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Monday, December 23, 2013

Looking Back on Five Years of Economic Turmoil: Heart Burn or Heart Attack?



When significant US economic markets went haywire in the summer and fall of 2008, a fear, even panic, struck those charged with developing and implementing economic policy. The prevailing thinking-- unbridled capitalism with near-religious confidence in market mechanisms-- appeared to be in irreversible retreat.
The housing market cooled, home values shrank, and the financial structure built around home ownership began to collapse. As the stock market fell freely from previous highs, led by the implosion of bank stocks, investors withdrew dramatically from the market. Credit froze and consumption slowed. Thus began a downward spiral of employee layoffs, reduced consumption, capital hoarding, and retarded growth, followed by more layoffs, etc. etc.
As fear set in, policy makers scrambled to find an answer to a crisis that threatened to deepen and spread to the far reaches of the global economy. With interest rates near zero, they recognized that the monetarist toolbox, in use since the Carter administration, offered no answer.
At the end of the Bush administration, bi-partisan leaders approved the injection of hundreds of billions of public dollars into the financial system with the hope of stabilizing the collapsing market value of banks, a move popularly dubbed a “bailout.”
Early in the Obama administration, Democratic Party administrators crafted another recovery program totaling about three-quarters of a trillion dollars, a program involving a mix of tax cuts, public-private infrastructure projects, and expanded direct relief. Economists generally viewed this effort as a “stimulus” program designed to trigger a burst of economic activity to jump-start a stalled economic engine. Dollar estimates of aggregate US Federal bailouts and stimuli meant to overcome the crisis rose as high as the value of one year's Gross Domestic Product in the early years after the initial free fall. The Federal Reserve continues to offer a $75 billion transfusion every month into the veins of the yet ailing US economy.
Bad Faith
The last three decades of the twentieth century brought forth a new economic consensus of not merely market primacy, but total market governance of economic life. Regulation of markets was believed to destabilize markets and not correct them. Public ownership and public services were seen as inefficient and untenable holdouts from market forces. Public and private life beyond the economic universe were subjected to markets, measured by market mechanisms, and analyzed through the lens of market-thought. Indeed, market-speak became the lingua franca unifying all of the social sciences and humanities in this era. With the fall of the Soviet Union, capital and its profit-driven processes penetrated every corner of the world. Only independent, anti-imperialist, market-wary movements like those led by Hugo Chavez, Evo Morales, and a few others gained some political success against the unprecedented global dominance of private ownership and market mechanisms.
While capitalism in its most unadorned, aggressive form enjoyed the moments of triumph, forces were at play undermining that celebration. Those forces crashed the party in 2000 in the form of a serious economic downturn, the so-called “Dot-com Recession” featuring a $5 trillion stock market value loss and the disappearance of millions of jobs. Economists marveled at how slowly the jobs were returning before the US and global economy were hit with another, more powerful blow in 2008. Clearly, the first decade of the twenty-first century will be remembered as one of economic crisis and uncertainty, a turmoil that continues to this day.
Apart from the human toll-- millions of lost jobs, poverty, homelessness, lost opportunities, destruction of personal wealth-- the crisis-ridden twenty-first century challenged the prevailing orthodoxy of unfettered markets and private ownership. Even such solid and fervent advocates of that orthodoxy as the Wall Street Journal, The Economist, and The Times were rocked by the crisis, questioning the soundness of classical economic principles. No principle is more dear and essential for the free marketeers than the idea that markets are self-correcting. While there may be short-term economic imbalances or downturns, free-market advocates believe that market movement always tends towards balance and expansion in the long run. Thus, a persistent, long term stagnation or decline is thought to be virtually impossible (with the caveat that there are no restrictions imposed on the market mechanism).
So when perhaps the greatest era of extensive global open-market economy experienced the most catastrophic economic collapse since the Great Depression, serious doubts arose about the fundamental tenets of market ideology. And during the darkest days of 2008 and 2009, a veritable ideological panic swept over pundits and experts of the Right and the “respectable” Left. Some rehabilitated an out-of-fashion economist and spoke of a “Minsky moment.” Liberals proclaimed the death of neo-liberalism (the popular term for the return to respectability of classical economics that began in the late 1970s). And still others foresaw a restoration of the interventionist economics represented by John Maynard Keynes, the economic theories that guided the capitalist economy through most of the post-war period. Even the most conservative economists conceded that market oversight, if not regulation, was both necessary and forthcoming.
Yet, change has not come forth. Despite over five years of decline and stagnation, despite a continued failure of markets to self-correct, free-market ideology continues to dominate both thinking and policy, clearly more faith-based than reality-based. In part, the resilience of open-market philosophy emanates from the shrewd manufacture of debt-fear by politicians and debt-mongering by financial institutions. By raising the shrill cry of exploding debt and impending doom, attention was diverted from the failings of the unfettered market and towards government austerity and massive debt reduction.
Diagnosis?
Clearly all the Nobel Prize-winning mathematical economic models thought to capture economic activity failed to predict and explain the 2008 crash. No amount of faith could disguise the monumental failure of raw, unregulated markets and the policies that promoted them. Two competing, sharply contrasting, and simplistic explanations came forward.
Defenders of free markets shamelessly, brazenly argue that government meddling thwarted the full and free operation of market mechanisms, thus, exacerbating what would have been a painful, but quickly resolved correction. Following the metaphor alluded to in this article’s title, heartburn was misdiagnosed, treated with radical surgery, only to create a life-threatening condition.
Of course this is self-serving nonsense.
Whatever else we may know about markets, we know this: since the process of deregulating markets began in earnest in the late 1970s, crises have only occurred more frequently, with greater amplitude, and harsher human consequences. Before that, and throughout the earlier post-war period, government intervention and regulation tended to forestall downturns, moderate their nadir, and soften the human toll. And a glimpse at an earlier period of market-friendly policy– the early years of the Great Depression-- demonstrates the folly of simply waiting for the promised correction: matters only grew worse. Then, as now, life proved to be a hard taskmaster; when market mechanisms really go awry, no one can afford to wait for self-correction.
Liberal and soft-Left opponents of an unfettered market offer a different argument. They saw the crisis as, not the absence of free markets, but the failure to oversee and regulate markets adequately. On this view, shared by nearly all liberals and most of the non-Communist Left, markets are fundamental economic mechanisms-- essential, if you will-- but best shepherded by government controls that steer markets back when they threaten to run amok.
