with his obvious prodigious research, gives him a privileged vantage point for commenting on this area. Readers will be impressed with his account of the history and ideology of Zionism. He brings great detail to the overt and covert activities of Israel both on behalf of US interests (as a policemen in the region) and in its own behalf (as a neo-colonial aggressor). His exposure of the role of US Zionists and their political partners in shaping US policies towards Israel (and the Middle East) is boldly and starkly presented, with little of the usual forbearance or timidity.

On the other hand, I believe his privileged position also brings a measure of myopia to his analysis. Throughout the book, he asserts a persistent importance of the Middle East and Central Asia that might unwittingly minimize the importance of other regions in imperialism’s grand designs. Certainly his demonstrated sensitivity to the shifting forces, policies and foci of imperialism would suggest that there is not one materially critical area of imperialist design. For example, through the first thirty years of the postwar period, imperialism was mostly directed to the Far East, with massive, brutal wars launched in Korea and Vietnam. And today, the staunch anti-imperialist advances in Central and South America cause deep concern and intense activity in the imperialist centers, especially the US. This area gets little coverage in Walberg’s fine book. Imperialism is indeed a scheme for complete global domination, wherever there are resources and people to exploit.

Also, I think that Walberg overstates the role of Israel in the imperialist order. Despite his excellent exposition of the “tail wagging the dog” behavior of Israel, it remains a junior partner in the imperialist picture. Israel still needs and expects the US to pull its chestnuts out of the fire.

In the same vein, it is an exaggeration to portray Islam (or any other religion) as inherently anti-imperialist: in his words, “The unyielding anti-imperialist nature of Islam, its rejection of the fundamental principles of capitalism concerning money, its refusal to be sidelined from economic and hence political life…” Surely, Walberg’s own account challenges this claim; Islamic movements in the Middle East have and continue to shift sides frequently in both the struggles between imperial powers, in support of imperialist powers, and its current leading role in resisting imperialism in the Middle East. I would suggest, rather, that religion adjusts (as with Catholic Liberation Theology) to the material, historical plight of its believers. In the case of the Middle East, half a century of Palestinian oppression is the wellspring of contemporary Islamic anti-imperialism.

“GGIII: Many Players, Many Games”—Walberg’s final chapter – is an immensely useful overview of how things stand at the moment in the Middle East-Central Asia “Great Game.” One will not find a better concise account of the forces, alliances and institutions at play in this contest, a contest best understood as between imperialism and its foes.

One final quibble: throughout Post-Modern Imperialism, Walberg insists on the division between pre-modern, modern, and post-modern states (hence, the title), a distinction he adopts from the influential work of Robert Cooper. Distinctions are neither true nor false; rather they are helpful, misleading or irrelevant. Despite its currency, Cooper’s distinction blurs instead of clarifying Walberg’s excellent account of imperialism.

That said, I can enthusiastically recommend Post-Modern Imperialism – the book is a serious contribution to our critical understanding of imperialism, its history, and, particularly, its expression in our era. By reading this study, both Marxist and non-Marxist activists will be better armed to confront the beast.

Zoltan Zigedy
zoltanzigedy@gmail.com

2011-2012: Summing Up/Taking Stock

2012-01-03T17:13:00.000-08:00

People across the political spectrum share one thing: they sense that we are living at a critical moment in the history of capitalism. Where the last decade of the twentieth century brought a near-universal and smug celebration of capitalism’s success, the second decade of the twenty-first century and beyond finds uncertainty, doubts, and fears in every conversation about global capitalism.

As recently as 1999, capitalism’s managers – look-alike, sound-alike politicians, media puppets, and swaggering corporate managers – enjoyed the confidence of all but obstinate skeptics and those many living on the margins.

True, the so-called “anti-globalization movement” gained traction at the end of the twentieth century, but as a scattered, unfocussed movement against capital’s excesses and not its mechanism.

Today, everything has changed. Confidence in capitalism and its institutions is at a low never seen in most our lifetimes. While I plead guilty as much as any Marxist in finding a “crisis” at every juncture, one can construct a plausible argument for locating profound contradictions in every bourgeois institution – the economy, the political system, ideology, and culture.

Few would argue that the global capitalist economy is healthy. Instead, leaders and thinkers of every stripe are occupied with offering road maps for delivery from the four years of intractable chaos. Little progress has been made.

The four years of economic turmoil has taken its toll on political legitimacy. The US political system and its two-party manifestation have likely never known such deep and popular disapproval. Alternative movements of left and right have boiled over to express this frustration.

The Obama administration, after three years, appears stuck in a historic rut slightly more activist than the Hoover administration in 1932, but far from the audacity and experimentation of the Roosevelt administration of 1933.

Looking back, it is easy to see the political revival of the right in 2010 as the obstacle and subsequent log jam to progress, but that abuses history. Armed with a Congressional majority, the Democrats could have moved decisively in 2008, but not with the cabal of neo-liberal advisors chosen by Obama to craft policy. One can better see the rise of the right as a measure of the disappointment with the Administration’s inadequate management of the economy.

In Europe, elected governments have ceded authority to technocrats approved by international financial interests. Frustration with social democratic impotence has lead to a series of “protest” victories by conservatives.

In the near future, there is a real chance that Germany will achieve, by peaceful means, the dominance of Europe that it sought in World War II.

Ideologically, most of the world’s leaders remain caught in the web of neo-liberalism – the worship of markets, balanced budgets, government restraint, and the sanctity of capital. Despite much sensationalist commentary early in the economic crisis about the death of neo-liberalism or the passing of the Thatcher-Reagan moment, political leaders, most economists, and too many labor leaders have failed to escape neo-liberal thinking.

Fundamentalist market dogma, enforced by an extortionate financial complex, breeds the crisis-deepening austerity favored by leaders in the US and Europe. And there is no escape in sight.

Culture, dominated by monopoly capital entertainment behemoths, has sunk to new levels of vulgarity and triviality. At the same time, it counts as the distraction that holds together the fragile politico-economic system. The coarseness of “reality” television, the violence and moral depravity of cinema, banal, soulless corporate-crafted music, and the faux-loyalties of spectator team sports pass as entertainment. Equally distracting is the ubiquitous cult of the celebrity.

The once-promising diversity of the internet is, thanks to commercial penetration, transforming into a medium of personal, individualistic self-indulgence.

The same monopolies that own the entertainment industry own the news media and employ the mass opinion makers. The result is timid, conformist coverage, slanted to respect officialdom and the corporate paymasters. Likewise, what passes for analysis is a useless brew of shallowness and deference to the rich and powerful.

Entering the New Year, dangers abound. Italy alone must refinance nearly a third of its national debt in 2012-2013—591.9 billion euros. Spain must refinance nearly half and Greece nearly two-thirds. None can sustain refinancing at current yields asked by financial markets without harsh, dramatic counter-cuts in spending. And these cuts necessarily will shrink economic growth, resulting in even greater debt as a percentage of GDP. Growth rates are already shrinking in the European Union: On December 16, Ireland announced a 1.9% drop in GDP for the 3rd quarter, well below expectations. Overall EU growth has slipped to .8% in the 3rd quarter from 3.1% in the 1st quarter. The politics of austerity will only exacerbate this trend in 2012.

In the US, the Federal Reserve reports that households’ net worth fell by $2.4 trillion from the second to third quarter of 2011. For the year, growth in personal disposable income has been flat or trending downward, while the personal savings rate has dropped dramatically and consumer credit debt is again on the upswing— mimicking the pre-crisis trend. Debt-driven consumer spending fuels what little economic growth is shown by the anemic US economy. These same consumers must contend with escalating food prices: year-over-year increases in food costs hit 4.6% in November.

September and October factory orders dropped and the index of service sector activity declined in November.

Unemployment remains dangerously and intransigently high despite minor adjustments in the official rate that reflect, at best, deep structural changes in the employment and compensation options available to those without work or underemployed. Even the Wall Street gasbags who fill the airwaves with Pollyanna optimism know that US standards of living have taken a radical and gloomy turn for the worse.

The electoral landscape in the US shows little to celebrate. While many on the left are again raising fears of a Republican Party in ascendancy, the truth is that the Republicans are engaged in an intense, bitter, and bloody struggle between the corporate wing and the no-nothing fanatics who occupy the Party’s extreme right. With Obama-mania now reduced to a tepid enthusiasm for blocking the crazies, corporate Republicans sense a real opportunity to win executive power as many of their European counterparts have in recent months. At the same time, they recognize that voters overwhelmingly reject the ranting of the extreme right Neanderthals. So far, corporate Republicans have used their financial resources and media control to turn back the tea-party pretenders: Palin, Bachman, Cain, Perry, and now Gingrich. Clearly, they want Mitt Romney, a man who can talk the tea-party talk, but walk the pro-corporate walk.

And just as clearly, the Democratic Party has its counterpart to Romney. Obama can skillfully rouse the liberal base by scoring the rich, the powerful, and the privileged while delivering for the corporations. The words are there, but where is peace, health care, EFCA, strengthened Social Security and Medicare, enlightened foreign policy, tax fairness, a robust social safety net, Constitutional guarantees and other “liberal” goals promised four years ago?

Obama and Romney are the designated hitters for the ruling class. Where do working people find their political voice in this charade?

Once again, the New Year promises intense struggles against imperialism, against exploitation, and for social justice and sovereignty. But again, the focus of these struggles will likely remain on the periphery of the most advanced capitalist countries where workers and the poor are more organizationally and ideologically advanced and fervent in their commitment. Despite healthy developments like the Occupy movement and only-too-rare labor militancy, North America seems destined to confine the fight to the corrupted field of electoral politics, especially in the US, where the Presidential election will soon overshadow all other action and siphon off oppositional energies.

The uprisings in North Africa and the Middle East were unexpected and important developments in 2011. They brought masses into the streets and shook ruling elites throughout the region. Yet observers overestimated their political impact and potential and underestimated the ability of imperialism to exploit these events for its own interests. The billions committed at the G-20 summit, the rapid response of the “soft” imperialist Western NGO’s, and the violent intervention of NATO quickly re-directed or superseded many of these movements with regime changes beneficial to the NATO allies, an attempt to create a reprise of the infamous “color revolutions.”

Libya was the clearest example of this, with Syria now fixed in imperialism’s sights. Egypt, another target of imperialist intervention, continues to resist the “helpful” hand of the US State Department and many US-funded NGO’s that hope to shape the political landscape in a way friendly to US interests.

The same kind of struggle is emerging in Russia after the strong showing of Communists and their allies in the Parliamentary elections. Enjoying little popular support and with much encouragement and resources from the West, Russia’s liberals have sought to bring down the Medvedev/Putin government through mass protests against electoral irregularities. While electoral fraud is a fact and directed mainly at Russia’s Communists, while the Communists support the struggle for transparent elections, the liberals are seizing on the issue as their own best chance to better their marginal role in Russian politics.

At the same time, in the time-honored bourgeois tradition, Vladimir Putin --the ruling class candidate for Russian President in the forthcoming elections – has thrown up a Trojan horse candidate disguised as the opposition: an expatriate, playboy billionaire who owns a US NBA basketball team. The hope, of course, is that the billionaire’s resources will generate a hollow media campaign to confuse and split the opposition.

The deceptions and ruses of imperialism and its liberal chess pieces ultimately serve imperialism. The broad masses astutely see the call for “democracy” or “free elections” as useful only insofar as they actually lead to their empowerment and well-being. For working people, this is, and should be, the litmus test for their support.

In Russia, as in the Egyptian revolution of 2011, the masses will rally against bad leadership under the banner of “democracy,” but they want more than a hollow procedural victory; they want peace, a better life, a promising future. Twenty-first century liberals offer only the meager morsel of elections and not the nourishment of justice and prosperity. That is why Russian and Egyptian liberals fared so poorly in recent elections. That is why Russian Communists made big gains.

My hope for the New Year is that working-class-oriented, working-class-based movements, especially Communist and Workers Parties, will bring this nourishment to all the peoples of the world.

Zoltan Zigedy
zoltanzigedy@gmail.com

The Chinese Puzzle

2011-12-14T13:10:00.000-08:00

Whither China? was the name of a widely circulated pamphlet authored by the respected Anglo-Indian Marxist author, R. Palme Dutt. Writing in 1966, with The People’s Republic of China (PRC) in the throes of the “Cultural Revolution”, the pamphlet sought to shed light on the PRC’s tortured road from liberation in 1949 to a vast upheaval disrupting all aspects of Chinese society as well as foreign relations. To most people – across the entire political spectrum—developments within this Asian giant were a challenge to understand. To be sure, there were zealots outside of the PRC who hung on every word uttered by The Great Helmsman, Chairman Mao, and stood by every release explaining Chinese events in the People’s Daily, Red Flag and Peking Review. A few Communist Parties and many middle-class intellectuals embraced the Cultural Revolution as a rite of purification. Yet for most, as with Palme Dutt, the paramount question remained: Where is the PRC going?

Today, forty-five years later, the question remains open.

The cultish followers of Mao have mostly gone on to their life’s work, though some still uncritically defend every aspect of Chinese Communist Party policies during Mao’s chairmanship.

But the PRC that we know today is a vastly different country from the country worrying R. Palme Dutt in 1966; yet it is one that is just as difficult to comprehend. In place of the economic stagnation of the Cultural Revolution period, the contemporary Chinese economy enjoys one of the highest consistent growth rates in the world and counts as an industrial giant well on its way to challenging the USA in annual national product. The economic autarky of the Mao period has been replaced with a massive effort to trade globally. And state enterprises and common land ownership are now eroded by private investment and private ownership. The PRC today has an abundance of millionaires and not too few billionaires, a fact that would violently offend the militants of the Cultural Revolution.

At the same time, the ruling party in the PRC is the Communist Party. Its theorists and ideologues insist that they are proceeding down a distinctive, deliberate road to socialism. Ironically the PRC is now the darling of many in the right wing of the anti-capitalist movement, embraced by those who defend the market mechanism and a gradualist, evolutionary approach to socialism.

Among those advocating socialism, the PRC constitutes a kind of laboratory for socialist policy, much the way the Soviet Union was regarded after 1917. Partisans of socialism sift through the massive literature, reports, and commentaries on the PRC to find evidence to support ideological positions. For the most part, conclusions are, at best, tentative and speculative. Comprehensive conclusions remain illusive to even the most elevated intellectual egos.

Yet the PRC is entirely too formidable of a factor in global political and economic affairs to ignore. Therefore, I offer some modest observations.

“China-bashing”

Wherever the PRC road leads, it remains a lightening rod to bourgeois politicians and, unfortunately, most labor leaders. To hide their own failings, they easily and often point to some Chinese policy that stands in the way of satisfying the interests of working people. In its crudest form and in its essence, it is vulgar anti-Communism. Exploiting the deeply ingrained collective hysteria of the Cold-War, crass leaders and class-compromised union bureaucrats invoke the words “Chinese Communists” and mass distraction ensues. China-bashing has replaced Soviet-bashing (and the once popular Japan-bashing when Japanese corporate power was on the upswing) as an easy and frequent diversion from the rapacious behavior of multi-national corporations.

Rather than blame US multi-nationals for the destruction of decent paying jobs in the US, leaders scapegoat the PRC. From 1999 until 2009, US multinationals added 2.9 million workers abroad while cutting 864,400 in the US, according to the Commerce Department. In 2009, these monopoly capitalist enterprises employed 23.1 million workers in the US against 10.8 million in other countries. Most overseas employees are in Europe with the Chinese holding only 943,900 jobs from US multi-nationals. Canada, Mexico, and the UK, on the other hand, account for over 3 million of multinational overseas employment.

These same multinational corporations have reduced capital investment spending in the US at a decade long annual rate of .2% while boosting capital investment overseas by an annual average of 4%.

These job shifts are corporate decisions based upon profit expectations and, according to the Commerce Department, “primarily to sell to local customers… rather to sell in the US market.” Thus, politicians and union leaders are hiding behind simplistic and self-serving demagogy in blaming China for the demise of US jobs. And their aversion to class struggle against US corporate giants masks the role of those corporations in taking jobs to where they can recover profits most easily; bogus patriotism obscures corporate fealty to the bottom line.

When pressed to put some meat on the bare bones of China-bashing, bourgeois economists cite the currency policies of the PRC. They argue that the relationship between the yuan and other currencies is consciously maintained at a lower-than-market level to increase the competitiveness of the Chinese export industries. But that argument has evaporated over the last year. Third quarter reports of PRC current-account surplus – a widely acknowledged measure of trade imbalance – show a dramatic decline from a year earlier; against the third quarter of 2010, the PRC current-account balance fell by 43.5%. Through the first three quarters of this year, PRC current-accounts surplus as a percentage of GDP fell from 5.1% last year to 3% currently. Ironically, at the November, 2010 G20 meeting, the US pressed hard to establish 4% or less current-accounts surplus/GDP as the benchmark for determining whether currencies were reasonably valued. With the PRC easily passing this test, the US has no argument. Nonetheless, US policy makers and pundits, including liberals, like Roubini and Krugman, continue to pound away at PRC currency policies.

When these current-account numbers are coupled with the continued high growth of the PRC (9.1% in the third quarter), they suggest that the PRC has made a significant shift from export growth to investment and consumption growth.

For the US left, the myths supporting China-bashing should be emphatically rebuffed. While the PRC policies internationally are generally self-interested – the PRC has seldom demonstrated the kind of international solidarity associated with twentieth century socialism—they are nonetheless independent of US imperialism. That is, the PRC operates to promote its own security and economic health. Where it clashes with US imperialism, for example, in UN votes against NATO aggression, progressives should applaud its role. At the same time, it shares many features with imperialism in its competition for markets, resources, and economic advantage in the global economy. These features often place it on the wrong side in its relations with other countries.

White Cat, Black stripes; Black Cat, White Stripes?

Much heat has been generated over the question of whether the PRC is socialist or capitalist. But from a Marxist perspective – like that of Palme Dutt – the telling question is not where it is, but where it’s going: Is the PRC on a path towards socialism or capitalism? Where is the process leading?

No one can deny that for decades, the PRC has allowed -- indeed welcomed -- capitalism in the front door. Foreign direct investment, joint-stock and private-stock enterprises, privatization, securitization, and acceptance of the market mechanism have all transformed the PRC economy into a prominent player in the global economy. This change has brought forth stunning growth for the country and a general rise in the Chinese standard of living, certainly from the stagnation of the period of the Cultural Revolution. In only a few decades, the PRC leadership has mounted a veritable revolution as profound as the sharp turns organized in Mao’s era.

At the same time, capitalism has brought with it nearly all of its ills: inequalities that rival history’s worse, a shattered health care system, working conditions that too often approach that of Dickens’ England, corruption, cronyism, unemployment, and a broken sense of collective fate or communal solidarity.

The entry of capitalist features into the PRC economy has plagued it with the maladies that arise from the anarchy of markets: imbalances, speculative fervor and bubbles, inflation, labor unrest, grey and black markets, and labor market chaos. In the spring and summer of 2010, workers rose against low wages and working conditions in many areas. Again, this year, there were significant actions for better pay, working conditions and against layoffs. In the fall, the PRC’s sovereign wealth fund was forced to buy shares in major Chinese banks. Despite the fact that private investors own a quarter or less of the country’s biggest banks, a sell-off by foreign investors caused a near panic met by the sovereign wealth funds’ intervention. Today, inflation, a construction bubble, and over reliance on exports weigh on the economy.

Despite these ugly aspects of the PRC’s flirtation with capitalism, the PRC negotiated the most tempestuous waves of the global economic crisis without the catastrophic damage incurred by the other economic powerhouses. In addition, most honest analysts, including even The Wall Street Journal, credit the PRC with a large role in thwarting world economies from being swept over the brink in 2008-2009.

How was this done?

In my view, those structures intact from the PRC’s early commitment to socialist economics proved to be a bulwark against global economic turmoil, especially from the financial sector. Regardless of the future course of the Chinese economy, many elements of socialist economic structures remain and they and they alone, permitted the PRC to evade the harshest consequences of the 2008-2009 collapse and blunt the forces of the market.

1. Banks and finance: The PRC’s four largest banks dominate the financial system along with the Central Bank. Despite recent public offerings, the big four banks remain 75% or more under public ownership. The experiment in raising private funds through stock offerings has proven to be more damaging (a recent sell-off briefly rocked the stability of these public institutions) than advantageous, but, nevertheless, the banks remain steadfast under government management. And the Central Bank, unlike our corporate dominated Federal Reserve, functions as a publicly run and owned institution tuned in closely to government economic goals. The “shadow banking” that rocked Western private banks was virtually unknown in the PRC: no securitized US mortgages, no complex derivatives, opaque bank-to-bank deals, etc. The pillars of the financial system, because they were publicly owned and relatively transparent, stood solid against the crisis; they retained the central functions of a financial system without the corruption of private profiteering.

For sure, private banking in the PRC exists and jolts the smooth functioning and stability of the financial system, but to date the government has been able to adjust financial flows swiftly and efficiently.

2. Economic Policy: The PRC retains indicative planning, though flexible and partial. With the onset of the global crisis, the PRC embarked on a sharp turn towards domestic consumption and investment and away from a deteriorating international market. Quickly adopting a massive $622 billion stimulus program and loosening the valves on lending from the publicly owned banks, the PRC minimized the damage from a collapsing global capitalist economy. While the West, stumbled and delayed, politicizing and horse-trading intervention in the economy, the PRC acted promptly and decisively. As a result, the PRC maintained a growth rate well above Western norms through 2008-2009, while nearly all other countries endured negative growth.

Even with the corrosive and corruptive influences of capitalist social relations, the Communist Party of China remains a leading institution linked to advancing the general welfare of the people. That is, it continues to respect and seek the promotion of national interests. Compare its performance in the face of severe crisis to the appalling submission of bourgeois democratic institutions in the West to the welfare and interests of capitalist institutions; banks and corporations were rescued while living standards were decimated. In terms of serving the interests of the vast majority of the people, the PRC institutions proved far more democratic in content than the formal Western “democracies”.

3. Planned development: The PRC adopted the “National Medium- and
Long-Term Plan for the Development of Science and Technology” in 2006, a plan that proposed doubling the percentage of GDP devoted to research and development through 2020. At the end of this November, the PRC confirmed a plan to spend $1.7 trillion over the next 5 years on sectors including alternative energy, biotechnology, and advanced equipment manufacturing (Reuters, 11-21-11). Such national planning is virtually unheard of in the West since the massive investments in infrastructure, education, and research and development brought forth by the panic over the Soviet launch of Sputnik.

Chinese planning shows much more responsiveness and flexibility than policy initiatives in the West. With global demand shrinking from 2008 through 2009, the PRC shifted swiftly with internal investment and expanded consumption while Western powers debated and hesitated.

4. Public ownership: With state banks opening the floodgates, and a
Communist Party leadership quickly implementing a stimulus program, publicly-owned enterprises reacted immediately and decisively to the call to expand economic activity. While the public sector was curtailed in the early years of the shift to market relations, it remains dramatically larger than in Western countries or most Asian neighbors. In a generally hostile article in The Wall Street Journal (China’s ‘State Capitalism’ Sparks a Global Backlash, 11-16-10), the authors make the point vividly: In 2008, the assets of the PRC’s publicly owned firms totaled 133% of economic output; in the same year, France’s state-owned firms’ assets amounted to only 28% of economic product. While much speculation revolves around the role of the public sector in the PRC, these numbers give a perspective on how important publicly-owned enterprises are in the PRC. Thus, when essential stimulus programs or planning initiatives are undertaken, they translate into rapid, measurable results, unlike in the US where policies are pushed through the sieve of private contractors with the consequent siphoning off of overhead and profits, few jobs created, and long delays.

While many in the West are skeptical of the PRC’s ability to move away from export-driven manufacturing to domestic consumption, the following figures are revealing: Exports as a percentage of GDP have fallen from 35% in 2007 to 27% in 2010; third quarter 2011 import growth exceeded export growth; and retail sales grew by 17% in August and 17.7% in September of this year against the prior year.

Of course the PRC’s success in weathering the economic crisis is no guarantee that it will do so going forward. Certainly the PRC leadership is aware of difficulties ahead. The PRC Vice Premier, Wang Qishan, was recently quoted by the Xinhua news agency: “The one thing that we can be certain of, among all the uncertainties, is that the global economic recession caused by the international financial crisis will be chronic.”

The country’s participation in global markets could present problems that even its remaining socialist tools cannot overcome. Moreover, it is not clear if the PRC will strengthen these safeguards or jettison them, as its leading Communist Party shapes this awkward mix of socialism and capitalism.

Thus, forty-five years after Dutt’s pamphlet, we are still left with the burning question: Whither China?

Zoltan Zigedy
zoltanzigedy@gmail.com

Is There a Future for the European Union?

2011-11-22T17:58:00.000-08:00

When the so-called “dismal science” – economics -- resorts to hollow metaphors like “contagion,” “belt-tightening,” “toxic,” or “tsunami” to describe economic facts and events, one might reasonably wonder if it represents dismay more than science. For sure, practitioners in this field eschew metaphors for technical jargon in their narrow academic studies that have earned many prizes and peer acclaim. But these studies have proven singularly unhelpful in explaining or resolving the four years of chaos that has befallen the global economy.

Thus, it comes as a surprise that those who are paid handsomely to think for us are hailing the appointment of two professional economists to run Greece and Italy. Reflecting these changes, stock markets and other market indicators also reacted happily. Aside from the fact that -- over the course of a weekend -- the democratic content of two bourgeois democracies were exposed as shams, aside from the fact that the appointments were largely dictated by forces outside of the two countries, it is incomprehensible that two economists—one a former vice-president of the European Central Bank and the other a former European Union Commissioner – will do anything other than continue subservience to the neo-liberal agenda. In effect, Greece and Italy have been put into receivership by the European Union.

That receivership promises no new approach, no retreat from austerity for the masses, no lessening of the slavish commitment to capital, and no defiance of financial markets.

“Centrifugal Forces”

There are properties of economic actors that exert pressure, propelling them away from each other, confounding collaboration and sowing antagonism. Marx identified these properties as intrinsic to capitalism. The properties of individual self-interest, competition and exploitation are inseparable from the social relations that define capitalism in all of its forms. From the small business owner to the CEO of a mega-corporation, from the Chamber of Commerce to the union of nation-states, the opportunity for gaining an advantage always stands in the way of any real, lasting unity between agents big and small. Within the confines of the capitalist mode of production, pressures are always latent to fracture or dissolve combinations or collectives.

Yet economic actors are wise enough to recognize the advantages that may arise from combination and cooperation; a larger capitalist enterprise enjoys an advantage over a smaller one: a big fish eats the little one. On the level of nation-states, a larger nation, or a federation of states, better competes against its rivals. Thus, they strive to advance their interests by striking some measure of unity with some against still other competitors.

Frederick Engels, in the seminal work of Marxist political economy, explained this dialectic well:

Each smaller group of competitors cannot but desire the monopoly for itself against all others. Competition is based on self-interest, and self-interest in turn breeds monopoly. In short, competition passes over into monopoly. On the other hand, monopoly cannot stem the tide of competition—indeed, it itself breeds competition… F. Engels, A Critique of Political Economy

It is this dialectical dance between immediate individual self-interest and self-interest promoted through opportune unity that explains the unstable existence of the European Union. Established as a bloc to compete more favorably against the economic might of the US and Japan, a senior partner in the Cold War rather than a compliant underling, the European community was a last-ditch effort to restore prestige and power to the old, formerly dominating European empires. Devastated by war and in the shadow of the new, post-war great powers, Euro-leaders hoped to forge a unity that would create a formidable entity capable of holding its own, or even overwhelm in the competition between imperialist blocs. Later, the bloc was the European answer to the post-Soviet international landscape that saw other economic powers like Brazil, Russia, India and China join the global competition for markets, resources, and ultimately profits.

In the better part of the twentieth century, imperialist competition led invariably to war; new economic, geographic and political arrangements were settled militarily. By contrast, the European Union was perhaps the most ambitious attempt at a voluntary and peaceful unification of capitalist states to secure economic advantage in global markets. But because each of its constituent states was in widely different circumstances and at uneven levels of development when accepting membership, they had widely divergent goals. The more economically successful states saw preferred markets for their products and downward pressure on their labor force from low-wage members. The poorer countries foresaw better financial terms, investments, and consumer spending from the newly adopted, successful Euro-siblings. In short, all the members – rich and poor – acquiesced to the Union for their own self-interest.

Today, these divergent interests are in immediate danger of destroying the EU. The only solution possible is outside of the logic of self-interest and individual advantage, that is, outside of the logic of capitalism. As Ian Bremmer and Nouriel Roubini put it, in an otherwise confused, cynical op-ed piece in The Wall Street Journal (Whose Economy Has It Worst? 11-12/13-11), “[the solution] implies a gradual transfer of wealth from the core economies to the periphery, a ‘transfer union’ from rich to poorer states.” Put plainly, the future of the EU rests on a program of affirmative action that will equalize the disparity in wealth and economic development between the European haves and the have-nots.

Instead, policy makers have resolved to punish the poorer states for being poor. The devastating austerity programs imposed by the EU, The European Central Bank and the IMF drive Greece, Ireland, Portugal, Spain, and soon Italy, into even greater depths of poverty. The inequalities in the EU generated greater inequalities and now the richer states propose to solve the financial crisis of the Union by proposing even greater inequalities. There is no affirmative action in this scheme.

Contrast this with the other twentieth-century experiments in unification: the union of republics constituting the USSR and the post-war CMEA project uniting Eastern European countries (and later, Cuba). For most of the twentieth century the USSR followed a Leninist policy of affirmative action regarding the poorer constituent republics of the USSR and likewise for post-war reconstruction of Eastern Europe (excepting the GDR which paid a heavy price in war reparations). Growth rates in the poorer republics and Eastern Europe’s former backwaters usually exceeded the rates of the Russian Republic. Most of these countries achieved levels of development on a par with or exceeding that of top European powers, measured by telling socioeconomic indicators: education, life expectancy, access to health care, culture, social securities, leisure, etc. And these achievements arrived in a short time.

Tellingly, the breakdown of Leninist policies during the Gorbachev era, the move to basing trade and aid policies on international market forces led to disintegration and the dissolving of this hard-won unity, another example of the centrifugal forces spawned by markets and the emergence of unequal, individualistic policies. Few will recall the disastrous effects of this policy shift, especially upon Cuba, and well before the demise of the Soviet Union. Indeed, these changes contributed powerfully to that demise.

With justification, one might conclude that unification – mutually beneficial combinations of national entities—is extremely unlikely to be successful with capitalist social and economic relations intact. Conversely, socialist social and economic relations, linked with an internationalist perspective hold the only real, lasting opportunity for unity among diverse states.

These same centrifugal forces gnaw at the twenty-first century effort to achieve economic integration among several progressive, anti-imperialist countries in Latin America. Clearly the European Union model cannot guide this effort. Its success can only come with a concerted effort to overcome the stubborn stance of self-interest and exploitative competitiveness of capitalist social relations.

From this perspective, I wrote in November of 2008:

As with the Great Depression, the economic crisis strikes different economies in different ways. Despite efforts to integrate the world economies, the international division of labor and the differing levels of development foreclose a unified solution to economic distress. The weak efforts at joint action, the conferences, the summits, etc. cannot succeed simply because every nation has different interests and problems, a condition that will become more acute as the crisis mounts… It is highly unlikely that the [European] Union will come up with common solutions. Indeed, the unraveling of the EU is a possibility.

Five months later, and well before Greece became the focus of EU crisis, I wrote:

The EU old guard, led by France and Germany, has adamantly refused to expand financial support for the Eastern European members. The limited aid to the newer members has been mainly exhausted by assistance to Latvia and Hungary. Germany, along with France, the dominant members of the EU, oppose additional EU-wide stimulus. It's not only Eastern Europe, newly capitalist states that thrived on international loans, but many of the original EU states that are left to their own devices. Spain suffers from the implosion of the construction industry, with delinquent loans and unemployment provoking a banking crisis. A 19% unemployment rate is projected for next year, the highest in the EU. Italy suffers continued stagnation, huge debt, and a broken, corrupted political system – a system that seems incapable of even generating a modest response to the crisis,

Germany has been only too anxious to accept the role as the "big dog" in the EU, dictating most of the terms of Union-wide economic policy. Much as the US assumes that role in the global economy, Germany uses its economic might and relative health to impose its will upon the EU.

Three years later, these assessments and projections have been borne out.

Zoltan Zigedy
zoltanzigedy@gmail.com

Where Does “Occupy Wall Street” Go From Here?

2011-11-03T10:04:00.000-07:00

One of the most striking aspects of the Occupy Wall Street phenomenon is its failure to get any traction among the elite political strata, especially among elected officials with an eye on the upcoming elections. Sure, there have been numerous Democrats and even some Republicans who have, with an earnest, but patronizing tone, suggested that OWS is an understandable response to the pain inflicted by a sinking economy. But there has been no real attempt to harness the visible anger and outrage to the forthcoming political campaigns of 2012.

This is especially noteworthy in light of the Republican stance regarding the so-called Tea Party movement. They, unlike the Democrats and the OWS movement, early and often endorsed, embraced, and amplified the views of the nascent Tea Party formation. They funded it and encouraged the already friendly media to exaggerate its size and importance. They rode the movement’s anger into the 2010 elections and welcomed its “heroes” into the Republican fold. No such embrace of OWS seems imminent on the part of the Democratic Party.

Recent poll results add to this observation: an AP/GfK poll conducted between October 13 and 17 shows that 37% of the public supports the OWS protests.

Compare this to the overblown Tea Partiers. At its peak at the time of the 2010 interim elections, the Tea Party drew 31% of the public’s support, according to a CBS/New York Times poll. That same polling source places Tea Party support at only 18% in August of this year. As I have argued and continue to argue, the Tea Party movement represents nothing more than the same 15-25% of the population that have always plagued US politics: the “Know Nothings,” the Klan, the Liberty Leaguers, the Black Legions, the Coughlinites, the Segregationists, the McCarthyites, the Goldwaterites, and now the Tea Partiers. They crawl out from under the rocks in times of crisis and, thanks to powerful funding and media hype, they enjoy undue prominence.

So with substantial and hopefully growing public support, why hasn’t the Democratic Party hitched its wagon to this popular movement? With the President’s popularity sinking, would not this be an unexpected boost to Democratic Party fortunes?

It’s not happening and it won’t happen because the Democratic Party is a corrupted and bankrupt organization owned by the very targets of the OWS movement. Of course I don’t discount the Democrats' enormous resources that are at play to co-opt, distort, and re-shape this movement; they have a sterling record of doing so with past potentially radical movements.

But the current message of OWS is substantially at odds with the values and material interests of all but a few fringe Democratic Party elected officials. The slogan touted by OWS supporters that “We are the 99 percenters” conveys a sense of class division and emerging class unity that sends shivers down the spines of the operatives from both political parties. Nothing violates the quaint rules of political engagement in our two-party contests like the recognition that the US is a class-divided society.

Similarly, the movement has focused on banks, investment houses, and Wall Street as symbols of the inequities and injustices of US society. Given the enormous material support for the Democratic Party proffered by these OWS targets, Democratic officials are more than a little uncomfortable acquiring a taint from this movement.

They don’t want it, and OWS shouldn’t want them.

While commentators ranging from old lefties to media nabobs have scored OWS for having neither a single issue nor a common program, the truth is that their central and primary slogans do capture the mood and anger of many if not most US citizens. In fact, given the shallow ideological depth of the US public conversation, stunted by swift suppression of diverse ideas, and a media that crowds out all but the most superficial thinking, the slogans, placards, and banners are well suited to the moment. With the left demoralized and ineffectual from the long bout with Obama flu and splintered by multiple, parochial issues, the OWS movement has marshaled a timely focus on economic issues to afford the left yet another opportunity to grow and participate in a real oppositional formation. The fact that a substantial body of the labor movement has spoken and acted in support of OWS shows the potential of this movement.

It goes without saying that OWS is as yet only a spontaneous and loosely organized beginning. Where it goes from here is decisive. Already the security services have begun harassment and repressive actions in Chicago, Oakland, and many other cities. Mindful of how the arrests and violent actions on the part of the police helped to energize the OWS in New York City, they have yet to bring the full weight of the state security forces into play. They are, however, challenging the depth of public support for the OWS movement by testing the public’s tolerance of police intervention. Consequently, public demonstrations of solidarity are essential at this time.

Today, OWS is largely only an emotional reaction to social inequality and the rapidly deteriorating standards of living in the US. Emotional responses, through acts of civil disobedience, acts of “witnessing,” and other attention-getting activities, may well be necessary for building effective movements for change, but hardly sufficient. Needed are organizational forms that can sustain and grow the movement. These forms can formulate and correct tactical and strategic action and organically develop goals and demands. These demands can be further pressed into advanced forms of struggle, achievable as reforms in the electoral arena or through revolutionary direct action. Each step is a challenge requiring organizing skills, a deepening understanding and the deft touch of capable leadership. In any case, spontaneity must evolve into concerted, focused collective action.

While many are hailing the “spontaneity” of this movement, they confuse a spark with a bonfire. Bonfires are carefully prepared, fed, and maintained. They require attention and effort or they will die or burn, to no good purpose.

The flip side of the spontaneity coin is the OWS obsession with “horizontal” structure and allergy to any kind of hierarchical organization. To many of us, this is strongly reminiscent of the 1960’s new left’s fixation on “participatory democracy.” Coming after the Cold War demonizing and destruction of labor militancy and Communist influence, many young leftists in the US saw the failure of radical ideas as a failure to incorporate democratic values. The then ubiquitous and popular anti-Communist and anti-labor stereotypes of Communist “dupes,” labor bureaucrats, and robotic thugs reinforced this view. Moreover, the fetish of bourgeois democracy, the notion that process trumps all other values, that how things are decided is more important than what is decided, has profoundly deep roots in US history. Coupled with the cult of the individual associated with US social development, this tendency fosters contempt for organization and structure. It also accounts for the popularity of anarchism on the left and libertarianism on the right: two radical expressions of a near-paranoid distrust of organized and structured collective action.

