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Tuesday, June 29, 2010

A Tragic Vote

Unemployment is a devastating experience, disrupting and, too often, destroying the lives of families and individuals. There are no reality television shows, no 4-part series on Public Television, and no in depth accounts in the major media of the pain of joblessness, despite the fact that it touches, in one way or another, a majority of US citizens. The harm of unemployment – lost homes, broken relationships, desperation, and fear of the future – counts for nothing with the corporate media. Those who have lost jobs that they have held for five, ten or more years are the forgotten victims of a callous capitalism that rewards the greediest, most self-centered of our fellow citizens. There are no Steinbecks, Guthries or Capras bringing their plight into public consciousness. They bear their pain and insecurity privately and anonymously behind a curtain of official indifference.

Thursday, June 24 will be remembered as an especially shameful day in US history.
After a Senate roll call vote, 1.3 million unemployed US citizens were to lose their unemployment benefits the next day. Counting those already scheduled to exhaust their benefits, over two million will be denied benefits by July 10. Thursday evening, Senators left their posts to enjoy a pleasant evening with friends or families – some with the smug satisfaction that they had voted right, still others clinging to some “higher” principle that they were holding the deficit in rein. There was none of the histrionics associated with the brutal attack on September 11, 2001, though undoubtedly many more lives will be affected negatively by this cruel vote. Families will have to make dramatic decisions over the next few weeks: let the car go and pay the mortgage; drop the COBRA health care program, accept foreclosure on the house; cancel college for the kids; sell personal effects on e-bay; etc. etc.

Does any one care?

Certainly not the political class – the well coiffed legislators who speak to the corporate media in their uniforms: sober business suits replete with the mandatory US flag lapel pin as a symbol of their patriotic zeal. On both sides of the aisle, they have their lobbyist lackeys to assure them that they did all they could in the face of the well-known 60% threshold that dictates that a Senate majority is not really a majority. After all, Senate majority leader Harry Reid has tried three times to get a 60% vote on unemployment extension. What more could we ask of him? It’s really that renegade Democrat, Ben Nelson, who always spoils the party. Now it’s on to passing a bill to cut taxes on small businesses.

And there is no lack of shameless hacks and crude apologists who will spin the brutal vote as really deserving of high praise. According to The Wall Street Journal, economics Professor Bruce Meyer of the University of Chicago argues that “There’s a very large body of research that says that more generous benefits that last longer… encourage people to stay out of work longer.” No doubt the looming disaster facing two million US citizens will prove to be an incentive to seek a non-existent job. For the learned professor, firmly secured in his tenured perch, the fate of the two million is of little consequence.

Another calloused comment came from Representative John Linder of Georgia: “…reports are coming in now that individuals are purposely staying unemployed so that they can continue to be propped up by the American taxpayer as long as possible.” In a world responsibly governed, this unjustified slander on US citizens would be met with outrage and censure. Not so in this season of toadyism and illusory bi-partisanship.

The Republican Senators predictably voted against extending unemployment, hiding behind the now ubiquitous debt scare. Their hypocrisy shines through in the face of the enormous, growing debt we have inherited from the former Republican administration – a debt incurred by their advocacy of wars, tax cuts for the rich and corporate welfare.

The Democrats offer a different flavor of hypocrisy; they are the party of regret. They regret that they don’t have the votes to override a Republican filibuster threat; they regret that they cannot keep their legislators in line; and they regret that they cannot rally around any but the most modest efforts at reform or legislative action. For those who will lose their homes, cars, credit ratings, relationships and, in some cases, their lives in the months to come, these regrets will be little consolation. They may wonder why the Democrats don’t call the Republicans on their filibuster threat and take the issue to the public, mobilizing Party activists, holding press conferences, publicizing the plight of the unemployed and using the presidency to shape public sentiment. They may wonder why the Democratic Party pit bull, Rahm Emmanuel, doesn’t discipline the renegades like Ben Nelson, with threats of withholding funding, denying committee positions or running primary opposition. They may wonder if Democrats know the difference between a weak gesture and a determined fight.