Thus, the 2008 crisis would have been averted, they believe, if rules and regulations remained in place that were previously designed and implemented to protect the economy from market excesses; if we had not loosened the rules and regulations, we would never have experienced the disaster of 2008.
This view is bad history and even worse economics.
While liberals would like to believe that regulations and institutions spawned by the New Deal of the 1930s stabilized capitalism and tamed markets, the truth is otherwise. The massive war spending initiated sometime before the US entry into World War II solved the problems of growth and excess manpower associated with the long decade of stagnation, hesitant recovery, retreat, and further stagnation that befell the economy beginning in 1929.
Capitalism gained new momentum with post-war reconstruction. Productive forces were restored where they had been destroyed, refreshed where they were worn, and improved in the face of new challenges. This broad restructuring of capitalism produced new opportunities for both profit and growth. At the same time, the lesson of massive socialized, public, and planned military spending were not lost. New threats were conjured, new fears constructed. The hot war in Korea and the ever-expanding Cold War fueled an unprecedented US expansion. It is not inappropriate to characterize this post-war expansion as a period of “military-Keynesianism.” That is, it was an era of Keynesian policies of planned, extensive government spending married to military orders outside of the market. Insofar as it transferred a significant share of the capitalist economy to a command, extra-market sector, it marked a new stage of state-monopoly capitalism, a stage embracing some of the features of socialism.
But by the mid-1960s this “adjustment” began to lose its vitality. Profit growth, the driving force of capitalist expansion, started a persistent decline (for a graphic depiction of this trend, see the chart on page 103 of Robert Brenner's The Economics of Global Turbulence (New Left Review, May/June 1998).
The falling rate of profit coupled with raging inflation by the middle of the 1970s. The military-Keynesian solutions to capitalist crisis were spent, exhausted, proving inadequate to address a new expression of the instability of capitalism. Perhaps nothing signaled the bankruptcy of the prevailing (Keynesian) orthodoxy more than the desperate WIN campaign-- Whip Inflation Now of the Gerald Ford presidency, an impotent attempt to stem the crisis with mass will-power where intervention failed.
Contrary to the claims of liberals, social democrats and other reform-minded saviors of capitalism, the resultant shift in orthodoxy was not merely a political coup, a victory of retrograde ideology, but instead it was an unwinding of the failed Keynesian policies of the moment. Thus, the Thatcher/Reagan “revolution” was only the vehicle for a dramatic adjustment of the course of capitalism away from a spent, ineffective paradigm.
With Paul Volker assuming the chairmanship of the Federal Reserve and the beginnings of systematic deregulation, the Carter administration planted the seeds of the retreat from the old prescriptions. Volker, with his growth-choking interest rates, ensured a recession that would sweep away any will to resist belt-tightening. But it took the election of the dogma-driven Ronald Reagan to emulate the UK's Margaret Thatcher and use the occasion to eviscerate wages and benefits in order to pave the way for profit growth.
The cost of restoring life to the moribund capitalist economy was borne by the working class. Foolishly, the stolid, complacent labor leadership had banked on the continuation of the tacit Cold War contract: Labor supports the anti-Communist campaign and the corporations honor labor peace with consistent wage and benefit growth. Instead, profit growth was restored by suppressing the living standards of labor-- cutting “costs.” A vicious anti-labor offensive ensued.
While the loyal opposition insists on portraying the break with Keynesian economics as something new (commonly dubbed “neo-liberalism”), it was, in fact, a surrender to the old. The bankruptcy of bourgeois economics could offer no new, creative answer to capitalist crisis; it could only cast off a failed approach and restore profits by relentlessly squeezing the labor market.
This response could and only did succeed because of the extraordinary weakness of the labor movement. As the profit rate began to rebound, labor lacked the leadership and will to not only secure a share of productivity increases, but to even defend its previous gains.
Thus, capitalism caught a second wind by retreating from the post-war economic consensus and reneging on the implicit labor peace treaty. Profit growth returned and the system sailed on.
But the continuing advance of deregulation and privatization brought with it a return to the unbuffered anarchy of markets. The Savings and Loan crises of the 1980s and 1990s and the stock market crash of October 1987 were all harbingers of things to come and reflections of deeper instability.
With the fall of the Soviet Union and Eastern European socialism, a huge new market was delivered to the global capitalist system, a market that further energized the opportunities for capital accumulation and expanded profits. Millions of educated, newly “free” (free of security, safe working conditions, legal protection, and organization) workers joined reduced-wage and low-wage workers from the rest of the world to form a vast pool of cheap labor. From the point of view of the owners of capital, paradise had truly arrived. Thus, an immense, one-sided class war and the wage-depressing integration of millions of new workers set capitalism on a profit-restoring path to health, putting the now impotent Keynesian orthodoxy in the rear-view mirror. Few would guess that this trip would endure for less than two decades before capitalism would again encounter serious crises.
Significant economic growth in a period of weak labor necessarily produces galloping inequality. With corporate and wealthy-friendly tax policies, many government redistribution mechanisms are starved or dismantled. The flow of wealth accelerates to corporations and the super-rich and away from those who work for a living. The coffers of the investor class swell with money anxious for a meaningful, significant return on investment. As the process of capital accumulation intensifies, fewer and fewer safe, high-yield productive investment opportunities arise to absorb the vast pool of ever-expanding wealth concentrated in the hands of a small minority.
In a mature capitalism, new, riskier avenues-- typically removed from the productive sector-- emerge to offer a home for capital and promise a return. Bankers and other financial “wizards” compete ferociously to construct profit-generating devices that promise more and more. These instruments grow further and further from productive activity. Moreover, their resultant “profits” are ever further removed from real, tangible, material value. Instead, they virtually exist as “hypothetical” capital, or “counter-factual” capital, or “future-directed” capital, or “contingent” capital. Some Marxists rush to label this product of speculation as “fictitious,” but that obscures its ultimate origin in exploitative acts in the commodity-production process. It is this expansion of promissory capital that fuels round after round of speculative investment lubricated with greater and greater debt.
Metaphors abound for the end game of this process: “bubbles,” “house of cards,” etc. But the ultimate cause of crisis is the failure to satisfy the never ending search for return. That is, the cause of crisis resides in the process of accumulation intrinsic to capitalism and the inability to sustain a viable return on an ever enlarging pool of capital and promissory capital. Capitalists measure their success by how their resources are fully and effectively put to use to generate new surpluses. That is the deepest, most telling sense of “rate of profit.” It is the gauge guiding the capitalist-- an effective rate of profit based on accumulated assets. Apart from official and contrived measures of profit rates, the growth of accumulated capital, weighed against the available investment opportunities, drives future investment and determines the course of economic activity.