The pressing question for OWS is not simply a matter of a platform or set of demands – as many critics put it – but of a commitment to develop the struggle to reach broad masses and deepen popular understanding.

We do not know where this will go. It is too early to either dismiss the movement or herald it as the beginning of something that will leave a lasting imprint on our politics. US history is filled with movements which
started by capturing broad support but collapsed when faced with the resources, organization, and subversion of our ruling class. The few, but significant, victories were won by developing solid, unshakable leadership with organizational skills and with a clear, firm vision of a better way.

We can all play a role in propelling this movement forward by engaging those activists militantly confronting the heart of the beast: capitalism. And it wouldn’t hurt to bring along a copy of V. I. Lenin’s What is to be Done.

Zoltan Zigedy
zoltanzigedy@gmail.com

Solyndra: Scandal or a Noble Effort that Failed?

2011-10-18T15:34:00.000-07:00

The internet and the other media are abuzz over the collapse of a private corporation, Solyandra LLC, singled out by the Obama administration for a $535 million government loan in early September of 2009. Solyndra, a company boasting of its mission to create a new, innovative type of solar panel was hailed by the President as the future of clean energy, a center piece of his stimulus program. As recently as May of last year, Obama pronounced Solyandra a “testament to American ingenuity and dynamism,” a claim that might well be proven sadly prophetic. After burning off well over half a billion dollars in less than two years, Solyandra filed for bankruptcy in September.

The dust-up generated by the Solyandra bankruptcy has pitted hypocritical conservatives on one side against cynical Obama apologists on the other. Neither side offers anything of value; both obscure the real lessons of Solyandra.

The charges and counters of insider favors and noble job-creating effort obscure the common practices of funding private enterprises with public funds. It is a rare, unusual occasion for the typical entrepreneur to tackle a new project without first seeking public, taxpayer funding. Though unspoken, this is the modus vivendi of twenty-first century capitalism. From the federal level of Solyndra to the local level of new restaurants, shopping malls or stadiums, thousands of contractors, developers, and business start-ups approach the government with hat in hand. From tax forgiveness to out-and-out grants, from publicly funded infrastructure improvements to interest-free loans, business in the US begins with the politics of securing taxpayer-provided welfare or cost-free public services.

Disguising these practices as job creating or growth enhancing, the Democratic and Republican Parties, liberals and conservatives, national politicians and local officials energetically endorse what has euphemistically been dubbed “Public-Private Partnerships.” Typically, the projects are profit-producing endeavors with any profits going to the capitalist partner and the costs and risks absorbed by the public partner. Generally the political operatives who arrange these deals are well rewarded for their effort with generous campaign contributions or out-and-out kickbacks. In the case of investment bankers who structure bond deals to finance such projects, there are fat commissions. And for the public – which seldom has a voice in these deals—there may be carrots: vague promises of jobs or increased economic activity. Or there are sometimes sticks: threats of relocation or closure of existing businesses. In any case, Public-Private Partnerships are never democratically decided, but imposed by the elites who stand to benefit.

The supreme irony of the emergence and dominance of Public-Private Partnerships lies in their blatant violation of the axioms of free market economic theory. The very proponents of these partnerships uniformly voice the values of entrepreneurship, market rationality, and market non-intervention. By the dogmas that dominate economic thinking in the US, a new business or the expansion of an existing business should be left to the tender mercies of the free market. If private capital is not made available, then the market, in its purported rationality, shows little confidence in the proposal; it is too risky. If, on the other hand, the market allocates private capital for a new project, there is no need for public subsidies. Obviously, hypocrisy is never an obstacle to profit seeking through pillaging public resources.

In the case of Solyndra, the Administration gambled public funds and lost on a project laden with political opportunities. If Solyandra had succeeded, Obama would have touted this as an example of job creation and environmental progressivism, a feather in his cap with important elements of his electoral base. His Republican opponents, on the other hand, cheerfully endorse private sector welfare, but seized an opportunity afforded by the bankruptcy to charge Obama with political favoritism in the Solyandra affair.

But missing here is advocacy for the people. Solyandra was a decidedly bad deal.

It was a bad deal because investing public money in private enterprises is generally a bad idea. There was a time when the ferocious war between corporate monopolies and small businesses might have been influenced by government intervention. There was a time when tax breaks, favorable loans to small businesses and other modest measures of support would have given small businesses a lifeline against McDonalds and Wal-Mart. But that moment has long passed. Instead, governments and public officials chose to side with monopoly capital, seduced by the corruption, influence, and power of giant national and international corporations. Those who need help the least, get it the most.

Of course the corrosive influence of profit on government funding is not new. In the interesting 1947 movie, Boomerang, an innocent man is railroaded on murder charges. Directed by Elia Kazan, in his “red” period before he ratted out his colleagues and comrades for mainstream respectability, the movie connects the fate of the accused to the conflict between the old-guard political party and its “reform” opponents. But the movie shows that there is more at stake than one man’s life. While the “reformers” are willing to broker a man’s life to remain in power, the movie reveals that there are even more sinister motives behind their complicity: the top “reform” leaders are involved in a shady deal to sell their real estate holdings to the city for a seemingly worthy public facility. If the Boomerang story resonates today, it is because these kinds of petty corruptions have since expanded and evolved enormously into common and prevalent practice.

The perpetual military economy propelled private appropriation of public funds and resources to an entirely new, qualitatively higher level after World War II and the onset of the Cold War. The so-called military-industrial complex – a kind of socialized mechanism of anti-social economic activity for private profit – intimately linked procurement, research and development, war planning, intelligence, etc. to the private sector. Thanks to the hysteria of the Red Scare, a massive amount of public funds was uncritically and wastefully funneled into profits for corporations parasitic upon both war fears and tax-payer resources. Even without the threat of world war, the military economy expanded and evolved to include private sector mercenaries, client armies, and a giant complex of private contractors and consultants. Standing as a symbol for this evolution is that private behemoth, Halliburton, which offers the military every service from showers to food service.

Two other distinct, but related, developments – the privatization of public enterprises and services and the explosive expansion of tax-evading “non-profit” services – added to the pillage of the public coffers and the taxpayers' paychecks. Despite its free-market advocates in both major parties, privatization has produced higher costs and diminished services, while the growth of “non-profits” has stripped tax collections and government revenues. In some cities over 40% of property goes untaxed because of the granting of transparently ridiculous “non-profit” status.

Solyandra is merely one more instance of the decay and systemic crisis of the capitalism system. Solyandra exposes not an aberration, but a politically charged example of the fusion of the private capitalist economy with the functioning of the state. While some rail against corporate welfare, few today understand its deep roots in the logic of capitalism. V. I. Lenin foresaw this development over a hundred years ago and later Marxist political economists developed his insights into the theory of state-monopoly capitalism. We can trace the twentieth century evolution of the unification of the state and monopoly capitalism from the capitalist response to the Great Depression through the lessons learned from the state’s role in creating political consensus, employment and profitability in World War II. We can see its further expansion in the permanent war economy, the wholesale purchase of the two-party system by private wealth, and the guarantee of private sector profitability in all state policy. We are now experiencing its highest form in the outrageous publicly funded rescue of the most irresponsible and socially aloof corporations.

Without this understanding, we only change the flavor of the drug we are offered.

Zoltan Zigedy
zoltanzigedy@gmail.com

Greece, A Victim of Capitalism

2011-10-09T15:49:00.000-07:00

Thanks to Walter Lippmann of CubaNews for the English translation of the Granma article which appears below in Spanish as well. Lippmann hosts the CubaNews list serve recommended on my blog-- the best English language source for real and honest information about the beacon of socialism in the New World. And thanks to Manuel E. Yepe who consistently and fervently advocates the Marxist-Leninist perspective in the pages of the esteemed organ of the Cuban Communist Party. Granma, as well, is a recommended link on my blog.

The Greek people continue to suffer from and struggle against the demands of finance capital. While the world economy hangs in the balance, the narrow interests and petty maneuvers of the capitalist actors continue.

ZZ

Havana, Monday, July 18, 2011. Year 15 / Number 199

MANUEL E. YEPE

http://www.walterlippmann.com/docs3223.html
A CubaNews translation. Edited by Walter Lippmann.

Greece, cradle of slavery democracy, seems fated to be among the countries digging the upcoming grave of capitalist democracy.

“To understand what the future has in store for the people of Greece, you need to imagine an intruder breaking into your home, pointing a gun at your head and demanding you give him your salary, your savings, your car, your TV set and your refrigerator.”

That’s how US writer and journalist Zoltan Zigedy sees the situation in his web site ZZ’s Blog where, under the title Capitalism Mugs Greece. Who is Next?, he explains that the Greek people did not benefit at all from the orgiastic profits of international banking nor did it promote its irresponsible behavior, but now it is forced to pay the price for the damage which caused the collapse of the global capitalist system.

“And if invasion, armed robbery and extortion are crimes, Greece is undoubtedly a crime victim. And the European Union, the European Central Bank and the International Monetary Fund are the criminals with the PASOK leaders and parliamentarians who attempt to legitimize the crime".

The recovery-from-recession prescription -- presented by capitalist economists as a universal law – stemmed from the concept that deficit and debt-promoting expenses stimulated growth and inflation which, in turn, increased tax incomes and made the debt cheaper allowing the reduction of public debt vis-a-vis the economic product.

Today, according to Zigedy, two factors have changed this dynamic. Firstly, the almost total domination of the neoliberal ideology which has generated in public opinion a great fear of any degree of public debt.

Secondly, for decades, changes in the global economy led to a new dynamic that manipulates and exploits the debt to limits never seen before. With many of the rich capitalist countries moving their manufacturing industries to low-salary areas, the financial activities – administration, manipulation and expansion of capital – took on a main role in these economies.

New techniques, instruments and institutions evolved toward the accumulation of surplus value – profits – in the hands of only a few engaged in the financial game.

The combination of these two elements –one subjective and the other objective – has placed Greece in a spiral of death. With a swiftly rising unemployment rate already over 16%, with taxes that cannot be collected, reduced salaries and benefits, with a growing number of homeless families and their social services slashed, Greek workers face a future of serious decadence.

The Greek people know little of the exotic instruments created in the international financial centers to generate the massive amounts of ghost capital that stimulates the growth of the predator system; they are only indirectly familiar with the arrogant and irresponsible actions of gargantuan international banks such as Bear Stearns, Lehmann Brothers and Goldman Sachs.

Zoltan Zigedy recommends that his fellow countrymen notice the similarities between this assault on the Greek people and the situation facing the US citizenry. “We should be inspired by the popular resistance in Wisconsin, Ohio and other states, and understand that we have a very difficult struggle ahead, without being seduced in this struggle by such false political allies as the Democratic Party, the US homologue of the Greek PASOK.”

Certainly for humankind the collapse of the global capitalist system will not be an easy matter, because there is no doubt it will do everything possible to delay its own debacle and will lay upon the rest of the world, including its allies, the associated damages.

La Habana, lunes 18 de julio de 2011. Año 15 / Número 199

Grecia víctima del capitalismo

MANUEL E. YEPE

Grecia, cuna de la democracia esclavista, parece encaminada a estar entre los países llamados a excavar la ya próxima sepultura de la democracia capitalista.

La plaza Syntagma, de Atenas, fue escenario de las protestas del pueblo contra las medidas estrangulatorias impuestas por la Unión Europea y el FMI.

"Para comprender lo que el futuro depara al pueblo de Grecia, usted debe imaginar que un intruso llega a su casa, le apunta a la cabeza con un arma y le exige que le entregue su salario, sus ahorros, su auto, su televisor y su refrigerador".

Así ve la situación el escritor y periodista estadounidense Zoltan Zigedy en su sitio web ZZ¢ s Blog donde, bajo el título Capitalism Mugs Greece. Who is Next?, explica que el pueblo griego no se benefició para nada con las orgíacas ganancias de la banca internacional, ni estimuló su irresponsable conducta y, sin embargo, ahora se le fuerza a pagar el precio de los daños causantes del colapso del sistema capitalista mundial.

"Y si la invasión, el robo armado y la extorsión son crímenes, Grecia es sin dudas la víctima de un crimen. Y la Unión Europea, el Banco Central Europeo y el Fondo Monetario Internacional son los criminales¼ con los líderes y parlamentarios del PASOK tratando legitimar el crimen".

Alimentado por una fuerte inyección de fondos públicos, el sector financiero del mundo capitalista desarrollado, que no fue condenado ni castigado por sus acciones conducentes al desastre que se pretendía reparar, retornó con fuerza a la especulación y, ahora, ataca las deudas soberanas de países como Grecia, Irlanda, Portugal y España, los más vulnerables en Europa, forzándoles a la conversión de la deuda privada en deuda pública.

Con pocas excepciones, estos países se vieron obligados a contraer mayores deudas para estimular el crecimiento económico ante la severa caída de la inversión y la demanda general, a nivel global. Las economías capitalistas quedaron sin otra opción que no sea la de seguir hundiéndose.

La fórmula para la recuperación en casos de recesión —que los economistas capitalistas presentaban como ley universal— partía de que el déficit y los gastos generadores de deudas promovían el crecimiento y la inflación que, a su vez, incrementaban los ingresos impositivos y abarataban la deuda permitiendo que la deuda pública se redujera con respecto al producto económico.

Hoy, según Zigedy, dos factores han cambiado esta dinámica. Primero, la dominación casi total de la ideología neoliberal ha ido conformando en la opinión un gran temor a cualquier grado de deuda pública.

En segundo lugar, por décadas, los cambios en la economía global llevaron a una nueva dinámica que manipula y explota la deuda hasta límites nunca antes vistos. Con muchos de los países capitalistas ricos trasladando sus industrias manufactureras a áreas de bajos salarios, las actividades financieras —administración, manipulación y expansión del capital— asumieron un mayor papel en estas economías.

Nuevas técnicas, instrumentos e instituciones evolucionaron hacia la acumulación de valor excedente —ganancias— en manos de unos pocos comprometidos con el juego financiero.

La combinación de estos dos elementos —uno subjetivo y otro objetivo— ha situado a Grecia en una espiral de la muerte. Con un desempleo en acelerado incremento que ya sobrepasa el 16 %, los impuestos que no se cobran, salarios y beneficios recortados, un número creciente de familias sin vivienda y con sus servicios sociales cercenados, los trabajadores griegos encaran un futuro de grave decadencia.

El pueblo griego conoce poco de los exóticos instrumentos urdidos en los centros financieros internacionales para generar las masivas cantidades de capital fantasma que avivan el crecimiento del rapaz sistema y solo indirectamente están familiarizados con las arrogantes e irresponsables acciones de gigantescos bancos internacionales como Bear Stearns, Lehmann Brothers y Goldman Sachs.

Zoltan Zigedy recomienda a sus compatriotas que vean la similitud que tiene el asalto al pueblo griego con la situación que enfrenta la ciudadanía en Estados Unidos. "Debía inspirarnos la resistencia popular en Wisconsin, Ohio y otros estados y reconocer que lo que tenemos por delante es una lucha difícil, muy difícil, sin dejarnos seducir en esta lucha por falsos aliados políticos como el partido demócrata, homólogo en Estados Unidos del PASOK griego".

Es indudable que para la humanidad toda el colapso del sistema capitalista mundial no será nada fácil, porque nadie duda que hará todo lo posible por retardar la debacle propia descargando sobre el resto del mundo, sus aliados inclusive, los perjuicios coyunturales.

http://www.granma.cubaweb.cu/2011/07/18/interna/artic01.html

There is a Better Way

2011-10-01T13:39:00.000-07:00

What can we learn from Karl Marx regarding the swelling second wave of the global economic crisis with its epicenter in Europe?

Writing in the first volume of Capital nearly 150 years ago, Marx added to the end of the first chapter a curious essay entitled “The Fetishism of Commodities and the Secret Thereof.” Coming after a rigorous argument that places the commodity at the center of his analysis of capitalism, section 4 reads like a disclaimer of all that precedes it:

Man’s reflections on the forms of social life, and consequently, also, his scientific analysis of those forms, take a course directly opposite to that of their actual historical development. He begins, post festum, with the results of the process of development ready to hand before him. The characters that stamp products as commodities, and whose establishment is a necessary preliminary to the circulation of commodities, have already acquired the stability of natural, self-understood forms of social life, before man seeks to decipher, not their historical character, for in his eyes they are immutable, but their meaning. Consequently it was the analysis of the prices of commodities that alone led to the determination of the magnitude of value, and it was the common expression of all commodities in money that alone led to the establishment of their characters as values. It is, however, just this ultimate money form of the world of commodities that actually conceals, instead of disclosing, the social character of private labour, and the social relations between the individual producers. When I state that coats or boots stand in a relation to linen, because it is the universal incarnation of abstract human labour, the absurdity of the statement is self-evident.

Nevertheless, when the producers of coats and boots compare those articles with linen, or, what is the same thing, with gold or silver, as the universal equivalent, they express the relation between their own private labour and the collective labour of society in the same absurd form.

The categories of bourgeois economy consist of such like forms. They are forms of thought expressing with social validity the conditions and relations of a definite, historically determined mode of production, viz., the production of commodities. The whole mystery of commodities, all the magic and necromancy that surrounds the products of labour as long as they take the form of commodities, vanishes therefore, so soon as we come to other forms of production.

The “secret” in this section is not only the secret to understanding commodities, even capitalism, but indeed the key to appreciating the Marxian method.

Marxism stands apart from “bourgeois economy” precisely because, through a dedicated study of history and revealed historical patterns, the Marxian method grasps that commodities, like markets, banks, and even today’s credit default swaps, are evolved and evolving human artifacts best understood through the constitutive relations between human actors who consciously construct and employ these instruments. That is to say, these elements, like the social relations that stand behind them, are neither fixed nor eternal, but changing and changeable.

Contrary to the pretentious, puffed up Hegelianism of celebrated pundit Francis Fukiyama, capitalism as we know it is not the “end of history.” And contrary to the triumphalism of iconic political figures like Margaret Thatcher, “There is No Alternative” is a foolish, bombastic slogan.

Yet today’s political leaders and economic thinkers are captured by the “magic and necromancy” of markets, as Marx might put it. They firmly believe that the profound economic crisis currently destroying thousands of lives and chewing up the standards of life of millions more can only be resolved in the narrow straight jacket of bourgeois economics and its eternal theological “laws.” But unlike the laws of nature, bourgeois economic laws reflect social relations, relations of social classes established by power, dominance, and privilege that might well be overturned or modified by human agency. We cannot replace the second law of thermodynamics for a “better” law of physics, but we can replace the current “laws” exhibited by the financial market place with new social relations and, consequently, a new financial order.

As Marx notes, this point is obscured for those unable to envision “other forms of production,” for those dogmatically wedded to the “immutable” laws of bourgeois economics.

With the exception of those fighting austerity and the tyranny of the popes of economic dogma such as the Greek Communist Party and others not constrained by any irrational fetish, the global economy remains strangled by the fetishism of markets and the financial predators exploiting that fetishism.

What is needed urgently is a break with stagnant, self-defeating thinking that elevates the cancerous financial sector and its privileged status among our institutions.

Witness the tragic pandering of progressive, social democratic, and other left political parties to the fetishism of financial markets throughout the world. The never ending demands of the agents of finance – the International Monetary Fund, the European Central Bank, and the European Union functionaries, in the case of Europe – bleed working people of the little they have retained in the face of the economic hurricane unleashed in 2008. Relentlessly, a tiny elite of financial manipulators and their hedge funds, private equity firms and investment banks have extorted concessions in the form of vicious austerity programs imposed on the masses.

The more governments concede in jobs, spending, and public welfare, the worse their economies perform. The worse their economies perform, the greater their debt in relation to economic product. The greater the share of sovereign debt against national product, the greater the concessionary demands of the vultures of finance. And the cycle repeats endlessly. This is the kind of reductio ad absurdum that only a madman could embrace.

The laboratory for this insanity is Greece. For two years financial predators have swarmed the relatively small chunk of international debt held by the Greek government while demanding the surrender of Greek assets and social spending to cover or guarantee those debt claims. The EU leadership could have easily placed this debt in a secure strong box as they did for banks in 2008 and 2009, protecting Greece from the vultures. Instead, they did nothing but collaborate with the assault of the financial sector. That collaboration, along with the compliance of the politically bankrupt PASOK government, brought catastrophe to the Greek people.

Recent exposés of misery in The New York Times and The Wall Street Journal have only scratched the surface of the pain now being endured daily by the workers in Greece.

And the misery will continue with the passage of the latest package of property taxes, salary reductions and layoffs. As these draconian measures, extorted by the titans of finance, further slow the Greek economy, officials will shrilly note that the Greeks are now even further from reducing their national debt and even more crippled by debt service. There will surely be further demands of privatization and austerity.

Unmoved by the fetishism of markets and the iron discipline imposed by its doctrinaire disciples, a growing segment of the Greek population has joined with Greek Communists and militant trade union leaders to simply say “No!” to this voluntary enslavement. For them, there is no fear of crumbling capitalist institutions. There is no civil debate over the fate of extortionate European banks. There is no awe of a future without the imposing structures constructed by European elites to shape Europe to benefit the privileged.

Rather, they face the future with optimism. Instead of “There is No Alternative,” they offer “There must be a Better Way.” The rest of the world would wisely heed this message and take a hard look at the socialist option.

The old Moor, as his friends fondly called Karl Marx, would smile at the slogan: “We will not pay for your crisis!”

Zoltan Zigedy
zoltanzigedy@gmail.com

Imperialism Unmasked

2011-09-07T16:52:00.000-07:00

If international solidarity is to be a cornerstone of building a militant and oppositional left in the US and other developed countries, then we have much work to do. Tragically, much of the left continues to tacitly or enthusiastically view NATO and US intervention in the affairs of far-off, small countries as support for just causes – noble military offensives for democratic change or the promotion of human rights.

Since the demise of the last great counterforce – the Soviet Union – the US and its allies have used their domination of all major sources of information to posture their many aggressions as altruistic efforts to secure stability, peace, democratic change and support for human rights.

Of course there is nothing new in this posture. Since the birth of imperialism, powerful developed countries have striven to shape the world in such a way that it benefits their economic and geo-political interests. They have sought to explain these interventions by offering transparent, but morally seductive, accounts of their motives. From the “civilizing” mission of British imperialism through the rabidly anti-Communist demonology of US administrations, imperialists have sought to mold the world in a way that best advances the narrow interests of their national bourgeoisie, especially its supra-national interests.

What is new is the incredible gullibility of so many to swallow the lame justifications for aggression against weaker, more vulnerable countries. When you slather great power intervention with noble-sounding homage to democracy and human rights, it remains imperialism. When powerful countries use their resources to fashion the world – regardless of their pretended motives – the result never serves either democracy or the interests of the subjected peoples.

I have in mind, of course, Libya.

While the media assiduously portrays the Libyan civil war as a popular rising and part of the so-called “Arab Spring,” they calculatedly avoid the obvious differences. Unlike the mass risings in Tunisia, Egypt, Bahrain, Yemen and some other Middle Eastern countries, the opposition to the Gaddafi government quickly took the form of an armed uprising. Within a month, a shadowy alternative government and armed resistance was established. In less than another month, US and NATO intervention occurred, sanctioned by a hasty UN resolution ostensibly passed to “protect innocent civilians” with a vigilant umbrella of air power, a “no-fly zone.”

Despite the pretext of the resolution, NATO intervention has been decisive in determining the outcome of the civil war. Air Power, arms, advisers and covert operations have wholly shaped every engagement, as well as terrorizing the Gaddafi loyalists. In addition, Qatar, Jordan, and the Emirates have supplied resources to the anti-Gaddafi cause, which certainly include advisors and might well involve combatants. What may have begun as an expression of political opposition was quickly transformed into a military action fronted by a surrogate regime and its rag-tag military, all serving the interests of the leading NATO countries.

The media portrays the Gaddafi government as Satin incarnate. This characterization is most agreeable to those in the West who trust no one but white guys in business suits. But even many of the left and most liberals fall prey to their own cultural biases by seeing Colonel Gaddafi as alien and unpredictable, without any reference point to the culture or social context from which he sprang. They are much more comfortable with “rebels” in Nike shoes and Western T-shirts.

But the issue is not whether Gaddafi is a good guy or bad guy, as simple minds in the West so often characterize conflicts. I confess that I know far too little about conditions in Libya, its history and its political life. I’m confident that pundits like Juan Cole or Stephen Zunes who have jumped out emphatically in support of NATO’s “humanitarian mission” know little more beyond uncritical internet research, anecdotes and hunches. The real issue is whether or not non-Libyans should have a say or, more urgently, a hand, in determining the fate of this North African country. Surely, those with the most at stake, those living in Tripoli, Benghazi and other cities or villages in Libya are both best equipped and most deserving to decide these matters without the eager “helping hand” of NATO.

This, of course, is the principle of self-determination enshrined in the United Nations charter and declarations of rights, a principle that has been shamefully abused since the post-Soviet domination of the UN by the US and its allies.

Self-determination is also a guiding principle, a core element, in the anti-imperialist posture. Anti-imperialists reject any actions or policies that restrain a people from determining their own course of action. But anti-imperialism is much more. It is also to confront and resist those great powers that overtly or covertly shape the fate of weaker nations for their own economic and political interests. For those living in those great powers – in this case, the US and other NATO countries – it is a special duty to vigorously and militantly support and advocate for the victims. The ideological softness fostered since the disappearance of a principled socialist bloc has sown confusion, luring many to side with imperialism in the several great-power encroachments and wars contrived since that time. The Balkans, Eastern Europe, the Middle East, Latin America and many other areas have experienced imperialist meddling, even military actions, all under the banner of human rights and democracy.

Blindness to imperial maneuvers produced little outcry when the G-8 countries – the primary imperialist countries – pledged $40 billion in “aid” for the “Arab Spring” countries in late May of this year. While few details were offered, the G-8 leaders stressed economic and social “reforms,” “transparency” and private sector development, all code words for fostering regimes amicable to imperialist penetration.

To Egypt’s credit, it emphatically turned down a US offer to supply the newly liberated people with $165 million to support “democratic and economic development” through the stealth imperialist agency, USAID. Egyptian officials were stunned when Hilary Clinton announced that these funds would come from existing aid programs and were to be administered directly by USAID and without the consent or involvement of Egyptian representatives. Egyptians wisely saw this as US interference in their internal affairs in order to influence the course of its ongoing revolutionary process.

On the Libyan question, skeptics point to the cozy relations Gaddafi has enjoyed with the West since 2003 as counter to the claim that the US and NATO are operating out of imperial hostility. Further, they cite economic ties as erasing any possible self-interestedness – energy resources, for example – that would motivate imperialist aggression.

For sure, recent releases from Wikileaks and other sources demonstrate warm, bilateral relations between US officials and Gaddafi right up to the January events. Even closer ties are now known between Libyan officials and the CIA. But this only demonstrates incredible hypocrisy on the part of the aggressors.

Even more revealing of imperial cynicism is the strange story of the rebels’ military commander, Abdel-Hakim Belhaj. In a recent AP story, Belhaj is identified as a CIA target swept off the streets of Bangkok in 2004 by the CIA, tortured, and rendered to Libya where he was imprisoned by pre-arrangement with Libyan authorities. The fact that Belhaj -- labeled a “terrorist” only a few years ago -- is now acceptable to the West as the principal military leader of the anti-Gaddafi forces seems to cause no discomfort.

But do the US and its NATO powers have an economic interest in seeing Gaddafi removed from power in Libya?

Contrary to the skeptics, the NATO aggressors have a major and telling interest in seeing Gaddafi removed. In a little noticed article in the back pages of the April 15, 2011 Wall Street Journal, author Guy Chazan lays out the case for the major oil companies in seeking Gaddafi’s departure (For West’s Oil Firms, No Love Lost in Libya). Chazan notes that foreign companies enthusiastically “poured in” to Libya after 2003; he cites a major player: “Libya was very fashionable… [e]veryone saw it as a great opportunity.”

But despite some major early deals, things turned sour. “Under a stringent new system known as EPSA-4, the regime judged companies’ bids on how large a share of future production they would let Libya have. Winners routinely promised more than 90% of their oil output to Libya’s state-owned National Oil Corp., or NOC.”

In addition, Libya kept its “crown jewels”—the onshore oil fields producing most of its oil – in the hands of state-owned companies. In 2007, even long engaged “friendly” companies were made to renegotiate their contracts to conform to EPSA-4. Foreign companies were forced to hire Libyans for jobs, including top managers.

One big loser was Italian oil firm, Eni SpA, which had to pay $1 billion to extend its contract with the Libyan government. Even more painfully, the Libyans reduced Eni’s share of production from 35-50% to a mere 12%. It’s no wonder that the Italian government was the most enthusiastic supporter of the NATO aggression. Nor is it anything more than a bitter irony that Eni CEO Paulo Scaroni pronounced the NATO assault on Gaddafi’s government “a lucky outcome.”

Chazan reports that “A clutch of companies left Libya as their five-year contracts began to expire, among them Chevron Corporation, BG Group PLC, and Australia’s Woodside Petroleum LTD.”

No doubt they are now eager to return with a more favorable regime on the verge of taking power under NATO’s protective arm.

In the last week of August, Eni SpA signed a contract with the “interim” government of Libya to fulfill all of the natural gas and petroleum needs of the Libyan people, a suitable reward for the fulsome efforts of Italian imperialism. No one in the capitalist media saw this naked payoff as shameless.

When the “friends of Libya” conference convened in Paris on September 1, 2011, the 63 countries representing themselves as “friends” spoiled their celebration by feuding over the disposition of the Libyan oil resources. “French Foreign Minister Alain Juppe said he thought it would only be reasonable if French companies benefited from preferential access to Libyan contracts, given that Paris, together with the UK, led the foreign military offensive in Libya”, as reported in The Wall Street Journal (Amid Harmony on Libya, a Spat Over Its Oil, 9-2-2011). So now the scramble for Libyan oil begins.

Convincing some that NATO intervention in Libya was an act of imperialist aggression may well be a hopeless task. Many are blind to capitalist motives, just as they are ignorant of historical patterns. Yet, imperialist aggression continues as blatantly and arrogantly as it has for well over a hundred years.

V.I. Lenin, writing in 1900 of the naked aggression against China by the “Great Powers,” presages the imperialism of 2011:

And now the European capitalists have placed their rapacious paws upon China, and almost the first to do so was the Russian Government, which now so loudly proclaims its “disinterestedness.” It “disinterestedly” took Port Arthur away from China and began to build a railway to Manchuria under the protection of Russian troops. One after another, the European governments began feverishly to loot, or, as they put it, to “rent,” Chinese territory, giving good grounds for the talk of the partition of China. If we are to call things by their right names, we must say that the European governments (the Russian Government among the very first) have already started to partition China. However, they have not begun this partitioning openly, but stealthily, like thieves. They began to rob China as ghouls rob corpses, and when the seeming corpse attempted to resist, they flung themselves upon it like savage beasts, burning down whole villages, shooting, bayonetting, and drowning in the Amur River unarmed inhabitants, their wives, and their children. And all these Christian exploits are accompanied by howls against the Chinese barbarians who dared to raise their hands against the civilised Europeans…

How is our government’s senseless policy in China to be explained? Who benefits by it? The benefit goes to a handful of capitalist magnates who carry on trade with China, to a handful of factory owners who manufacture goods for the Asian market, to a handful of contractors who are now piling up huge profits on urgent war orders (factories producing war equipment, supplies for the troops, etc., are now operating at full capacity and are engaging hundreds of new workers). In the interests of this handful of capitalists and bureaucratic scoundrels, our government unhesitatingly sacrifices the interests of the entire people. And in this case, as always, the autocratic tsarist government has proved itself to be a government of irresponsible bureaucrats servilely cringing before the capitalist magnates and nobles. (The Chinese War)

That was the ugly face of imperialism in China, this is the ugly face of imperialism in Libya today.

Zoltan Zigedy
zoltanzigedy@gmail.com

Sinking Fast

2011-08-13T16:53:00.000-07:00

Regrettably, there is much to write about that must take a backseat to the economy and the current panic in equity markets. For the moment, the political fiascos, imperialist misadventures and cultural crudities that cry out for commentary are driven into the background by the fears generated by the latest economic news.

The loss of over 10% of equity value in one week terrorized business and economic pundits while driving investors to the exits. Making matters worse, there is an overriding, profound sense that no one in the seats of power knows what is wrong or how to fix it.

Of course some of us foresaw another round of decline coming, what the media has misleadingly dubbed the “double-dip”.

I posted on May 4, three months ago: “Rather than a recovery, we are in Act II of a severe crisis of capitalism. It is not merely a financial crisis, a severe business cycle trough or a radical imbalance, but a profound crisis of the capitalist system.” (The Crisis of Capitalism: Act II). Citing trends in GDP, labor productivity, unemployment, consumer spending, trade and even profits, I drew the conclusion that the road ahead was not only bumpy, but deeply rutted and perhaps impassable.

In another post in late June (Reliving 1937?), I emphasized the folly of debt hysteria and wholesale government budget slicing as a prescription for a seriously ill economy. A near consensus of economists and policy makers were blithely urging the same policies that nearly wrecked the vulnerable New Deal recovery in 1937. History was indeed repeating itself, first as a misstep in 1937, now as dogma-driven insanity.

Among liberal economists, Paul Krugman has commendably repeated warnings of this disaster in the pages of The New York Times.

And on the left, political economist Jack Rasmus has, for many months, boldly projected an impending relapse of 2008, citing a raft of economic data supportive of this conclusion (see jackrasmus.com).

But most economists and mass media commentators were swept up in the debt fraud and the high drama leading to the last minute capitulation to debt extortion.

After the curtain fell, ridiculousness reached new heights as Standard and Poor’s – one of the feared financial rating agencies (the same cabal that assigned the highest ratings to toxic, Rube Goldberg financial junk)—lowered the US credit rating by one notch. To underline the irrelevancy of this rating, the yield of US Treasury notes immediately dropped. Instead of fleeing US debt, investors stepped up to pay more and buy more. In fact, since late July, as the phony debt standoff grew in intensity, the yield on two and ten year Treasury bonds fell at an unprecedented rate, indicating not only willingness, but eagerness on the part of investors to secure US debt. In addition, the stern warnings about the consequences of debt on interest rates were proven unwarranted, with mortgage rates at an historic low. Still the humbuggery reigned.

This is a strange debt “crisis” indeed that attracts investors to secure more US debt. The same pundits who cite rising interest rates on EU member state bonds as evidence of a debt crisis conveniently overlook the reverse behavior of US bonds. The blatantly contradictory claims of economists and public commentators demonstrate that the “crisis” is really a contrived political maneuver.

No one notes that the credit rating of the Peoples’ Republic of China is two notches below the lowered rating of the US. It is no wonder that PRC officials howled at the US debt drama after they were able to weather the 2008 financial crisis despite a credit rating of only AA-. Standard and Poor’s ratings mean little to a country unchained from the tyranny of bond markets. Thanks to the PRC’s publicly owned banks and its large measure of economic planning, PRC leaders are able to withstand capitalist irrationality better than their Western counterparts.

Capping the confusion and deception of the first week of August was President Obama’s emergency statement during the stock market collapse on August 8. Adding to the madness, he spoke of “a renewed sense of urgency” in drastically reducing US debt, as though throwing gasoline on a fire would somehow extinguish it. I’ll leave it to psychotherapists to determine if the President really believes this nonsense.

Some not-so-random thoughts:

1. We are indeed falling off the economic precipice. While stock market performance is only a secondary indicator of economic health, it does signal the sentiment in ruling circles and among the wealthy. That sentiment is decidedly confused and fearful. Volatility, as in 2007-2008, signals an imminent retreat from investing. The players who remain active are hedge funds and private equity firms who gain even when the rest of us are drowning economically. We lost the chance to tame these renegades in 2009 and 2010 with financial reform, but left them free to prey on our economy. And they are.

2. Profit and its tendency to decline are still at the center of the global economic crisis. While profits have grown enormously over the last two years, they have shown slowing growth for some time. Moreover, the widely noted $2 trillion in cash reserves held by US corporations represent the same glut of liquidity, or vast pool of capital seeking a return, that led to the last crisis of financial speculation. In a Marxist technical sense, these reserves count as potential constant capital and weigh against the profit rate of capitalist enterprises. The lack of investment opportunity for accumulated capital explains why the stock market and economic growth are in such dire straits despite officially high profits. Capitalism only thrives when every possible cent of accumulated surplus is placed back into the profit-generating caldron.

3. Increased labor exploitation – the principle force propelling the proclaimed recovery – has petered out. Labor productivity, won by employing fewer workers to do more work, dropped .6% in the first quarter and another .3% in the second quarter of 2011, calculated on an annual basis. I noted the decline in productivity growth in my May 4 article, but new BLS figures actually show an absolute decline. While capitalists will continue to try to squeeze workers, BLS data prove that hyper-exploitation is showing diminishing returns.

4. Act II of the capitalist crisis is still centered on the financial sector. Despite the absorption of weaker financial institutions by those left standing after the 2008 crisis, despite the concentration of finance capital, banks are in a precarious position, holding shaky loans and dubious assets. Again, the opportunity was lost in 2009-2010 to secure a rational, economically useful role for banks. Instead, they were allowed to resume their rogue, speculative ways, further exacerbating the crisis.

5. Unemployment – the idling of workers seeking to keep their families from despair – continues to loom over the economy. As I urged in my May 4 posting, the “official” rate, as bad as it is, is a false, misleading indicator of the plight of the workforce. Instead, we must measure the pain of job loss and employment frustration by the employment-to-population ratios and the labor participation rates which better show the tragic fate of the US workforce. Jack Rasmus, in a recent post, has given an even more forceful, complete explanation of the true dimensions of unemployment (http://jackrasmus.com/2011/08/07/look-again-july-jobs-declined-by-198000/), an explanation that erases the false hopes encouraged by the media.

6. The trade balance widened in June to the detriment of US exports, a trend that further dilutes GDP growth potential.

All signs point to a perfect conjunction of stubbornly irrational policy decisions and lost economic momentum leading to the second, more intractable act of this twenty-first century economic crisis.

Zoltan Zigedy
zoltanzigedy@gmail.com

A Crisis of Liberalism?