But it’s not just the political class that bears the responsibility for this totally avoidable human tragedy. From organized labor to our small Marxist-Leninist movement, we have done far too little to ensure this essential element of the right to life; without unemployment benefits, the lives of hundreds of thousands will come crashing down. The Thursday vote came and went without militant protests and massive demonstrations. The malaise that has settled over the left and the labor movement for decades has disposed us to look for others – the Democratic Party, charities, social agencies, lawyers and judges – to do our work. Further, we know that our predecessors – the movements that emerged in the thirties and gave us unemployment insurance – did not shirk their duty to organize and agitate. They were not waiting for the workers to spontaneously rise, but organized demonstrations and other militant actions that shook the politicians in Washington into action.

Too much is at stake to waste time distributing blame. We all share the shame of the Thursday vote and its disastrous consequences. Will we act?

Zoltan Zigedy,

Thursday, June 24, 2010


V. I. Lenin wrote over ninety years ago that “under the general conditions of commodity production and private property, the ‘domination’ of capitalist monopolies inevitably becomes the domination of a financial oligarchy.” He elaborated that “The supremacy of finance capital over all other forms of capital means the predominance of the rentier and of the financial oligarchy.” I will leave it to the curious reader to examine Imperialism: The Highest Stage of Capitalism for the persuasive argument that stands behind this prescient claim. But rest assured, it follows from a deep understanding of Marx’s exposure of the logic of capitalism and the evidence available in Lenin’s time. Ironically, this now ancient projection – this forecast of the dominance of finance capital - speaks more to the economic crisis now raging globally than the host of Nobel laureates who pontificate about the cause of the downturn that began in 2008.

The dominance of a “financial oligarchy,” as foreseen by Lenin, reached its zenith over the last twenty years with the financial sector doubling its share of US corporate profits. But “dominance” is not merely a matter of profit supremacy; it also includes the ascendance of political, social, and ideological power. The neo-liberal turn ushered in at the end of the Carter Administration and vigorously nurtured by Reagan began a process of de-regulation that ultimately removed the fetters on finance established by the New Deal. The financial sector unleashed debt as the mechanism to enslave consumers, cities, counties, states, and sovereign nations. Pension funds were either privatized or coaxed into speculative investment pools. Credit cards, mortgages and bonds became the tools for domination by the financial oligarchy. At the same time, the huge profits accumulated allowed the financial sector to purchase a decisive influence in the two-party circus through lobbies, campaign contributions, and brazen corruption. With the notable exception of Oliver Stone’s film depiction of the evil Gordon Gekko, investment bankers were viewed as the brightest, most dynamic and most envied figures in the popular imagination.

Dominance inevitably invites tyranny and the financial sector eagerly took advantage of the opportunity. Today, the expression of this tyranny is the notion that run-amok banks are “too big to fail.” We see this tyranny in the arrogance of Goldman Sachs, operating with no regard for national interests or public opinion and no effective government brake. Similarly, the timidity of legislators in devising effective banking regulation highlights this tyranny. But nothing underscores this tyranny more than the current European debt crisis.

Europe, today, is a hostage to the bond market. Because the European Union is an incomplete project rife with inequalities, imbalances, and historic contradictions, it is easy prey for the financial oligarchy. These weaknesses left the less developed economies to the vultures of finance capital. But the game was not solvency because there was really never any question - as things stood in the fall of 2009 - that Greece, Portugal, Italy, Ireland, Spain, or even Romania and Hungary could meet their debt obligations or secure new loans. Rather, the crisis was contrived by financial predators. The full-scale speculative attack by the financial sector strangled these economies into submission, forcing them, at the moment when recovery was in the balance, to shed any stimulative programs and embrace extreme public-sector austerity. Nine months later, this debt panic has spread throughout the world, with governments racing to cut public-sector jobs, benefits and salaries, eliminating social programs and privatizing public works.

Like sheep, politicians, pundits, and policy wonks have added their voice in obeisance to the bond markets. The PASOK government in Greece bowed to the financial oligarchy, followed by the Spanish, Portuguese and Irish governments. The new UK government guaranteed deep cuts in government spending. Debt concerns have pushed aside all other issues in the Dutch elections. The French government is pressing for an increase in the retirement age. And the new government of Hungary nearly collapsed by suggesting that it might deviate from the IMF-imposed game plan of fiscal miserliness.

The US, though untouched by the financial aggression, has also succumbed to the extortion of the financial oligarchy. President Obama aims to cut Social Security and Medicare through his stealth Commission on Fiscal Responsibility and Reform.