In 1999, the profitability of the technology sector dropped precipitously as a result of the unrealizable investment of billions of yield-seeking dollars in marginal Dot.com companies and internet services. As an answer to the problem of over-accumulation, investing in the fantasies of 20-year-old whiz kids proved to be as irrational as sane observers thought it to be. The crash followed.
And again in the heady days of 2005, buying bizarre securities packed with the flotsam and jetsam of mortgage shenanigans seemed a way of finding a home for vast sums of “unproductive” capital. After all, capital cannot remain idle; it must find a way to reproduce itself. But what to do with the earnings from reselling the demand-driven securities? More of the same? More risk? More debt? And repeat?
The portion of US corporate profits “earned” by the financial sector grew dramatically from 1990 until the 2008 crash, touching nearly 40% in the mid-2000s and demonstrating the explosion of alternative investment vehicles occupying idle capital. It is crucial to see a link, an evolutionary necessity, between the restoration of profitability, intense capital accumulation, and the tendency for profitability to be challenged by the lack of promising investment opportunities. It is not the whim of bankers or the cleverness of entrepreneurs that drives this process, but the logical imperative of capital to produce and reproduce.
Some Comments and Observations
There are other theories of crisis offered by the left. One theory, embraced by many Communist Parties, maintains that crisis emerges from over-production. Of course, in one sense, over-accumulation is a kind of overproduction, an overproduction of capital that lacks a productive investment destination. But many on the left mean something different. They argue that capitalism produces more commodities in the market place than impoverished, poorly paid workers can purchase. There are two objections to this: one theoretical, one ideological.
First, evidence shows that a slump in consumption or a spike in production does not, in fact, precede economic decline in our era. If overproduction or its cousin, under-consumption, were the cause of the 2008 downturn, data would necessarily show some prior deviation from production/consumption patterns. But there are none. Instead, the reverse was the case: the crisis itself caused a massive gap between production and consumption, exacerbating the crisis. The threat of oversupply lingers in the enormous deflationary pressure churning in the global economy. Despite the fact that consumer spending is such a large component of the US economy, the effects of its secular stagnation or decline has been largely muted by the expansion of consumer credit and the existence, though tenuous, of social welfare programs like unemployment insurance.
Second, if retarded or inadequate consumption were the cause of crises, then redistributive policies or tax policies would offer a simple solution to downturns, both to prevent them and reverse them. Thus, capitalism could go on its merry way with little fear of crisis. Certainly this is the ideological attraction of overproduction explanations of crises: they allow liberals and social democrats to tout their ability to manage capitalism through government policies.
However they cannot manage capitalism because crises are located, not in the arena of circulation (matching production and consumption), but in the profit-generating mechanism of capitalism, its veritable soul.
Because of the centrality of profit, the over-accumulation explanation has an affinity with another theory of crisis: Marx's argument for the tendency of the rate of profit to fall. In fact, it can be viewed as a contemporary version of the argument without nineteenth-century assumptions.
Happily, many commentators today have revisited the theory outlined in Volume III of Capital, finding a relevance ignored throughout most of the twentieth century. Only a handful of admirers of Marx's work kept the theory alive in that era, writers like Henryk Grossman, John Strachey, and Paul Mattick. Unfortunately, today's admirers, like the aforementioned predecessors, share the flaw of uncritically taking Marx's schema to be Holy Grail. For the most part, Marx used very occasional formalism as an expository tool and not as the axioms of a formal system. Those trained in modern economics are prone to leap on these formulae with an undergraduate zeal. They debate the tenability of a model that depicts the global economy as a collection of enterprises devouring constant capital at a greater rate than employment of labor and mechanically depressing the rate of profit. This is to confuse simplified exposition with robust explanation. Much can be learned from Marx's exposition without turning it into a scholastic exercise.
Among our left friends, it has become popular to speak of the crisis and era as one of “financialization.” This is most unhelpful. Indeed, the crisis had much to do with the financial sector; indeed, the financial sector played and is playing a greater role in the global economy, especially in the US and UK; but conjuring a new name does nothing to expose or explain the role of finance. Like “globalization” in an earlier time, the word “financialization” may be gripping, fashionable, and handy, but it otherwise hides the mechanisms at work; it’s a lazy word.
*****
There is a point to this somewhat lengthy, but sketchy journey through the history of post-war capitalism. Hopefully, the journey demonstrates or suggests strongly that past economic events were neither random nor simply politically driven. Instead, they were the product of capitalism's internal logic; they sprang from roadblocks to and adjustments of capitalism's trajectory. As directions proved barren, new directions were taken. While it is not possible to rule out further maneuvers addressing the inherent problem of over-accumulation, the problem will not go away. It will return to haunt any attempt that presumes to conquer it once and for all. And if capitalism carries this gene, then it would be wise to look to a better economic system that promises both greater stability and greater social justice. Of course, finding that alternative begins with revisiting the two-hundred-year-old idea long favored by the working class movement: socialism. Affixed to that project is the task of rebuilding the movement, the political organization needed to achieve socialism.
As things stand in today's world, there are most often only two meager options on the regular menu: one, to save and maintain capitalism with the sacrifices of working people and the other, to save and maintain capitalism with the sacrifices of working people and a token “fair share” sacrifice on the part of corporations and the rich. Neither is very nourishing.
The first option is based on the thin gruel of “trickle down” economics and the nursery-rhyme wisdom of “a rising tide raises all boats.” It is the prescription of both of the major US political parties, Japan's Abe, the European center parties, and UK Labour.
The second option promises to save capitalism as well, but through a bogus fair distribution of hardship across all classes. This is the course offered by most European left parties and even some Communist Parties.
But a system-- capitalism-- that is genetically disposed to extreme wealth distribution and persistent crisis does not make for an appetizing meal. Instead, we need to dispense with programs that promise to better manage capitalism, as Greek Communists (KKE) like to say. That is for others who are at peace with capitalism or underestimate its inevitable failings.
The only answer to the heart failure of capitalism is to change the diet and put socialism on the menu.