2011-08-02T16:28:00.000-07:00

“Obama’s offer… falls to the right of the average voter’s preference; in fact, it may outflank the views of the average Republican.” George Packer (The New Yorker) citing The New York Times writer, Nate Silver

“Put it this way: If a Republican president had managed to extract the kind of concessions on Medicare and Social Security that Mr. Obama is offering, it would have been considered a conservative triumph” Paul Krugman, The New York Times

“President Obama presented Republicans with what, at almost any other time in recent history, would be seen as a conservative dream…” The Nation editorial

“It was shocking when he betrayed core principles of the Democratic Party, portraying himself as high-minded and brave because he defied his loyal constituents.” William Greider, The Nation

The quotes above and many other similar statements point to a crucial, disturbing moment in the evolution of US politics. Self-styled liberals or, as they now prefer to be called, “progressives,” are recognizing the loss of their influence in the dynamics of the US political process. They are feeling the pain of marginalization.

For liberals, the election of Barack Obama signaled a return to an imagined earlier politics that would establish a coalition of the have-not and have-less elements of US society and would counter the unrestrained pillage of the very rich and powerful. This idealized vision never promised to settle accounts with powerful interests, but only to buffer the pain of the less advantaged with a robust, but patronizing “safety-net.” In foreign policy, liberalism never abandoned imperial goals masked as advocacy of transcendent values, but sought a softer, less belligerent imposition of these goals on client states and potential opposition. In the 2008 election campaign, Barack Obama and other Democratic Party candidates did much to encourage the view that new politics were on the horizon.

Nearly three years after the election, the promise of Obama and the hope of liberals are gone, replaced by shock and disappointment.

Liberals-in-denial blame the Obama debacle on the ultra-right: the determined, uncompromising right flank of ruling class politics that unabashedly promote the interests of the wealthy and powerful while advocating unrestrained US global dominance. Standing by 19th-century economics, libertarian social and political policies, and hyper-patriotism, the ultra-right enjoys a base seduced by an ideology in a world awash in compromise, opportunism and hypocrisy. Against their shrill, ideological fervor, Obama, the prince of civility and concession, stands no chance. For the liberals, the ultra-right violates the rules of fair play, a charge of little sting at a time of profound economic and political crisis.

Still other liberals lash out at Obama as a traitor to the cause, a candidate who side-stepped the promised changes and violated the values enunciated in the 2008 campaign. For the most part, they need to revisit the campaign promises and sweep away the naiveté that blinded them to the massive corporate and elite support that put Obama on the main stage. They need to investigate the available, though widely ignored, accounts of Obama’s political career that cast great doubts on his liberal credentials and show his progressivism to rest on the thin ice of opportunism. Those who bought the puffery of vanity political accounts have no one to blame but themselves. More importantly, liberals fail to acknowledge the many decades of Democratic Party embodiment and facilitation of shifting liberal values; they fail to see the continuing escape from and re-shaping of those values as demonstrated transparently by the previous policies of the Carter and Clinton administrations.

US Liberalism

US liberalism is an elusive ideology, if it is an ideology at all. It shares with classical liberalism a reverence for vague and fuzzy notions of freedom and liberty that deny any class relativity to these concepts. For the most part, US liberalism in the era of monopoly capitalism differs from US conservatism by exhibiting more social tolerance, allowing more free space for life-styles, religious attitudes, ethnic differences, and expression. Notably, the limits of liberal tolerance often stop at radical political expression and activity. Liberals are seldom friendlier to socialist, anarchist or Communist movements than their conservative counterparts.

Some locate the roots of modern US liberalism in the Progressive Era. Others see stirrings of the modern variant in the doctrines of Woodrow Wilson. But liberalism, as we came to know it, surely owes its fundamental principles to the Franklin Roosevelt era and New Deal policies. Shaped by a profound capitalist economic crisis, an influential and growing independent left, and emerging ultra-right, fascist threats, Roosevelt and his allies crafted an ideology that re-structured capitalism and its institutions to meet these challenges. Not without many reservations, the Democratic Party became the flag-holder for this new ideology.

Apart from the bloated mythology surrounding the New Deal, the liberal initiatives of the 1930’s ameliorated the hard edge of suffering falling upon most working people, deepened democracy and proved to be immensely popular with a majority of US citizens.

Key elements of New Deal liberalism include the following:
1. Government has a duty to establish a baseline of living standards guaranteed to all.
2. Government has a similar duty to regulate and manage the capitalist economy to ensure its viability and success.
3. Foreign policy should avoid intervention (except in the Americas) and rely on negotiation and international institutions.

To a great extent, these elements served as a cornerstone of liberalism, broadened its appeal and established a loyal base for the Democratic Party. Coupled with the threat of fascism, this produced an uneasy, but stable unity with the socialist and Communist left.

New Deal liberalism reached its zenith during World War II with its Grand Alliance of those fighting fascism, an alliance that included the Soviet Union. The post-war world envisioned by liberals as well as Communists promised an end to war, peaceful democratic governments and a decided social and economic tilt towards the masses. The Potsdam, Tehran and Yalta conferences sketched the outlines of this post-war world.

But it was not to be.

New Deal liberals and Communists alike underestimated the strength of reaction and failed to stem the counterattack by corporate interests and their political allies.

Within three years of the end of the war, liberals melted before an onslaught of hyper-patriotism and anti-Communist zealotry. In a preview of our current moment, liberalism sought to compromise with the most rabid, anti-democratic forces, conceding civil liberties, foreign policy sanity and the militarization of the US to protect remnants of the New Deal agenda. With the left nearly destroyed or in retreat, liberals lost the spurs that prodded the most radical, progressive policies in the New Deal’s response to the Great Depression. With that loss went the spine of liberalism. The Cold War ushered in the retreat of liberalism and the infidelity of its Democratic Party electoral partner.

With the mass upsurge of the 1960s driving the initiative, liberalism and its Democratic Party vehicle made one last, futile attempt to breathe life into the New Deal agenda. Lyndon Johnson’s Great Society returned to the spirit of the New Deal, but made the fatal mistake of embarking on domestic reform while appeasing conservatives with an aggressive, imperialist war. The New Deal and the Cold War were simply incompatible.

Since that time, with liberalism and the Democratic Party joined at the hip, the trajectory of US liberalism and the Democrats has moved further and further away from New Deal ideology. The Democratic Party platform of 1976 was the last gasp of New Deal consensus, only to be neglected and subverted by the Carter administration.

The electoral victory of Ronald Reagan pushed liberals and the Democrats even further from New Deal thinking, with both soon accepting the primacy of free markets, de-regulation, a minimal public sector, balanced budgets, and government non-intervention in the affairs of corporations.

If liberalism had an ideology, it was embodied in the New Deal. With most of the New Deal gone and liberals tepidly defending its remnants – Social Security, Medicare and Medicaid – it’s hard to find the soul of this once vital political force.

Liberals and Democrats

US liberalism, since the time of the New Deal, placed its fate in the hands of the Democratic Party. Indeed, most identify modern liberalism with the Democratic Party. It is easy to understand why. During the New Deal era, the Democratic Party was the vessel for New Deal policies and the legislative executor of those policies. But it is also necessary to understand that it was not an easy fit. Roosevelt battled internally with many factions within the Party, as did his closest liberal allies.

From the onset of his term, Roosevelt felt compelled to appoint conservative Party figures to key positions and appease the pro-business orientation of the Party’s old guard. As a self-proclaimed experimenter, he shifted personnel to find answers to the Great Depression: progressives brought him success, conservatives didn’t. In addition, he was always looking over his left shoulder at a Communist and labor movement that was pressing hard at his heels.

His successes won a huge victory for the Democrats in the 1936 election. While many newly elected Democrats were progressive, many were not. And his program after 1936 was often stalled and even reversed by conservative elements in the Party. In short, the Democratic Party was still a bourgeois party. It did not make Roosevelt and his New Dealers progressive; they made the Democratic Party progressive.

In 1948, New Deal liberals, led by ex-Vice President Henry Wallace, understood this well. In the face of a Democratic Party retreat from the New Deal ideology, they formed a third party, the Progressive Party. While many see this as ill-advised and ill-fated, others of us view this move as a premature recognition of the forthcoming decline and dissolution of New Deal liberalism. While the Progressive Party fell victim to Cold War hysteria and liberal divisiveness, it attempted to keep alive the soul of the New Deal.

Over the next many decades, with the rise of television and other new media, the decisive role of polling, and the accompanying critical necessity of fund raising, the Democratic Party became less of a willing partner for New Deal ideas and more of a brand to be manipulated by consultants and other shapers of public opinion. The draw of ideas and issues was replaced with the politics of personality and vapid sloganeering.

Having made its bed with the Democratic Party, US liberalism valiantly stood by as the Democratic Party was polluted and corrupted with corporate money. A Party allied with the bourgeoisie became a Party owned by the bourgeoisie. Instead of a Party seeking the enlightened interests of US capitalism to be found in a measure of social justice, the Democratic Party became a vulgar tool of US capitalism, paying lip service to its core support in the labor movement and among African Americans and other minorities.

Today, liberalism has paid a heavy price for its marriage with the Democratic Party. By slavishly correcting its vision to comply with an increasingly ideologically bankrupt and crassly opportunistic political machine, liberalism has acceded to the sapping of its once politically relevant principles.

It is not for those of us of the anti-capitalist left to find redemption for liberalism. We have our own work to do. But its collapse has left the door open to the continuing advancement of the most extreme, the most rabid supporters of corporate brigandage and political reaction.

Zoltan Zigedy
zoltanzigedy@gmail.com

What It Takes to Make It Better

2011-07-24T14:25:00.000-07:00

On July 2, as people in the US began their Independence Day festivities, Associated Press writer, Paul Wiseman, offered a remarkable article for our fellow citizens to ponder. In The Economic Recovery Turns 2: Feel Better Yet?, Wiseman gives a summary of the meaning of “recovery” for ordinary folks.

Wiseman observes: “[ In this recovery], …ordinary Americans are struggling with job insecurity, too much debt and pay raises that haven’t kept up with prices at the grocery store and gas station. The economy’s meager gains are going mostly to the wealthiest.”

True enough.

But Wiseman goes on to demonstrate his claim in a way never seen in the mainstream media. He points out that workers’ wages (with skyrocketing executive pay included!) account now for 57.5% of GDP, down from 64% before the first throes of the crisis. Moreover, profits are up by nearly 50% since the “recovery” began in June of 2009. Much of this, I might add, “achieved” during the tenure of a laughably pro-worker government led by the Democrats.

Wiseman notes that “Unemployment has never been so high – 9.1 percent [now 9.2%!] – this long after any recession since World War II… Average worker’s hourly wages, after accounting for inflation, were 1.6 percent lower in May than a year earlier…[And] Higher paying jobs in the private sector, the one’s that pay roughly $19 to $31 an hour, made up 40 percent of the jobs lost from January 2008 to February 2010, but only 27% of the jobs created since then.”

Wiseman’s bleak picture of US workers’ plight dispels any notion, constantly floated by politicos and their lap dog media, of shared sacrifice. Instead, the “recovery” has been decidedly one-sided: the wealthy and the corporations have enjoyed substantial gains, while working people have sunk further economically.

On the heels of the long July 4 weekend, pundits and forecasters sought to conjure better news by projecting a drop in the unemployment rate. Euphoria set in when the ADP data suggested strong job growth, sending the stock market soaring.

But as is often the case, the ADP report proved to be fool’s gold and the forecasts baseless, with the June unemployment rate notching up to 9.2%. A mere 18,000 jobs were added in June, the fewest since September of 2010. And May’s meager numbers were also revised dramatically downward. It has been over a year since fewer private sector jobs were added to the workforce. Temporary jobs – the new “growth” area – were down by 12,000.

In addition, wages were lower in June and workers worked fewer hours. If Wiseman had waited a week, he could have painted an even bleaker picture.

Amazingly, news of this import – news that directly and severely affects the lives of hundreds of thousands of people and indirectly millions more – gets little more than a shrug from a media obsessed with bizarre crimes and celebrity missteps.

At the same time, the politicians who owe their offices to these millions sidestep the question by expressing canned condolences prepared for random acts of nature, or – worst of all – linking the solution to unemployment to the need to rein in the debt, a cynical insult to the unemployed. The Commander-in-Chief offered an empty platitude – “The American people need us to do everything we can to strengthen the economy and make sure that we are producing more jobs.” – while working hand-in-glove with Republicans to cut government spending and guarantee the loss of more jobs.

This is surely a shameful performance all around.

To be sure, the continuing crisis of capitalism demonstrates the bankruptcy of the ideologies that supposedly triumphed over Marxism, over Communism. With those ideologies enjoying well over thirty years of ascendancy and domination over policy, the net result is an economic collapse of catastrophic proportions. If this putrid mix of corrupted bourgeois politics and economic alchemy were held to honest account, millions of our fellow citizens would be rushing to embrace an alternative, including socialism.

But those who rule and hoard the wealth have many mechanisms to restrain any such movement: fear, war-mongering, xenophobia, racism, anti-Communism, consumerism, and a host of other tools designed to derail any movement away from accepting the despair brought forth by capitalism.

Fending off these ugly, divisive influences has never been easy; perhaps it is even harder today, but it is essential for uniting and unleashing the popular forces that could challenge a world view that has been tried, but failed.

Yet, fighting consumerism, racism, anti-Communism and the other sordid road blocks to unity is not enough. We cannot unify without something to unify around. We cannot take an exit from this road designated by misleaders and well-paid flacks by simply removing blinders. We must also offer a new route, based on careful analysis and historical experience, that promises an escape from the carnage of global economic crisis.

A vague commitment to anti-capitalism is not enough, either. While it makes a nice slogan, a nice balm for the soul, it offers no solution, no road forward.
The road forward begins with a vision of a society shorn of all-powerful corporations, corrupted politicians, the pillaging of nature, exploitative social relations, and self-centeredness. For sure, it’s not a new idea. Elements of that society are found in all religions; they emerge more fully in utopians like Thomas More, Fourier, Saint-Simon and Robert Owen who painted a social landscape of fraternity and cooperation.

Industrial society coalesced this thinking into the idea of socialism and the recognition that the market economy and private ownership of productive assets stood in the way of the new vision. The clearest and most reasoned, though certainly not the final, expression of this vision was conveyed in the works of Karl Marx and Frederick Engels.

Since their time, no other alternative to capitalism, no rival vision, has emerged to effectively challenge capitalism, except socialism. No alternative has captured the allegiance of working people world-wide, across borders, in factories and villages, like socialism.

With the Bolshevik revolution in Czarist Russia, the vision became a reality. Like all visions that come to life, the Russian experience inspired and warranted study. And the touchstone of that inspiration and study was the work and thought of the Bolshevik leader, V. I. Lenin. Throughout the twentieth century, millions drew upon that experience to spark and shape their struggle for a better life. As Bertolt Brecht wrote:

Comrade Lenin has been honored
often and plentifully. There are busts and statues.
Cities and children have been named after him.
Speeches have been given in many languages,
meetings held, and demonstrations
from Shanghai to Chicago in honor of Lenin.

Again, Lenin was not the last word, but his program and its successes marked a step further from vision to reality. It was no accident that Leninism, as an anti-capitalist program inspired by Marxism, marked a point of departure for anyone serious about moving beyond the grip of capitalism. And to date, no alternative to Leninism has succeeded in fully breaking the shackles of exploitation and the dictatorship of profit.

Assuredly, political movements of a different cloth and their leaders have successfully championed anti-imperialism and national independence. Some have even raised the banner of “socialism” over profound changes in the balance of forces between the owners of capital and working people. They have even privileged working people, to some extent, over the bosses, using electoral leverage to achieve great gains. But they have yet to eliminate exploitation or erase private profit as the economic engine. Nor do they have a coherent idea of how to do it. I am thinking today, of course, of the revolutionary movements that inspire us in Latin America. While they inspire us, they inspire us as visionaries, remaining caught in the web of utopianism, as were Robert Owen and Pierre-Joseph Proudhon before them.

Of course much has changed since the time of Lenin. Still, Leninism remains the touchstone for crafting a revolutionary strategy. Advocating anti-capitalism, while dismissing Leninism, failing to heed its lessons, is like starting a journey without knowing where you are and where you are going. Marxism-Leninism boldly offers a full account of both where we are and where we should be going.

The failure to seriously engage Marxism-Leninism is a transparent failing of the left, especially in the US, but also in many other parts of the world. It is not a theological failure, a failure to memorize the classic texts or mechanically apply them, but a failure to grasp the powerful tools resting in the Marxist-Leninist tool chest – the analytical devices of class, profit and exploitation and the strategic notions of vanguard party and dictatorship of the proletariat. That is not to say that these tools must be accepted as they are or applied in the old ways, but they remain available, particularly at a time when so few viable alternatives to capitalism have emerged.

One sees the absence of class analysis and revolutionary tactics in the popular movements in the US, much of Europe, and the upheaval in many Arab countries. While the sentiment is there – anger, frustration, and despair – it fails to channel toward a program of fundamental change. While we must admire the determination and dedication of active masses, that action is too often dissipated or redirected by self-styled leaders or “democratic” illusions. Rather than shaking the foundations of capitalism, these movements demonstrate against the personalities and character of those in power. But these rulers are disposable, to be easily and quickly replaced by others of their ilk. A deeper understanding of the structures and institutions that reproduce the model bourgeois politician and minister is lacking. Marxism-Leninism offers that understanding.

The capitalist media showers us with pictures of thousands of “indignants” determined to give voice and physical commitment to their anger. Missing from these pictures are the slogans or banners that reflect an alternative program either challenging capitalism or wresting power from the capitalist rulers and their parliamentary lackeys. In short, they constitute no “specter” haunting those in power.

For Marxist-Leninists, spontaneity is seldom a reliable road to change.

In the US, the political arena is further complicated by leftist ideologues who have no mass base and mass leaders who have no ideology.

With no mass base, the best known ideologues command an audience, but their words are shorn of tactical constraints or organizational commitment. As such, they speak “freely” and “independently,” but with little concern for the political impact or the context of their statements. Noam Chomsky’s recent sharp, public criticism of a single alleged policy of the popular, progressive Hugo Chavez government in Venezuela is a case in point. As perhaps the leading light of the broad left, Chomsky, with his interview in the UK Guardian, provided raw meat to a pack of media carnivores ready to pounce upon the Bolivarian Revolution. This attack came at a time of great vulnerability brought on by malicious speculation about Chavez’s health. No doubt Chomsky acted from sincere individual conscience, but dissociated from any organization and without any responsibility to a movement –and no internationalist obligation to the interests of the majority of the Venezuelan people. As a result, he evades responsibility for the consequences of his words.

And our mass leaders, especially most labor leaders, often rail against the inequities and injustices wrought by capitalism, but without any over-riding, systematic understanding of how it produces and reproduces these results. Mired in the immediacy of policies dictated by others – corporate bosses, two-party politicians, and other hostile social forces – they only react with indignation and without a strategic plan to shift to the offensive. Without an ideology, without a class-based stance, they fulminate without inspiring, posture without leading. All of the mass anger and fighting spirit is funneled into the electoral arena and barely qualified support for the Democratic Party.

The Wisconsin uprising demonstrates well the ideological vacuum and strategic chains limiting the labor movement. Acclaimed by all as a major escalation of working class militancy, the mass actions threatened to grow in scope and fervor, but were soon sapped by “leaders” promising to convert the struggle into a grueling legalistic campaign for electoral recall. Instead of mobilizing tens of thousands of workers nationwide who are equally threatened by draconian cuts in wages and benefits, instead of calling for strikes and other expressions of solidarity, US labor leaders opted to divert the struggle to a mere political contest between Republicans and Democrats. Their fear of mass initiative and their ideological immaturity smothered a rare opportunity for US workers to achieve a level of effectiveness on a par with many struggles in Europe and the Arab world, a chance to stand up to ruling class power.

These weaknesses point again to the need for a Marxist-Leninist political organization, an organization committed to bringing a vital, energizing ideology to working people. Whether that organization comes in the US from a change in direction of the now nearly empty shell of the Communist Party USA, or one of the few, small organizations that have emerged to fill the ideological void abandoned by the CPUSA, or from some new formation is yet to be settled. The process is a difficult one requiring a clearing of all of the ideological underbrush accumulated since the fall of the Soviet Union and the shedding of all of the disillusionment generated by that fall. That process will only develop from offering Communist leadership to mass action and diligent and aggressive action in the war of ideas.

Such an organization will not arrive spontaneously, but we should be confident it can be delivered.

Zoltan Zigedy
zoltanzigedy@gmail.com

Capitalism Mugs Greece. Who Is Next?

2011-07-06T16:58:00.000-07:00

To understand the fate facing the people of Greece, you have to imagine an intruder coming to your home, putting a gun to your head and demanding that you turn over your earnings, surrender your savings, and sell off your car, your television, and your refrigerator t. Greek citizens neither benefited from the profit frenzy of international bankers nor encouraged their irresponsible behavior, yet they are being asked – no, forced – to pay the price for the damage incurred in the collapse of the world capitalist system.

Greece – a small corner of the European Union – and its people know little of the exotic instruments concocted in the world’s financial centers to overproduce massive amounts of phantom capital fueling the growth of this rapacious system. They are only indirectly acquainted with the arrogant, irresponsible actions of giant investment banks like Bear Stearns, Lehmann Brothers or Goldman Sachs. Very few Greeks see their future tied to the success of the predatory financial behemoths that roam the global economy. And yet they are being forced, at gun point, to pay for their losses.

When the media fog lifts, this is clearly the plight of Greece’s eleven million citizens.

If home invasion, armed robbery, and extortion are crimes, then surely Greece is a crime victim. And the European Union, the European Central Bank and the International Monetary Fund are the criminals. They are aided and abetted by the bond bandits who prey on debt, pouncing on a country struggling to revive its sinking economy. And their puppets – pathetically willing accessories to the crime – are the PASOK leaders and parliamentarians who attempt to legitimize the crime.

With few exceptions, countries have been obliged to take on additional debt to stimulate economic growth in the face of a severe drop in global investment and broad demand. Capitalist economies have no option other than sinking further in decline. In earlier times, deficit, debt-producing spending produced improved growth and accompanying inflation. Growth and inflation, in turn, increased tax revenues and cheapened debt, allowing the public debt to shrink in proportion to the economic product. This has long been a feature of capitalist recoveries from mild to severe recessions. Conventional economists teach this as though it were a universal law.

But we live in exceptional times and conventional economists are seldom right about anything any more.

Today, two factors have changed this dynamic. First, the near-total domination of neo-liberal ideology has shaped opinion to fear public debt of any degree. What was once the dogma of the fringe right has, thanks to over forty years of focused, class-based intellectual encroachment, spawned a uniformity of thought among the media, politicians, and opinion makers bordering on faith and defying history and facts. What began as the so-called “Washington Consensus” in 1989 has become an international consensus, gaining near-theological obeisance. International capitalist institutions like the International Monetary Fund have eagerly embraced its tenets.

Debt hysteria, like patriotic fervor, induces baseless fears that perversely shape policy decisions. Like contrived patriotism, debt fright masks a hidden agenda – in this case, a hatred of all socially useful public spending.

Secondly, for decades, changes in the global economy ushered in a new dynamic that manipulates and exploits debt far beyond anything we have seen before. With many of the capital-rich countries surrendering their manufacturing to low-wage areas, financial activities – the management, manipulation and creative expansion of capital – took on a greater role in these economies. New techniques, instruments and institutions evolved to accumulate surplus value – profits – in the hands of the few engaged in the financial game.

As capital accumulated – US financial profits accounted for over two-fifths of all profits before the collapse – it became increasingly difficult to maintain the rate of return spurred by financial ascendancy. (In Marxist terms, the tendency for the rate of profit to decline reared its ugly head.) Riskier and riskier speculation sought to find a home for the overproduction of capital until the system collapsed, the scenario that we all know so well.

Fueled by an injection of public funds, the financial sector has returned to speculation with a vengeance. In addition, they are now finding new profits in attacking the debt of the most fiscally vulnerable countries and forcing the conversion of private debt into public debt. The financial sector was neither wounded nor chastened by its folly. Instead, it has roared back, attacking sovereign debt in vulnerable countries like Greece, Ireland, Portugal and Spain. Speculative capital has turned virulently predatory.

The combination of these two elements – one subjective, one objective – has placed Greece in a death spiral. With unemployment soaring over 16%, taxes on the poor enacted, homelessness on the rise, salaries and benefits sliced, and social services eviscerated, Greek workers face a future of decline.

II

If there is one insight central to the science of Marxism, it is that appearances seldom reveal the real social realities; indeed, they most often mask them. The interplay of personalities, the clash of proclaimed interests, or the statements of policy makers conveyed by the corporate media are seldom the actual forces at play in social developments. Instead, material forces evolving from the system’s dynamics are usually the decisive factors in driving change.

In the case of Greece and, soon, the other vulnerable European Union countries, finance capital -- particularly its most predatory elements (hedge funds and private equity firms) -- has exploited the crisis to generate profits by betting against Greece’s ability to manage its debt. These bets have predictably influenced the market, making it even more difficult for Greece to secure and pay off its debts. As selling and redeeming bonds became more costly, Greece lost the ability to generate a recovery from further deficit spending.

Without a boost from public sector spending to jump-start economic activity, tax revenues shrank further, crippling Greece’s ability to meet debt payments and again find favor with the bond profiteers. The painful, tortured route to economic destruction ensued.

The only sensible exit from the vise gripping Greece was to stand up to finance capital and extract a new deal or exercise its sovereignty by voiding its debt – defaulting. But Greece’s “socialist” party, PASOK, instead turned to the eager criminals of the IMF, the EU and the European Central Bank for “help”. Only the Greek Communist Party and the advanced sector of the working class, PAME, advocated swift exit from the financial vise.

III

Where the media presents Greece’s plight as simply one of irresponsible government bringing pain on itself and the attendant economic hardships as the market’s revenge, the truth is far different. The Greek crisis is what an unrestrained, dominant, and predatory financial sector produces. But we must also recognize that the financial monster devouring Greece is itself the product of a capitalist system dependent upon finance to sustain its continued accumulation of surplus value. Those who think that taming the financial behemoth will restore a kinder, gentler capitalism are ignorant of the system’s logic.

By turning to the triumvirate (the EU, IMF and the ECB), the PASOK government surrendered the country’s sovereignty and its economy to three enemies of the Greek people, three enemies with often contradictory agendas.

The European Central Bank is the strong-arm enforcer for European banks. Its goal is simply to ensure that Euro-banks are not damaged by any Greek events, that the banks’ investments and loans are protected. It adamantly opposes any policy that will ask euro-banks to sacrifice. The ECB opposes default at all costs, threatening to not buy Greek bonds if Greece defaults. It supports EU bailouts because they transfer Greek debt from the private sector to the public sector. J.P. Morgan estimates that public sector sovereign debt liabilities against Greece will surpass their private sector counterparts in 2013 as outstanding bonds are paid off. This trend is expected to continue, going forward. The ECB welcomes this exit by private banking since it will leave the banks immune from any negative consequences. They have no interest in the fate of Greece’s working people.

The International Monetary Fund, on the other hand, serves as an active agent for international capital. Through extortionate loans, it imposes the conditions for capitalist exploitation upon countries desperately in need of financial help. Privatization, diminished social securities, and dis-empowered workers constitute its agenda. Clearing a path for US imperialism drives the policies of the IMF, with the interests of the other imperialist powers playing a secondary role.

The details of the austerity package for Greece – privatization, unemployment (to discipline workers), destruction of social services, etc. – are the work of the IMF. It was with glee that international capital welcomed the demand for a $71 billion privatization of Greek public assets, including Athens Airport and Greek railways. The Wall Street Journal cynically dubbed it a “National Tag Sale.” The IMF, too, has no interest in the fate of Greece’s working people.

The European Union, a political body, reflects the political will of the dominant governments of the EU: Germany and France. Both countries’ governments subscribe wholeheartedly to the neo-liberal dogmas, prescribing austerity for growing public debt. In this respect, they endorse and lead the EU to support the IMF regimen. But they have political reservations about the terms of the extortionate deals crafted to impose austerity. They resist committing their own public funds to buy the Greek government's collaboration in selling out the Greek people. So-called “bailouts” come at the expense of public funds provided by the EU constituent governments. They prefer to find another weapon to hold to the head of the Greek people. But the EU, as well, has no interest in the fate of Greece’s working people.

Like all criminal syndicates, the unity of the triumvirate is threatened by selfish interests. The German government recently proposed a restructuring of privately held Greek debt (largely euro-banks), but the ECB slammed the door on this since it would call on European banks to sacrifice. France is now proposing similar actions with the ECB similarly in opposition. Neither government wants to commit its own public funds to the sustenance of Greek government debt. While they agree on the crime, they cannot agree on the weapon.

IV

It would be a profound mistake to see the mugging of Greece as an isolated, inconsequential event. Rather, it is a template for the way ahead for international capital.

In the days before the betrayal of the Greek people by the 155 PASOK representatives, stock markets world-wide were falling, in fear that the massive strike and demonstrations of the Greek people might frighten these spineless politicians into rejecting the extortionate deal demanded by the IMF, the ECB and the EU. The mere possibility that resistance would derail the program shook the foundations of capital. In the days following, the markets leaped forward more than they had in months.

Greece is neither isolated nor inconsequential.

The pattern established in Greece is being repeated in other countries, like Portugal, Ireland and Spain. Italy and the UK are next in line, with others to follow. The game plan will undoubtedly be tailored to different circumstances and different balances of forces, but capital will relentlessly strive to squeeze profit from the living standards of working people and expropriate the public wealth held socially. The weapon in this assault is debt manipulation.

Some on the left sounded the death knell of neo-liberal capitalism in the depths of the crisis. Clearly, that was a profound mistake. Neo-liberalism, financial predation and global capital have mounted a vigorous counter-attack, leaving those illusions dashed.

We can, however, draw important lessons from the Greek struggle. While the Greek people, led in this conflict by Communists and class-conscious workers, failed to stop the mugging, they are not defeated. They will have much to say about the next chapter in this unfolding story.

For us in the US, the assault on the Greek people should remind us of what we face. While we should be inspired by the resistance in Wisconsin, Ohio and other states, we must recognize what a daunting, difficult struggle lays ahead. And we should not be seduced by phony political allies like the Democratic Party, the US counterpart to PASOK, in this fight.

With all respect to our many causes, this is the central battle of our times.

Zoltan Zigedy
zoltanzigedy@gmail.com

Summing Up: Three Essays on Where We Are

2011-06-21T16:26:00.000-07:00

Reliving 1937?

Though Ben Bernanke, the head of the Federal Reserve, prides himself on his extensive research and expertise on the Great Depression, he is strangely quiet on the glaring parallels between this moment and a similar moment four years into the New Deal “recovery” from that earlier economic catastrophe. I wrote in February, 2008:

The [Roosevelt] Administration lost further steam by aggressively attempting to balance the budget in 1937. With the economy sharply rebounding, administration officials began to sound the fear of inflation, urging budgetary restraint. Federal spending was cut drastically, with the WPA nearly shut down. Consequently, the economy quickly sank into decline. Industrial production fell drastically (35% in 9 months), prices fell and unemployment jumped dramatically.

Through the first months of 1938, Roosevelt stayed firmly with the policy of fiscal restraint urged by capital. This appeasement of business only deepened the crisis. In April, Roosevelt reversed his policies, reviving WPA with $1.25 billion for employment and further funding other programs to the tune of $3 billion. The Congress overwhelming approved these moves.

The turnabout of policy led to a turnabout in economic activity. Almost immediately, industrial production, employment, prices, and payrolls begin to climb. Nonetheless, the US economy never reached pre-Depression levels of employment and industrial production until 1939, seven years after their lows. By then, the mandate of 1936 was gone, eroded and crippled by the retreat of 1937 and the fresh economic slump of 1937-1938. The momentum of New Deal progressive legislation was lost without achieving the goals of full recovery or social justice.

Balancing the budget in 1937 is exactly the same thinking as the beliefs behind the debt hysteria rampant with the media and the legislators of both parties today. And in both cases, it is the interests of capital that stand to benefit from the policies. As recent economic reports prove, we are in danger of driving off the same cliff that the New Deal economy encountered in 1937. Radical budget constraints and the consequent austerity will, if history means anything, quickly find that cliff.

Oddly, few commentators reference this historical lesson – or few other historical lessons, for that matter – except notably Paul Krugman, columnist for The New York Times, who has warned of a repeat of 1937.

Another, far more curious, reference to the parallel comes from the extreme right, the pen of the best-selling author, Amity Shlaes. Shlaes is celebrated for the publication of a bizarre historical narrative of the Great Depression that crudely recasts the period as confirmation of the economic philosophy of Milton Friedman.

As an unvarnished apologist for unfettered capitalism, Shlaes recognizes the power of the historical precedent in potentially crafting a counter-argument to the shrill, ubiquitous argument for government austerity. Even though liberals are unwilling to challenge or even tepidly object to debt-fright, she hopes to head them off at the pass should they find some spine. In a Pittsburgh Tribune-Review commentary, Is ’11 the New ’37?, Shlaes argues that the wrong lessons are conventionally drawn from the 1937 economic relapse. The Yale University English major, elevated by the media into a serious economic historian, argues that rising taxes, Social Security payments, bank regulation, and, most importantly, the cost of labor, caused the relapse of 1937. Ominously, she contends, these same moves threaten the economy in 2011.

This is utterly ridiculous, yet Shlaes passes as a serious voice in public discussion of economic policy. More and more, that discussion is conducted in the realm of fantasy.

Consider the data: Federal tax receipts did grow between 1936 and 1937, but only by an absolute amount less than the growth of tax receipts between 1933 and 1934. Moreover, during the war years, a time of great expansion, tax revenues nearly doubled every year between 1941 and 1944. Clearly, there is no defensible simple relationship between rising taxes and economic decline – a fact that even a celebrity English major should acknowledge. High taxes or Social Security payments did not cause the 1937 collapse.

As for banks, credit grew between 1936 and 1937, as it did every year going forward from 1933. While its expansion slowed in 1937, it was not enough to account for the deep decline of 1937 that began in the summer. Indeed, the Board of Governors of the Federal Reserve tightened the reserve requirements for banks concurrent with this slackening, which only made matters worse. At the end of the summer, the economy collapsed.

To cite the rise in the cost of labor as a cause of the 1937 collapse purposely violates the truth. While the powerful unionization drive in manufacturing brought many into the protective umbrella of the CIO, earnings in manufacturing, mining, construction, transportation, communications, and public utilities grew at roughly the same pace as the prior two years going into 1937. The exception was a notable increase in earnings in the agriculture, forestry and fisheries sector, which was notoriously underpaid and of little impact upon the overall economy.

But what does stand out in the data is the pronounced decline in federal government expenditure which dropped in 1937 and even more rapidly in 1938.

By April of 1938, the Roosevelt Administration realized that its balanced budget “olive branch” to big business had failed and returned to New Deal pump priming:

Therefore, on April 14, the President sent a special message to Congress and addressed the nation in a fireside chat which announced the revival of the policies which had brought recovery in 1935, and had been reversed just prior to the recession [of 1937]. A new appropriation of $1,250,000,000 for the expansion of WPA employment was proposed… Additional appropriations for the PWA, PSA, CCC, NYA, USHA… brought the total recommendations… to slightly more than $3,000,000,000… (The History of the New Deal, Basil Rauch, p. 300).

With this return to stimulative programs, the economy began to recover again in 1939. A similar fireside chat from President Obama would be welcome now.

Shlaes blatantly distorts this history with a zeal driven only by ideological dogma and fealty to the celebrity easily won from our modern-day philistines.

But on one point, Shlaes approaches the truth. She correctly notes that military spending overwhelmed the tepid stimulus for popular programs offered by the Roosevelt Administration and invigorated the US economy going forward. After 1939, the major stimulus for growth came from rapidly expanding war-driven public expenditures. Only when the economy was established on a war-time footing -- in 1941 -- did GDP and per capita GDP surpass the level of 1929. For liberals like Paul Krugman, this glaring fact challenges the mythology of the New Deal. Can capitalism survive without massive military spending? With the US committed to a perpetual war economy since World War II, is it possible for capitalism to offer economic growth and peace with the rest of the world? History suggests that it cannot.

Today, we get war without economic growth or social justice.

*************

Disintegration of the Old Order

I wrote in November of 2008:

The economic crisis has reversed the post-Soviet process of international integration -- so-called "globalization." As with the Great Depression, the economic crisis strikes different economies in different ways. Despite efforts to integrate the world economies, the international division of labor and the differing levels of development foreclose a unified solution to economic distress. The weak efforts at joint action, the conferences, the summits, etc., cannot succeed---for the simple reason that every nation has different interests and problems, a condition that will only become more acute as the crisis mounts. In the past, the most economically powerful country, the US, could impose a solution to regional problems as it had before in Asia and South America. With the US economy the most seriously wounded, this is now highly unlikely.

We see great stress on the European Union. Germany's export-driven economy is collapsing. France, on the other hand, has yet to feel the full force of the crisis. Italy maintains staggering debt and an already stagnant economy. Spain's real estate and building boom is rapidly contracting. In the face of these disparate, but debilitating expressions of the world economic crisis, it is highly unlikely that the Union will come up with common solutions. Indeed, the unraveling of the EU is a possibility.

I returned to this theme on several occasions in subsequent posts. Today, the European Union is indeed unraveling. While Germany’s export economy has recovered, the stark difference between Germany’s momentary prosperity and the fate of much of the rest of the EU has only exacerbated the tensions wracking Europe. Nor did I anticipate that Greece, Portugal, and Ireland would prove to be the focal point of EU dissolution. Nonetheless, the projection stands up. The EU faces numerous contradictory policy choices, all of which threaten to unwind the Union.

But the larger point should not be lost. Those who foolishly saw a new era of the decline of the nation-state, the global dominance of transnational corporations, and the emerging rule of international organizations in the wake of the collapse of the Soviet Union profoundly misread the logic of capitalism and the resiliency of nation-state imperialism. This view proved quite popular with neo-Marxists, especially in the nineties. In its essence, it was a rejection of Lenin’s theory of imperialism.