For those who refuse to challenge the dominance of financial markets and the tyranny of bonds, there is no other way but to accept and impose deep cuts in public spending. The attack upon Greece was a demonstration of the power of the financial sector and its ruthlessness in using it. Just as the spending cuts are beginning to be felt, Greece is experiencing explosive inflation, a development ominous in its effects upon the living standards of the Greek working class.

But there is an answer to the tyranny of bonds, an answer that calls for the mass mobilization of working people against the financial oligarchy. That answer refuses to defer to a system that promises to set back for decades the security and living standards of working people while offering a bleak future.

The ubiquitous mouthpieces of the financial oligarchy call for sacrifices to restore order to the economic system. This is a calculated deception. There is no noble sacrifice in surrendering to extortion any more than there is inevitability in the domination of financial markets.

Workers in Greece, led by the Greek Communists and the all-union grouping, PAME, are in the forefront of organizing strikes and demonstrations against the financial oligarchy. Their determination and calls for unity have set an example for all European workers. On the heels of the Greek actions, Portuguese workers took to the streets. Spain’s largest union, Comisiones Obreras, went on strike on June 8, with 75% of the organization’s 2.6 million workers honoring the action and a general strike projected. Public-sector workers in Romania have organized several militant actions.

As the fightback mounts, unity is essential, but not at the expense of militancy. The rumblings from the leadership of many European unions are welcome, but must be backed up with effective organization and mass mobilization. Recently, several UK union leaders spoke angrily of the draconian cuts promised by the new government, but failed to offer more than sharp rhetoric and future electoral threats. In the US, a few leaders have spoken out against the Obama administration’s covert assault upon social programs, but nothing like a mass movement has yet to emerge. A class-based confrontation with the financial oligarchy faces many obstacles, not least of which is the post-Cold War near total domination of organized labor by class collaborationist, social democratic leadership.

And the financial oligarchs are fully aware of this weakness. Recently, the head of the European Commission, President Jose Manuel Barroso, gathered many of the social democratic union leaders to lecture them on the dangers of resisting the assault on living standards prompted by the predatory debt “crisis.” As reported by the UK Daily Mail: “In an extraordinary briefing to trade union chiefs last week, Commission President Jose Manuel Barroso set out an ‘apocalyptic’ vision in which crisis-hit countries in southern Europe could fall victim to military coups or popular uprisings as interest rates soar and public services collapse because their governments run out of money.” It is “popular uprisings” that Barroso fears, a fear that is shared by social democratic union leaders. Moreover, he wants to enlist these leaders in shoving the austerity program down the throats of workers. John Monks, head of the European TUC, commented, “I had a discussion with Barroso last Friday about what can be done for Greece, Spain, Portugal and the rest and his message was blunt: ‘Look, if they do not carry out these austerity packages, these countries could virtually disappear in the way that we know them as democracies. They've got no choice, this is it.”’ At the same time, “Mr. Monks yesterday warned that the new austerity measures themselves could take the continent ‘back to the 1930s’,” according to the Daily Mail. Clearly, social democrats like Mr. Monks are willing to send the European working class “back to the 1930s” rather than risk popular uprisings that would challenge the financial oligarchy.

The World Federation of Trade Unions has called for an international day of action of the trade union movement on September 7, 2010. Every effort must be made to build for this action over the summer. Every effort must be made to mobilize working people against the financial oligarchy.

Popular uprisings are what we need.

Zoltan Zigedy

Monday, June 7, 2010

A Shameless Shill

I’ve finished reading an article based upon a lecture given by Paul Volker on his receipt of the inaugural prize granted by the Stanford Institute for Economic Policy Research for his contributions to economic policy. The article, “The Time We Have Is Growing Short,” appears in the June 24, 2010 issue of The New York Review of Books. Now Volker is the grand old man of US economic policy gurus. His face appears, along with those of the other key advisors to the Administration, in newspaper photo after photo. He carries the equally grandiose title of Chairman of the President’s Economic Recovery Advisory Board; he is a former Federal Reserve Chairman famed for his full-bore deflationary attack upon the hyper-inflation of the 1970’s.

When Volker opines, people listen. I do, too.