Zoltan Zigedy
zoltanzigedy@gmail.com

Saturday, November 23, 2013

How “Gotcha” Journalism Mutes the Truth



A few months ago a Pittsburgh labor attorney and human rights activist, Dan Kovalik, penned an op-ed piece for a Western Pennsylvania daily, The Pittsburgh Post-Gazette. Kovalik took up the case of an elderly adjunct professor at a local private university who died virtually penniless, with insecure shelter, and with tenuous health care. In the several hundred words allowed him, Kovalik brought forward Margaret Mary Vojtko's struggle to eke out a living from the meager salaries offered by adjunct university and college teaching employment. Kovalik made no effort to disguise his own solution: he noted that he met Vojtko in the midst of a union organizing campaign, a campaign which promised some relief from the poverty level wages and absent benefits provided by the well-endowed university.

To probably everyone's surprise, Kovalik's account sparked an enormous burst of commentary and interest in the cause of highly educated, but poorly paid university teachers. Other adjuncts realized that their plight was not uncommon, but shared by thousands working in academic institutions throughout the US. The story of Margaret Mary's tragic demise lifted spirits and provoked anger.

Predictably, the Pittsburgh institution that employed Vojtko, Duquesne University, mounted a feeble, but loud defense. Nonetheless, Kovalik's article pressed school administrators to bargain with the union and imparted meaning to a senseless tragedy. In the hard-hitting and noble tradition of muckraking journalists like Upton Sinclair, Lincoln Stephens, and Ida B. Wells, Kovalik offered Vojtko's story as a case study in the plight of thousands of underpaid and exploited college and university level teachers.