Today, events have demolished this view, with its adherents retreating into the academy or moving on to a new “re-thinking” of Marxism or Leninism, the game that sustains the intellectual left.

Instead, we are left with the crumbling of the institutions thought to be cornerstones of international integration and globalization.

Consider some of the elements that were thought to be the secure foundation and cement of a new transnational, global world order: the International Monetary Fund, free-trade agreements, NATO, the Organization of Petroleum Exporting Countries, bi- and multi-lateral coalitions, etc.

In the case of the IMF, contradictions abound between the advanced capitalist countries and the formerly compliant or subservient emerging economies. Intense frictions arose around IMF policy allowing unrestricted capital flows, with the entrenched representatives from developed economies reluctantly conceding some control to the emerging economies like Brazil. The recent jockeying over a new IMF Director only underscores these differences and tensions.

US free-trade agreements between Colombia, Panama and the Republic of Korea languish without ratification. Formerly, these agreements were rammed through in the face of any and all opposition. However, confidence in the virtues of free-market dogma is now lessened and ruling class unity is impaired over the “advantages” of these agreements.

NATO is experiencing deep divisions. In an unprecedented public admission, outgoing US Secretary of Defense, Robert Gates, expressed severe criticism of the US’s NATO allies, questioning their commitment to provide resources and manpower in support of NATO’s objectives. Most often, these objectives are dictated by the US and coincide with US interests. Members are less than happy with this arrangement, affording the US with less cover for its imperial designs.

The imperialist venture in Libya currently demonstrates the contradictions in NATO. Enthusiastic supporters of aggression have their eye on their own interests in and dependency on Libyan energy resources while other members have their eye on the impact of the aggression on the outcome of the so-called “Arab Spring.” The escalation of this naked aggression, with no success in sight, has only brought these contradictions to the fore.

Similarly, the uprisings in several North African and Middle Eastern states has shaken the alliances between conservative governments and their international sponsors, the US and Israel. Imperialists are scrambling to contain the damage through contradictory policies: propping up some conservative governments with aid and even military intervention, while reluctantly discarding others with the hope that money and covert operations will cobble together a friendly alternative. The recent decision by the G-8 pledging $40 billion towards the “Arab Spring” is the bank roll for both projects. In these impoverished countries, $40 billion will go a long way toward buying public opinion, feeding corruption, and directing policy, just as it did in Eastern Europe after the fall of the Soviet Union. Nonetheless, forces are unleashed that promise to disrupt the balance of power in the regions.

OPEC, long led by close US ally, Saudi Arabia, has recently concluded an acrimonious meeting with members agreeing not to agree on a policy going forward. Where OPEC formerly linked its policies to the needs and wishes of the most advanced capitalist countries, the relationship has soured with many member states.

Further east, the long-standing alliance between the US and Pakistan is under great stress, with hostility growing daily.

Relations between the US and China are similarly frayed.

Other examples of divisions and tensions wracking global cooperation and integration abound. The global economic crisis has exposed inter-imperialist rivalries and differing national interests long simmering during the decade of “globalization” and capitalist triumphalism. As these rivalries intensify, it will be increasingly difficult for policy makers to contain the damage inflicted by a sinking global economy.

The collapse of the old order offers left forces, progressives, and especially advocates of socialism, an opportunity to plant the seeds of a new order based on social justice and equality. While the road is difficult, the opportunity should not be lost.

************

The Joke’s on Us!

If nothing else sours the last remaining liberal, it should be President Obama’s Jobs Council. Faced with massive and sustained levels of unemployment (with signs that more is coming), the “hopey, changey” President created a council to address the most serious threat facing his country.

Presidents create councils when they have no policy ideas of their own and they hope that the public will be fooled into thinking that they intend to seriously address an issue.

In Obama’s case, he doomed the project to failure and contempt from the beginning by appointing Jeffrey Immelt as chairman of the Council. Immelt is CEO of GE, notorious for its anti-labor policies, off-shoring, and plant closing – actions that destroyed tens of thousands of jobs. Appointing Immelt to the key position is like asking a convicted rapist to lead the discussion on sexual harassment.

In addition, Obama loaded the Council with CEOs, none of whom has a distinguished record on hiring in the face of the crisis. Consider, for example, council member Jim McNerney of Boeing. His company is currently charged by the National Labor Relations Board with moving a plant to the non-union South to punish union workers who exercised their right to strike, a unique qualification for improving the lot of working people.

The biographies of this bizarre collection of tycoons on the President’s Job Council website tout their many awards and success in generating a return on investment. In other words, they are proven masters of lowering costs – including labor costs – for the sake of corporate profits.

To add credibility to this collection of wolves guarding the hen house, Obama appointed Richard Trumka, head of the AFL-CIO. With all his bluster about corporate greed and Democratic Party betrayal, he will have to live with his conscience over breaking bread with these corporate predators.

Last week, this august group offered the President and the public its initial proposals. Even the business community recoiled against its timid initiatives: The Wall Street Journal headlined: Surprise! Interim Jobs Advice From Panel Lands With Thud. They went on: “The yawn-o-meter spiked into the red zone in part because these ideas aren’t that new.”

They were not only old ideas, but ineffective and irrelevant to job creation; they were a joke.

Leading the way was the tired old bromide of job training, matching skills to available jobs. Apparently, no one bothered to notice that the private sector has not created sufficient jobs to offer to trained employees. Hopefully, the President knows better. Certainly Trumka does.

In addition, they implore the government to make it easier for firms to get construction permits, as though the permits – and not the availability of projects – stand in the way of job creation. Charged with finding jobs, the CEOs divert their attention to greasing the skids for contractors.

They see expediting foreign visas as a route to boosting travel and tourism. It’s hard to imagine anything further down a list of initiatives for effectively stimulating new jobs. Are there potential foreign visitors clamoring to have their visas approved to flood the US with euros or yen? If there were, would it put a dent in unemployment?

Extending credit to small businesses through the Small Business Administration is offered by the Council as a job-generator. Overlooked, of course, is the massive bail-out the public has made to banks so that they could continue to extend credit to worthy small businesses. Are they not fulfilling this function? Should they not bear this responsibility? And where are the businesses confident enough of the recovery that would use the loans to take on new employees?

Finally, the Council invokes the obvious by calling for an effort to employ construction workers, particularly in reconstructing public and private structures more energy efficiently. No doubt this is particularly appealing to the CEO of General Electric, whose firm, no doubt, has a hand in offering products and services in this sector. But invocation, like prayer, will not create jobs.

Like an obedient lap dog and vulgar careerist, the great labor traitor, Andy Stern, hailed the proposals, saying that the Administration has “the validation of the business community to get this done.”

When has there been as much insincerity and hypocrisy collected in one meeting place? When has a President offered a more absurd approach to the most pressing problem facing the economy and feared by the public?

Everything stinks about this sham “initiative.” There isn’t enough shame to lay before the initiators and participants in this tasteless joke on the US people. Obviously, no solution to unemployment is forthcoming from this Administration.

Zoltan Zigedy
zoltanzigedy@gmail.com

Captive Nations

2011-06-01T17:33:00.000-07:00

Nearly thirty-five years ago, in a rare moment of truth-speak, President Gerald Ford, participating in a televised pre-election debate with future President Jimmy Carter, denied that the socialist countries of Eastern Europe were “captive nations” under Soviet domination. Ford, not known for his political acumen, violated one of the cardinal rules of national political campaigns: thou shall not deviate from “truths” held closely by the US ruling class. The media came down on Ford like a ton of bricks; some say his indelicate comment cost him the election.

It is likely that the bumbling Ford misread his cues or suffered a brain lock since he had earlier signed a proclamation designating the week beginning July 13, 1975 as “Captive Nations Week.” Breaking with the unity of thought that ruling elites fight so hard to establish is not easily forgiven, even if it is inadvertent.

Despite the end of the Cold War, sacred and unassailable truths still are a fixture of US political discourse: politicians are not allowed to mention that the Cuban people overwhelmingly support their government; the plight of the Palestinian people – their suffering and hardships – must remain unspoken at all costs; the charge of terrorism must include and be confined to acts against imperialism; and private ownership of assets is always to be preferred over public ownership. These are theological commandments in a country that trumpets its commitment to freedom of thought.

The Real Captive Nations

Though the notion of “captive nations” was one of those ridiculous ideas born from the malignant minds of Cold Warriors, there is no better time than today to find it a precise and appropriate application. Its aptness is one of those sublime ironies that would make the old master, Karl Marx, smile.

In the wake of the most destructive waves of the economic crisis, most nations were left with extraordinary public debt. Bailouts, stimulative spending, and substantially reduced revenues pushed public debt loads dramatically higher, excepting those few countries with sufficient reserves. In a real sense, the assumption of debt was the prescription – the only prescription – for surviving an accelerating mortal spiral of the capitalist system.

But in a capitalist country in the web of a global capitalist system, debt is shorthand for an intimate relationship between borrowers and lenders, a relationship that is easy prey for international banks, hedge funds, and the global enforcers of capitalism, the International Monetary Fund and the World Bank.

The group of weaker, less developed countries of the European Union was one of the most vulnerable targets of financial predation. When the Union was formed in 1993 from the European Economic Community, Ireland, Spain, Portugal, and Greece were late comers and poor sisters to the more highly developed countries of the EU like West Germany, France, Italy and the other northern neighbors that founded the EEC. There was enormous pressure for these countries to achieve a “European” level of development and living standards. By membership, they gained open markets and access to capital. Their relatively low wages gave them somewhat of a competitive advantage within the Union. Despite this “advantage,” they remained the underachievers of Europe – more the quaint vacation destinations for the rich than economic titans.

With the creation of a single currency, the euro, in 1999, and the establishment of the European Central Bank, economic relations between members were reordered. The common currency forced the surrender of individual sovereignty over monetary policy, eliminating an individual state’s ability to adjust exchange rates against other currencies. Further, euro-zone participation was predicated on a strict set of economic (neo-liberal) parameters established by the Treaty of Maastricht. Regulatory constraints were imposed as well. In effect, countries surrendered a great measure of their sovereignty to be a part of the super-state, the EU, the weaker economies surrendering their fate to the economic super-powers of Northern Europe.

For the less developed, membership in the euro-zone was an opportunity for conservative governments to impose neo-liberal changes, justified by the promised prosperity enjoyed by the wealthier member states.

Ireland granted subsidies, lowered corporate taxes and taxes on the wealthy to draw multi-nationals to exploit an educated, but low wage working class. Greece sold off public assets to the tune of 11.1% of GDP between 1998 and 2003. Both were hailed as exemplary team players.

Only Communists and the anti-capitalist left foresaw danger in surrendering sovereignty to the dominant powers in the EU.

With the full blast of economic crisis in 2008, all of the EU-based hopes were dashed. Catching up was off the table and survival was the business at hand. Ireland’s unregulated banks had piled up huge debts, necessitating massive government-funded bailing. The Iberian construction boom fizzled, leaving mountains of debt and massive unemployment.

But Greece was the special case. When the newly elected PASOK government revealed in 2009 that the budget deficit was twice what the previous government had claimed – no doubt for political reasons – the financial predators descended upon the country. Like a pack of wolves attacking the weakest, most vulnerable of the herd, international bankers, equity firms and hedge funds began to bet against Greek debt management, driving the cost of borrowing sky high. They speculated with credit default swaps and against credit default swaps, establishing an upward swing in the costs of financing and re-financing debt and a downward swing in credit ratings. These swings invited further speculation and a further worsening of Greece’s debt position.

Financial writers purposefully overlook these waves of aggression, lest they reveal the continued existence of rampant speculative capital, the very element that brought the global economy down. Instead, they write of Greek corruption, profligacy and financial irresponsibility.

In truth, Greece was the victim of international banks, equity firms and hedge funds - a financial mugging that brought the country to the brink of debt default in May of 2010. And under the guidance of a social democratic government, a government wedded to neo-liberal policies, Greece surrendered unconditionally to the rule of the EU, the ECB and the IMF, accepting a bailout of €110 billion. Greece became a captive nation.

As a condition of EU and IMF servitude, Greece was forced to accept an austerity program that, apart from incalculable human misery, brought the economy down, sinking into depression. Greece is, indeed, a captive nation.

The New York Times reported on May 16 that unemployment in Greece is approaching 15%, cement production is down 60% since 2006, steel production is down in the last two years, Athens has experienced a 25% increase in homelessness, and food kitchens are flourishing. Public sector jobs, wages and benefits have been slashed deeply. The human costs of this austerity program are only beginning to set in, while the cuts promise to retard Greece’s ability to raise tax revenue for both human services and debt repayment. The Greek government announced in April that it will seek an additional €3 billion in cuts. Currently, 6.7% of the declining Greek GDP goes to debt service, a figure inevitably growing as the economy shrinks and the cost of debt increases. These are the consequences facing a nation captured in the web of the EU, ECB and the IMF.

This is not merely extortion, but a wholesale commandeering of the Greek economy, and consequently, its political and social life. Recently, EU leaders demanded that the two predominant bourgeois parties of Greece meet and agree to continuing EU policy after the October, 2013 end of the PASOK government’s term. Dutifully, they met, though they could reach no agreement. Nonetheless, PASOK offered another €22 billion in cuts and tax increases to appease the EU lords of the manor.

But the EU game plan is not merely to bring Greece to its knees, but to steal its physical assets. The EU is demanding a fire sale of public assets, a massive privatization of the shared wealth of Greek society. So far, the appeasing PASOK government has entertained a €71 billion sell-off, with ports, airports, transport, power, water, motorways, gambling companies and telecommunications under consideration for heavily discounted sale to foreign investors. While this might momentarily appease the financial vultures, the massive loss of future revenue to the Greek government will only further cripple the Greek economy.

With glee, the IMF has noted that there is additionally a potential €200-300 billion of Greek property available for pillage, including the Olympic facilities and military properties. Will the Parthenon be next?

Greece has not known such domination by foreign powers since the Nazi occupation. As then, the only option is resistance.

Like a Nazi “Reichsbevollmächtigter,” the plenipotentiary of the EU is currently debating Greece’s fate. Understanding that Greece will be unable to pay or refinance the €66 billion in loans that will come due in 2012 (foreign bank lending to Greece declined 19% in 2010), the leaders are debating the best way to pick over the bones of the Greek economy. On one hand, the ECB threatens to cut off Greek banks (they borrowed €88 billion from the ECB in March) if the government attempts to modify its debt in any way. On the other hand, the euro-powerhouses, Germany and France, endorse loan restructuring in lieu of an additional bailout as requested by the Greek government. Neither option treats Greece as other than a satrapy.

The Other Captive Nations?

For the mainstream media, the enslavement of Greece is simply an aberration, a condition invited by Greek irresponsibility or a tragedy loosed by the gods of mythology. In reality, Greece’s plight is clearly the model for the other weak sisters in the EU. Ireland accepted a bailout that came with austerity provisos that mirrored Greece’s package and resulted in a dramatic decline in Irish living standards. With over a hundred billion euros in non-performing loans, a total that grew substantially from 2009, Irish banks continue to hang by a thread, inviting further extortionate intervention by the EU. They borrow even more than Greek banks from the ECB. And the yield on Irish bonds is 7.5% - a record level – above comparable German bonds. More austerity looms.

Portugal’s economy is reeling with at least a 2% annual decline in GDP projected for this and next year thanks to a severe austerity program. A €78 billion EU bailout is forthcoming, assuredly with further austerity and privatization demands from the EU lords. At the same time, Portugal is in the midst of a severe political crisis.

Spain, the next country in the sights of international financial predators, is also politically shaky with recent municipal elections rocking the ruling party. Spain’s 21% unemployment and stagnant economy thwart the country’s ability to contain and reduce its debt. While Spanish national debt trails the other three countries as a percentage of GDP, it is widely known that much Spanish regional and municipal debt has been hidden, unreported in official figures. The ruling “Socialist” Party has embarked on a severe preemptive program of budget cuts, layoffs, flexible work rules and other austerity measures that will only hasten the EU wolves to Spain’s door.

Even Italy, one of the old-guard members of the EU, may prove to be a candidate for captive-nation status. On May 20, Standard and Poor’s lowered the Italian public debt - $1.9 trillion – to negative status.

Resistance, not Collaboration

Facing captive nation or neo-colonial status imposed by their northern neighbors and the EU administration, the southern European countries have no option but to resist. Social democratic and conservative parties offer no road but collaboration. Like their Nazi-era predecessors, these Vichy-like leaders attempt to appease their masters while quelling the rising of the people. Trapped in the neo-liberal bubble and with no alternative vision, they enable the developed European powers to achieve the domination that the fascists of the last century sought through military means.

Resistance, however, means refusing the terms and conditions imposed by great powers. It means ignoring the debt – placing it aside, isolated from national accounts, as the “too big to fail” international banks did at the height of the crisis. It means threatening default if national sovereignty is not respected.

Resistance means rejecting the undemocratic nature of the EU and its institutions. If this means leaving the euro-zone and the imperious rule of the ECB, then captive nations should well entertain this option.

Resistance means formulating a new vision of a democratic, peoples’ Europe free from the domination of capital and elite rule. Of course this is a vision that projects socialism as the ultimate goal of rational, humane social relationships.

In Greece, this project is borne by the peoples’ movement of PAME and the militants of the Greek Communist Party. They, like their counterparts in the resistance to Nazi occupation, stand resolutely against the EU political and economic “occupiers,” rallying the masses to fight collaboration.

In Portugal and Spain, mass movements of workers and youth have taken to the streets in defiance of the bankruptcy of social democracy and the pain of EU-imposed austerity bringing joblessness and poverty. Hopefully, class-based organizations and Communists will continue to struggle to provide a visionary focus to their anger.

Those of us who stand in solidarity with the emerging European resistance should heed their experience. The wolves of financial predation are at our doors, too. The debt scam – the principal weapon of ruling class warfare today – threatens all of us.

Zoltan Zigedy
zoltanzigedy@gmail.com

The Clash of Egos

2011-05-24T11:32:00.000-07:00

What the voters wanted was unquestionably significant change. What they were promised was change. Whether change will come from the Obama administration is - at best - questionable….

And every indication is that the Obama administration will continue down the path of advancing imperial interests and privileging corporate America.” ZZ’s Blog, 11-06-08

"Has Obama betrayed his progressive promise? Obama never made a progressive promise. The idea of Obama as a water-bearer for liberal or progressive reform came not from Obama's mouth, but from the sheer wishes and dreams of the left…"

In fairness, Obama has betrayed no one. His vast centrist following and the Democratic Party old-guard have shown no fear of Obama's perceived "progressive" agenda, an agenda that appears to be more and more in the minds of a self-deluding left. ZZ’s Blog, 12-09-08

Liberals and the celebrity left are in a catfight over their relationship to the Obama Administration and it’s not a pretty thing. Chris Hedges stirred the pot recently with an interview of Cornel West on Truthdig, augmented with his own angry voice, denouncing Obama: The Obama Deception: Why Cornel West Went Ballistic. The interview circulated widely on the internet, generating discussion and controversy like few other internet commentaries.

Hedges postures the Obama “deception” as a Shakespearean tragedy and West depicts it as a personal affront. While many of my left brothers and sisters have hailed this personal mea culpa and attack on Obama as welcome, joining those sending the interview far and wide, they have only added to the tiresome finger pointing that advances our struggles very little.

West earns no thanks for placing the character flaws of the current President, as he reveals them, at the center of the political universe. It is especially embarrassing that he cites the personal slights – the absence of inaugural tickets, missing handshakes, unreturned phone calls, official jabs – as the fulcrum of his argument.

It really is not about Cornel West.

At one point, Hedges senses that the interview has gotten too personal. He writes: “But there was also the betrayal on the political and ideological level.” Yet a few lines later, he returns to the personal: “Obama and West’s last personal contact took place a year ago at a gathering of the Urban League when, he says, Obama ‘cussed me out.’”

In its essence, the interview is an indulgence in Cornel West’s personal pique -- a People magazine-style profile breathlessly hanging on the words of one of our “stars.” If Obama had proved to be everything that the “hopey-changey” left had forecast, West’s complaints would now be viewed as they are: an irrelevant exercise in self-indulgence. This interview is unbecoming of Chris Hedges, who has shown a deep understanding of the issues and has put his own body on the line to stop the war and fight corporate power.

Predictably, The Nation magazine – the most prominent periodical on the left and an early champion of the Obama-as-savior perspective – unleashed its star TV-commentator upon the Hedges/West interview (Cornel West v. Barack Obama, The Nation blog). Melissa Harris-Perry grasped the opportunity afforded by West’s “ballistic” personal tirade and lunched on West’s celebration of self-worth. She wrote: “I can tell the difference between a substantive criticism and a personal attack. It is clear to me that West’s ego, not the health of American democracy, is the wounded creature in this story.”

While establishing her own modest, tepid criticisms of the Obama administration, she further charges West with an unholy alliance with TV personality Tavis Smiley, a counter-charge of the same irrelevance as West’s outburst.

What do we ask of those who promoted the mistaken view that Barack Obama was the second-coming of FDR? Do we want a public tirade denouncing Obama? Do we expect a period of self-flagellation or contrition? Should those who eagerly signed onto “Progressives for Obama” be taken to the woodshed?

None of these options shows even a measure of political maturity. The battle then, and the battle now, is a battle of ideas and not personalities. Revealingly, the exchange between Hedges/West and Harris-Perry says little about the way forward. Absorbed in a clash of celebrity egos, they are more intent on settling scores than mapping a way to mount a counter-offensive to the relentless advances of monopoly capital.

A left constructed on wishful thinking and opportunistic campaign promises is little better than a right based upon fantasy and eighteenth-century dogma. But it is not helpful to promote the cult of personality that has become so prevalent in our culture.

In today’s climate, charges of “betrayal” or “deception” are hollow. They reflect a misreading of the history and social role of monopoly capital and its bankrupt two-party system; they obscure the deep mechanisms that sustain the capitalist system. We desperately need acts of resistance and not web battles between our luminaries.

For those who want to go beyond the trivial, beyond the wars on the web, the road is clear: look at what our brothers and sisters are at this moment doing in Greece, Portugal and Spain. Faced with the austerity that will soon visit the US, they are in the streets, anchored by militant labor movements that understand the stakes and confront the enemy: capital. It’s time for our own labor movement to go beyond electoral maneuvers and bring the fight to the streets in the US. We should help them figure out how to get there.

Zoltan Zigedy
zoltanzigedy@gmail.com

A Phony Anti-War Movement?

2011-05-17T17:20:00.000-07:00

In a recent radio commentary, Glen Ford, executive editor of the Black Agenda Report, lashed out at what he calls the “The Phony Anti-War Movement” (BAR, 5-3-11). Based on a comprehensive study conducted by two academic writers, Michael Heaney, of the University of Michigan, and Fabio Rojas, of Indiana University, Ford charges that “many of the folks that turned out in such large numbers to demonstrate against America’s wars when George Bush was president, were really only opposed to Republican wars. Thus, when Barack Obama captured the White House, the so-called anti-war movement largely collapsed.” The study, as well as Ford’s commentary, gives voice to what many of us on the left have felt for some time. In the US, during the Bush administration and prior to the 2008 election, the anti-war movement surfaced, grew, and gathered momentum. Subsequent to the election, the movement appeared to hesitate and immobilize.

Ford, one of the most incisive, principled, and uncompromising commentators on the left, adds that “United for Peace and Justice, UFPJ, the anti-war umbrella group during the height of protest, was behaving more as an arm of the Democratic Party than as principled peace activists. The shallowness of these phony anti-warriors was so obvious, UFPJ was widely derided as United for Peanut Butter and Jelly.” Thus, Ford paints both the leadership and many of the activists associated with the movement as “a cynical gathering of partisan Democrats.”

But are matters quite that simple? Should we cast the anti-war leadership and thousands of activists into the same barrel? Are there more complex reasons for the “sell-out” of the anti-war movement?

Surely many remember the dissolution of the anti-war movement of the sixties and seventies. Contrary to our recent experience, that movement grew massively during the tenure of a Democratic President and dissipated during the rule of the hated Nixon. Many attribute that “collapse” to the elimination of the draft, the winding down of direct US military involvement, and the shrinking of US casualty figures.

We might argue that in both cases – the Vietnam war and today’s endless twenty-first-century wars – the decline of anti-war activity was a victim of personalized, narrow commitment and shallow ideology. The earlier anti-war movement lost young people when their fate decoupled from the prosecution of the war and lost liberals when US surrogates took over combat and the US death toll dropped dramatically. The lessons of this period were not lost on the ruling class; the many wars preceding the “War on Terror” were fought with puppet fighters or the massing of vastly overwhelming power exercised by a volunteer military. The use of unmanned drones and other remote weaponry – favored by the Obama administration - draws on these lessons.

Similarly, our era’s anti-war movement reflected growing military setbacks and rising casualty figures. More than the organizing skills of the official leadership, the imagery of a solitary mother of a dead soldier stalking George Bush energized the movement. Cindy Sheehan was effectively the inspirational leader of the movement. Other family members of US casualties added their voices, dramatizing the horrors of war inflicted upon US families.

Cindy Sheehan, through her activism, grew to understand the role of the US in world affairs, especially the effects of US aggression upon its victims and the interests served by these attacks. She began to see the historical patterns and connections that reveal the real nature of US foreign policy. In short, she acquired an anti-imperialist consciousness.

Sadly, this understanding has not sunk deep roots in the US peace movement since the wholesale destruction of the left in the McCarthy era. Consequently, the bulwark of anti-imperialist resistance has been the distant victims of US intervention and not the folks on the imperialist home front. They have risen when things went badly, when aggression proved costly, when the consequences of US imperialism began to touch people personally. It is only then that opposition to war becomes a mass movement. Undoubtedly this sentiment, when it arises, plays a key role in stopping US predatory wars, but it should not be confused with anti-imperialism.

Without anti-imperialism at its core, anti-war movements in the US are destined to only activate masses when the horrors of war are brought home. “Successful” assaults on the interests, lives, and dignity of other peoples will likely be met with passivity, even applause, when they are wrapped in the cause of “democracy” or deposing a demonized “tyrant.” We saw this in Angola, Grenada and Yugoslavia. And we see this today in Cuba, Venezuela, Bolivia, Syria, Libya, Peoples Democratic Republic of Korea, Iran and many other countries.

Of course the ultimate source of this profound weakness is a political system – a two-party charade - that resolutely denies that the US is an imperialist power. Indeed, both parties actively and openly advocate for US imperialism. They make no concession to those standing in the way of US corporate interests or seeking their own path of development. While progressives may have hopefully thought they heard Obama and the Democrats say they were anti-war, they really heard that Obama and the Democrats were determined to drop direct and risky military involvement in the costly Iraq occupation and re-direct it to Afghanistan. It was undisguised in the campaign speeches and clearly stated in the Democratic platform. In other words, the Democrats resolved to deliver imperialism at a cost more agreeable to the US public.

With the presumptive “people’s” party fully committed to the imperialist agenda and a corporate media slavishly cheerleading for the same, it is only independent progressives and the left – the political outliers - who can lead the US public away from complicity with imperial aggression. They – and they alone – can provide the leadership that will educate and organize the US peace movement to be more than a response to mounting US casualties, military setbacks, and a useful tool for Democratic Party politicians.

Glen Ford’s scathing condemnation of much of the prominent recent leadership of the peace movement is well deserved. They failed to elevate the anti-war program to include a deeper understanding of imperialist aggression. In the interest of “breadth” and “unity,” they assiduously excluded many causes associated with US intervention or complicity, arguing that these issues might offend feckless liberals and middle class sensibilities. Principles were sacrificed for an elusive broad appeal. Whether the leaders were web warriors masking Democratic Party partisanship or struggle-in-the-streets “radicals” seeking some kind of soulless popular front is irrelevant. They allowed electoral politics to trump resistance; they bet everything on the 2008 election. The “success” of this effort was the creation of a movement shallow in commitment and thin in ideology, a movement easily hijacked by the Democratic Party.

Fortunately, there are organizations, like the United National Antiwar Committee (UNAC) and many national, regional and local committees, which are continuing the battle to end, not just Bush’s wars, but Obama’s wars as well. They share an independence of the two parties as well as a core understanding of the imperialist character of US foreign policy. While others wait for the Administration to have a change of heart, they continue to organize and agitate against policies that are costing thousands of lives to project US capitalism throughout the world. No one is excluded from these organizations or actions, but no one’s resolve against imperialism is muffled, either. When the imperial program is again perceived by the public as failing – which it will – they will be there to build a more militant, principled mass movement. Hopefully, next time will be different.

Zoltan Zigedy
zoltanzigedy@gmail.com

Crisis of Capitalism: Act II

2011-05-04T17:09:00.000-07:00

When, in the last few weeks, insiders and economists like Jeffrey Sachs and David Stockman – not noted for their radical postures – decry the state of the economy and the direction of policies, all of us should take note.

Sachs, one of the fathers of neo-liberal “shock therapy,” recently cited decades-long stagnant wages and obscene levels of inequality: “We’ve reached the greatest income [and] wealth inequality in history… This is a new ‘Robber Baron’ era, of course.” He went on to say “…the people at the top buy the politicians… All of them – all parties. Everyone is in the hands of the super wealthy.” (Interviewed by Aaron Task, Tech Ticker, Yahoo! Finance).

In a similar vein, David Stockman, former director of the Office of Management and Budget under the Reagan Presidency, ripped the “crony capitalism” that has changed “capital markets into a rip-roaring casino that really is not productive for the real main street economy and is generating windfall gains for a very limited number of people to no good purpose…” He sees ordinary folks trying to save in this environment as “savaged” by Federal Reserve and government policies. (Interviewed by Peter Gorenstein, Daily Ticker, Yahoo! Finance).

These gloomy, critical views stand in stark contrast to the generally up-beat, optimistic reports and forecasts that usually flow from policy makers and dominate the media today. For the experts and pundits, the crisis has passed and we are on the way – though, they concede, tentatively – to recovery.

In truth, our modern-day Pollyannas mistake the first act for the entire play. While our economy may not be on the edge of a precipice, the problems that placed the world economy near collapse have only been displaced, pushed forward or swept aside. Even an arch advocate of capitalism such as Vincent Reinhard, senior fellow at the conservative American Enterprise Institute, understands this: “After a severe financial crisis, we [tend to] get a severe recession, slower recovery and subpar expansion… Denial is a standard feature of financial crises…" (Interviewed by Stacy Curtin, Daily Ticker, Yahoo! Finance).

A closer look at the economy – an up-to-date report card from a Marxist perspective – is surely in order.

Gross Domestic Product

The broadest conventional measure of national and international economic performance remains GDP growth. Laden with the assumptions fundamental to the continued functioning of the capitalist economic engine, it valorizes all that is considered important to the ownership class and its continued accumulation of capital. Conversely, if an enormous human asset, such as the addition of one year of life span, were added to every person in the US, that value would not show up in the annual GDP figures except insofar as it generated commercial economic activity. Yet, as biased as the GDP growth figures are, their trend does reflect something real – the prospect of capitalism’s sustainability.

The first quarter figures for 2011 show a tepid US annual GDP growth of 1.8% from January through March. Pundits posture this as an aberration, a momentary stumble; but the trend line from the last quarter of 2009 is decidedly downward, in step with the drying up of stimulus funds. Nonresidential fixed investment has followed the same downward trajectory since its highpoint in the second quarter of 2010, even with spending on equipment and software leaping 11.6% this past quarter.

Likewise, export growth rates – touted by the experts as a leading force of recovery -- show the same downward trend from the level reached in the last quarter of 2009. Despite the Federal Reserve’s shrinking-dollar policy to sustain the rate of export growth, it is now falling below earlier levels of growth. Given that refined oil-based products account for the second largest component of export value and that the dollar value of these exports is highly inflated by the rising cost of oil, export growth calculated in dollars is exaggerated in the official numbers.

Further suggestive of foul weather ahead, the February GDP report for Canada – the US’s leading export destination by far – demonstrated an actual decline of .2%. It is hard to imagine robust export growth ahead, with a stagnant Canadian economy.

The growth rate of government spending – the sole factor preventing the economy from falling over the cliff at the height of the crisis – is now in negative territory and falling rapidly. The debt hysteria gripping local, state and federal officials produced budget cuts that are only now beginning to affect the GDP and other key economic indicators. Their influence on key factors – employment, incomes, consumer spending, etc. – will be felt more dramatically and negatively in the months and years to come.

Consumer spending continues its modest growth from its decline in the depths of the crisis. Its sustainability is in question, however, given that wages failed to keep up with inflation in the first quarter of 2011. This suggests that consumer debt and shrinking savings will again be the source of consumption growth, a condition ominously reminiscent of the pre-crisis period.

Internationally, GDP growth shows the same downward trend in nearly all the developed capitalist world, particularly the European Union. For those countries that have surrendered their sovereignty to the International Monetary Fund and the European Union – Greece, Ireland, and Portugal – the decline is far more dramatic. In the case of Greece, compliance with the austerity hawks has been catastrophic, with four successive quarters of losses greater than an annualized rate of 5%. PRChina and many emerging markets, on the other hand, have sustained high growth rates for diverse reasons, ranging from rational planning to irrational investment bubbles.

Profits, Productivity and Employment

Profit growth in the US – the fuel for a capitalist economy – has sprung back sharply from its nadir in the last quarter of 2008. Accelerating rapidly from that point, growth has stabilized over the last year at a rate commensurate with the pre-crisis period. Pundits hail the growth of profits in the manufacturing sector, a factor that has now reached about 90% of its pre-crisis level of production. But they fail to ask how profit growth can be so strong with less production and capacity utilization well below pre-crisis levels. The answer lies in a sharp increase in the rate of labor exploitation, expressed as intensified labor productivity. Labor productivity drove the explosion of profits after the 2008 collapse, settling at a level above historic averages. Put bluntly, the restoration of profitability came at the expense of an increasingly sweated, shrunken workforce.

Two factors opened the door to profit restoration: a weak, class-collaborationist labor movement, unwilling to confront capital, and the high rate of unemployment sowing fear throughout the workforce – what Marx called “the reserve army of labor.” With little organized fight for a larger share of the surplus and generalized fear of job loss among the working class, intensified exploitation was readily available to the capitalist class.

Nonetheless, the trend in labor productivity, like the trend in profitability, is downward, suggesting strongly that the crisis has failed to wring from the economy the long-term tendency for the rate of profit to decline–the theoretical basis for the Marxist theory of crisis.

With private sector labor productivity losing momentum, capital has turned to the service sector, primarily public goods and services, as a target for countering slowing profitability and surplus accumulation. The current attack on public employees’ rights, wages, salaries and benefits marks this tactical shift. With weak unions, disunity and nearly non-existent class consciousness, the private labor market is virtually elastic – capitalism can dictate the terms and conditions of labor. State-monopoly capital cannot tolerate a relatively inelastic public sector labor market with high union density, firm contracts and stable standards of living alongside a nearly enslaved private sector. Hence, it has launched an all-out assault on public sector workers, organized by capital’s minions in both political parties. While they cannot outsource police, firemen, and other face-to-face employees, they can break their unions. Of course, this initiative is done under the transparent ruse of debt reduction.

Another alarming sign emerging from the profit picture is the return of financials as the leading force in US profit growth. While non-financial profits lost steam at the end of 2010, profits from the financial sector jumped dramatically. By the end of 2010, financial profits achieved the same percentage of total domestic profits as they did in 2005. Clearly, speculation and financial maneuvers have ominously returned to the main stage in the US economy. For example, hedge funds have been increasing their CDS bets against Japanese debt, doubling the notional value of swaps made over the last year. Millions were made with the recent natural disaster and nuclear crisis. Debt speculation is an active agent in amplifying the volatility of European debt.

While supporters and critics of Administration policies wring their hands over the persistently high rate of unemployment, massive layoffs -- reducing the labor force dramatically faster than economic activity – was the key factor in restoring profitability and increasing asset value as expressed by equity markets. It would be naïve not to see unemployment as a capitalist tool of capitalist recovery, a tool that the ownership class is reluctant to surrender.

Much has been made of recent drops in the official monthly unemployment rates. Critics are quick to correctly note that these declines also reflect people who have left the workforce, people who are “discouraged” and statistically disappeared.

Perhaps a more realistic measure of the employment consequences of the crisis comes from examining the employment-to-population ratios and the labor participation rates compiled by the Bureau of Labor Statistics. The ratio of US employed to the total population has lost 4.5 points from its pre-crisis peak – a workforce loss of 13 to 14 million workers. When we add back those displaced but receiving unemployment compensation, we find a loss of 1.9 points in the labor participation rate, revealing 5 to 6 million workers officially disappeared – left without jobs or unemployment benefits. For these casualties of the crisis, savings, family support, food banks, social security, meager government aid, or the street are their only means of support. Unlike the politically biased official unemployment rates that obscure as much as they reveal, these grim BLS calculations offer little to celebrate.

Nor does the future of US employment appear bright. Over the last decade, US based multi-national corporations have added over two million jobs overseas while eliminating nearly 3 million here, a trend that will likely continue.

Running on Empty

Since the depths of the crisis over two and a half years ago, US policy makers have sought to stabilize and revive the critically wounded capitalist system. First, they offered a transfusion to the financial sector by injecting trillions of publicly obligated dollars into its lifeless body. Secondly, federal authorities cut away the gangrenous tissue infected by financial speculation – over a trillion dollars’ worth of fetid securities -- and placed it in the vaults of the Federal Reserve and Treasury, where it rests to this day. Thirdly, lawmakers agreed to an $800 billion stimulus package meant to restart the economy’s feeble heartbeat. After all these treatments, the economy remains in critical condition.

In mid-2010, the Federal Reserve recognized that these efforts to resuscitate a sickly economy were failing. Despite offering financial institutions and corporations virtually cost-free loans, the economy continued to respond sluggishly. The authorities acknowledged that the huge accumulated federal debt would eventually require higher interest rates to entice purchases of treasury securities to offset that debt. They understood that higher interest rates to secure the purchase of government debt would rebound through our financial institutions, driving all interest rates up and slowing borrowing. With lending drying up, they anticipated that the economy would slow down.