Volker rehearsed the causes of the current economic crisis with some insight and even an ounce of venom. He shows an awareness of the often predatory, speculative direction of the US financial sector with a series of verbose, but pregnant questions:

Has the contribution of the modern world of finance to the economic growth become so critical as to support remuneration to its participants beyond any earlier experience and expectations? Does the past profitability of and the value added by the financial industry really now justify profits amounting to as much as 35 to 40 per cent of all profits by all US corporations? Can the truly enormous rise in the use of derivatives, complicated options, and highly structured financial instruments really have made a parallel contribution to economic efficiency? If so, does analysis of economic growth and productivity over the past decade or so indicate visible acceleration of growth or benefits flowing down to the average American worker who even before the crisis had enjoyed no increase in real income?

Volker is nothing, if not blustery. But it was good to see such an acclaimed figure pose questions that others and I have been asking for some time. Sadly, he could not bring himself to frankly answer these rhetorical questions. Of course the answers are simple: The white guys in business suits occupying the offices of the financial sector are vastly overpaid; the financial sector has engaged in an enormous speculative orgy to capture the lion’s share of corporate profits; the newly contrived investment instruments have nothing to do with efficiency or economic desert; and the US worker gets nothing, but exploited.

Volker went on to offer cautious praise for the Senate’s financial reforms, suggesting that these legislative moves should offer a fire break to future speculative excesses: “The essential logic is that the taxpayers need not, and should not, be called upon to support essentially speculative activities within the protected, implicitly subsidized financial sector.”

Hear! Hear! Chairman Volker.

Would anyone disagree – without showing any unearned confidence that the Senate reforms will actually be effective – that the working people of the US should not bail out mega-banks from their folly?

But then matters took a strange and mean turn:

If we need any further illustration of the potential threats to our own economy from uncontrolled borrowing, we have only to look to the struggle to maintain the common European currency, to rebalance the European economy, and to sustain the political cohesion of Europe. Amounts approaching a trillion dollars have been marshaled from national and international resources to deal with those challenges… The hard fiscal and economic adjustments are necessary…

In an uncertain world, our currency and credit are well established. But there are serious questions, most immediately about the sustainability of our commitment to growing entitlement programs… [my emphasis]

When I read this, I felt a growing anger, a recognition that I had been taken in by a consummate con artist, a shill for those who care not a whit for “the average American worker.” Volker knows, or should know, that the European drama of the last nine months was wholly caused by the same parasitic, speculative financial wizards that he rails against in his article. The ominous-sounding near-trillion dollars to meet this challenge is no different for the European taxpayer than the challenge that US taxpayers faced to “support essentially speculative activities” nearly two years ago. It is no different – in his words - than the “trillions of dollars of official funds [that] came to the rescue of the broken system in the forms of loans, capital, and guarantees.”

To conclude from this indictment of a voracious and renegade sector of capitalism that entitlement programs – Social Security, Medicare and Medicaid - benefiting millions of the most vulnerable of our citizens should be cut or “reformed” is intellectually dishonest and morally corrupt. There is no connection – absolutely no link - between the popular entitlement programs and the crisis hammering the global economy. If anything, these entitlement programs have blunted some of the misery brought on by the financial sector and sustained consumption and even survival among the neediest retirees and the poor.

But there is a stealth agenda in Volker’s talk, an agenda that shows him to be nothing more than a courtier for Wall Street, which would benefit dramatically if social security were privatized, and the corporate cabal who oppose all social or public programs on principle.

Elite support for this is deep and broad. From the Heritage Foundation and the Reaganauts to Bill Clinton, who sought privatization of Social Security in his Administration, and President Obama, who has now established his own stealth “reform” Commission, the attack on entitlements has raged for thirty years. When it snows, they blame it on Social Security.

The current European rampage to cut public spending for social programs and to privatize is part and parcel of this same vicious attack on the working class and the most disadvantaged that Volker is proposing. The same spurious connection between financial aggression and public spending is offered to justify destruction of the European safety net and working class living conditions.

They say that every crisis presents opportunities; the ruling classes are certainly not letting this crisis pass without seizing the opportunities. We must fight tirelessly to curb President Obama’s National Commission on Fiscal Responsibility and Reform; we must work equally hard to expose lapdogs like Volker who seek to clear the way for this disgusting process.

Zoltan Zigedy