Unfortunately, the valuable muck-raking tradition, like whistle blowing, is considered bad sport in the age of stifling corporate journalism and rampant toadyism. Extremely rare socially relevant journalism is either accidental journalism or revelation wrapped in scandal, smut, or corruption. Today's young journalist with an eye to a career understands that entertainment metrics trump shaking a fist to power, that “reality” voyeurism titillates the passive reader, and that ferreting out injustice doesn't pay.

In that vein, Slate magazine, a journal that appeals to middle-class social liberalism, unleashed an assistant editor, L. V. Anderson, to doggedly dig up the real story of Margaret Mary Vojtko (Death of a Professor, 11-17-2013). Undoubtedly Slate's founder, Michael Kinsley, an old Cold Warrior transformed into a leading spokesperson for post-Reagan liberalism, could smell a radical message in the Kovalik article. The subversive Kovalik was actually suggesting that institutions owed a decent living to their employees! He had the audacity to imply that some employees-- those without trust funds-- actually depend upon their employers for their survival! Such a view offends the sensibilities of our betters who are confident of the many charities and helping hands that are always there for the asking.

Dutiful to her assignment, Anderson visited Pittsburgh on a mission:

Kovalik’s not-so-subtle implication was that if Duquesne had negotiated, Vojtko might not have died the way she did...
 But was that true? Who was Margaret Mary—the person, not the symbol of victimhood?
 Through a journey of several thousand words, Anderson familiarized us with personal details of Vojtko's life-- a veritable made-for-TV reality exposé-- cobbled together from interviews with people who have no fear of contradiction or explanation from the dead. She shares with the reader idiosyncrasies, hardships, and foibles that are embedded in every life, but only deemed relevant in our era of embarrassing mass titillation.

We learn that an eighty-three-year-old woman is untidy, forgetful, rigid in her views, mistrustful, and doggedly independent. How these personal attributes bear on her treatment by Duquesne University is left unexplained; how many of us share these personal “flaws” is never addressed. But the not-too-subtle point is that Vojtko could have fared better if she would only have shed her stubbornness and accepted the help that many claim was there.

Undoubtedly that view is held by those who obstinately refuse to accept any responsibility for the behavior of institutions that dominate our lives. Their indifference to the casualties wrought by banks, corporations, insurance companies, universities, military, and government agencies leave millions of Margaret Mary Vojtkos to the not-so-tender mercies of these institutions.

After six thousand tedious words of the minutia and trivia of Vojtko's life, one may be convinced by Anderson that a human life is indeed complex:

The story I uncovered was more complicated than the story that went viral. The reasons Vojtko’s life ended in misery had much less to do with her status as an adjunct professor than tweeters... might believe.

To be fair to the university, though, better benefits and job security would not have altered many of the personal factors that precipitated Vojtko’s crisis. Her hoarding and her deep-seated stubbornness—not her finances—were behind her refusal to get her furnace fixed, or to move to a facility better suited to her medical condition.
To be fair?

To be fair, Anderson would have interviewed any of the thousands of working class retirees living in Western Pennsylvania who would have told her that Vojtko's “stubbornness” was pride-- a pride born of the belief that when a man or woman works hard all of his or her life, he or she should have a measure of benefits and security without begging or accepting charity. Anderson would understand that motives, like lives, are complex even for those on the bottom rungs of the economic ladder. As do many other workers, Votjko valued her dignity, privacy, and independence. They were not easily surrendered to accept charity or even well-meant help. Those with a finely honed sense of justice are not quick to trade it for the work house or the charity ward, even in its modern incarnations.

It's a pity that those values are neither understood nor shared by Anderson. When a hundred years ago Upton Sinclair wrote of the workers exploited by the meat packing industry, he undoubtedly knew that many were flawed in character or values. But presenting them in all of their “multidimensional” character, revealing their weaknesses, or pandering to gossip was of little interest to him. Instead, he wrote of the horrific working conditions, brutality, and misery brought on by the industry. He chose to take the side of the weak over the strong.

Today, inequality has reached the extremes of Sinclair's time, yet most of our media chroniclers deliberately ignore the damaged lives, shattered hopes, and even premature deaths spawned by inequality. Turning away from these ugly facts, they-- like L. V. Anderson-- offer casual, flippant bromides: pick up the phone and call for help! As our political leaders work diligently to disassemble the social securities protecting the poor and needy, more and more of our neighbors face the choice of relying on goodwill or accepting a shattered life.

We should be grateful that there are writers like Dan Kovalik who speak out against these outrages.

Zoltan Zigedy
zoltanzigedy@gmail.com





Tuesday, November 19, 2013

Looking Back: 50 Years after the JFK Assassination



They are derisively called “conspiracy theorists”. They carry the torch for the beliefs that sixty to eighty percent of their fellow citizens share since the assassination of President John Kennedy. From October 17 to October 19, several hundred gathered in Pittsburgh for the “Passing the Torch” symposium, a forum devoted to many of the leading investigators discussing alternate visions to the US government's official version of the murder of Kennedy.