Thus, they sought to backstop this potential setback to recovery by embarking on a massive purchase of US treasury securities to maintain extremely low interest rates and ease any barriers to borrowers – essentially a rear-guard action dubbed Quantitative Easing II. As with the gangrenous financial securities, they purchased nearly $600 billion in government debt and locked it in the Federal Reserve vault, where it joins the garbage accumulated in the speculative frenzy that gave birth to the crisis. They hope to determine what they will do with it and the other “assets” at a later date.

Like most of the moves that flow from economic theories corrupted by wishful thinking and iron-clad confidence in capitalism, the Federal Reserve strategy produced consequences undesired. The huge infusion of dollars to purchase treasury securities cheapened the value of the dollar against other currencies. Imports, which outstrip the value of our exports to other countries, grew more costly to the US consumer; and inflation raised its ugly head, chewing away the living standards of working people. Further, many commodities, like oil, are traded internationally in dollars. With the value of dollars declining, pressure drove suppliers to raise prices to offset the falling buying power of the dollar, creating more inflationary pressure internationally. Moreover, rising interest rates in several countries inflated their currencies against the dollar as well, further affecting the costs of imported goods. These inflationary forces amplify the costs of other products, feeding an inflationary spiral. Despite unfounded optimism purveyed by the authorities and the media, inflation poses a serious threat to the economy and, especially, working class living standards. Those elements of the Consumer Price Index most relevant to working and poor people – fuel, health care, food, childcare, school fees, rent, etc – are those showing the most dramatic increase.

In addition, Federal Reserve policies failed in their mission. Though the cost of funding the US government debt is relatively stable, the cost of borrowing in the consumer arena continues to grow. Interest rates on mortgages, student loans, auto loans, etc. are on the rise. Again, QE II offered little relief to working people.

Prospects

Rather than a recovery, we are in Act II of a severe crisis of capitalism. It is not merely a financial crisis, a severe business-cycle trough or a radical imbalance, but a profound crisis of the capitalist system. Yes, there are imbalances, especially in the global economy. However, they are the effects and not the causes of this deep crisis. The advanced economies are scrambling to find solutions – individually – to the intractable problems of stagnation or decline, inflation, debt, intensified competition and failing economic institutions. These problems have fostered equally intractable political crises. Economic blocs, like the European Union, are under great stress from the diverse interests of the member states.

The emerging economies, on the other hand, are super-heated and threatened by the influx of speculative capital boiling over into severe eruptions of inflation and over-production.

As I argued some years ago, early in the crisis, the ephemeral era of capitalist cooperation – once called “globalization” – is over. Nation-states are going it alone, trying to find solutions to their immediate life-and-death issues, often at the expense of their global “partners.” Where they do find areas of limited cooperation, for example, in the aggression against Libya, their differences surface as well.

Years from now, when sober heads look back on the global crisis, they will recognize that the stability of PRChina, with its publicly owned banks and rational planning, did more to save the global economy from the brink than all of the bankrupt policy antics of the major capitalist powers. But there are more acts to come before the global capitalist economy finds firm ground.

What is missing from the maelstrom is for the working classes of all nations to move to center stage and demand solutions benefiting the vast majority. The Economist magazine, the voice of free markets since Marx’s time, reports that confidence in free markets has sunk by 21 percentage points internationally since 2002. Similarly, the Gallop Poll shows the confidence in banks and Congress is now at an all time low in the US. Only 23% of respondents have “a great deal of” or “a lot of” confidence in banks. The Congress scores even lower: a meager 11% share “a great deal of” or “a lot of” confidence in the US legislative branch. The crisis opens great opportunity to shape the world in a new direction, a direction that would not merely tame capitalism, but remove its destructive forces forever.

Zoltan Zigedy
zoltanzigedy@gmail.com

The 16th Congress of the World Federation of Trade Unions Athens, Greece, April 6-10, 2011

2011-04-21T17:54:00.000-07:00

For ZZ's report on the historic 16th World Federation of Trade Union's Congress, please follow the following links:

World Federation of Trade Unions:

http://www.wftucentral.org/?p=3695&language=en

Marxism-Leninism Today:

http://mltoday.com/subject-areas/labor-movement/the-16th-congress-of-the-world-federation-of-trade-unions-athens-greece-april-6-10-2011-1134-2.html

For a video of the proceedings, please access this link:

http://www.wftucentral.org/?p=3692&language=en

“No-Fly” Imperialism

2011-03-31T07:43:00.000-07:00

As the super-power and its sub-super-power friends rain bombs and missiles on Libya, we face a new crisis of clarity and courage in the US. While many in the world recoil from the destruction and human toll of this un-provoked assault by foreign powers on a small, relatively defenseless country, most of our fellow citizens, without much thought, buy into the government and the slavish media’s spin on this aggression.

From a far-off planet, beings would trust their instincts and see the massive military force unleashed on a section of North Africa as the criminal violation of Libyan air space and territoriality that it is. They might wonder what possibly could justify this aggressive action, even what could motivate seemingly senseless economic and human destruction.

But in our corner of the world, words like “No Fly Zone,” “human rights,” “democracy” and “humanitarian intervention” are drained of any credible meaning and cynically repeated by perpetrators who know that, if they are repeated enough and echoed by a subservient media, they will cow masses into thoughtless compliance.

Libya is in the throes of a civil war. Unlike other risings in the Middle East, the opposing forces have resorted to armed confrontation, resolving to settle the affair violently. On one side is a once-popular nationalist leader credited with overthrowing an absolute, but “pro-Western” monarch. He has vacillated between hostility to Western interests and mutual, cooperative relations. Up until the uprising, he had many European friends and corporate collaborators attracted to Libya’s energy resources.

Gadhafi has the dubious distinction of being perhaps the first international leader openly targeted by the US Government for assassination. In 1986, the Reagan administration launched an overt air attack upon him that resulted in the death of numerous civilians. Formerly, government-sponsored international assassination was couched in deniability and reserved for US security services. With little significant domestic opposition, the precedent has encouraged subsequent administrations to expand these illegal murders, most recently with the wide-spread drone attacks embraced by the Obama Administration.

Gadhafi has created his own unique state structure that claims a “democratic” and “socialist” character, a matter best left to be judged by the Libyan people.

Arrayed against Gadhafi in the civil war is a resistance movement that embraced armed struggle and occupies key cities in the Eastern part of Libya. Nominally leading this movement is the former Libyan Justice Minister and a largely anonymous, secretive council that has yet to reveal either a clear program or ideological commitments. Interestingly, they fight under the flag of the old pre-Gadhafi monarchy. Many left commentators have exposed financial ties and covert contacts with Western intelligence agencies and covert organizations. The impact of these charges is difficult to assess since such contacts are widespread, infecting almost all of the oppositional movements in the Middle East, including those in Egypt and Tunisia. Subsequent news reports have confirmed a significant and growing engagement by US and British security forces, including the embedding of a top military leader with undeniable ties to the CIA and the US foreign policy establishment. Anti-imperialists should well remember the covert assistance delivered to Islamic fundamentalists throughout the Middle East by US and Israeli intelligence as a backstop to secular left movements, a devious tactic that spawned a new oppositional movement that turned against its sponsors. Nonetheless, the kept media has, with little evidence, proclaimed the anti-Gadhafi forces “democratic.”

No-Fly Zones

US and European intervention in Libyan affairs hides under the cover of a UN resolution authorizing a “No-fly zone.” A no-fly zone was a formal devise contrived in 1991 to pressure Iraq under the guise of protecting human rights. Forcing a resolution through the UN Security Council, the US and its allies “interpreted” the resolution to allow the policing of Iraqi air space, denying Iraqi military planes or missiles any activity in much of its territory. In fact, this maneuver was an attempt to provoke a response that would lead to an escalation of US military action. Interestingly, US policy assumed that pre-emptive strikes were unnecessary because the US maintained such an overwhelming military and technological advantage.

Facing little effective international or domestic opposition to the Iraqi venture, the US and its allies again went to the UN well for approval of air power to secure “human rights” in the ongoing dismantling of Yugoslavia. From 1993 on, NATO conducted air strikes to influence the outcome. Emboldened by the success of the “humanitarian intervention” ruse and confident of their domination of the UN, the Western allies nakedly used air power to shape the post-Soviet world in their own interests, but at the cost of thousands of innocent lives and massive economic destruction. With most opinion makers in the Western capitalist countries seduced by the doctrine of “humanitarian intervention,” a new tool of imperialism was born.

Now the tool has been unsheathed against Libya. Rushing through another “No-fly” UN resolution with the shameful acquiescence of some abstaining “progressive” states, the US and its allies are again seeking to dictate the fate of a sovereign state. In this case, they have shed even the illusion of disinterested humanitarian intervention by actively coordinating with and supporting the military operations of the anti-Gadhafi forces. The initiative for this aggression was eagerly assumed by France and the UK, a development that likely reflects their reliance on Libyan energy resources.

Like a petulant child, the Western powers – the US and its NATO allies – press the limits of tolerance. From its malign origins as a maneuver to influence regime change in Iraq, the “no-fly zone” tactic has morphed into a scheme to dismantle the former Yugoslavia and, now, a transparent cover for naked, unprovoked aggression against a sovereign nation. The full might of Western military power has wrecked havoc upon the civilian population to sheer away Gadhafi supporters through terror. While paying lip service to the UN resolution, NATO spokespeople have endorsed this terror campaign as the strategic goal – an updated version of “shock and awe.”

Imperialism

Imperialism makes adjustments. After the demise of the Cold War, US imperialism structured a new world order. With the absence of a formidable military and economic counter-force, policy makers were emboldened to take direct, overt action to shape the world in a way agreeable to capitalist economic interests. During the Cold War, these goals were sought through covert action, subservient regional watch dogs, and surrogate armed forces, rarely through direct military engagement; fear of the military might of the socialist community foreclosed direct intervention. With those barriers removed, the imperialist countries are now feasting on weaker countries through open military action.

In order to dampen popular resistance, imperialist aggression is clothed in the lofty humanitarian language of democracy and human rights. With a tame, compliant mass media, aggression is readily postured as fostering democracy and promoting human rights, oblivious to the very lives of hundreds of thousands of those who disagree or are merely bystanders.

Unfortunately, many progressives and leftists have failed to adjust to the adjustments of imperialism; they have been blinded by the cynical, empty slogans proclaimed by imperialist aggressors. They refuse to see those resisting aggression as anti-imperialists, whether in Iraq, Afghanistan, or now Libya. Instead, they are side tracked by cultural, religious or political differences not palatable to smug, all-knowing Westerners.

The crucial and fundamental right of national self-determination, so crucial to the oppressed and scorned by imperialism, has been cast aside. For most of the twentieth century, this principle was the cornerstone of liberation from big power domination. In today’s world, it is expressed as non-intervention in the internal affairs of other nations. Throughout the world - from Cuba and Venezuela to Georgia, from Iran to Peoples’ China – the US violates this principle on a daily basis. However we may personally judge the practices or political systems of our neighbors, they are for them to determine. It is surely not a matter to be decided by the great powers of our time. Their sanctimony thinly disguises their own imperial interests.

Indifference or willful consent to imperialist aggression is not an honest option.

Zoltan Zigedy
zoltanzigedy@gmail.com

Unwanted Advise

2011-03-24T11:54:00.000-07:00

When in doubt about how to channel the movement forward, I suggest asking someone standing in the way of change. Do the opposite of what they advise.

Fortunately, we have unsolicited advise from William McGurn, a corporate Vice President of News Corporation, the giant media conglomerate that, under the ownership of Rupert Murdoch, brings the world the right-wing, pro-corporate, anti-democratic slant through familiar vehicles like Fox News and The Wall Street Journal. McGurn is an especially important voice since he writes the speeches for CEO Murdoch and, before that, he was the chief speechwriter for George W. Bush.

He regularly writes the folksy WSJ column called “Main Street,” though it is doubtful that McGurn often visits “Main Street,” except when he mistakes it for “Wall Street.”

Most recently, McGurn penned a column entitled “Rules for Wisconsin Radicals”, offering “…ten rules for Wisconsin protesters…” (Wall Street Journal, 3-15-2011) Undoubtedly, he didn’t write these rules to seriously direct those fighting to preserve the wages, benefits, and rights of Wisconsin public sector workers, but rather to provide a moment of jocularity for his Wall Street pals and other moguls. (We used to call them “fat cats,” but they’ve joined the fitness craze; they still smoke fat cigars and belong to private clubs, though.)

McGurn begins with a rule that, should anyone take it seriously, guarantees a tame and ineffective movement: No more Jesse Jackson. Apart from its embedded racism, this rule is a recipe for dissipating the energy that street action generates. Lurking behind this advice is a fear that a movement can grow and develop into a real threat to corporate power and elite politics. Jackson’s rhetorical powers and ability to unite seemingly varied interests might “suggest to people... that the protesters may be more radical than they claim,” quoting McGurn.

Precisely.

And it is exactly the fire and brimstone and ability to link causes brought by people like Jesse Jackson that promise to mold a particular struggle into a national movement attracting millions. Mainstream McGurn’s rule reveals his own thinly concealed image of the average US citizen as dumbly sitting in front of the TV watching the demonstrations on Fox News and frowning at the sight of Jesse Jackson. Sure, that may be true of many Fox News viewers, but millions of people – certainly most African Americans – remember the picket lines, voter registration projects, protests and demonstrations that Jesse Jackson has enlivened.

Rule Two proscribes other figures associated with the left: Ditto for Michael Moore, Susan Sarandon, and Tony Shaloub. While they and other activists may get under the skin of those trawling Fox News for wisdom, they bring together others who will recognize the connections between many and varied movements: health care, women’s issues, repression of Arab Americans, and immigrant rights. It is through these connections that recognition of a common foe creates the conditions for a united movement, something that Mainstream McGurn profoundly fears.

Sadly, many on the left have fallen into McGurn’s trap by narrowing the focus of struggles in order to court the illusory mainstream. Elements of the anti-war movement have excluded “controversial” leaders and issues so as not to alienate fair-weather friends in the Democratic Party or those they imagine too dumb to gauge their own stakes in various issues. Implicit in this tactic is contempt for people’s ability to learn and grow. Implicit in this approach is a lack of the ability to imagine a unified, diverse movement emerging. Cynically, this is often presented as an attempt for “broad unity.” Instead, as we have seen, this results in vague, tepid and uninspiring demands.

Lose the peace signs, McGurn admonishes, that would suggest “a hankering for the anti-middle class 1960’s.” This third rule is an odd twist on history. The movements of the sixties produced an end to legal segregation in the South, civil rights legislation, anti-poverty programs, Medicare, the collapse of a President’s re-election bid, and enormous pressure to end an unjust war. While the peace sign was just one of the symbols of the time, it is hard to envision how these gains were achieved while offending the “middle class.”

The simple truth is that McGurn fears a repeat of the movements that swept the sixties; he fears that the peace sign and its broad appeal might unify those seeking peace with those promoting other causes for social justice.

Put out more flags and sing “a few verses of ‘God Bless America.’” Sure, flags, like peace symbols, are welcome, but turning the Wisconsin struggle into an orgy of patriotism and chest-pounding loyalty is a sure-fire way to divert a movement that shows a glimmer of recognition of class oppression into a celebration of common destiny and the mirage of shared sacrifice. Whenever the moguls sense a stirring of resentment among their vassals, they bring out the flag and patriotic songs to remind the downtrodden of how they are all part of “…one nation, invisible…” I doubt if McGurn would invite a band of workers carrying flags into the corporate board room to remind the directors that we are “…one nation, indivisible…” and entitled to jobs and fair and equitable treatment. Maybe that’s where we most need more flags and patriotic songs.

Rule Five: Respect the law. Paraphrasing Marx, agents for change shouldn’t interpret the law, but force the legal system to embrace social justice – to change it. This is rarely possible without defiance of the law. All the successful movements that have made the US a better nation have challenged the law when it was a barrier to advancing the struggle. From the slavery abolitionists to anti-war activist Cindy Sheehan, principled fighters for justice have energized movements with their determination to go beyond the constraints of polite discourse and even the laws. One of our great democratic achievements – the elimination of legal segregation – would have failed if the civil rights movement abided by the laws of the time.

Mainstream McGurn scolds the Wisconsin teachers with his sixth rule: If you are teachers, don’t call in sick as a group so you can all protest. McGurn’s concerns about cancelled classes and student welfare would be touching if he showed the same concern for teachers’ unions and their welfare. Once again, he shows scorn for the intelligence and integrity of the “mainstream” students and parents who value the well being of teachers and identify with their needs. (In every opinion poll, teachers are among the most respected segments of society—well above corporate bigwigs, politicians, and even pundits!)

McGurn is especially appalled by the incivility of the demonstrators. No more Hitler moustaches on Governor Walker, he exclaims. “…Hitler analogies are tired.” Or do they touch a raw nerve? In any case, my own survey of the multitude of homemade signs suggests that McGurn’s imagination is even greater than his indignation. But in any case, policing the signs and images is merely a distraction from the work of nurturing a dramatic fight back against his friend, Governor Walker. Where McGurn sees a public relations spectacle, others see the kindling of class struggle, a fire that McGurn deeply dreads.

Rule Eight: Make local workers your public face: real teachers, real cops, real firemen. “… [T]hey make a much more sympathetic case than the professional union leaders.” While “professional union leaders” are struggling to shed the rust of class collaboration, dividing them from the rank-and-file is a sure way to derail a movement. When masses are in motion, even the most cautious, backward union leaders will jog to keep up. They pose a real danger, however, when their fears of worker militancy threaten to clear the streets in favor of political maneuvers and back-room deals. But the spotlight is large enough for everyone to stand in it.

If you want to cripple a movement, take McGurn’s Rule Nine to heart: Don’t call for grand actions only likely to confirm your weakness. Certainly modest, polite and limited requests will hearten the moguls and elites who are only too happy to dismiss them. This brand of pre-destined defeatism limits the horizon of victory before the battle is waged. Surely, the decades-long, one-sided class war waged by corporations and their minions must be met with more than the threat of minor, tentative skirmishes. Unquestionably, great victories require thorough and thoughtful preparation, but they are foregone if couched in timidity. Lenin said it well: “Only struggle discloses to it [the masses] the magnitude of its own power, widens its horizon, enhances its abilities, clarifies its mind, forges its will.” For Lenin and other peoples’ leaders, weaknesses are not to be heeded, but to be overcome through action.

The “business unionism” practice of offering concessions before confrontation has proven to be bankrupt. The prospect of “grand actions” should be on the agenda.

Lastly, McGurn admonishes protesters to [s]how some sympathy for the tax payers. In McGurn’s world, public sector workers are merely burdens on taxpayers and not the essential elements of a functioning and hospitable society. It never crossed his mind that they may be more socially useful than stock brokers, Wall Street managers or CEOs. Workers’ struggles to maintain and advance a modest standard of living is seen by him and those like him as a personal burden rather than compensation for the education, protection and services that they provide for the vast majority. In his world of gated communities, mansions, private jets and limousines, private schools, private clubs and the other privileges of wealth, the public services that sustain the work, security and private lives of most of us is of little consequence.

Of course we are all taxpayers and most of us are grateful for the social benefits that public workers provide. We wish that less of our tax burden were wasted on destructive wars, subsidies for giant corporations and fixing the messes left in the wake of corporate irresponsibility and crime. For McGurn and his friends, these are tolerable uses of taxpayers’ dollars; for the rest of us, they are not.

Thanks, but no thanks, William McGurn. As the battle for justice for public sector workers grows in Indiana, Ohio, Pennsylvania, New York and most other states, we’ll find our own way.

Zoltan Zigedy
zoltanzigedy@gmail.com

Class Solidarity: The Road to Unity

2011-02-23T16:44:00.000-08:00

Some see the description “Marxist” as an anachronism. Certainly much has changed in the world since the times of Karl Marx and Frederick Engels. Indeed, capitalism – the object of their study – has evolved strickingly from the socio-economic order they sought to understand in the nineteenth century. Yet we are constantly reminded of the fruitfulness of their key analytical tools: class, exploitation and profits.

We find these tools useful in some of the most unlikely places, as demonstrated by a recent article in The Wall Street Journal. Writing on the Journal’s refreshingly eccentric sports page, author Matthew Futterman tackles the political economy of the National Football League (The NFL’s $1 Billion Game of Chicken (2-17-11). Futterman states: “The League has run out of new ways new ways to make another quick $1 billion, so its turning its focus to the biggest piggy bank of all: its own players.” Within the next two weeks, the player contract expires and NFL management will likely lock out – call a management strike on – the players and their union.

Futterman adds that behind this threatened lockout is “a notion that’s familiar to investors, but that represents a radical notion in professional sports: the idea that a sports league, like a giant company, must show steady growth over time. And more radically, a slowdown in the rate of growth, even without actual losses, is sufficient grounds to ask labor to make concessions.” In other words, professional football is a giant monopoly business with its own unique expressions of class, labor exploitation and profit accumulation.

Of course this backdrop of social confrontation and the drive for greater profits is not readily apparent to the average fan. Professional football occupies a special place in US culture. On one hand, it postures as a “pure” sport with great athletes – athletes bred, trained and motivated for most of their young lives – competing in a brutally violent game. On the other hand, it is presented as capturing the US ethos: overwhelming power, domination, confident cockiness, as well as respect for authority and unquestioning patriotism. Unmistakably, this representation is a profoundly conservative ethos.

But as Futterman’s candor shows, the NFL is far more than this popular image. From tickets to television, from media noise to gear, from advertising to fantasy football, the NFL both occupies a huge chunk of US cultural life and stands as a profit-generating behemoth.

It is this last aspect that draws little attention. Even less attention is given to the conflict between owners and workers, especially the players.

Between 2000 and the 2010 season, revenues have grown from about $4 billion to $9 billon. While every NFL team is highly profitable, owners view their protected franchises – their teams – as their major source of wealth. Just as stock market investors have come to place equity value over dividend return, team owners are most interested in seeing their team’s worth grow. For example, the NY Jets were purchased in 2000 for $635 million. Ten years later, another comparable franchise - the Miami Dolphins - sold for $1.1 billion.

The explosion of revenue in the NFL has come from several inter-connected sources. From 1993 to 2005 NFL owners extorted massive public funding for new stadiums. By threatening to move franchises, team owners and compliant city and regional officials have contrived a massive public welfare program for the benefit of the wealthy owners; the WSJ estimates that public subsidies averaged $500 million per year over the 13-year span.

Thanks to brand new stadiums with not-too-subtle class divisions (end-zone seats vs. luxury sky boxes), ticket revenues exploded, doubling between 1997 and 2007. Today, the average ticket costs $76 per game. It’s an unspoken truth that most season ticket holders are far removed from the working class who largely follow their team from in front of their television sets.

But competing media conglomerates have been the most kind to the NFL owners. Media rights to NFL broadcasts and properties have jumped from $2.6 billion annually in 2005 to $3.8 billion in 2010.

One might think that the NFL team owners would be quite satisfied with their lofty financial achievements, but like all capitalists they have an unquenchable thirst to accumulate. But as Futterman cogently puts it, they are looking for new ways to “make a quick $1 billion…” With new stadiums built and steadfast resistance to further subsidies on the part of the public, the team owners have turned away from the public troughs. With ticket prices sky high, they are afraid of squeezing fans further. And media contracts will increase only modestly over the next three years.

Therefore, owners are turning to the tried-and-true, centuries-old capitalist tactic: increase labor productivity by reducing wages and increasing the workload. They hope to add two more games per season to increase revenue. Thus, players will work 1/8th more for the same salaries. Standing in the way of this intensification of the owners’ exploitation of the players is their union’s resistance. Consequently, the lockout threatens to cancel the next season and pressure the players’ ability to earn a living.

As much as fans admire NFL players, they show little sympathy for their economic plight. Attention to the mega-salaries of superstars blinds them to the facts of an NFL career. The average median salary of an NFL player in 2009 was $770,000. But the average career lasts only 3 years, giving the average player a lifetime earning of $2 million plus from the NFL. Most players come from modest backgrounds and, unlike autoworkers or plumbers, have devoted fully 10 previous years of intense, competitive training without compensation beyond athletic scholarships. Thus, a 24-year-old average NFL retiree has earned well under $200,000 a year over his career, leaving his job often with debilitating injuries and little skill for any later opportunities. The media-hyped splendor of the super-star masks the far less glamorous status of the NFL’s ordinary player. Clearly, a lost season for players who only average three productive years is a powerful economic blow.

So, yes, players are workers, though unusually well paid for a brief time, and workers with their own unique advantages and difficulties. Players, like most fans, have drunk the cultural kool-aid that elevates all NFL players to elite status. The players don’t want to be seen as workers, but neither do many other well paid professionals or craftsmen for that matter.

For those of us who are consumers of the players’ product – fans – we need to take sides in a struggle between admittedly well-off players and the handful of mega-rich owners who seek to get more for less from their employees. In the end, that is the central question of Marxist and scientific socialist theory: exploitation. Exploitation defines class position as well as the distribution of the surplus, in this case NFL earnings. Unfortunately, the market determines the consumer’s place in this arguably decadent and politically numbing exercise in primitivism and violence – we lose a bit of our souls every Sunday in the fall. And our dollars combine to generate the $9 billion that the owners are so greedily striving to stuff into their pockets. But behind our shared football mania is an exploitative socio-economic system, just as ancient slavery stood behind the entertainments of the Roman circuses and the encounters of gladiators.

The lesson here is not that we should drop all activities to organize huge rallies in support of the small number of NFL professionals who are exploited by their employees, though there is much that we can easily do to show our solidarity with them. We certainly have more urgent priorities in supporting the public employees in the class war now raging in Wisconsin and breaking out in numerous other states. The living standards of all government employees –federal, state and local – as well as their union rights are under assault from many quarters, an assault that presages further attacks upon all workers. Instead, we must recognize that the Marxist notion of class – employees versus employers – trumps all other notions that divide workers by strata, job description, race, gender or nationality. It is “class,” as Marxists understand it, which serves as a basis for unity, and not some bogus unity forged from artificial ties with fickle friends in bourgeois politics or opportunistic, tenuous common interests. Those loose ties maybe be useful and even tactically desirable, but not at the expense of class partisanship.

A healthy sign of this class solidarity is the recent open letter from several current and former members of the Green Bay Packers professional football team urging support for Wisconsin’s embattled public workers. Is it an accident that they played for the only publicly owned team in the National Football League?

Zoltan Zigedy
zoltanzigedy@gmail.com

Vulgar Burlesque and High Drama

2011-02-01T08:08:00.000-08:00

The last week in January proved to be eventful. First, President Obama gave a State of the Union address on Tuesday that set a new standard of empty rhetoric and low customer satisfaction. Most notably, for skirting any important issues of the day, the address left both left and right uncomfortably disturbed by its lack of red meat. Perhaps in looking for a signal of surrender to the right, Conservative pundit, Peggy Noonan, called it “unserious,” “mushy,” and “barely relevant.” These non-ideological descriptions could equally serve the left.

Of course that was the point of the speech; the image crafters around Barack Obama are now engaged in a re-election campaign and that is exactly the porridge that best serves a sitting President.

For those on the right, it would be naïve to believe that Obama would come over to their side publicly, antagonizing the traditional Democratic base. Otherwise, there would be no political space for the AFL-CIO head, Richard Trumka, to praise Obama as “heading in the right direction.” Obama will appease his potential corporate contributors with deeds and not words.

For those on the left who remain expectant that Obama will break away from his corporate tether, call for a renewed commitment to progressivism, and propose even a weak anti-corporate, pro-people program, one can only prescribe new medication and a history lesson.

Many in our left – level-headed folks with an understanding of the two-party charade – expected to see an exposure of Obama’s perfidy in embracing debt hysteria and chopping essential public services. But eight years of Bill Clinton slipperiness should have taught that a clever elected official never shows his hand in public statements. And Barack Obama is certainly clever.

Putting aside naïve expectations, the real Obama message is that elections are serious business. Far too serious to engage in the posturing that feeds the punditry. Instead, a far-off election in 2012 calls exactly for a speech like the one Obama gave on Tuesday night, a speech that reaches the clouds in airy rhetoric referencing common sacrifice, noble goals and moving anecdotes. Its genius lies in placing seduction over substance.

Beyond the noise of the media gasbags, beyond the shallow electoral rhetoric, a different message has been delivered. Knowing corporate Republicans have gotten it.

The dry conservative wit Ben Stein spoke on CBS news (1-23-11) with only a touch of frivolity:

But wait a minute! Isn't there someone out there who is Obama's equal in oratory, charisma, and ability to draw votes who COULD run as a Republican?
Why, yes there is: Barack Obama, his own self.

YES!

Think about it: Since the election of 2010, he is clearly moving in the direction of the Republican Party. He has completely signed on to the Republican position on tax cuts and kicking the deficit can down the road.

In a more serious vein, the retired University of Chicago colleague of conservative icon Milton Friedman, Robert Z. Aliber, opined in a MarketWatch.com interview (1-28-11):

Not only is Obama serious about reducing our trade deficit with China, but he is also reviewing onerous business regulations. He hired big, bad banker Bill Daley as his chief of staff; he put cost-cutting General Electric Co. (NYSE: GE - News) Chief Executive Jeffrey Immelt in charge of a "jobs committee;" and he even invited Goldman Sachs Group Inc. (NYSE: GS - News) Chief Executive Lloyd Blankfein, Wall Street's prince of darkness, to the White House when Chinese President Hu Jintao was in town.

"There's no need for the Republicans to put up a candidate in 2012," Aliber added. "The Republican candidate is President Obama."

Of course these reliable conservative voices are not advocating that Obama run for the Republican endorsement. Instead, they are affirming that corporate power is perfectly happy with an Obama second term. They are signaling that behind the curtain of tea-bagger histrionics, media antics, and poll-driven faux populism, core corporate Republicans would live happily with Obama at the executive helm. Having passed the test of corporate fealty, the President presents a more reliable, focused option over the theatrics of Palin and the other Republicans of dubious distinction and unproven corporate worthiness.

For Republicans, the 2012 Presidential campaign presents a problem: With a growing strength in Congress, they risk a setback comparable to the Barry Goldwater debacle - a quixotic campaign dominated by the crackpot right - if they sign on with Sarah Palin or her ilk.

Expect the corporate coffers to flow generously and overwhelmingly to Obama with only token support for the Republican outliers. If the Republican primaries produce a more centrist Republican, a more dedicated corporate type, he or she will likely fare poorly against a well funded incumbent. But the conservative Republican establishment seems pretty comfortable with such an outcome.

Of even more potential importance, the uprisings in the Middle East may well usher in changes that seriously challenge the stability of US imperialism. In the post-war period, the US has sought to establish a gendarmerie in the Middle East from friendly client states. In place of the traditional imperialist colonial structures, US policy shifted to establishing reliable and militarily powerful overseer states that would guarantee US economic domination while concealing the deep structure of neo-colonialism. For decades, Israel and Iran, under the Shah, performed this function in return for massive US aid, largely in the form of the most sophisticated US military weaponry.

For Israel, the deal guaranteed military advantage over any other Middle Eastern country. For the Shah, the compact funded a massive security apparatus against domestic opposition as well.

With the deposing of the Shah, the US lost its reliable partner, replacing it with Egypt. Now the second largest recipient of US aid in the Middle East, Egypt is responsible for containing Arab outrage with Israel and guaranteeing safe oil shipment through the Suez Canal and the Sumed pipeline.

But the successful uprising against the corrupt, reactionary government of Tunisia has inspired the Egyptian masses to rise as well against the brutal government of Mubarak. As this is written, his regime hangs by a thread. While events are confusing and fast moving, several points are apparent:

●The uprising seems to be popular, secular, broad-based and fueled by poverty, increasing food prices, and unemployment. Opposition seems to cut across classes.

●Mubarak has demonstrated no reliable base of support beyond his security services. Despite warm, close relations with its US counterparts, the military has yet to take strong action against the activists, even, in some reported cases, showing rank-and-file sympathy for the demonstrators.

●Slogans appear largely limited to the removal of Mubarak, often identifying him with the US and Israel, but with little to suggest a conscious program or unified leadership. Theocratic themes have been noticeably absent.

●The best gauge of the character of the revolt remains the US reaction: Confusion seems to have seized the US government caught between preserving a “democratic,” “human rights” image and defending its interests in Egypt and the guarantee of stability that Mubarak brought. Press Secretary Gibbs suggested that the US might withdraw aid; Secretary of State Clinton stated that there was no threat to do so. Government Officials call for “reform,” “change” and “peace,” but Clinton has assured the press that they have not sought Mubarak’s departure. Obama spoke to Mubarak, but only adding to the impression of diplomatic confusion.

●The US contingency plan in case of Mubarak’s departure seems to be based on the quick ascendancy of Mohamed El Baradei, the former head of the International Atomic Energy Agency. While reviled by the Bush administration for his opposition to the Iraq invasion, he has apparently developed warm relations with the Obama Administration, according to The Wall Street Journal. That same WSJ (11-29/30-11) issue notes that he has little connection to the uprising and even less credibility with the Egyptian masses. Nevertheless, El Baradei has returned to Egypt and insinuated himself into the role of opposition spokesperson - doing so with a remarkable speed, strongly suggestive of the assistance of US and possibly Egyptian security services. Counter-factually, the capitalist press has sought to portray the Johnny-come-lately ElBaradei and the previously stand-offish Muslim Brotherhood as the leadership of the movement.

Given the panic occupying US officials, the hitherto manageable stability of the Middle East seems to be in jeopardy. The outcome is far from decided, but certainly the risings are threatening to imperial domination of the region and promising for the national democratic processes that were far from completed in the region after the Second World War. Time will tell if the US and its allies will be able to quell the risings or turn them to their own advantage, but the rising masses in the region deserve our solidarity.

An eventful week, indeed.

Zoltan Zigedy
zoltanzigedy@gmail.com

Is Obama Wall Street’s New Best Friend?

2011-01-23T11:43:00.000-08:00

Is President Obama Wall Street’s best friend? CNBC seems to think so.

In the column “Talking Numbers” posted on Yahoo Finance (“Why Obama May be Wall Street’s New Best Friend”, 01-18-10), CNBC pundits postulate that President Obama has swiftly moved into bed with Wall Street financiers and corporate moguls. They opine:

Candidate Obama was an anti-tax cut, pro-regulation, anti-big business populist ready to take on Wall Street and any fat-cat CEO who stood in his way. President Obama? A bit of a different story.

The president's tack to the middle began with a trickle last year when he made some key concessions on health care policy and financial reform.

But since the November election, after which he famously described his Democratic Party's defeat as a "shellacking" at the hands of reformist Republicans, the move has become even more pronounced.

The post-campaign president has hired Wall Street insider William Daley as his chief of staff in an apparent means to ingratiate himself with the leaders of corporate America, struck a high-profile bargain on tax cuts, and now has put burdensome job-killing regulations on the table.

While it remains to be seen how sincere the president's conversion is, it's been a winning ticket for investors so far.

Like Paul on the road to Damascus, President Obama has been struck with the recognition that economic recovery must come from obeisance to the corporate agenda. Or at least that’s the way that Wall Street sees it. CNBC writers smugly cite Wall Street colleagues to bolster their claim:

"It's amazing how far he has moved off his campaign promises to the left, and moved over to the center-right," says Gary Hager, president of Integrated Wealth Management in Edison, N.J. "The White House is definitely going to be more accommodative of Wall Street, because they see the absolute big enchilada on the ground is unemployment. The only real way to tackle unemployment is to get banks lending and companies hiring."

Some may find it puzzling that banks and companies have had two years of bailouts and loans followed by soaring productivity and exploding profits and have yet to lend or hire, yet Obama is said to believe that more warmth and fuzzy “accommodation” will produce results. Is this really what is going on?

Perhaps the truth is suggested by a few other slippery quotes from the posting:

After all, the president barely hid his contempt for Wall Street during the campaign even as many of its workers were pumping money into his campaign coffers. Employees of Goldman Sachs (NYSE:GS - News), for instance, contributed nearly $1 billion[sic] to the Obama campaign. (my italics)

And:

"He had a come-to-Jesus meeting with some major leaders in this country, most of them running big corporations. I think he came out of there impressed that he needed to take a different view toward business," says Rob Lutts, CIO and president of Cabot Money Management in Salem, Mass. "If you analyze his speeches, it was always 'us and them.' What he didn't realize was those are the people who are going to create the jobs, create the environment so he can get re-elected." (my italics)

Would it be cynic to suggest that the cozy relation that Obama is fostering with Wall Street and corporate executives has more to do with his re-election effort than economic policy?

Would it be mean-spirited to suggest that Obama has started his 2012 fund-raising campaign in earnest?

I’m afraid that is my view. In any case, Obama’s embrace of the interests of monopoly capital is now more than the suspicion raised by hard-lefties and fellow Marxists that called him out two years ago as another –albeit softer and slipperier – bourgeois candidate. As hard as it is to swallow by those once intoxicated with Obama-mania, the truth is now out in the open: On Monday, President Obama offered his contrition to the temple of Wall Street, The Wall Street Journal with an op-ed piece pledging a campaign of de-regulation for US corporations. Yes, de-regulation of those formerly lured by previous de-regulation into catastrophic speculative ventures – a jail break for financial criminals with deep pockets for potential campaign contributions.

Obama’s new-found love fest with business interests should not come as a shock. It is hardly a betrayal to those who studied his early career, his campaign, and the first two years of his Administration – a history of friendliness to power and means, occasionally masked with vague, highly rhetorical homage to popular causes seductive to voters.

With Obama’s public hug from Wall Street, two dangers arise. Some may now be inclined to turn towards cynicism, walking away from struggles that they thought Obama would lead. They may fail to draw the lessons of bourgeois politics, repeated since the beginnings of the Republic: change emanates and succeeds only through independent, popular pressure.

Others may repeat the failed strategy of the past and argue once again that Obama, despite his shortcomings, is still better than Palin, Romney, or whatever candidate the Republicans offer. While this will undoubtedly be true, it consistently leaves working people with a smaller piece of the pie. Decades of preferring death by a thousand cuts over a brutal coup de grace hardly seems worthy of a democracy.

It is neither a time to despair nor a time to retreat, but a time to fight. But this time, our fight must not invest all in the “hope” and “change” promised by a media-savvy politician hand-picked by a corrupted, corporate-owned political party. It won’t be an easy step for many.

Zoltan Zigedy
zoltanzigedy@gmail.com

Doug Henwood’s Alternate State-of-the-Union Address

2011-01-11T16:12:00.000-08:00

I had a dream that Doug Henwood, editor/publisher of Left Business Observer, gave the forthcoming State-of-the-Union address. The event that no doubt triggered this dream was reading a recent essay appropriately entitled “What a Damn Mess” (LBO #130). With his usual well-timed sarcasm, Henwood sets out to take “a comprehensive look at the state of the US economy – not the usual a little of this, a little of that approach, but some measure of how it all fits together.” It is this approach to “how it fits together” that most closely resembles the Marxist method. Rather than taking a snapshot of the economy, Henwood places our historic moment in time lines of fifty, a hundred, and even a hundred and fifty years, revealing trends, relationships, and perspectives otherwise overlooked. A story emerges that is far more insightful than the usual shallow speculations of mainstream economists.

Henwood gauges the last decade of growth of Gross Domestic Product per capita against that of past decades going back to the 1870s. It turns out that in the first decade of the twenty-first century the GDP grew less than in any decade excepting the second decade of the twentieth century. Even before the severe economic downturn, the economy was on track to suffer the worst decade of per capita growth in 80 years!

I am reminded of the pundits who blamed the demise of the Soviet Union on worsening growth through the 1970s and 1980s. I wonder if they foresee a similar outcome for the US. In any case, sluggish, slowing growth gives policy makers little to herald in their performance of the last ten years. And in the face of brisk growth in the so-called developing countries, this feat projects poorly for the maintenance of US global dominance in the future.

Outside of the growth fanatics, these numbers would mean little if the general well being of the population were advanced despite slow economic growth. But this is far from the results obtained, as Henwood’s charts and data show.

Employment is an all too familiar story: the drop in employment growth generated by the crisis is unprecedented since before WWII. But there is more in the details. The level of male employment as a percentage of the male population has been dropping steadily since World War II while the percentage of female workers as a percentage has grown even more steeply. While we should hail these numbers as somewhat reflecting a welcome reduction of barriers against female employment, they also represent the necessity of maintaining two workers per household in order to maintain a sustainable standard of living with stagnant wages.

Henwood also notes that a record number of the employed are part-time employees, the highest in 55 years.

A telling graph on page 4 of the LBO issue provides a host of interesting insights by tracking the growth of real incomes by income level from 1920 until today. Not surprisingly, the top .01% of incomes (the filthy rich, the ruling class, the haute bourgeoisie) always fares well with an interesting exception: their relative position against other income classes actually sank throughout the decade of the seventies. This coincides, of course, with the crisis of Keynesian economic philosophy (from a ruling class point of view) and the subsequent emergence of neo-liberalism as the dominant policy ideology in the US. As a response to this crisis (for the few), our venerable political system gave us the destruction of PATCO and union bashing, deregulation, tax relief for the rich and corporations, reduced social spending and the other features associated with unfettered capitalism. And the decline of incomes was not only arrested, but the real incomes for the wealthiest soared from that time forward.

But for the working class (90% of income earners), the story is different: throughout the “golden era” of US capitalism (1945-1970) coincident with the destruction of the labor left and the embracing of class collaboration, the conscious blurring of class lines, and the intensification of consumerism, the growth of incomes in different strata marched forward almost in lock step. The fact that everyone seemed to be doing better created the illusion of market fairness.

But the growth of real income for the working classes stagnated after the early seventies – it essentially flat lines – through today. For nearly forty years, the vast majority of the US saw no significant increase in real income. By contrast – as noted above – the incomes of the obscenely rich climbed to unprecedented heights.

It doesn’t take a chart or much imagination to see that the distribution of income between the vast majority of US citizens and the extraordinarily privileged has shifted dramatically under the reign of neo-liberal ideology, an ideology that thoroughly infects both major political parties.

An interesting – and, I think, profound – connection revealed by Henwood’s chart is the steep spike in real income enjoyed by the grossly rich before both the Great Depression and again before the current severe crisis. The chart dramatizes these spikes against ninety years of income relationships and suggests that great swings of income distribution in favor of the wealthy presage severe economic decline beyond the periodic business cycles.

Certainly this is consistent with the left-Keynesian position that misdistribution of wealth in favor of the rich diminishes the buying power of the masses and leads to a crisis of overproduction. Progressives and even a large part of the Marxist left have subscribed to the view that pressure brought on by reduced consumer demand slows production, resulting in a spiral of declining production, consequent unemployment, and even sharper drops in consumption only abated with government intervention and the restoration of consumer demand. While this is a convenient and neat explanation, it fails to agree with the facts as they unfolded before the current crisis and turns a blind eye to the critical role of debt in modern state-monopoly-capitalism. In fact, there was no sharp fall off in consumer consumption leading up to the current crisis because consumer debt continued to sustain consumption.

But there was a fall off in profit growth in the lead-up to the still raging crisis: year-to-year profit growth began to decline from roughly its decade-long average in the fourth quarter of 2006 (Standard and Poor’s 500) and continued downward through the fourth quarter of 2008, returning dramatically positive in the fourth quarter of 2009. It is this notion of profit as the motor force of capitalism that is central to the Marxist analysis of crisis. And it is the constant tendency of its rate to decline that explains the current crisis. The huge pool of accumulated and often idle capital brought on by the explosion of wealth concentration, as demonstrated by Henwood’s chart, brought enormous pressure on the capitalist system to find new sources of return. Much of the task of expanding profit was taken on by a financial sector that sought profitability through risky financial contraptions constructed around debt and further and further removed from productive activity. It was the malfunction of this profit-generating tactic that brought on the crisis.

For those who fail to see the decisive role of profitability in the motion of the capitalist system, the jobless recovery remains a mystery. With five periods clocked of robust profit growth, no amount of cajoling, incentives or prayer will bring capitalists to hire. Either job creation will re-connect with profit growth or the jobs must come from somewhere besides capitalist corporations.

Henwood constructs a clever chart that tracks the relationship between corporate profits and employee compensation a year after the bottom of the eleven downturns since 1949. In all but the last two economic declines, profit growth outstrips the growth of employee compensation (after all, it is capitalism!), but at a generally growing ratio between 1.8 and 5.1. But with the recovery of 2001 the ratio leaps to 27.7. And with the tentative “recovery” of 2009 the ratio explodes to 50.4! This data will not be noted in Obama’s State-of-the-Union address.

Something new is happening here. Virtually all of the benefits brought on by recovery are now passed on to the corporate sector. In both the crises of the first decade of the twenty-first century, the costs of the downturn have been borne by the majority without any of the benefits of recovery. I have written about this in previous posts, arguing that rising productivity and fewer employees with stagnant wages and benefits account for the explosion of profits. In Marxist terms, this constitutes an increase in the rate of exploitation. As Marx argues in Vol. III of Capital, increasing the rate of exploitation is a principal means of counter-acting the tendency of the rate of profit to fall and a way out of crisis. And what lubricates this intensification of labor exploitation is a supine labor movement and an accommodating state.

Indeed, it is a “damn” mess. Henwood provides much more evidence to bolster the case for an economy in shambles, sometimes understating the case against a corporate orgy at the expense of the rest of us. For example, he pegs the “effective” tax rate for corporations as hovering around 30% (the ineffective statutory rate is 35%). In fact, the effective rate for publicly traded corporations – the big earners - is around 16.5% (the rate they actually pay). Moreover, the share of corporate taxes of total federal tax receipts has dropped from just under 25% in 1960 to well less than 10% at the beginning of 2010. And the share of pre-tax profits going to federal tax payments has dropped from over 30% to less than 15% over the last decade. They’ll go down even further with the Obama corporate tax incentives coming this year.

As stated above, there is no good reason to expect this improvement in profitability from tax breaks to have any effect at all on job creation. In fact, just the opposite should be projected.

I don’t expect Obama to acknowledge this sad, gloomy picture in his State-of-the-Union address. Likely, he will tout a non-existent recovery and a rosy future. I suspect that he will tell a scary tale of debt looming over his fragile recovery and call for common sacrifice to ward off the frightening debt-monster. No doubt he will celebrate his new-found warm friendship with corporate America, posing this affair as the key to job creation.

Instead of watching this nonsense, I’ll turn off the telly and re-read Doug Henwood’s “What a Damn Mess.” I suggest you take out a subscription to Left Business Observer and do the same (only $22/year).

Zoltan Zigedy
zoltanzigedy@gmail.com

Obama and the Left: Crossroads

2010-12-25T18:02:00.000-08:00

In the fall of 2008, I wrote the following (2008: A Reprise of 1976?). It seems timely to reproduce it today:

Upon taking office, the Carter administration began a steady drift to the right. Following the lead of Democratic Party strategist, Patrick Caddell, Carter chose a business-friendly approach that placed the battle against inflation at the center of domestic policy. His personal opposition to the Humphrey-Hawkins bill led to the passage of a bill unsatisfactory to organized labor. National health care was shelved and tax reform was never achieved. Carter vetoed public works legislation as inflationary. The neo-liberal deregulation agenda generally attributed to the ultra-right actually began with Carter’s deregulation of the airline industry in 1978. He also started the process of deregulation of other industries, such as communications, oil and finance.

Little was advanced to improve either the status of African Americans or race relations, though Carter appointed more minorities to posts in his administration than any previous President.

Despite his platform promise to reduce military spending, Carter expanded the military budget, reversing the trend of the prior ten years. With Carter’s assent, the US began to send military equipment to the Afghan mujahadeen even before the Soviet occupation. Support for these feudal warlords harnessed to US Cold War aims soon reached $600 million per year. Ironically, they are the cadres now fighting the US occupation of Afghanistan. Carter instituted the so-called Carter Doctrine pledged to oppose any but US influences in the Persian Gulf area. This oil-driven version of the previous Monroe and Truman Doctrines has remained US policy to this day and justifies the use of military force in the region when US “interests” are claimed.

To his credit, Carter negotiated nuclear weapons reductions (SALT II) and a Panama Canal treaty, and also secured a minor reduction of US occupation troops in the Republic of Korea.

Carter’s retreat from the Democratic platform produced a number of oppositional blocs, including the labor/liberal-supported Democratic Agenda in late 1977 and the Progressive Alliance in 1978. The Democratic Party base of labor, African Americans and liberals was stung by the growing conservatism of the Carter Administration, a rebuff that led to Ted Kennedy’s campaign against the incumbent in the 1980 primary elections.

With Carter’s failure to steer a new, progressive course, the electorate, with the limited choice offered by the two-party system, opted for a different direction in 1980.

The promise of 1976 was squandered by the Carter Administration. Will the opportunities for change afforded by Republican failure be wasted again in 2008?

After much hesitancy, a growing segment of the broadly conceived left – Communists, Socialists, radical democrats, and New Deal Democrats – has come to recognize that the Obama Administration operates much like the previous Democratic administrations over the last thirty-five years. Carter shared self-righteousness and cultivated civility with the current President, along with a ready willingness to sell out campaign promises and platform statements. Clinton exhibited a cunning slipperiness and lack of even superficial principle that is often revealed in Obama’s public statements.

But these are merely features of their political personality, features that occupy the pundits at The Nation and other liberal publications. The common thread that binds Democratic administrations, top national Democratic elected officials, and their attendants is that they are members of an elite club and bound to place the interests of the club first- they are part of and employed by the rich and powerful. While this is readily apparent to many of us, there are still many waiting for a public confession.

Some temper their disappointment by arguing that the Obama Administration stands between us and a far worse fate at the hands of the extreme-right. Therefore, we must support it or permit the pain of a more onerous administration. This is, of course, an iteration of the old “lesser-of-two-evils” position. But that position was meant only to be a tactical retreat - a temporary, uncomfortable affair followed by an embarrassed exit – and not a life-long marriage. Instead, it is the constant refrain, election after election, of many prominent leftists and “progressive” Democratic Party apologists.

While there may be nothing wrong with this stance for those solidly – and happily – wedded to the Democratic Party and its self-limiting goals, the “lesser-of-two-evils” concession is poison to anyone with greater aspirations for the country and partisanship for its majority of people who work for a living. For the left, it is simply disastrous.

The “lesser-of-two-evils” left suffers two pathologies: the first, a delusion of grandeur, and the second, an allergy to the principles of oppositional politics.

It is illusory to think that the US left yet matters in national or even state-wide bourgeois politics, especially within the most advanced form of bourgeois politics: the two-party system. When pundits and the media refer to the Democratic Party base, some take that to be the “left.” It is not. It is actually the bureaucracy-led labor movement, urban liberals, and African American and Latino voters. They matter in supporting the Democrats, but less and less in the policies pursued by elected officials. They are not, as a whole, the left, but constitute the natural constituency for left-led movements. They are potentially a left base, should the left organize and agitate among these groups.

But to believe that the left matters within the two-party system is delusional. Come election time in the national or statewide arena, the efforts or absence of the left on behalf of the Democrats is never decisive and is usually not even marginally influential. Nor does the left’s cheerleading make a difference. Some leaders and pundits rally the ranks at election time as though a squad of infantry would decide the clash of armies.

Of course there is always the Nader example that liberals dredge up whenever pressed on the folly of supporting weak, ineffectual candidates. Left votes for Nader, they assert, cost Al Gore the 2000 election. They conveniently ignore the dozens of reasons - most importantly, Gore’s lack luster campaign – for the defeat. And they arrogantly presume that Nader votes really belong to the Democratic Party. Such a presumption underlines the contempt that Democrats show to their base. Their votes, too, are owned by the Democrats, a condition of electoral slavery.

Secondly, the “lesser-of-two-evils” strategy constitutes a complete and catastrophic misreading of oppositional politics. A left political organization – too small to actually contest elections – serves nonetheless as a material force for influencing elections by projecting advanced demands. Those demands may, in turn, shift electoral discourse away from the usually overwhelming pressure of wealth, media access and power. Of course, it may not, but it will draw adherents to the side of truth and justice. And in the longer view, it will strengthen and build the left. Thus, the left grows in times of strong independent movements for social change. And contra the “lesser-of-two-evils” philosophy, it provides the spine for those rare occasions when the Democratic Party actually advances the peoples’ interests such as with the New Deal or racial desegregation.

Therefore, the role of the left is a critical role - a role to challenge and provoke social institutions to move away from their tendency to accept and expand the privileges of the few.

Since the diffusion and loss of focus of the anti-capitalist left, this critical role has been lost in US politics. Reinforced by the handful of left publications that obsess over the maneuvers and deals of bourgeois politicians, the broad left has accepted electoral politics as its touchstone, waiting patiently for an establishment candidate who can revisit the myths attached to the great liberal icons: Roosevelt and Kennedy. This is a tragic misreading of history and a shameless neglect of the historic mission of left movements.

But even more shameless is the posture of elements of the anti-capitalist left who speak and write of a grand coalition against the ultra- or extreme right. They posture as though there is a supra-organization joined around the sole goal of burying the foul creatures inhabiting a corner of US politics since the country’s founding. There is no such coalition. Instead, there are many groups with varied interests that latch onto the Democratic Party because they see nowhere else to turn. Historically, it has been the goal of the left to nurture a broader vision that could tie these interests together into a real coalition, not to merely halt the influence of the most backward political forces, but to improve the lot of the majority.

Miguel Figueroa, leader of the Communist Party of Canada, spoke well when he addressed a recent gathering of Communist Parties in South Africa:

It is equally if not more impermissible however for the Communists to enter into alliances in a self-effacing way, making unprincipled political and ideological concessions for the sake of maintaining unity, and jettisoning the independent role of the Communist Party in the process.

But in the case of the US, there is only an imaginary alliance that makes one concessionary demand upon its members: vote and support Democratic Party candidates. When all the rhetoric is cast off, the “alliance” is merely a fig leaf for unconditional loyalty to the Democratic Party and its agenda. And “unity” is never in jeopardy when there is only a one-way conversation between the Democratic Party leadership and those who dutifully follow.

The “Marxists” who contrive this fictional alliance, in moments of ideological nostalgia, appeal to the United Front tactics offered by the Communist movement in the struggle against fascism. But even a casual read of the documents endorsed by the Communist International demonstrate that these “Marxists” neither understand the tactic nor know when and how to apply it.

But suppose Obama had delivered on many of his campaign promises. Would that have earned our uncritical support? Respect, sure. Critical support, perhaps. But not the fawning idolatry that much of the left demonstrated after the election. Nor should it have brought a virtual collapse of the peace and justice movement. For the left, the task of constantly prodding and pushing the political goal forward should not be compromised in victory or defeat.

And now it’s time to get beyond wringing our hands over what Obama promised, what he did, and what he will or will not do, and focus on what we will do – a stance that promises to bring life back to the left.

Zoltan Zigedy
zoltanzigedy@gmail.com

Through the Looking Glass

2010-12-16T17:15:00.000-08:00

Debt hysteria is undoubtedly the most disgusting, lie-infested scam since George W. Bush launched his propaganda blitz leading up to the unprovoked invasion of Iraq. Like the Bush offensive, the debt scam has drawn public attention away from the critical issues facing the world - especially working people - at this critical moment. Unlike the Bush-era deceptions, debt hysteria has thoroughly infected policy throughout the world.

It is a supreme irony that the debt fears now provoked by government deficits are construed as excessive, while the decades of growth of personal debt and speculative debt in the private sector were seen as benign. Where all government debt grew roughly 8.5 times from 1978 to 2008, US mortgage debt grew 11.5 times, non-financial business debt grew by over 10 times, and debt in the financial sector by nearly 50 times! (Estimates from Epic Recession: Prelude to Global Depression, Jack Rasmus, p. 33) Yet few alarms were triggered as these vast sums of debt served to sustain and grow the profit margins of monopoly corporations. As long as the debt energized profit taking, the level of indebtedness was of no consequence. All of this changed – or should have changed – after the mountains of debt accumulated in the financial sector collapsed, bringing the global economy to its knees two years ago.

It is equally ironic that a quasi-governmental body – the Federal Reserve – pumped, with no transparency, $9 trillion in loans into the private sector to rescue corporations from the consequences of their collapsing debt load, as recent revelations have shown. We now know that the private sector, primarily the financial industry, hung by a slender thread thanks to years of promiscuous borrowing to fuel scandalously risky speculation.

Despite this indictment of private sector abuse of debt, policy makers have offered few guarantees that private sector debt will not again paralyze the global economy. Nor is there any hysterical concern over private debt with the opinion makers who protest so loudly over public sector debt.

US Debt: A Dose of Terrorism

With the federal deficit reaching $1.5 trillion in 2010, it is understandable that some would react to the figure with alarm. It is formidable figure, but what does it mean?

Actually, it means very little. There have been Federal budgets that have shown more percentage growth of the deficit or more growth against other measures such as GDP. Some of these budgets have correlated with good times, some with bad times. There is no strict relationship between budgetary frugality or generosity and prosperity.

Some deficits have resulted from reduced tax revenues, some from leaps in government spending. Interestingly, some of the biggest recent boosts in government spending – the great sin of debt scolds – have occurred under the Presidential stewardship of professed archenemies of deficits (Reagan, Bush I, Bush II).

Without exploring the details of government spending, there is no factual basis for alarm with the absolute or relative size of a Federal deficit. In the case of the current deficit, there are good reasons to examine why the US deficit is growing. As Jeff Madrick points out (NY Review of Books, 12-23-10), “…almost all of the projected deficit through 2020 will be the result of three factors: the recession, the tax cuts of the early 2000s under George W. Bush, and the hundreds of billions of dollars of war spending.” I would add that the continued growth of the costs of private medical services passed on to the public sector also adds substantially to these projections. All are social evils worthy of attacking, but not because they add to the deficit.

Other liberal economists, like Dean Baker and James K. Galbraith, have demonstrated loudly and conclusively why there are no theoretical reasons to fear an expanding Federal deficit or higher levels of public debt (apart from state and municipal budgets that are limited statutorily to balancing revenues and expenditures). They vigorously dispute the inappropriate parallel with family budgets and the catastrophic consequences of individuals spending more than they make. The Federal government does not endure the pain of the profligate neighbor who runs the credit card to the limit. Instead, the Federal government can borrow extensively through the sales of Treasury securities, particularly at a time when interest rates are at an historic low. Moreover, the Federal Reserve’s QE2 program is currently attempting to drive those interest rates down further through $600 billion in Treasury purchases, but with a different goal in mind.

Sane people will find no plausible explanation for the intensifying debt scare in the US, beyond political manipulation. And crude political manipulation it is: a ruse akin to the hysteria generated by the “war on terrorism.” With fear piled upon fear, politicians and policy makers are exploiting the ensuing panic to vigorously attack both the already inadequate safety net and working class living standards.

Political elites and their minions have taken to heart the slogan “every crisis presents an opportunity” by turning it on its head through a campaign of disinformation and fear mongering. Instead of taking up the cause of the twenty-five million unemployed and underemployed, they have seized the moment to impose even greater hardships on the vast majority of US citizens.

It took very little to rouse President Obama and his Administration to join the baying dogs of debt hysteria. With the creation of the Bowles-Simpson Debt Commission, he embraced the hypocrisy of debt terrorism. And his recent freezing of the wages and salaries of Federal workers justified by deficit concerns only underlines both his dishonesty and his callousness. His sharp right turn from his already right leanings should chasten those still star-struck with “change that you can believe in…” And those who still posture Obama as a progressive champion should be boiled in oil. His recent agreement to establish a NAFTA-clone trade pact with Korea has stirred great anger in the upper echelons of the AFL-CIO, the same labor leaders who hailed his pledge to revisit NAFTA and make it more labor-friendly.

The plain and simple truth is that the debt hysteria has no sound basis in economic theory or experience. Instead, it is a political ploy to raise fears to justify imposing austerity on workers, youth, minorities and the elderly. Its quick and ready acceptance by opinion makers demonstrates a callous dishonesty.

European Debt: Plundering the Weak

The European debt fears that have brought panic to the EU leaders and a wave of austere budget cuts has a real villain, but it’s not the profligate spending and big deficits that the media shrilly reports. Instead, it is hedge fund managers and a motley crew of other powerful financial pirates – Barron’s magazine cleverly calls them “bond vigilantes” -who understand the dynamics of international debt markets and prey on the weakest players. The wondrous thing about the new financial instruments devised in the late-twentieth century is that they allow and invite as much or more money to be made betting on failure as betting on success. Moreover, the financial predators have the weight in the market to force panic and reap profit from the chaos they produce.

These vultures ply on the fact that the weaker economies in the European Union are caught in a deadly vise: they owe much of their debt to foreign banks and they have surrendered monetary powers by replacing their sovereign currencies with the euro. First, Greece came under fire beginning in the fall of 2009 with a massive campaign driving the cost of insuring debt and acquiring loans. Of course these pessimistic bets further stressed Greece’s ability to muster funds, leading to even further aggression on the part of vulture capitalism through even more pessimistic bets against Greece’s ability to repay debt. And thus the noose tightened around the Greek economy.

As a result, Greece was forced to surrender its sovereignty and economy to the leaders of the European Union and the International Monetary Fund. In return for loans and guarantees that dispersed the vultures, the EU and IMF dictated an austerity program that drastically lowered the standard of living of the Greek people. Only the most militant sector of the Greek working class – the Communist Party and PAME – offered any real alternative to this devastating aggression.

The debt vultures turned next to Ireland later in 2010: same process, same result. With the EU and IMF now effectively ruling Ireland, the already shrunken Irish public sector is further squeezed with a drastic cut in jobs and public services piled onto an existing unemployment rate of 14%.

With the Greek and Irish carcasses picked clean, the aggressors are turning to Portugal, another country carrying debt and hamstrung by the acceptance of the euro as its national currency. And Spain - perhaps even Italy – is vulnerable to future attack.

In an unusually candid admission, The Wall Street Journal wrote of this insidious process in late November (Traders’ Targets: Portugal and Spain). Author Cassell Bryan-Low concedes that “hedge-fund managers are cautiously setting their sights on potential problems in countries such as Portugal and Spain…[T]hey are expecting more bad news to come, predicting that borrowing costs elsewhere will become prohibitive, potentially forcing other countries to also seek a bailout or restructure their debt.” Bryan-Low notes that some traders are a bit gun-shy because “the notion of betting against Europe’s peripheral economies has… become an emotional topic amid debate whether such moves have contributed to those countries financial woes…” Some officials “have called for the banning of certain instruments, such as derivatives…” Several fund managers are cited who confirm “bearish bets” on Spanish debt, with one stating ominously, “I don’t think those issues are going to go away, which is why the euro is going to stay under pressure.” The carnage continues…

Vulture capitalism preys on countries outside of the euro-zone as well. As I have shown previously (IMF Debt Hypocrisy: Sticking it to the Hungarians http://zzs-blg.blogspot.com/2010/08/imf-debt-hypocrisy-sticking-it-to.html), the game is really not about reducing deficits or debt levels, but about imposing the will of international capital on vulnerable countries and hammering the conditions of life for working people. When the Hungarian government proposed raising taxes on banks to reduce the deficit, their international overseers became hysterical - threatening repercussions - despite the fact that Hungary would meet the targets set by the IMF. It was not defiance of debt-reduction goals that brought on censure, but the refusal to put the burden on the Hungarian people.

Since the article, the defiant Hungarian government has pledged to lower personal taxes and boost welfare spending while increasing taxes on banks, telecommunications, retail businesses and energy companies, to raise revenue by $2 billion. This defiance has brought on a severe downgrading of Hungary’s credit rating to near junk status by Moody’s credit rating service. The prime minister’s office bluntly, but accurately, characterized this move as a response to “measures that hurt the interests of international capital in the short term” as reported in the back pages of the WSJ (12-7-10). So there is another path to debt management, but one would never know it from the actions of the cowardly governments that rule in the rest of Europe. Instead, they surrender their national sovereignty with a whimper.

Today, the capitalist class leads with the debt card in its efforts to discipline and dominate the working class. The failure to understand this strategy disarms working people caught in the throes of a new offensive in the class struggle. Just as we exposed the hypocrisy of George W. Bush’s contrived invasion of Iraq, we must bring light on the hypocrisy and deceit of the debt scare.

Zoltan Zigedy
zoltanzigedy@gmail.com

International Finance’s Raid and Occupation of Ireland

2010-12-12T13:15:00.000-08:00

Ireland is a young country, established only 88 years ago after centuries of domination by its powerful neighbor the United Kingdom. After liberation, the country remained largely in the shadow of its former colonial master, serving as a source of cheap immigrant labor. Irish youth would leave their homeland, portrayed in popular lore as a quaint land of small villages and crude agricultural economies, for work in London or other UK cities. The more ambitious would venture to the US, where the earlier successes of millions of Irish immigrants elevated a few to the upper echelons of wealth and power.

But with the emergence of a new era of intense capitalist growth spurred by unfettered and ever-expanding markets, technological advances, and financial daring, Irish policy makers decided to join the race to success promised by this developmental model.

Enthusiastically, successive Irish governments followed the scriptures of neo-liberal dogma. Possessing an educated, but low-wage work force, they enticed transnational corporations to locate in Ireland by offering them an obscenely low corporate tax rate, the lowest in the euro-zone except for Bulgaria. Tax rates for the wealthy were lowered, including a constantly shrinking capital-gains tax.

Given domestic growth, the financial sector was encouraged to exploit the newly found prosperity with an orgy of lending and investment in housing, commercial real estate, and the new, exotic instruments common to the financial sector over the last thirty years.

As a result, Ireland and the Irish economy were heralded by opinion makers, politicians, and the gatekeepers of capitalism, the World Bank and the IMF. With a public relations flourish, they dubbed Ireland the “Celtic Tiger” of the world economy.

Today, the tiger is on its deathbed.

Slammed by the global economic downturn, Ireland now stands as an example of all that is rotten in the global economy, all that is misguided in the neo-liberal program, and all that is painful in an unfounded faith in capitalist social relations.

With the pace of economic activity decelerating rapidly in 2008, the Irish government recognized that declining tax revenues placed stress on its budget. Where some governments sought to use public funds to stimulate growth, Ireland began a process of government austerity that would please the financial world and hew to the most dogmatic of neo-liberal principles – the budget was substantially in balance at the end of 2007.

But overlooked by Irish officials, the banks were carrying enormous debt with little prospect of realization. As in the US, the Irish financial industry had supported an orgy of real estate development that could only prove of value if the “Tiger” kept its furious pace of growth. Foreign banks, principally in the UK, France and Belgium, added their capital to stoke the fires of speculation. When this growth collapsed, the prospect of recovering these loans also collapsed. In addition, Irish banks, like their US and Icelandic counterparts, engaged in a risky speculative game with the flashy, but risky financial instruments invented in recent years. The potential losses were staggering. The banks tried to hide their losses. Officials pretended they didn’t exist.

As late as May 2008, Irish regulators assured the public that the banks were “sound and robust.” But early the next year, the government injected around 7 billion euros of public funds into the banking industry. And for the next two years, the Irish government denied that the banks were collapsing while adding billions more of public funds to rescue them.

In the fall of 2010, the Irish finance minister called for a final, honest accounting of the costs to the public for the bankers’ folly. The figure – undoubtedly an underestimation – totaled 50 billion euros or roughly US$ 50,000 per household.

While it is true that the collapse of the Celtic road to prosperity is an indictment of the policy choice of free market “cowboy” capitalism - the zealous faith in the dogmas of neo-liberalism - there is more to this tragedy. Unspoken in accounts of the Irish developmental debacle is the role of international finance capital in exploiting the crisis and driving Ireland into the hands of the European Central Bank and the IMF with a painful loss of national sovereignty.

Over the last thirty years, the financial industry has constructed and employed new, sophisticated methods of garnering profit from betting on negative outcomes as well as success. Hedge funds, private-equity firms, as well as big banks gain as much or more from exploiting weakness and economic vulnerability as they once did from supporting strength and growth. Consequently, they pounce on wounded economies, driving up borrowing rates and risk assessments while betting on default. This financial attack creates a disastrous, unending escalation of the costs of financing and refinancing debt that chokes off a government’s ability to fund even its most critical functions.

We saw this process in Greece last fall and winter. And we saw it again in Ireland this summer and fall: since the summer of 2010 the spread between the yield necessary to sell Irish government bonds and the yield of stable German bonds has jumped four-fold. This is an instance of financial aggression, pure and simple, with the next target undoubtedly the economic sovereignty of Portugal.

Inevitably, a country under this withering attack from the financial sector must turn to others for debt relief. In the case of Ireland, the European Union and IMF are staving off the assault with an 85-billion euro loan. In return, the Irish people surrender their sovereignty and submit to a severe further dose of austerity: the minimum wage is to be slashed by 12.5%, welfare benefits will be cut, pensions reduced, health care denied, public workers’ jobs eliminated, and the costs of education increased. This comes on top of an existing 14% unemployment rate. Once again, Irish youth are leaving in droves.

Ireland and its economy are effectively under the stewardship of the European Union and the IMF.

It is common, especially on the Left, to blame the Irish tragedy on the foolish belief that markets and business-friendly policies will bring prosperity to a poor country competing in a world of rapacious corporations and more advanced economies. While this is true, it misses the important point that the predatory international financial sector looms over a country’s effort, ever ready to pick the bones should that country falter. There is capitalism and then there is vulture capitalism.

Zoltan Zigedy
zoltanzigedy@gmail.com

MARKET-BASED SOLUTIONS: ZZ TACKLES THE DEFICIT

2010-11-24T08:15:00.000-08:00

As the number of Debt Commissions multiplies and media gasbags generate hurricane-like forces and hysterical fears of government insolvency, I’ve decided to surrender to the madness and propose a fresh, creative approach to debt reduction. My approach has the added value of requiring no budget cuts or tax increases. Instead, the solution will be found in cutting waste and acquiring new revenue sources hitherto unexplored.

And all of these revenues are generated by tapping the hidden potentials of the market place, a solution that will endear this plan to the vast majority of free-market economists and policy jockeys.

In its essence, my program exploits the vast assets currently wasted in our two-party political system. Instead of holding costly primary elections, I propose that we auction off the candidacies for the two parties with all proceeds going to the Federal budget. And instead of holding costly electoral campaigns, we adopt a system based upon cash votes: one vote for every dollar spent. The nine months currently devoted to canned speeches, staged rallies and meaningless debates could serve as an ongoing telethon with the dollars (votes) pouring in with a huge surge near the end. Again, all proceeds would go to the Federal budget. The beauty of this scheme is that the process is totally transparent and the results very likely close to the ones we usually get with the current electoral system.

But there is more: We could sell the naming rights to all of the House and Senate seats. The 18th Congressional District of state X might become the Halliburton or Goldman Sachs seat. The Delaware Senate seats could be sold to Dupont and the credit card industry. The possibilities are endless.

Likewise, the naming rights to departments, public buildings, airports, parks and roads might well generate millions to the Federal government. Admittedly, this might result in some awkward moments – the Richard Nixon Justice Department, the Strom Thurman Equal Rights Commission, etc. – but a small cost for market efficiency!

Instead of all the lobbying money currently wasted on campaign coffers and personal graft, we might consider installing turnstiles in government offices and agencies, charging lobbyists by the hour or earmark.

We might also consider marketizing the judiciary by selling judgeships and auctioning decisions. Undoubtedly, the legal profession would object since there would be little need for private attorneys, but the resultant revenues could go directly to the Federal budget, thus aiding widows and orphans.

The market-based solutions to the widely acclaimed deficit crisis are limited only by our imagination. Instead of slowly choking public education with privatization schemes (charter schools), why not simply construct a government fee schedule that allows youth to buy their way into a future career or profession? Of course, their fees would be refunded if they failed to meet the standards minimally necessary for performance in their fields. Doctors who consistently harm their patients would be asked to purchase a new profession more consistent with public welfare. Surely this would meet the requirements of market rationality.

For those without the funds to bid on prestigious professions, a government lottery could sort out those relegated to low-paying service jobs, those destined for prison, and those unhappily cast out as redundant. As always, the proceeds of this process would go to ease the deficit.

The beauty of this debt-reduction scheme lies in its total transparency. There are no hidden agendas, secret meetings, under-the-table deals; all transactions are in the open. While it produces virtually the same results that current practices deliver, it dispenses with the hypocrisy that infects the present political system. Moreover, the funds currently absorbed by our parasitic class of consultants, political staffers, office holders, campaign professionals, media moguls, etc. are shifted to debt reduction. It is no exaggeration that this market-based approach could produce billions of revenue to bolster the Federal budget.

Some may object, citing the absence of democracy in this approach. But this is a petty complaint, given that the results would most likely be the same as our current way of doing things. Social scientists call this an isomorphism: The processes may appear different, but operate the same and produce the same outcomes. Less kindly, Marxists call our current political system “bourgeois democracy,” a political doctrine that postures as democratic while functioning to produce and reproduce rule by wealth and power.

Undoubtedly, those who persist in defending the current two-party system will be outraged, condemning this proposal as cruelly cynical. Indeed it is. But the option is to reject the vulgar entertainment we accept as democracy and fight for a third peoples’ party or a new democracy. Anything less is rotten with hypocrisy.

Zoltan Zigedy
zoltanzigedy@gmail.com

Election Results: Telling the Forest from the Trees

2010-11-09T16:31:00.000-08:00

I have slogged through uncountable commentaries on the mid-term elections. Many have offered useful insights on an event that will no doubt shape the political direction of the next two years. Yet, there is little to surprise in the outcome for anyone following recent and long-term developments in the US political system.

Two years ago, I projected that the Obama presidency would likely follow the pattern of the Carter presidency. Both came after a deep crisis of legitimacy: in one case, the Nixon debacle, in the other, the disastrous Bush presidency. The candidates postured as outsiders and in both cases they made impassioned pleas for change with a vague commitment to a “progressive” agenda. But in the end, the two administrations proved to be shaped by and acquiescent to a ruling-class agenda. The election of both candidates energized, protected and promoted a two-party system in need of credibility.

In another contemporaneous post, I drew upon the venerated I. F. Stone, who, groping for understanding of his disappointment with the Kennedy tenure, wrote of the enormous institutional forces that blocked any deviancy from the ruling-class agenda in the unlikely event that any President should truly want to stray.

In all three cases, performance fell far short of public expectations. In all three cases, the left mistook cosmetic adjustment for real change.

With the exception of a brief interlude of New Deal vigor during Lyndon Johnson’s presidency, spawned by a martyred Democratic president, an overwhelming defeat of the Goldwater extreme right and the pressures of a militant Civil Rights Movement, this has been the pattern of Democratic presidencies for the last fifty years.

While many know this history, few see it as a pattern. Since the marginalization of the Marxist left, few find or even look for meaningful connections and continuities linking political events. Instead, the media and establishment punditry portray the US electoral process as a regular contest, fought around carefully crafted personalities, shifting demographics, debate performance and the poll results of the moment disconnected from class and process. They neither look for nor find the deeper structural forces that determine how the game is played and who wins.

A deeper look exposes the internal logic of a two-party electoral system in a class-divided society. Without a radical challenge, such a system inevitably produces rule by wealth and power over the popular will. As money and wealth determine both the candidates and the outcomes, the political leaders become more and more distant from the people, something the Tea Party movement knows and exploits effectively.

Further, the issues raised in electoral campaigns function to establish a space between the candidates, necessary to legitimize the elections in the eyes of voters. But once elected, the differences between candidates prove illusive. Thus, we find more and more commentators referring to the Bush/Obama continuum. On war, immigration, civil liberties, etc, we are all too familiar with the shortcomings of the Democratic Administration and its legislative allies. But the Republicans demonstrate the same cynicism toward their promises: both Reagan and G.W. Bush ran as deficit hawks, but oversaw some of the largest government spending splurges in history, all in the interest of the military-industrial sector of monopoly capital. This cynical manipulation of the electoral process is neither an historical accident, nor an aberration of an otherwise democratic procedure, but a logical development of a two-party system in an increasingly class-divided society.