For three days, a group of ordinary-looking, very well-spoken, collegial people discussed and debated the plausibility of conflicting explanations of the Kennedy assassination. Those who have been misled by the corporately-compromised media would be disappointed with the participants: there were no ominous references to the Holy Grail, Area 51, or Roswell, except in jest. Rather, the atmosphere of the gathering was more akin to a convention of neurosurgeons without the glamor of a glitzy destination. The few cranks-- anti-Federal Reserve exponents and religious zealots-- saw their comments politely dismissed.

Questions and Answers

Broadly speaking, there are two research methodologies that engage assassination investigators. One group of researchers develop, examine, analyze, and debate the physical evidence. The objects of their study are the familiar artifacts: the Zapruder film, the so-called “pristine bullet,” the rifle associated with Oswald, autopsy photos, etc. Of course not all physical evidence is either direct or clearly relevant. Photos, personal accounts, audio tapes, documents, etc. may be merely suggestive and open to broad interpretation. While physical evidence may count as “hard” data, it virtually never fills all of the narrative space between the premeditation to murder and the completion of the act. The judicial system recognizes this oft-occurring opening by placing the “hard” evidence before a jury with the hope that they will have the collective judgment to satisfactorily fill the gaps and arrive at a well-considered conclusion.

But it would be naive to press the idealized courtroom analogy too hard. The court of public opinion, like the real judicial system, allows of differential resources, bias, and clandestine influence. But where honest people recognize that the courts are “overly” fair to the rich, and that the poor suffer a surfeit of fairness, the court of public opinion dispenses entirely with the notion of fairness. With the Kennedy assassination, the government and its agencies have invested overwhelmingly in the Warren Commission/Oswald-did-it-alone version. The US government has resisted, at every step, revealing relevant evidence that might shed new light on the case; it has even denied access to evidence developed to support the conventional view; and it has actively interfered with independent investigations of the assassination. Now-public documents show that the security agencies spied on and interacted with the Garrison investigation in New Orleans. Recent revelations demonstrate that the CIA established their former (1963) chief of covert operations in Miami as their liaison with the 1976 House Select Committee on Assassinations... without revealing this relevant fact (the Joannides affair). This revelation has belatedly driven the formerly compliant final head of that investigation, G. Robert Blakey, into uncharacteristic fits of indignation:

I am no longer confident that the Central Intelligence Agency co-operated with the committee.... I was not told of Joannides' background with the DRE [Revolutionary Student Directorate], a focal point of the investigation. Had I known who he was, he would have been a witness who would have been interrogated under oath by the staff or by the committee. He would never have been acceptable as a point of contact with us to retrieve documents. In fact, I have now learned, as I note above, that Joannides was the point of contact between the Agency and DRE during the period Oswald was in contact with DRE. That the Agency would put a 'material witness' in as a 'filter' between the committee and its quests for documents was a flat out breach of the understanding the committee had with the Agency that it would co-operate with the investigation.

Given that researchers face a hostile government and its lap-dog media, it is truly amazing that researchers have advanced the study as far as they have. Of course hostile intelligence agencies and a media with blinders only reinforce the suspicions that the truth remains to be uncovered.

Blending into the physical evidence and further filling the evidentiary gaps are the circumstances and personal ties of the key players in the murder-- so-called “circumstantial evidence.” For example, the bizarre trajectory of Lee Harvey Oswald's brief adult life is breathtaking and complex. He crosses paths with a wide variety of diverse and contradictory characters while taking on equally contradictory personae.

Apologists for the Warren Commission want us to believe that these oddities reflect an isolated, but unstable personality. But the narrative fails the “credible-movie-script” test: No one would believe this tale if it were a movie.

Further, Oswald's Mexico trip the month before the assassination is a surreal saga fraught with confusion, misidentification, and mystery.

Beyond Circumstances

Is there anything that a Marxist could add to nearly fifty years of skepticism over the Warren Commission and the account of the assassination defended by the security agencies, US elites, and the corporate media?

Certainly a strong case could be made for the account offered by the former head of Cuban counterintelligence, Fabian Escalante. His book, JFK: The Cuba Files, based on his careful review of Cuban evidence, presents many new elements of the days, events, and personalities leading up to the assassination, though no citation of his work arose during the three-day symposium in Pittsburgh. In fact, I inquired of a lobby bookseller with a trove of assassination and associated books why he failed to offer Escalante's book in his extensive collection. He muttered something about how youthful Escalante looks in his pictures despite his retirement-- clear recognition of Escalante's work, but an evasion of its absence.

It is unfortunate that investigators ignore his book because he untangles much of the Mexico City puzzle. And his profiles of likely suspects add much to the existing biographies. But one senses a hesitance to accept a contribution from a Cuban official, a remnant of Cold War distrust. Moreover, the investigators, with only a few exceptions, own a rather conventional, naive politics. At the end of the symposium, a panelist posed what proved to be an embarrassing, but revealing question: How many here would welcome a Kennedy Presidency today?

The participants and audience demonstrated resounding approval with an enthusiasm betraying frenzied devotion to a fallen martyr rather than mere respect for a murdered President.