Some will find this overly deterministic, suggestive of a fatalistic course to US politics. Still others will find this dismally pessimistic. It is neither. It is, instead, a realistic assessment of where our neglect of the structural limitations of the US two-party system has taken us. Any response to the power of money, the corruption, and the cynicism of today must address these structural impediments. It is not enough to live in a fantasy world of marginal reform, incremental change, or slavish faith in a corporate-sponsored party.

Just as careful study reveals the rigid logic of the two-party system, a long look at periods of progressive change expose the genuine alternatives to a system that trivializes public engagement and guarantees results friendly to the wealthy and powerful. All important reversals of the two-party trajectory came with the building of mass movements driven by peoples’ causes – the plight of the rural poor, the exploitation of industrial workers, against imperialist wars, for civil rights for minorities, equality for women, etc. Insofar as these movements maintained a distance from the two parties, along with a dogged commitment sustained regardless of the party in power, they were able to leave an indelible mark on the political landscape. Insofar as they hitched their movement to the Democratic Party or Republican Party, they were quickly absorbed into the electoral campaign machinery, with their cause tacked on to the end of a long list of Party priorities. Again, these are historical constants that must be addressed going forward if we are not to continue down the same ineffective, well-worn path.

Recognizing that in the US today we are accustomed to preferring score cards to theory, I suggest we consider the voting patterns in the mid-term elections. Exit polls show that the groups most supportive of the Democrats in the election were: African-Americans, Hispanics, youth, union households, and urban dwellers. Yet they were the groups that benefited least from two years of a Democratic Executive and Congress. These are the same groups that demonstrated the most enthusiasm for change and have suffered the most from a profound economic crisis. They have witnessed and will pay for the enthusiastic rescue of Wall Street and the corporate sector, while their own interests have been neglected or trampled.

Until we come to grips with this glaring contradiction, we will continue to repeat the same mistakes with the same disappointing results.

Zoltan Zigedy
zoltanzigedy@gmail.com

Micro-lending Falls on Hard Times

2010-11-04T17:11:00.000-07:00

Do I have a grudge against the Nobel Prize committees? A few weeks ago I launched a broadside against the awarding of prizes to three - no doubt well meaning and diligent - academic economists whose work on unemployment was postured as earthshaking contributions to resolving the current crisis. At the same time, I took a pot shot at last year’s Nobel Peace Prize going to the serving US President, an award that likely caused him some embarrassment after his dramatic escalation of the war in Afghanistan. And I couldn’t help noticing that my colleagues at Marxism-Leninism Today posted an article by Stephen Gowans that loosed his acerbic, sharp pen to blast this year’s Nobel Peace award granted to Liu Xiaobo. Gowans’s considerable talents conclusively demonstrate the stealth political agenda behind the committee’s decision. One is staggered by an international award earned by the recipient’s singular achievement of soliciting and attracting a mere 10,000 on-line signatures on a petition that, in effect, calls for the overthrow of the Chinese government.

But let me be clear about this: my quarrel is not with the recipients, at least not in past polemics. Rather, it is with committees that posture as unbiased and speak with the conceit of service to mankind. Instead, it is more and more obvious that the awards serve the ends of Western elites and legitimize their view of the world.

Take, for example, the 2006 Peace prize awarded to Prof. Mohammed Yunus for his pioneering work on what came to be called “micro-lending”. No doubt micro-lending – the idea that tiny loans to impoverished people could or would raise people from poverty – might, in some cases, be effective. Undoubtedly a small loan to a budding entrepreneur could launch a new, successful career in one of the world’s many economically barren areas. Of course informal loans in these areas are already a fact of ordinary life. Some are generously granted by family or friends, some are extended by usurious loan sharks. In any case, while granting that some could be lifted out of poverty with a modest loan, a financial helping hand, only the witless or perhaps a capitalist sensing potential profit would pose micro-lending as a solution to world poverty. Generously, I doubt that even Yunus ever saw the practice as the solution to mass poverty.

Nonetheless, the media, a gaggle of liberals, and many pundits hailed micro-lending as a miraculous answer to grinding poverty. In a striking display of ostentatious compassion, celebrities tossed money at the micro-lenders, puffing with pride over their genuine sympathy for the downtrodden. As the word got around about micro-lending, a groundswell of enthusiasm and a basket of awards and prizes followed, culminating in the Nobel Prize. Even Bill Clinton, the Terminator of the US welfare program, hailed micro-lending as one of the truly great poverty-reducing instruments.

As the micro-lending mania flourished, I thought that this too would pass. Like so many faddish schemes of the past, I saw micro-lending as one more fashionable way to turn liberal eyes away from the true causes of poverty in the developing world. Instead of dealing with the legacy of colonialism and the continuing pillage of imperialism, micro-leading gives comfortable people in the West a guilt-cleanser, a measure of smug acknowledgement – like the once popular “CARE” packages – that poverty was being whipped. It is certainly less costly than repaying the teeming masses for centuries of exploitation, brutal domination, and neglect. And I was well aware of the argument that a mere $200 micro-loan could help a poor villager establish a bicycle shop. But I wondered how the other villagers could rise from poverty by also setting up bicycle shops.

But lurking in all the palaver over micro-loans was the interesting micro-fact: lenders generally charged between 25 to 100% annual interest. Now I don’t know what village loan sharks charge, but my imagination stretches to envision their pushing much beyond these bounds. Granted, their collection methods might be considerably more severe than the beneficent micro-lender. To my mind, the micro-lending mania produced the aura of the pay-day loan shops that prey upon the working poor in the US.

But the micro-lending phenomena proved to be more than a passing fad. Today in India, one of the largest “markets” for micro-loans, there are more than 25 million borrowers and loans total well over 200 billion rupees. Total loans have grown nearly six times in three years. Banks and private equity firms have plowed over $4 billion this year into what has become a significant industry. The largest micro-lending firm recently offered $350 million in shares on the Indian stock market, according to The Wall Street Journal (10-29-10). Capitalism has discovered micro-lending.

Whatever noble intentions may have spurred the micro-lending movement, it was quickly stripped of any such sentiments when the financiers discovered it. Like efforts in the US to encourage low-income home ownership, the financial predators saw only profit. And they leaped at it, pushing the limits as far as the last dollar (or rupee) of profits could be squeezed out. The parallel between this exploitation of the most vulnerable in India and our own tragic exploitation of the poor through sub-prime mortgages is glaringly apparent.

It took a rash of suicides by borrowers to bring these abuses to the attention of Indian government regulators. The headlines in The Wall Street Journal tell it all: India’s Major Crisis in Microlending: Loans Involving Tiny Amounts of Money Were a Good Idea, but the Explosion of Interest Backfires (10-29-10), Backlash in Microlending (10-30-10). All debt payments have been suspended by the authorities and loan agents have been arrested in the Indian state burdened with 30% of the country’s micro-loans, leading WSJ writers to conclude that “the microlending movement… has in recent weeks fallen into chaos.” Once again financial predations result in chaos and crisis, a pattern that only escapes those willfully blind or cornered by self-interest.

The naked truth is that lending, like insuring, is a socially useful function if and only if it is democratically administered and publicly sustained. There is no rational or moral justification for engaging private interests. A disinterested public administrator armed with default data, an available loan fund, and a reasonable sense of social priorities and judgment of character could dispense loans untainted by the distraction of profits. Profits only distort the rationality or efficiency of this necessary social function.

The same could be said of insurance. Armed with actuarial tables (usually assembled from data collected from government agencies), a schedule of costs and benefits can be constructed by a competent statistician. It is an easy step to fairly and equitably distributing these costs and benefits in the most efficient and democratic way. Again there is no justification for introducing private gain into this process. It’s only an invitation to chaos and crisis.

It’s time to drive the money lenders from the temple.

Zoltan Zigedy
zoltanzigedy@gmail.com

Profits or Prosperity?

2010-10-31T11:42:00.000-07:00

Data on US profits for the second quarter of this year are well worth studying, not only for what they say about the health of the corporate sector, but also for what they reveal about the structure of our economic system and the priorities of our policy makers.

Commerce Department figures show that after-tax profits rose 3.9% from the first quarter and a staggering 26.5% from the same quarter in 2009. This year-to-year percentage growth is the highest ever recorded by the Commerce Department without factoring for inflation. (The figure is even more impressive given that virtually none of the growth is due to inflation over the last year!)

Perhaps even more telling is the percentage of national income accounted for by profits. Well over 9% of national income in the second quarter of 2010 counted as profits, the 3rd highest portion since 1947. Interestingly, the percentage of national income was only marginally higher in two quarters of 2006 when the unemployment rate was 4.6% at the peak of the last economic expansion.

Analyzing the data, The Wall Street Journal (10-4-10) concluded that those corporations making up the Standard and Poor’s top 500 corporations – the core of monopoly capital – actually grew by 38%, returning $189 billion or 15.6% of all after-tax profit.

WSJ analysts underline the profit trends by noting that profits are up 10% over 2008 though revenues are down 6%. Monopoly corporations now make 8.4 cents on every dollar of revenue, when they made only 7 cents on every dollar in 2008.

The Winners’ Circle

For corporations, the numbers are spectacular. They indicate a complete recovery of the profit momentum lost in 2008 and 2009. Since the early 1980’s, after-tax profits - as a percentage of total national income - have marched upward and onward, indicating that more of the wealth created in the US has been distributed to the corporate sector. At the beginning of the 1980’s, less than 5% of national income found its way to corporations as profits. Today, that percentage appropriated by corporations, especially monopoly corporations, has increased to nearly 10%.

Several interrelated factors have contributed to this shift of wealth to corporations from the rest of us.

First, the rate of exploitation – the relation between the share of wealth appropriated by the ownership class and the share left to the workers - has increased dramatically. Labor’s bargaining power has diminished with the decline of both union density and militancy. Hourly wages in the US have been stagnant or declining throughout most of the last thirty years while productivity has increased consistently. The average hourly wage (adjusted for inflation) for production and non-supervisory employees has hardly budged since 1978. Indeed, nearly two-thirds of ALL workers average hourly wages have stagnated since 1978. At the same time, benefits have been cut, shifted or eliminated for most workers. Given the growth of the national income in this period, it follows that more of society’s wealth is available to the corporate sector, its managers, investors, and parasitic minions.

Secondly, the growing significance of financial instruments and the financial sector has prodded corporate profits to new heights. With the stagnation of mass purchasing power brought on by rapacious exploitation, the financial sector has established borrowed money as the vehicle for improved living standards for most US citizens, given that capitalists have the money and the rest of us do not. Consumer debt – mortgages, credit cards, student loans, home equity loans, etc. – has replaced wages as the means to a better life for the vast majority of those outside of the ownership class. Consequently, more and more of corporate profits were represented by deferred, projected, or even hypothetical wealth – the wealth that would be accumulated when all debt is eventually cleared. The financial sector went even further and through the creation of financial exotica (instruments derived from the real-world contracting of debt) claimed further profits from the buying and selling of these artificial creatures. Of course it was the collapse of this debt house-of-cards that brought the world economy to its knees in 2008 and 2009. And yet the share of total corporate profit attributable to the financial sector remains over 40% despite this destruction of deferred, projected, and hypothetical profit.

Thirdly, the actions of policymakers – lawmakers of both parties and their technocratic vassals – have aided and abetted the corporate drive for profits. By privatizing and commodifying many public assets, they have widened the arena of profit taking. By turning a blind eye to corporate migration to low-wage labor markets, they have pressured wages to the level of the lowest competitive nation. And through removing socially responsible restrictions on corporate activity, they have allowed corporations to escape the costs of compliance, even at enormous social costs born by the majority.

The creation of public-private partnerships by lawmakers and enthusiastic administrators has transferred enterprise risks to the public while subsidizing private profit taking. Likewise, tax policies have shifted to remove nearly all burdens from corporations. Conversely, policymakers have weakly submitted to an extortionate con game of credits and infrastructure subsidies to keep old businesses or attract new plants, warehouses, or other private investors. Local, state and regional authorities are caught in a vicious competitive spiral of ever more generous bids to retain or attain a business. The game ends when the last competitor falls exhausted. And often the winner lives to regret the enormous costs of success.

And, of course, the government has embarked on a massive and unprecedented bailout of financial institutions and other major industries over the last two years, a bailout that brought these corporations from their knees to new heights of profitability. Likewise, the widely heralded stimulus program channeled vast sums to private firms – unlike the public works programs of the New Deal – further propping up profits with little impact upon employment.

These three processes – intense exploitation of labor, the dominant role of the financial sector and the subservience of policy to the interests of capital – combine to explain the explosive growth of that share of US national income flowing to corporate coffers. They also explain the cracking of the foundations of our economy over the last few years.

Conjuring Consensus

The explosive growth of after-tax profits as a share of national income over the last three decades was hardly a secret; it was not a closely held conspiratorial plot; nor were the events and policies that enabled this development out of sight of the public. Nonetheless, the corporate onslaught met feeble resistance.

Thanks to a corporate-friendly media, a compliant punditry, and a public diverted by entertainments besting the most elaborate Roman circus, the profit gouging agenda became the widely accepted road to general prosperity.

Sure, the early Reaganite slogan of “trickle down” growth – the notion that the success of the wealthy would seep down into the lower classes – was met with significant skepticism, even derision. But by the time of the Clinton administration, this idea was deeply embedded in mass consciousness. Captured by the more colorful metaphor that “a rising tide lifts all boats,” the idea that the success of the most favored, the most advantaged, would bring a general rise of social good planted deep roots in the public psyche. For most US citizens, it became an obvious truth that corporate success - growth, increasing profits, and stock appreciation - led to employment and rising living standards. We might express this “truth” with the simple formula: corporate profits→growth→jobs→general welfare.

It was this thinking that bolstered the notion in the labor movement that workers should support “their” corporations – US-based corporations – against “foreign” corporations, despite the fact that the modern monopoly corporation knows no borders. Similarly, people came to believe that government should guarantee the health and profitability of their employers in order to secure and create jobs and, in due course, generate a rising standard of living for employees. In turn, if profitability is accepted as the sole, decisive factor in social progress, then employee concessions often become a necessary evil that smooths the road to further progress.

The triumph of the sovereignty of profits left little room for alternative thinking that might cast corporate profits in a different light. This identification of profits and general prosperity smothered considerations of public ownership and the operation of socially beneficial enterprises, redistributive policies, democratic governance of corporate activity, or even an open discussion of the biblical notion of a “fair profit.”

The Chain is Broken

Despite the brutal economic facts of the last decade, few have shown the vision or courage to admit that the key links between profits and prosperity have been shattered. Economists acknowledge that the upturn after the recession of 2001 was decidedly a “jobless recovery,” a recovery with little to offer the majority of working people other than more debt. Moreover, the profit recovery since the 2009 economic nadir has accompanied a stubborn, unmoving near-depression level of unemployment. The volcanic rise in profits (206% for the S&P 500 in the last quarter of 2009 against the same quarter in 2008) stands in sharp contrast to an equally dramatic change in the misery indices: declining incomes, greater inequality, rising poverty rates.

Even those deafened by the constant media babble or blinded by political flimflam should now see through the humbuggery of placing human advancement in the hands of profiteers. The old argument that corporate avarice, through the unbiased operation of the market, will benefit us all must surely be retired.

Economists concede that the next decade - called by some, a "lost decade" - promises, at best, a feeble recovery with likely persistent unemployment, greater impoverishment, a retreat of social securities, and ominous uncertainties for most outside of the ownership class. Thus, the first two decades of the twenty-first century will have featured a decided retreat from the prosperity promised by a profit-driven market economy. Many, if not most of the people will have experienced the better part of their adult life in the shadow of these tribulations. The hopeful notion that the next generation will do better is severely threatened, maybe shattered. Indeed, it is now apparent that few boats are lifted with a rising tide driven by profits.

The responsibility for exposing the failure of profit-centric economic policy falls squarely on the US left. While the US left is small and with a narrow circle of influence, it alone can begin to project and popularize an alternative economy that reduces or eliminates the decisive role of profits. It alone can offer a road apart from the path paved by corporate self-interest.

Some falsely counter pose organizing and agitating for a just, democratic alternative economy – to my mind, socialism – with political work on the margins of mainstream politics. For decades, this argument has surfaced time and again with every election cycle or legislative session. The struggle for socialism, the argument goes, is distant and difficult, while we – the left - might have an impact on the immediate issues and options at play in the two-party charade. This is, I believe, a dangerous brew of egomania and complacency. The reality is that the left has neither the bucks nor the bodies to shift the balance in the big show (nor is engagement welcome, except at the price of any left identity). And when left engagement does threaten to upset the political trajectory (for example, the Nader campaigns), these same “soft” left advocates roundly condemn the effort.

But in the end, it is possible to do both: one can, if one likes, participate energetically in the big game – primaries, legislative lobbies, etc. – with the hope of moving the ball incrementally forward. And one must fervently engage our foes on every level, whether it be in the neighborhood or around individual issues. At the same time, one can and must organize and agitate for an alternative to the profit-centric dogma. Without a determined effort to spark and fan the embers of extraordinary, fundamental change, we are doomed to see our future sink in the face of corporate power and greed.

Zoltan zigedy
zoltanzigedy@gmail.com

A Prize or a Bad Joke?

2010-10-19T16:38:00.000-07:00

Many see the Nobel Prize as the Super Bowl of intellectual life. But more and more, it appears to be like another championship belt in the World Wrestling Federation. Where awarding the “Peace” prize to the Commander-in-Chief of the world’s most war-mongering power tarnished the award, the recently awarded prize for economics brings the contest down to the level of American Idol.

“Economic science,” as its practitioners refer to it, has moved in two directions at once: further away from the reality of economic life and closer to self-sustained scholastic exercises understood and appreciated by the few who work in those same close quarters. Yet never does it travel too far from the ranch of apologia for the holy scriptures of capitalism.

Capitalist triumphalism – the view that all deep questions about the fundamentals of economic structures and activity have been settled – dominates and informs recent academic research in the field. If one suspects a parallel with the religiously driven dogmas of Ptolemaic cosmology, it is there to be found. The world of modern academic economists assumes, with no need to prove it, that economic activity is and can only be understood with the basic units of markets, individual actors and their sets of interests, acquisitive motives, and private ownership. This is the game and the only game. Outsiders – Marxists and renegades from economic scholasticism – are not allowed to play, since they fail to abide by the rules.

But sometimes reality intercedes with brute economic events that challenge this smugness. As the often-brilliant John Strachey wrote in 1935 during the midst of the Great Depression:

The capitalist world… has its experts, its economists. The phenomena of crisis lie, however, outside the scope of their science… They have evolved a science of economics which seems to explain the exact workings of the capitalist system, and (incidentally) justifies those workings in every respect. There is only one difficulty. The system periodically refuses to work… (The Nature of Capitalist Crisis, p.8)

Today, we are in the throes of a similar crisis and economists are similarly fumbling for explanations and solutions.

In the spotlight of today’s crisis is the seeming intractability of extremely high unemployment, a problem even more embarrassing to capitalist apologists in light of record-setting profits.

Thus, many, even far outside of the academic world, expectantly turned with great interest to the announcement that three economists would share the $1.5 million Nobel Prize for purportedly insightful work on unemployment. Peter Diamond, Dale Mortensen, and Christopher Pissarides won the 2010 prize for their “groundbreaking ideas that help explain why unemployment remains stubbornly high in the US and other developing countries,” as hailed by The Wall Street Journal.

Sadly, any such expectations would be quickly shattered. The core problem addressed by the three scholars is not the unemployment of the moment, but the relatively high unemployment associated with the European economies of the 1980s and 1990s. At that time, France, Germany and other advanced economies enjoyed strong growth, rising living standards, viable social welfare benefits, but relatively high unemployment – high relative to the theoretical fundamentals of economic dogma. Conventional thinking dictated that growth and rising standards should motivate Europe’s unemployed to seek the available jobs, but instead many chose to obstinately accept the benefits of the social welfare system while settling for a measure of leisure in an abundant society. Essentially, they were redundant, but without courting starvation, some choosing to write poems or backpack through Europe like the sons and daughters of the idle rich. In the eyes of those benefiting from the imposition of strict discipline upon labor, the unemployed were not victims, but outlaws.

Not only did this violate the logic of market forces, but it also challenged the culture of the post-feudal work ethic as explained so well by Max Weber. Since jobs were available, economists - like the three laureates - took on the task of explaining this phenomenon and thus providing policy tools to restore order to economic orthodoxy. The intellectual contributions of the three came to be called “search theory” – an explanation of how the buyers and sellers of labor power can fail to match up. In other words, they sought to account for why workers were not automatically and always herded into jobs despite the assumption that work was necessary to survive. They postulated that “frictions” – inhibiting factors – allowed for jobs to be unfilled while workers were idle. Their “frictions” were hardly novel or earthshaking: “tough” labor regulation restricting firings, “generous” unemployment benefits, inadequate or inappropriate skill sets, and geographical distance between jobs and workers, for example.

It should not escape notice that none of these “frictions” touch on the fundamental friction between workers and employers, namely, the fight for the distribution of the economic surplus. None of these “frictions” address the kind of employer-friendly unemployment that pressures workers into pay cuts and concessions or increases the rate of exploitation. To state the obvious, isn’t it possible that workers do not take available jobs because the available jobs simply do not pay enough? Is this not a street-corner answer to “search theory”?

But these are answers to different questions, questions of little interest to academics accustomed to seeing employees as numbers in calculations or variables in complex equations. Moreover, workers or their organizations do not fund academic research or make generous awards to economists.

Does the Nobel-award-winning research help us understand or overcome the current crisis of unemployment as The Wall Street Journal proclaims?

No, not at all. It is irrelevant and, should it influence policy, potentially disastrous. The current tragic unemployment rate is the result of two years of uneven class war over the carcass of a severely wounded economy. Unemployment is the casualty count of the working class. Profits are the war booty of the employers. Government and its policy makers have sided decisively with the profit-seekers.

Unlike the period in Europe studied by the three economists, there are far too few jobs available today. (The Wall Street Journal in its article hailing the awarding of the prize provides a deceptive chart that shows a growth in available jobs since the worst moment of 2009, a growth that does not even account for those newly entering the job market.) The unfavorably geographical distribution of jobs today is not a matter of leaving home for another city or state, but leaving for an entirely different time zone! Witness the thousands who travel overnight to attend job fairs or apply for a few dozen jobs. The mounting foreclosures, the explosion of food stamp applications, and the growth of unclaimed medical prescriptions hardly point to “generous” unemployment benefits offering a cushy life. And of course there are no “tough” job regulations that restrained the cruel, massive layoffs of the last two years.

At its core, “search theory” finds no fault with the reigning economic system. It identifies no “friction” between the needs of people and the relentless drive for profit. It is blind to a decade of slow or non-existent job growth coupled with growing concentration of wealth and the quickening rise of after-tax profits as a portion of national income. “Search theory” dares not search in this territory.

Instead, this “groundbreaking” theory seeks to motivate the unemployed to try harder, move to low wage areas or retrain for subsistence jobs. It justifies the limiting of unemployment benefits. For all its theoretical sophistication, “search theory” is simply the latest version of the carrot and the stick – in today’s world, a shriveled carrot and a heavy stick.

Zoltan Zigedy
zoltanzigedy@gmail.com

Had Enough?

2010-10-06T18:17:00.000-07:00

Frustration with the Obama administration has reached a new level with only 45% of US citizens polled approving of the job that the administration is doing and 39% voicing approval of the administration’s policies on the economy (see Wall Street Journal/NBC telephone polls, 9-7-10). The overall mood is pessimistic: 65% of those polled believe that the US is in a period of decline; 59% of the polled population thinks that the country will be the same or worse in five years.

Only 30% of poll participants believe that the country is headed in the right direction. This is a negative assessment not seen since the tail end of the Bush administration.

In a normal election cycle – the give-and-take of the two Parties – this would signal enthusiasm for the party out of power: the Republican Party. However, among Republicans, only 30% have a positive view of their own party, the lowest number recorded since before 1990.

These numbers express a smoldering anger about where we have arrived since the 2008 election and where we are heading.

The only major new force on the political scene reflecting this angry mood is the Tea-Party phenomenon–-- a faux populist movement backed by extreme-right money and fueled by the ultra-right media.

Facing an interim election in November, all of the healthy forces in US political life are scrambling to establish a posture towards these elections. Bitterness, backbiting, and confusion abound. The Internet is abuzz with the anger of scorned liberals who feel betrayed by two years of, at best ineffectual, at worst, malign administration leadership. As the Administration positions itself for the coming months, it reflects this mood by jettisoning three of its leading economic lights: Peter Orszag, Christina Romer and Lawrence Summers. The exit of Rahm Emmanuel, Obama’s chief of staff, has passed the rumor level and is now a fact, as is likely the departure of many other prominent members of the administration. Despite their fealty to the corporate financial sector, Obama has suggested that he is seeking economic advisors that are more comfortable communicating with the corporate world.

Some in liberal circles cling to lingering hopes that the “real” Obama will soon be revealed. With all the enthusiasm of a revival meeting, they are awaiting a political rapture – a fulfillment of the “change” and “hope” themes of the election campaign. But my angry local letter carrier sees it differently. She says that people mistook “hope” for “dope,” a succinct declaration of her own frustrations.

Indeed, all signs point to a reshuffling of the administration in an even more conciliatory-to-the-right, pro-business direction. As the Wall Street Journal reports, “Part of the president’s task will be to ‘reset’ relations with the business community, not only to ease working in a divided Washington but also to smooth his path to re-election” (9-23-10). There is little room in this scenario for the revelation of a progressive, pro-working-class agenda. The WSJ cites senior White House officials as saying, “the president could concentrate on finding common ground on deficit reduction, education and immigration while guarding his achievements, from health care to student lending to financial regulation.”

The Political Crisis

All polls agree that approval ratings for the President have sunk substantially since his inauguration. And approval ratings for Congress hover at an embarrassing low level, a level that has been maintained since a time deep into the Bush Administration. Polls also show that both Parties are generally unpopular. Whether one bought the Obama message or not, it should have been apparent that his administration was meant to change the national mood of dissatisfaction and the international scorn brought on by the previous administration. They have failed in that task. And the political crisis continues.

The distance between the legislative actions of elected officials and the needs and desires of the electorate has never been greater. And the Obama Administration suffers inordinately from this distance because they promised so much in the presidential campaign. This distance was shown most recently with the issue of allowing the Bush tax cuts for the wealthy to expire. Initially, Obama and the Democratic leadership proposed maintaining the cuts for all but the very wealthy, a move that would have brought a measure of fairness to tax policy and generated $700 billion over 10 years in extra Federal revenue. The Republicans mounted a hysterical and demagogic campaign based on the inflammatory charge of tax increases. When opinion polls showed that the tax increases for the rich were popular (mid-September, CBS/New York Times - 53-38%), especially in key “battleground” states, the Republicans backed down. But, immediately, 31 Democratic Representatives voiced their public opposition to taxing the rich. Consequently any decision on the Bush tax cuts will be deferred until after the November elections. Every signal points to Congress maintaining the Bush tax policies for another two years.

Why is there such distance between popular issues and legislative action?

Many pundits employ vague, cloudy concepts like “gridlock” or blame a new-found intransigence or incivility. But the truth is simpler, but deeper: Elected officials are, for the most part, owned by monopoly capital. To a very great extent, the course of political success is greased with money and the opportunity to forge a successful and long political career is dependent upon corporate friendliness. Of course this is not new, but it has reached a new level of prevalence, demonstrating strikingly that the state – its structures and personnel – is dominated by and serves the interests of monopoly capital; that is, our reigning socio-economic system is state-monopoly capital.

Thus, there is no exit, without some radical surgery, from the political crisis that grips the US.

Moreover, the results of the November elections – regardless of the outcome - will have no dramatic impact on our profound political crisis. This does not mean, however, that there is nothing to be gained in the election. There are independent candidates – Greens, for example – who could open cracks in the corrupted two-party system. There are also some independent-minded Democrats who could, though only with a strong prod from progressive constituents, mount a meaningful challenge to the ossified, corporate-coddling Party leadership. And there would be advantages, advantages with a shrinking relevance, to maintaining a balance of forces favoring the Democrats. However, the ever-growing distance between the Democrats and the needs of the populace dampens any enthusiasm for fighting for this advantage.

Therefore, there is a deep and deadly contradiction embedded in the two-party system, a contradiction that will only be overcome with the emergence of independent movements unwaveringly committed to principled, progressive politics.

Going forward, we can expect the Obama Administration to focus on the 2012 Presidential election. The Obama team will maneuver rightward, leaving many of the now-distant campaign promises like EFCA or immigration reform in its wake. The hints referenced above signal an aloof presidency, above the fray, though ever sensitive to the needs of the corporations and their generous campaign contributions. Like Bill Clinton, Obama will seek a presidential posture dissociated from any ideological position, but portraying civility, bi-partisanship, likeability and managerial competence – a posture appealing to the non-ideological center thought to be crucial for re-election.

Needed: A Break from the Past

Undoubtedly, these observations may not come as news for many, especially many of the 65% of those polled who think the US is in decline. The widespread mood is anger and disappointment. But little will come from moods if no useful conclusions are drawn, if patterns remain unseen, if events are misunderstood. Far too many see the political crisis in terms of flawed personalities, individual values or ideological caricatures. The long-term trend of wealth and income inequality; the ever-growing concentration of power and influence in the hands or corporations, especially the financial sector; the growth of political corruption and the role of money and media in electoral politics; the ascension of the callous, anti-social culture of individualism assailing “entitlements” or common benefits; the repeated aggressive military missions to deny any barriers to international capital--- all these phenomena interact and decisively cause the deepening political crisis. These are not moments of bad judgment, occasionally flawed policies, or aberrations. They are features of the logic of capitalism, a capitalism that brought on an equally profound and closely related economic crisis.

Not everyone yet makes these connections, but they ignore them at great peril. While there is a widespread sense that we are at a decisive moment, there is an unfounded faith that the old solutions will suffice. Some pine for an imaginary time of social harmony and cultural unity while conveniently ignoring those left out of their idyllic fantasy – a world without immigrants, embracing segregation and racism, and willfully ignorant of the crude exploitation of labor. Others embrace liberal values associated with an imaginary kinder, gentler capitalism, but turn away from the reality that the profit-hungry modern corporation stands firmly and powerfully against this dream.

Politics will become real only when we face the truth that the modern monopoly capitalist corporation stands as the adversary to all but the very rich. That understanding will lead to the further understanding that only a broad anti-monopoly strategy will solve the crises of our economy and our politics.

It’s a curious, but telling, fact that political discourse has shifted from the extreme-right-imposed cultural battlefield of abortion, gays, and guns dominating the last decade to the issues of the economy and the role of the state. The Right has entered this new battlefield under the banner of fiscal austerity and hostility to government. Led by tea-bagger foot soldiers, they rail against government spending, regulation, and social programs. If they succeed in selling this line to voters, they will bring pain and devastation not only to working people, but also to the whole economy and social fabric.

Sadly, the Democratic Party leadership has shown little or no interest in engaging the right on this battlefield. They concede that government spending should be restrained, regulation should be minimal and non-antagonistic to business interests, and social programs must be trimmed. It is left for Democratic-friendly labor leaders and party loyalists to defend this blatant coincidence of political outlook. They must excuse this conjunction of Democratic views with Republican ideology as a tactical retreat or they must argue that Democrats will inflict the pain of austerity more compassionately. Neither excuse is credible with angry, frustrated voters who continue to thirst for effective change.

This is the great tragedy of the November elections. Indeed, there is much at stake, but the Democrats refuse to fight a credible battle, a battle that would require at least a modest rebuff to their corporate masters. As things stand, the election will turn on how much fear of a return to Republican leadership can be generated rather than what the Democrats would accomplish with a victory.

Last week’s giant rally in Washington, DC only underlines these contradictions. Committed people came in droves to express both an outrage at where we are heading and a determination to join others in changing course. Hopes were high that leaders would energize the causes that inspire people to action, such as fair labor legislation, employment opportunities, peace, immigration reform, racial equality, help for the poor and disadvantaged, and mortgage and other debt relief. While speakers readily chronicled the evils produced by a system of inequality and injustice, they were hesitant to speak its name: capitalism. Instead, most urged those who came on buses, trains, planes, and cars to work for the election of Democrats in November.

This constant cycle of placing all the hopes for a better future in the hands of corporate-owned Democrats must be broken. This is not a call for those fearful of a Republican victory in November to sit on the sidelines or boycott the elections, but, rather, for them to further commit to establishing independent voices, voices that will demand that all elected officials choose between corporate fealty and the causes of the people.

For too long, many progressive and left leaders have posed supporting the Democratic Party against any initiative that might upset or provoke Democratic leaders. They narrowly and rigidly limit political action to the electoral campaign and reject any challenge to Democratic Party leadership as heretical and divisive. Such an approach has led us into the current political crisis and offers no way out. This false tactical finesse smothered the anti-war movement and tolerated the evisceration of health care reform, the expansion of imperialist aggression, the coddling of the financial sector, and the criminal neglect of the unemployed, the underemployed and the poor. It is time to reject it and move on.

There is no easy escape from our political crisis. But it begins by building movements outside of and often apart from the ineffective Democratic Party.

Zoltan Zigedy
zoltanzigedy@gmail.com

URGENT: STAND UP TO REPRESSION

2010-09-25T17:22:00.000-07:00

Friday, September 24 at 8:00AM, the FBI made a coordinated raid on seven homes of several anti-war and solidarity activists and two offices in Chicago and Minneapolis and served grand jury subpoenas in Illinois, Michigan, and Minnesota. Other activists in California and North Carolina were contacted in an effort to intimidate. These actions by Federal agents are part of an effort to suppress militant anti-war activity and especially anti-imperialist solidarity with movements in Latin America and Palestine.

Those subpoenaed report that the FBI investigation is directed towards possible “terrorism” charges against those activists who were themselves terrorized by the Federal agency. Once again the fear-mongering “terror” charge has been mounted against all who dare to speak out against US imperial transgressions.

Initial reports indicate that the homes were ransacked with all but household essentials taken by the FBI.

Several of the activists are well known as long time, dedicated, and principled fighters for working class empowerment and social justice.

Clearly, this represents a ramping up of Federal activism against the left and, thus, a tribute to the work of these activists as well as a badge of honor in the struggle for social justice. We should all show our solidarity. You can send your support to: info@colombiasolidarity.org or info@fightbacknews.org.

The following actions are urgently needed:

Call the U.S. Attorney General Eric Holder at 202-353-1555 or write an email to: AskDOJ@usdoj.gov.

Demand:

**Stop the repression against anti-war and international solidarity activists.

**Immediately return all confiscated materials: computers, cell phones, papers, documents, etc.

**End the grand jury proceedings against anti-war activists.

Plan and Support national days of protest at FBI offices or Federal Buildings, September 27 and 28th.

A demonstration has been called at the Minneapolis FBI Office Monday, 4:30, September 27th(111 Washington Ave. S.).

Zoltan Zigedy

zoltanzigedy@gmail.com

What has California just taught us about fighting for single payer?

2010-09-09T17:48:00.000-07:00

With his permission, I'm guest posting Charles Andrews comments on the recent betrayal of the California single payer health care bill. Charles' comments begin here:

The commentary excerpted below is fascinating. Russell Mokhiber draws the lesson that we must fight for single payer on our own, "dumping the Democrats." I agree.

But the writer builds his case using analysis by Don Bechler. Unfortunately, Bechler's analysis verges on childish. See my remarks after the excerpt:

Single Payer Later

By Russell Mokhiber
Single Payer Action, September 7, 2010

What’s happening in California is the best argument to dump the Democrats.

Forever.

And start anew.

It’s the only option.

The state legislature in California has twice passed the California single payer bill.

And twice, Governor Arnold Schwarzenegger has vetoed it.

Earlier this year, the Senate passed it for a third time.

And the Assembly was about to pass it for a third time.

But the Democratic Speaker of the Assembly pulled the bill at the last minute.
...
“The Democrats should have put it up for a vote in the Assembly,” said Don Bechler of Single Payer Now. “California has been the wind in the sails of the single payer movement. Each time the legislature passes it, we get stronger. We have more people in our movement than ever before. Passing it for a third time would have built the momentum.”

“The California legislature has twice before said that they are for having a universal health care system minus the insurance companies,” Bechler says. “We can be proud of winning that little battle.”
...

Full item at http://www.singlepayeraction.org/blog/?p=2562

Bechler claims, "The California legislature has twice before said that they are for having a universal health care system minus the insurance companies." They said it, but it was an open secret that a good number of California legislators from progressive districts voted for the single payer bill knowing the governor would veto it. The vote was a credential on a legislator's lapel, nothing more.

Bechler further claims, "Each time the legislature passes it, we get stronger. We have more people in our movement than ever before."

Don's mailing list has grown. That's great. But Bechler does not give evidence that the legislature's staged votes were the cause. If I drink too much beer in the evening, I need to urinate around five in the morning. Sure enough, an hour later the sun rises. Gee, my urine makes the sun rise.

Every day more people experience the fact health care sold as a commodity is health care denied, health care sold at an extortionate price, health care done wrong. That experience - and as much agitation as we can do about it - is why more people than ever before believe health care must be provided as needed, as a program we all have equal rights to, guaranteed no matter what. Most of these people do not know about the Potemkin votes of the legislature in past years.

Reading the sum of Bechler's comments as reported by Mokhiber, it almost sounds as though Bechler wants to throw out a lifeline to the California Democratic Party: You guys better do some damage control, or rank and file supporters of single payer are going to take Mokhiber's advice: Dump the Democrats.

The California Democratic Party's stab in the back of single payer has made many people reconsider the entire politics of winning such a big reform. It is important to draw lessons based on facts.

Can we ever get Equal Care for All? I discussed that problem on MRZine at
http://mrzine.monthlyreview.org/2010/andrews260110.html

Sincerely,

Charles Andrews

P.S.: And there is larger analysis of major reforms in my book No Rich, No Poor. See
http://www.amazon.com/NO-RICH-POOR-CHARLES-ANDREWS/dp/096799053X

Liberal Remorse: The Nation Forum

2010-08-30T16:45:00.000-07:00

The August 30/September 6, 2010 issue of The Nation magazine features a forum entitled “Debating Obama,” keynoted by Eric Alterman, with responses by six other writers. The forum reflects a sense among The Nation editors - and no doubt most of the readers of the leading liberal/progressive publication - that matters did not go quite as expected after the inauguration of the youthful, well-spoken Democratic President, Barack Obama. In fact, Alterman puts it plainly: “Few progressives would take issue with the argument that, significant accomplishments notwithstanding, the Obama presidency has been a big disappointment.” Alterman goes on to say: “… if one examines the gamut of legislation passed and executive orders issued that relate to the promises made by candidate Obama, one can only wince at the slightly hyperbolic joke made by late-night comedian Jimmy Fallon, who quipped that the president’s goal appeared to be to ‘finally deliver on the campaign promises made by John McCain.’”

There is more than a little expression of betrayal in this statement.

But could it be that the disappointment and sense of betrayal is misplaced? Could it be that liberals and progressives misread the moment, misjudged the locus of power, and, indeed, totally misunderstood the mechanism of capitalist rule in the US? Could it be that the Obama election was little more than an adjustment to corporate rule, an adjustment from a failed regime that threatened to rip the fabric of contrived consensus to one more likely to strike a path offering the appearance of change and a new direction while preserving the interests of those holding power? Could it be that, in the clatter of the usual campaign rhetoric, most change-starved voters heard a message that they wanted to hear, ignoring the huge corporate funding and same cast of characters orchestrating the campaign?

This is not an understanding yet agreeable to the liberal and progressive establishment, though it was the conclusion that I, and too few others, drew during the presidential campaign. In response to a euphoric celebration of the Obama victory, I wrote the following shortly after the election:

At the top [of the Obama team] is a superstructure of solidly established, old-guard politicos who have yet to propose one idea that departs too far from the limited toolbox of neo-classical economics and imperial foreign policy. Yes, there is talk of green initiatives, a friendlier relationship with labor, support for social liberalism, and a vague, dangerously tame reform of health care. But this group has shown no new thinking on the catastrophic economic crisis. Moreover, their timidly progressive pronouncements differ little from the false hope promised by the Clinton and Carter Democratic Administrations that precede this one. .. Below this elite center of power is an electorate overcoming racism, demonstrating a decisive rejection of the Bush administration, and starved for real change.... Change will come from the efforts of those organized oppositionally to force new initiatives and not from those relying on the good will of ruling elites. To ignore this historical truth is to risk the disillusionment and alienation of all of those who have advocated change with their vote. (November 22, 2008)

And now, disillusionment is widely apparent.

A little over four months after the inauguration, I wrote again on this topic, comparing the euphoria and subsequent sourness of the venerable I. F. Stone on the Kennedy presidency. Stone, like today’s liberals, embraced JFK with star-struck infatuation. His return to reality was both bitter and filled with disappointment. My comments:

Typical of jilted lovers, many will turn against Obama with a bitter sense of betrayal. This is both naive and misplaced. Like Kennedy, Obama is neither an agent for change nor a closet reactionary. Like Kennedy, Obama is the executive of a vast structure welded to interests that have little in common with the interests of the majority of US citizens. Admirers of Kennedy will recall the enormous forces arrayed against change in his time: the Joint Chiefs of Staff, defense contractors, the CIA, Southern politicians, etc. Detractors will, with equal passion, note how little Kennedy did to challenge these forces. Likewise, those still taken with Obama fever will point with disgust at the obstructionist Republicans, the "Blue Dog" Democrats, the "disruptive" left, and other evil forces, as though they are not always a part of the two-party carnival.

It is not Obama, but this corrupted, broken two-party system of governance that betrays our aspirations. It is not designed for change, but to smother it. Never in the history of this undemocratic "democracy" have the wants and needs of the citizens been so distant from the intent of the ruling elites. This reality cannot be laid at Obama's feet.

The only antidote to the rot of this system is political independence within, but especially outside, of the existing two parties. There is simply no reason that activists engaged in Democratic Party circles cannot work outside - independently, uncompromisingly and vigorously - on progressive, advanced issues, with no concern for ruffled feathers. To fail to do so, betrays any commitment to real change. (May 30, 2009)

Indeed, the predictable disappointment has set in, witnessed by the Nation forum. It would appear from the “debate” that the fault lies not with Obama, not with liberal self-delusion, but with the system: “It doesn’t matter what Obama dreams of. The far more important fact is that the system is rigged, and it’s rigged against us,” to quote Eric Alterman.

Yes, it is – and it’s called “capitalism,” with its accompanying phony democracy, ownership of the media, and measurement of all things by profit.

Sadly, the wave of disappointment has not brought forth a deeper understanding and new resolve. The participants largely endorse Alterman’s sketch of the ills of the system: the influence of money, the Bush legacy, the dysfunction of political institutions, the power of finance, and the corruption of the media. All true, but hardly new or alien to the evolution of the system. One searches in vain for an over-arching theory that explains and connects these features of our present predicament. There is not even a modest indictment of capitalism in this debate – not to mention an advocacy of socialism.

Instead, we are offered a shallow and diverse set of remedies ranging from mandatory voting to reforming the Senate rules, including the predictable, but tragically complacent call to stay the course. To her great credit, Barbara Ehrenreich cuts through the fog of liberal hand wringing to serve up a moving indictment of government’s role as a “handmaid to corporate power.” Her palpable anger at the state of the nation leads her to announce that “these are revolutionary times.” One only wishes that her brief essay offered a course of action to match these “revolutionary times.” One hopes that we will hear more from her.

One can find little to inspire from the other discussants who serve up the following lame variations on “change that you can believe in” and resignation to Administration impotence:

●“One hopeful hypothesis… Obama is taking the best deal on the table today, but one expects that once he is re-elected in 2012… he will build on the foundations laid during his first term to bring about the fundamental “change” that is not possible in today’s environment.” (Eric Alterman)

●“From the legacy of Bush-era incompetence and corruption to the partisan discipline of the GOP and the Roberts Court to the influence of lobbyists, one marvels that the president has accomplished anything at all.” (Michael Kazin)

●“Operating in a dysfunctional environment dominated by a minority party that thinks its road back to power is to block everything and bring the president to his knees, Obama and his congressional allies have had remarkable success… far more than the bitter cauldron of partisan rancor and ideological fervor would ordinarily allow.” (Norman Ornstein)

●“…Obama may well be the most progressive alternative possible in our current reality.” (Salim Muwakkil)

●“President Obama and his unwieldy party have managed to enact major reforms… that are the most far-reaching and economically redistributive social accomplishments since the New Deal.” (Theda Skocpol)

●“Don’t give up… Don’t believe in silver bullets… Deal with fixing Senate rules first…” (Chris Bowers)

Unlike with Ehrenreich, the sentiments expressed in these comments show no sense of outrage or urgency about the problems facing millions of citizens. Instead, there is complacency, a distance from the everyday tragedy of unemployment, foreclosure, and an uncertain future faced by even more people today than in the Great Depression.

With their apology for the new Administration, the academics in the forum display an unpardonable distortion of the history of the New Deal era. They fail to acknowledge the similar forces holding back reform in that era: intransigent corporate and political opposition, a hostile Supreme Court, and demagogues and false prophets. The Roosevelt Administration overcame these obstacles thanks to pressure from a militant, revolutionary left and the determination and commitment of unswerving progressives. Where are the Perkins’s, Wallace’s, Wagner’s, Connery’s, and Hopkins’s in the Obama Administration? To hold the Obama Administration to a lower standard is to demean the dogged effort and sacrifice readily assumed by those courageous liberals. None succumbed to the seduction of lobbyists. None weighed their future careers before the task at hand. Perhaps these scholars think the KKK and the Liberty League and the other native fascists were less of a threat then than the tea-baggers of today.

One yearns in this forum for some call to action – perhaps an endorsement of the October 2 march in Washington supported by the NAACP and the AFL-CIO – or even a commitment to revitalize the too long dormant anti-war movement. One looks for alarm at the Obama stealth commission patiently waiting for the November electoral dust to clear before pillaging Medicare and Social Security. But we find none of these progressive initiatives.

The cure for the hangover from the Obama-high is honesty and action, not remorse or more hope. The realities of our political system are transparent and have been for over a generation: the two-party system is broken and lurching ever further from any credible vision of democracy. More importantly, we are facing an unprecedented social, political and economic crisis that is in many ways even more challenging than the Great Depression. We have to be honest enough to see that we have not measured up to these challenges. We have to be bold enough to risk radical solutions worthy of the moment.

Zoltan Zigedy
zoltanzigedy@gmail.com.

Is It Time for the Shorter Workweek?

2010-08-23T07:50:00.000-07:00

There is no lack of rhetoric expounded on the need to dramatically reduce unemployment. Using the most revealing government figures, nearly 17% of the US workforce is unemployed. That figure means that nearly one in five US citizens working before the economic crisis, or joining the workforce since, is, at this moment, idle or under-employed. Counting the involuntary part-time workers and discouraged workers, the total number of US workers seeking work totals nearly twenty million. Though the media and the governing cabal have shown little more than token interest in the staggering human tragedy facing these workers and their families, nearly everyone voices a determination to see unemployment reduced. And while it’s easy to procrastinate on a solution, it must be remembered that the economy needs to generate at least 150,000 jobs a month to keep up with population growth. And therein is the problem: while everyone may want full employment, few have an honest, real plan to achieve it.

Instead, we get lots of talk about “green” jobs, retraining, tax incentives, etc – the usual malarkey that constitutes a stump speech for Democratic Party candidates. Historically, most Democratic leaders and unimaginative, class-collaborationist labor leaders have sought to prompt – “incentivize,” to use the fashionable term – business to hire more workers. This thinking accepts the primacy of the corporate class and seeks to motivate that class by appealing to its selfish motive: profits. For decades, local, state and federal governments have poured billions of taxpayer dollars into the pockets of developers, contractors, service providers and factory owners to entice and cajole them into hiring more workers. Tax incentives to businesses and entrepreneurs have substantially absented the corporate world from its place as fellow taxpayers, leaving the burden on the rest of us.

Despite the persistent execution of this strategy, all economists agree that we have lived through a “jobless” decade. Since the dot.com recession, job creation has lagged far behind population growth and the demand for good-paying jobs. That is a fact. The crisis beginning in 2007/2008 only exacerbated this development by shedding millions of jobs. And since the false recovery, job growth has been non-existent, despite the dramatic rise in profits. That, too, is a fact. Only those ideologically wedded to capitalist dogma fail to see this. The strategy is completely bankrupt.

Responding to the crisis, the Obama administration crafted a hybrid plan that sought to both generate recovery and spur job creation with an $862 billion stimulus program. Commendably, the Administration devoted nearly $300 billion for aid to states, unemployment benefits, and food stamps. Offsetting this was a $336 billion financial incentive package of tax cuts, one-time payments, etc., meant as an expensive bone to those economic Neanderthals who still believed that the recovery would come when folks had a few extra bucks in their pockets. This was merely another example of Obama’s oft-repeated desire to appease the flesh-eaters of the right, a useless political gesture that will be paid for by future taxpayers.

Remaining in the package was a total of $230 billion, a not-insubstantial sum, despite the squawking of well-meaning liberal economists who thought the package inadequate. But simple arithmetic would show that this allocation would support over 5-6 million public sector jobs at $35,000 for a year, even with a modest factor for overhead costs. Moreover, including a conservative application of the economic multiplier effect would add thousands of additional jobs and growth in the private sector. Of course, that would amount to direct federal employment, an approach comparable to that adopted during the Roosevelt administration in response to the Great Depression. But from slavish worship of the supremacy of the private sector and the overpowering influence of that sector on the campaign accounts of our leaders, that solution was ruled out of hand by all but the fringes of government and the labor movement.

Instead, the Obama Administration chose to follow the same path that has proven bankrupt for so painfully long: dangle projects with risk-free public subsidies in front of private contractors. While there still are substantial funds unspent, the results have been disappointing by everyone’s account. At the time the program was initiated, few asked how the funds would be dispersed (I did, on my blog. See How Not to Create Jobs). Would the funds simply go into the pockets of contractors who would complete the work with an existing work force? Would much of the effective stimulus be absorbed by profits and not employment? Indeed, the results were disappointing, but only to those who naively believed that contractors or project managers were in the business of creating jobs. They were happy to rake in profits from infrastructure projects or accept subsidies for new enterprises outside the conventional market, provided the government guaranteed the funding and assumed the risk. In this regard, the Administration merely created a duplicate of the wasteful, profit-bloated defense industry --- no new ideas here, but an additional debt on the shoulders of the taxpayer.

Labor history offers us a different solution, an effective solution. After the Civil War, a movement stirred in the US to shorten the working day to eight hours. Eight-Hour Leagues sprang up throughout the country. Labor embraced the eight-hour day movement and the movement strengthened and helped to organize labor. This struggle reached across the oceans and spurred similar movements around the world.

Winning the eight-hour day became the galvanizing issue of all labor struggles for almost a century. Unions were built and contracts won around achieving a shorter working day. The political landscape – from labor’s point of view – was shaped by the eight-hour struggle.

Today, a shorter workweek would offer a victory for labor against the relentless offensive mounted against workers that has stagnated or reduced benefits over decades. Many, if not most, in labor have not known a major victory for working people in their lifetime. But more urgently, a shorter workweek would offer an answer to the persistent and damaging high unemployment brought on by the economic crisis. A mandatory shorter working day and working week, with strict overtime penalties for exceeding those limits, would force employers to hire more workers to maintain the same level of production or to increase it. A federally mandated shorter workweek – a seven-hour workday/thirty-five-hour workweek – would decrease the workweek by over 14% and potentially increase employment by the same amount. Of course, employers would fight such an increase in hiring as a threat to profitability, but the pressure of the market – the shortage of existing labor – would force new employment in order to even maintain existing levels of production or service activity.

Unlike the conventional answers that place the burden of employment recovery squarely on the backs of taxpayers, the shorter-workweek strategy attacks the profits of the employer. Enabling legislation should guarantee no reduction in pay, as well as reducing hours of work. Accordingly, it is from the surplus value of the capitalist enterprise that new employment would be funded. Only a solution that solves the unemployment problem with a shift in the economic balance sheet from capitalist to worker counts as an overdue offensive in the class struggle and a real advance for working people.

Where the bankrupt, ineffective “incentive” model of employment growth is shared by both political parties and acceded to by most of organized labor, the shorter-workweek model would mark an embrace of class militancy, as well as an effective measure with a noble historic precedent. Unemployment did not come from some inexplicable quirk of nature; it came from the ruthless, conscious profit seeking of the corporate class. In a just society, they should pay for its extinction.

The Fair Labor Standards Act of 1938 governs these matters. It has been amended many times since 1938 to improve the status of labor, but never to change the length of the working day. Maybe the time is now.

Zoltan Zigedy
zoltanzigedy@gmail.com

Human Rights and iPhones

2010-08-16T16:11:00.000-07:00

I have read The New York Review of Books off and on for forty years. Generally, I take it to be an easy way to follow trends in US liberal thinking. It stands as a bridge between prominent academics and a self-conscious educated, elite class. For some, it is the source for the last word in cocktail party discussions. For others, it is a channel to drift arcane, scholarly controversies towards a larger audience.

Throughout the forty years, the publication has sustained a narrow ideological range of centrist liberal thought – one conjures a picture of a reader ready to defend the Volvo, The New York Times, and the travel agency against all threats, foreign and domestic.

Running through those forty years like a thick thread is a relentless, rabid streak of anti-Communism. Early on, Robert Conquest railed against the evils of the Soviet Empire, supported by academics of the same Hoover Institute ilk. This surely didn’t separate the NYRB from the many other publications favored by liberal elites.

Later, with détente softening the Cold War hysteria, the NYRB continued to hold to a hard-line, “Scoop” Jackson version of Soviet-US relations, taking up the cause of Soviet Jews and other “dissidents.”

Similarly, those who rejected the “revisionist” US historians - historians who had taken a more measured, less demonizing view of the Communist Party USA - always found a willing partner in the NYRB.

With the departure of the Soviet Union, liberal attention turned away from the Red threat, only to find a new demon to flog in Islamic fundamentalism. Yet throughout the post-Soviet era, the NYRB continued to pound away at anything even vaguely associated with socialism or Communism. Venezuela came in for its share of battering. And of course, Cuba stayed solidly in the cross-hairs of the NYRB stable of writers. The most signal accomplishment of the NYRB in this period was to help elevate an obscure anti-Soviet academic, Anne Applebaum, into a prominent public intellectual devoted to the NYRB anti-Communist mission, a worthy successor to Robert Conquest.

The weapon of choice in attacking everything Soviet or Communist was and is the puffed up, self-righteous liberal ideological pillar: human rights. With US legal segregation removed in the third quarter of the 20th century, the last formal contradiction with 18th century bourgeois rights theory was removed as a thorn in the side of US liberalism. Finally, North Americans and their European friends could, without naked hypocrisy, tout the two-hundred-year-old doctrines that closed the door on feudalism and opened the way for the capitalist order. While new, expanded versions of human rights doctrine were proposed – versions that reflected new concerns, deprivations, and oppressions identified since the 18th century – most US liberals cling to the narrow interpretations constructed with the rise of a comfortable, cosmopolitan bourgeois class and its aspirants. Not surprisingly, the rights recognized by liberals are precisely the rights that they find most useful in their own pursuit of happiness.

Human rights organizations and campaigns exploded with the course of the Cold War and its aftermath. Nearly all reflected a naïve cultural crudeness and historical myopia, imposing standards on others that ignored historically and culturally shaped practices enjoying popular support or consensus. Many, if not most, received overt or covert support from Western governments that shaped the focus and intensity of their human rights campaigns. Neither the will of the people nor the taint of government manipulation was daunting to these campaigns.

The human rights organization favored by The New York Review of Books is Human Rights Watch, an organization that grew out of Helsinki Watch, the old Cold Warrior set up to ferret out human rights violations in the Soviet Union. Today, enjoying a generous $44 million budget, with nearly all revenue coming from the US and Western Europe, the organization has offices throughout the world and generous salaries for its directors. Its deputy director for the Americas, Daniel Wilkinson, was thrown out of Venezuela some years ago for aiding the foreign policy initiatives of the Bush administration.

In a recent article in NYRB entitled “The New Challenge to Repressive Cuba,” Wilkinson takes up the cause of Cuban bloggers who, by his account, are challenging “repressive” Cuba. But where are they mounting this challenge, since he concedes that few in Cuba read the blogs? Clearly, their audience is drawn from those who follow the bloggers in the US and Western Europe, those likely to draw a negative opinion of Cuban life apart from any direct exposure to the facts. There is not even a feeble attempt in the article to substantiate the picture drawn by “dissident” bloggers. Their claims stand as unvarnished “truths.” It would be as though a human rights campaign were mounted solely on the basis of the blogs of our own hysterical tea-baggers. In reality, Wilkinson presents not a report on Cuban conditions, but second- and third-hand anecdotes of those in opposition to the Cuban system. This is the work of a politically driven prosecutor and not an unbiased human rights advocate.

And who are the bloggers? Only those who write critically of the Cuban government are worthy of his attention. While he claims that there are over a hundred “unauthorized” bloggers operating from Cuba, Wilkinson only shows interest in the “at least two dozen who are openly critical of the government.” The remainder remains voiceless and its opinions are ignored. Wilkinson, like most of the corporate media, focuses on Cuba’s celebrity dissident, Yoani Sanchez, known as Generation Y. With the help of US and Western European media attention, Sanchez has established a huge following outside of Cuba, estimated by Wilkinson at a million visitors a month; her blog is translated into fifteen languages. It is not unlikely that Sanchez has a greater media exposure – a wider range of influence – outside Cuba than any Cuban “official” publication. Wilkinson (or Sanchez) never ask or explain how this could be or what this means. But surely – short of divine intervention – such a following is not possible without the overt or covert help of others of more than modest means. Only the most gullible would not suspect the hand of those committed to changing the socialist governance of Cuba. It is one thing to stand in open opposition to the Cuban government and quite another to hypocritically hide behind a posture of unbiased support for human rights.

To many of us, especially those of us blogging critically of our own government, the celebrity of the handful of Cuban bloggers so often hailed by the human rights establishment stands in sharp relief to our own lack of attention from those same advocates. They seem to have a profound blindness to the criticisms and human rights violations voiced on thousands of blogs in the US and Western Europe. Those same advocates fail to acknowledge the marginalization of opinion by a monopoly capitalist media as de facto censorship in the US and Western Europe. Moreover, our experience with this de facto censorship teaches that one does not become an overnight, world-wide media sensation without the help of a hidden hand.

Lurking in the shadows of the Wilkinson assault on “repressive” Cuba is the conceit of great-power chauvinism. Wilkinson willfully underplays the material shortcomings of a tiny island country saddled with a blockade that has hindered its development and a legacy only fifty years free from the most exploitative of colonial relations with the US. While the Cuban government has readily admitted that it lacks the means to bring its citizens fully into the Internet era, Wilkinson seeks to add this shortcoming to the human rights balance sheet.

One can only marvel at a “human rights” advocate who so cavalierly poses the interests of an admitted “at least two dozen” bloggers before the will and interests of the Cuban people. Do they share Wilkinson’s and the bloggers’ views? We do not know. Not only because our government will not let us travel there, but also because Wilkinson never bothers to ask them. It is possible – I believe it is extremely likely – that most Cubans are not only content with, but energetically supportive of, their government. This most basic of human rights –the right to have a government legitimized by popular consent – seems to elude the deputy director of Americas Watch. No doubt he scoffs at any popular government that does not agree with his own narrow vision of procedural democracy. Political diversity does not appear to be an element of Wilkinson’s notion of human rights.

There is no mention in Wilkinson’s article of the generous budget set aside by the US Congress (not to mention the secret and quasi-governmental budgets) for the express purpose of overthrowing the Cuban government. There is no comment on the activities of the US Interest Section in Havana directed towards fomenting and subsidizing opposition. One would never know that many of the so-called “political prisoners” were prosecuted for acts that any judicial system would count as acting to overthrow the government and in the interest of a foreign power. In Wilkinson’s eyes, they are political prisoners. And yet, he cannot even mention the plight of the five Cuban patriots judicially railroaded in the US for acts that would be hailed by any true human rights advocate as thwarting terrorism. Hypocrisy on stilts…

Wilkinson ends his “challenge” to Cuba with a truly pathetic paean to the iPhone attributed to Yoani Sanchez, Generation Y: “I had the desperate desire to grab [the Spanish journalist’s] iPhone and run off with it to hide in my room and surf all the sites blocked on the national networks. For a second, I wanted to keep it so I could enter my own blog…”

If this is the cutting edge of the struggle for human rights, it is no wonder that they ran Wilkinson out of Venezuela.

Zoltan Zigedy
zoltanzigedy@gmail.com

IMF Debt Hypocrisy: Sticking It to the Hungarians

2010-08-02T18:32:00.000-07:00

For decades, left critics of the International Monetary Fund (IMF) have maintained that the IMF is merely a tool for enforcing the interests of financial elites, especially those in the US. Predictably, this view has been scornfully dismissed by those in power and their media lackeys who posture the institution as the benefactor of needy countries. The persistent history of the IMF’s extortionate funding, linked to austere cuts in social spending, is simply dismissed as pressing fiscal responsibility on countries lacking the spine to address their profligacy. Such are the myths that sustain faith in global capitalism.

But a close look at the IMF in action reveals the politics lurking behind its high-sounding mission statements. Consider the recent encounter between the IMF (and EU representatives) and the newly elected Hungarian government. After the conservative Fidesz Party won the April elections, leaders showed a spark of economic populism by refraining from deep cuts in social spending to reach its European Union-established goal of a deficit of 3.8% of GDP. Instead, Fidesz ministers planned to enact a financial transaction tax that would lower the deficit with additional revenues. This did not please IMF representatives, despite the fact that Hungary had been the poster child for fiscal responsibility by pulling itself back from the brink of insolvency through four years of extreme, painful cuts in government spending. The social democratic Hungarian Socialist Party – the previous ruling party – imposed extreme austerity on the public sector in order to curry favor with the IMF, a prize that was won in late 2008 with the awarding of a $26 billion loan. When the brakes were applied, the deficit (expressed as a percentage of GDP) shrank from nearly 10% in 2006 to under 4%, an extremely painful process, but one that exceeds in intensity the experience of any other European government. In short, Hungary currently comes closest of any of its European neighbors to the guidelines established by the EU and the IMF for fiscal responsibility.

Nonetheless, when the Hungarian government negotiated with the IMF and EU in mid-July in order to draw the remainder of the 2008 loan, the IMF abruptly withdrew from the meeting charging that Hungary was doing too little to reduce its deficit. Honest observers could not help but be puzzled by this action, given Hungary’s stellar performance in jumping through IMF hoops. Immediately, the currency, the forint, dropped in value, the Hungarian stock market dropped 3%, and the cost of insuring the debt leaped up. Clearly, financial markets were punishing Hungary for being good. One banking executive, quoted in The Wall Street Journal, commented that things are going to “get pretty ugly.” The European commissioner for economic and monetary affairs threatened that Hungary’s “excessive debt by next year will require tough decisions, notably on spending.” But most telling, the IMF chief for Hungary, Christoph Rosenberg, described the measures offered to lower the deficit, particularly the bank tax, as “ad hoc,” according to the same WSJ article (7-19-10).

Why should the IMF care how the Hungarians lower their deficit? More to the point, why is one policy prescription for curing the deficit – imposing government austerity – legitimate and yet another prescription – raising bank taxes – dismissed summarily as “ad hoc”?

The IMF walk-out gives the lie to the notion that the organization serves nobly to reward fiscal responsibility with generous help to struggling national economies. Instead, the IMF, central banks, and policy makers use debt levels and rising deficits to extort reductions in socially beneficial spending in the public sector. When Hungary reduced pensions and benefits, raised the retirement age, sliced subsidies, and denied wage increases, it was deemed prudent and deserving of a loan. But when the financial sector was asked to bear some of the burden of deficit reduction, the IMF condemned Hungary’s government and walked away from the negotiating table. IMF officials assuredly knew that Hungary would be punished for its defiance, unleashing the predatory financial sector to batter currency exchange rates, equity values, debt costs, bond ratings, and insurance costs.

Hungary provides a rare, naked exposure of the insidious, hypocritical use of debt extortion to dismantle the hard-won social safety net. Throughout Europe, this strategy has spread like a plague – a plague on working-class standards of life. From Greece to Ireland, from Spain to the UK, from Portugal to France, the financial oligarchy has hammered the fiscal health of nations, raised hypocritical fears of debt and deficit difficulties, and assaulted policies, institutions, and programs benefiting the majority of the citizens. And of course – thanks to a compliant media and parrot-like economic gurus – the unwarranted, but fearsome, threat of unmanageable debt has washed upon US shores.

The end game of this charade is two-fold: First, it seeks to put the burden of debt reduction squarely on the backs of working people. All the debt accumulated by endless wars, bloated militaries and security services, tax relief for the rich, and corporate welfare and bailouts is shifted to the masses. Those sincerely concerned with rising debt should look elsewhere. As Jack Rasmus points out in his new book, Epic Recession, the largest portion of total US debt over the last decade was located in the financial arena; less debt was held in the mortgage and consumer category; roughly the same amount of debt as household debt was found in the non-financial corporate sector; and the least share of all was on government balance sheets. Moreover, household and government debt has shown less growth before 2009 than either non-financial or financial corporate debt. So for those obsessed with the rising debt, their attention could profitably be focused beyond government spending and towards those in the corporate club responsible for the excessive borrowing that enabled the current crisis.

Secondly, the offensive against government support for human needs is a direct attack upon labor costs. By stripping working people of any guarantees beyond the very minimal for survival, the debt ruse creates fear and desperation on the part of unemployed workers, marginally employed workers and those with little or ineffective organization. Without a safety net and in the face of growing uncertainties, employees opt for wage and benefit concessions or accept working conditions far below what they otherwise tolerate. The destruction of collective goods further impoverishes working people along with the extension of their working life through the advancement of the retirement age. If the winning of the 8-hour day was one of the monumental victories in the class struggle under capitalism, the extension of the working lifetime - with the increase in retirement age - is an equally devastating setback. Thus, the debt scam is quite simply the classic logic of increased labor exploitation carried on by means of financial hypocrisy.

It should not be overlooked that the financial weapon wielded by the European (and US) ruling classes demonstrates both the dominant power and continued unfettered, free-wheeling play of the financial sector. Despite all the talk of re-regulation and oversight, financial activity remains arrogantly aggressive and highly speculative. Undoubtedly this underlines the absolute victory of the financial sector – as Lenin predicted – in capturing the leading role in state-monopoly capitalism. Both the crucial part played by the financial sector in electing the US President – the largest contributor to the campaign coffers – and the leadership that the sector’s representatives enjoy crafting economic policy only amplify this point.

For Hungary, the future is ominous. Investors continue to shed government debt and the markets have pressured Hungarian debt to junk-status, though the rating agencies have yet to catch up. Consumers and small businesses are caught in a credit vise that grows worse with the decline of the currency, the forint. Nearly 70% of consumer debt is held in foreign currencies borrowed from foreign banks. Since revenues, wages, and salaries are in forints, the foreign currency debts inflate with the forint’s decline. Certainly this is an additional reason for the IMF’s naked protection of the financial sector. Meanwhile, living standards decline and unemployment is above 10%. In a curious article on Hungary’s increasing misery, The Wall Street Journal reports a growing nostalgia for the socialism of the past. Margrit Ember is quoted: “I’m not saying it was all good… [b]ut under the old system you couldn’t end up in a situation like this.” Istvan Kovacs, an organizer for the Hungarian Communist Workers Party remarks that “its views are enjoying a resurgence.” “I meet more and more people who say things were better under socialism.” According to the WSJ, “his own salary is being garnished because he defaulted on a euro-denominated loan from an Austrian bank.” Yes, Istvan, there is an alternative…

Zoltan Zigedy
zoltanzigedy@gmail.com
August 1, 2010

LIFE BOATS FOR THE MASSES

2010-07-06T16:30:00.000-07:00

In 1795, the justices of Berkshire established a scale of relief for the poor and underemployed in England. This revolutionary departure from the draconian, punitive English Poor laws established a base line of survival or minimum standard of living to be guaranteed to those whom circumstances placed below this level. Known as the Speenhamland system, this approach soon prevailed throughout England. As Karl Polanyi pointed out in his essential book, The Great Transformation, Speenhamland effectively established, for the first time, a “right to live.” It was abolished in 1834. Polanyi remarked, “Indeed, nothing could be more obvious than that the wage system imperatively demanded the withdrawal of the ‘right to live’ as proclaimed in Speenhamland – under the new regime of the economic man, nobody would work for a wage if he could make a living by doing nothing.” In other words, the logic of capitalism is inimical with a “right to live”.

This truth was borne out two centuries later when our elected officials under Bill Clinton again wrenched the “right to live” out of the welfare system and enforced the imperatives of the labor market. The timing was fortuitous. Decades of vulgar media accounts of welfare laziness and indolence had wormed its way into the popular imagination and employment was relatively high. Few saw this as a scheme to relieve a tight labor market and pressure wages downward – the same logic that drove the abolishment of Speenhamland.

Now, a decade and a half later, the labor market is non-existent and there is no “right to live”. Hopefully, history will settle the score with those responsible for the destruction of our welfare system, but, in the meantime, millions face a bleak future in the face of a teetering economy and mass unemployment.

Eighty years ago –July 4, 1930 – 1,320 delegates assembled to form the National Unemployed Council, an organization that grew to 800,000 members by 1938. This founding meeting came on the heels of demonstrations nationwide engaging nearly a million and a half unemployed in March of 1930. Both the demonstrations and the National Unemployed Councils were organized by the Communist Party and the Trade Union Unity League. These actions led to the later enactment of Social Security, Unemployment Insurance and other vital, life-affirming social programs.

No such organization exists today, though one is urgently needed to fight for the needs of the millions who have been thrown off the unemployment relief roles – the gutting of Unemployment Insurance. The size of the civilian labor force has shrunk dramatically from May to June, indicating unemployed workers losing their benefits or discouraged from looking for work. Their numbers will explode to at least three million by the end of July if unemployment benefits are not restored. To add perspective, one must count, in most cases, spouses, children and other dependents to fully appreciate the brutal effects of these lost benefits.

At the same time, those lucky enough to have jobs are experiencing greater hardships. In June, average hours of work dropped, as did average hourly wages. Jesse Rothstein, chief economist for the Labor Department, quoted in The Wall Street Journal, said: “It’s hard to overstate how deep the hole is….” Many “don’t seem to be appreciating the gravity of the situation.” That would include our politicians and the media. They seem to share more with Richard Hastings, macro and consumer strategist at Global Hunter Securities, who wrote about the unsuccessful vote on extending unemployment benefits: “The vote’s message was probably healthy: move in with your parents and learn to take care of something other than your next tweet.” Surely, there is a special place in hell for Hastings and his ilk.

Polling by the Pew Research Center gives a snap shot of the effects of the downturn on those still clinging to a job: 28% have had their work hours reduced, 23% have suffered cuts in pay, 12% were forced to take unpaid leave, and 11% were made part-time. These drastic changes in the work place have generated equally drastic changes in personal habits, from spending less on expensive items to deferring marriage and children. Mainstream economists will focus – correctly – upon the potential loss of buying power, while conveniently ignoring the accompanying intensification of the labor of those holding jobs and the resultant increase in the rate of exploitation for the sake of profits.

In this desperate accounting, a distinction is lost. All would agree that in one sense the devastation befalling working people is a result of the economic crisis. But, more importantly, the pain of unemployment, impoverishment and hyper-exploitation is the result of both corporate and political policy decisions; people in power have decreed with their decisions that most people will suffer. This understanding cuts through the fatalism and despair that grip so many. There are other policies that would not saddle the majority of us with such a bleak future.

This same understanding should awaken people to the cynical, dishonest offensive against Social Security, Medicare, and Medicaid now being mounted by our political elites. Wildly exaggerated claims about the insolvency of these programs have circulated for decades, mostly as cover for the financial sector’s rapacious hunger for the assets held by or flowing through them. For a brief moment, attention turned away, thanks to the implosion of the financial sector and the embarrassing disappearance of massive wealth to banking irresponsibility. With the financial sector now alive and well, due to an obscenely generous transfusion of public funds, attention has returned to stripping these programs – this time under the ruse of “deficit reduction.” One can only marvel at the slavish creation by our corporate media of the new fear of “unsustainable” sovereign public debt. In a short time, opinion makers, politicians, and academic economists have joined hands to manufacture a fictitious monster threatening the very foundations of our way of life, a way of life that is merely a fleeting memory for most. With nearly two-thirds of the US population believing that this apparition is our greatest threat, the attack on the last remaining elements of a people’s economy is swiftly moving forward.

Whether one believes in apparitions or not, the debt-scare could be answered in many ways that would not disable these popular programs: taxes could be raised on corporations and the wealthy; revenues could be generated in myriad ways; from taxes on risky speculative ventures in the financial sector, foreign military aggression could be ended; the military budget could be dramatically slashed; the CIA could be eliminated; single-payer health care could be enacted; the costly criminal justice system could be dramatically reduced by replacing punitive judicial measures with treatment and rehabilitation; etc.

But it is abundantly clear that policy makers have their sights on Social Security, Medicare and Medicaid. They have drawn conclusions from the recent European experience of debt hysteria provoking austerity - austerity exacting the huge loss of jobs, income and benefits in the public sector, as well as radical surgery on the social safety net.

The Obama Administration sought to begin this process by encouraging the Congress to establish a committee to address “fiscal responsibility,” with entitlement programs clearly the target. With the forthcoming November elections in mind, Congress balked. Determined to move forward, the Administration established a National Commission on Fiscal Responsibility and Reform and extracted a promise from Congressional leaders that their findings would receive an up-or-down vote after the November elections, shielding the potential damage from a popular backlash against Congress as a result of the vote.

The Commission is loaded with debt-scolds sharing a history of advocacy of privatization, market friendliness, and public-sector austerity. President Obama has set a tone of cost cutting by declaring that “All of us should be worried about the fact that we have been running the credit card in the name of future generations. We’ve got to get our debt and our deficits under control…especially on big-ticket items… That’s going to be our project for the next couple of years.” He made no mention of extracting revenues from the multi-millionaires and billionaires who have profited hugely from generating and managing that debt.

The members of the Commission, most vocally its co-chairs, have been transparent about its goals of cost cutting and focusing on entitlement programs. Alan Simpson, one of the co-chairs of the Commission, “reassured” that no one over 58 needs to worry about Social Security benefits. The not-so-hidden implication is that everyone else should be worried!

Just as in 1834, we are now confronted with a massive, determined effort to destroy the “right to live” in the face of a deepening crisis of capitalism rapidly eroding jobs and benefits for the majority of US citizens. They are caught in a vise of collapsing living standards on one side and draconian policy decisions on the other. It is not a moment to contemplate electoral prospects or renew our vows with hope, but a time to act. Desperate times are not served well by pragmatism and maneuvers to subtly shift the balance of forces. Instead we need to project new and not-so-new, but bold policies that challenge the dominant trends in US politics. We can debate the political nuances of these dominant trends – whether they are spawned by the strength of the ultra-right, the spinelessness of Democrats, or the consensus obsessions of the President – but it is more important that we move on to organizing and leading a fight back.

We must organize and build movements to stop the aggressive wars of our military and our imperialist allies.

We must fight for a federal jobs program of the boldness of the New Deal that puts swift job creation above contractor profits. Such a program must have strong affirmative action constraints.

We must demand unlimited unemployment insurance until employment returns to historically stable levels.

We must demand a shorter workweek with the same pay for private sector jobs, a move that will stimulate new hiring in this sector.
We must demand the broadening and strengthening of welfare for those who have fallen away from the job market.

We must make every effort to derail the ruling class plans to eviscerate the popular entitlement programs of Social Security, Medicare and Medicaid.

These are life-or-death immediate demands that cannot wait for the formalities of the November election.

Zoltan Zigedy
zoltanzigedy@gmail.com