Perhaps it is here that a Marxist can make a modest contribution to our understanding of the Kennedy assassination by adding an element of political realism and historical context.

Regard Oswald's strange course from his adolescence in the mid 1950s through his death in November of 1963. Many point to the incredible twists and turns taken by him through this period. They argue that other forces must be at play: Oswald must have been a puppet. Opponents dismiss this as only indicative of his instability.

But these arguments miss the point.

The real conundrum is in reconciling that bizarre path with the known, demonstrable behavior of the US security services. It was in that period that their covert and overt surveillance reached unparalleled heights. And it was in that time frame that their suppression and prosecution of the left was at its pinnacle. It is simply impossible for Oswald, posturing as a Communist or Marxist militant, to have escaped their constant attention and, indeed, harassment, if anyone in the higher echelons of the many bureaus and agencies believed that posture. Consequently, it would be beyond comprehension that Oswald would have been where he was alleged to be at the moment of the assassination without those many security offices discounting his “leftist” credentials.

Reflect on the following:

Oswald was allegedly a self-proclaimed Communist in his adolescence before his Marine Corps enlistment and remained so during his 35 months in the Corps (Oct. 1956-September 1959), often sharing his politics with fellow Marines. Despite his openness, he was given at least a “confidential” security clearance and assigned to a secret U-2 base in Japan. He was trained in sophisticated radar tracking and had access to much sensitive information.

At the same time, hundreds of Communists and thousands of liberals were under surveillance, lost their jobs, or were in jail. Communist leader Claude Lightfoot was sent to jail in 1956 when Oswald joined the Marines. A year earlier, copywriter Melvin Barnet was fired from his job at the New York Times for his political views. The infamous FBI COINTELPRO, a program of active measures against Communists and other leftists, began in 1956. Leaders of the ACLU were informing to the FBI in that period. A Professor at the University of Michigan, Chandler Davis, went to jail for his views in 1959, at a time Oswald was espousing Communism to his fellow Marines.

Is Oswald's story credible? Did he escape the net that captured liberals who were victimized by snitches and liars? What accounts for his immunity?

Upon discharge, Oswald set off within 10 days on his voyage to the Soviet Union and defection. Investigators quibble over the formalities of the defection, but no one questions that Oswald made the strongest political statement by surrendering his passport and taking residence in the USSR from late 1959 until June of 1962. After stating his misgivings about the USSR, he was smoothly integrated into a nest of anti-Bolshevik Russians living in arguably one of the most rabidly reactionary, anti-Communist cities in the US, Dallas, Texas (the other candidate being Miami, Florida). Oswald and his young wife quickly find friends who would, by inclination, stand off from his politics, social status, and manners. At no time does this produce a backlash commensurate with the tenor of the times.

It wasn't until late 1962 that Junius Scales, a district functionary of the Communist Party in North Carolina, was released from prison for merely being a Communist. The Smith Act, The Internal Security Act, the Immigration and Nationality Act, and the Communist Control Act remained in full force in this period, all aimed at suppressing and repressing Communists. Spanish Civil War vet and Communist Archie Brown was arrested in 1961 under the Communist Control Act. In 1962 and 1963, Jack O'Dell was forced out of his leading role in the Southern Christian Leadership Conference by the Kennedy administration for his alleged Communist affiliation. The US government pressed again to revoke Paul Robeson's passport in 1962. The Berlin Crisis, the Bay of Pigs invasion of 1961 and the October Cuban missile crisis of 1962 brought anti-Communism in the US to a boil.

It was in the midst of this atmosphere that Oswald brought his crackpot leftist ideas to Dallas and into the arms of anti-Communist fanatics. While working at an enterprise engaged in classified military work, Oswald contacted both the Communist Party and the Socialist Workers Party-- he had maintained subscriptions to their respective newspapers since his return to the US. Unlike thousands of people who were denied employment, experienced harassment, or found their names on watch lists, Oswald enjoyed a charmed life within a cesspool of right-wing intrigue and anti-Red hysteria.

The spring of 1963 brought Oswald to New Orleans where he mounted a one-man campaign to establish left credentials while blatantly drawing attention to his activities, a bizarre goal for an authentic leftist in a hostile environment and with no allies. Warren Commission apologists like Gerald Posner answer that these actions only prove that Oswald was unbalanced and unpredictable.

But that evades the pertinent question.

Where were the security services that were systematically hunting, harassing, and persecuting everyone in the US with even a pinkish tint? How does Oswald escape their net? Did anyone in the US leave such a trail of provocative left-wing foot prints as did Oswald?

Before, during, and after Oswald's pro-Cuban adventure in the deep South, critics were threatened, beaten, and even killed for opposing segregation. And yet Oswald's television notoriety earned by defending revolutionary Cuba brought a violent reaction only when Oswald provoked one. Lee Harvey Oswald was perhaps the only self-proclaimed leftist in the US who traveled, lived, and acted with impunity during this repressive era.

Immediately before leaving for Mexico in September of 1963, Oswald telephoned the head of the Texas Socialist Labor Party to mention that he wanted to meet before he left for Mexico City, a conversation that was surely overheard by authorities. What would be the likelihood that the correspondence between two public Marxists would not be the subject of interest in these repressive times and in the paranoid South?

Border crossings were, as they are today, designed to filter those worthy of scrutiny or detention. Yet Oswald went on his merry way to Mexico City with his passport and visa intact. For years, Mexico had been a haven for political expatriates and fleeing victims of the blacklist. All were under constant attention from US and Mexican authorities. Like Portugal and Spain in World War II, Mexico was to the Cold War a hot bed of spying and intrigue where all the antagonists maintained robust stations. Enter Lee Harvey Oswald. Flashing his leftist credentials, Oswald visited and revisited the Cuban and Soviet embassies loudly touting his desires to travel to Cuba and the Soviet Union. Without doubt, these plans were exposed to US authorities, who, uncharacteristically, did virtually nothing. Should his plans have been actuated, he could have been the US's first double-defector! No one seemed too alarmed in the higher echelons of the CIA and FBI.

This tortured history could easily be dismissed as the expression of an unstable, twisted mind. But that dismissal would only strengthen the oddness of the lack of action on the part of the US security services that would have had to curiously dismiss Oswald's vocal leftism and uncommonly audacious expression of that postured leftism.

Viewed from the Marxist left, Oswald's showy exhibition with a gun in one hand and a copy of The Worker and The Militant in the other smells of a provocation. Even a newcomer to the culture of the left knows that Trotskyists and Communists are water and oil. Thus, for a “veteran” of the left like Oswald to go to some lengths to make such a display is only intelligible if he were seeding evidence for some unrevealed purpose. Was the carefully posed picture meant to impress the left? Of course not. Was it meant to make a different impression?

Oswald was likely the only “leftist” in the US to never make first-hand, direct contact with other leftists, to never attend a meeting, to never join an organized demonstration or vigil in 6-8 years of off-and-on “activism.” He was well known as a “leftist” to non-left acquaintances and co-workers as well as much of the general public. But the broad left only knew him through correspondences.

In the end, it is impossible to reconcile Oswald the “leftist” with the unlikely indifference of the US intelligence and police establishment. At the same time, it is impossible to accept the authenticity of that leftism.

But if Oswald was not genuine, if he was only posing as a leftist, what was he really?

Since the intelligence and police agencies ignored Oswald as though they knew he were not a leftist, since he slipped easily through the net that captured thousands of the faintly pink, who did they think he was? He certainly did plenty to deserve their attention, attention that they seemed determined not to give.

Until we know who Oswald really was, we will never solve Kennedy's assassination.

Zoltan Zigedy
zoltanzigedy@gmail.com




Saturday, October 12, 2013

The Banks: Serial Offenders

Newspaper accounts anticipate that JP Morgan Chase, the huge banking and  financial services company, is close to an agreement with the Department of Justice over charges brought against the company for its mortgage bond policies leading up to the 2008 economic collapse. JP Morgan Chase hopes to avoid legal proceedings by agreeing to settle the matter for around $11 billion with the caveat, of course, that they are admitting no guilt.

Just over a week ago, the same firm agreed to another settlement of just a bit less than a billion dollars over the trading fiasco dubbed “the Whale.”

In addition, JP Morgan Chase has paid out settlements of $1.8 billion for mortgage-foreclosure practices over the last year.

In the same time frame, the company conceded nearly half a billion dollars for the charge of energy market manipulation. Add another $300 million for claims lodged against mortgage-backed securities.

And we mustn't forget the nearly quarter-of-a-billion settlement against allegations of muni-bond manipulation in 2011.

With these six likely settlements in three years alone totaling about $15 billion in charges over questionable practices, one might conclude that JP Morgan Chase was a serial violator.

It might make one angry that JP Morgan Chase executives receive no penalty-- indeed continue to receive large bonuses-- despite these violations.

It might make one angrier still to scrutinize the long list of earlier settlements and penalties incurred by the firm, including for intimate involvement with the criminally corrupted firms of Enron and WorldCom. One might further mention JP's derivative scam that nearly drove Alabama's largest county into bankruptcy, a maneuver that pressured a three-quarter-billion-dollar settlement.

Further outrage might spring from the company's record fine paid to the United Kingdom's Financial Service Authority in 2010.

Certainly JP Morgan Chase's admission in January of 2011 that it systematically overcharged thousands of overseas military personnel on their mortgages would prompt the ire of many.

And then there is the matter of our government rewarding what appears to be a criminal enterprise with $25 billion in TARP funds to guarantee its managers didn't run the corporate ship aground on the shoals of the 2008 economic crisis! A helping hand to a criminal syndicate.

Understandably, some have suggested that “too big to fail” should be construed as “too big to jail.”

But JP Morgan Chase, like other big time criminal gangs, is quick to throw its associates under the bus to avoid prosecution. The mega-bank has postured as the victim of its own mortgage originators while offering to cooperate with federal prosecutors and deflect attention from its own role. A recent report by investigative reporter, Rich Lord, has shed light on this practice in Western Pennsylvania (Indicted Attorney points a finger at JPMorgan, Pittsburgh Post-Gazette, 10-6-13). To the surprise of no one but, perhaps, Federal prosecutors, documents have surfaced that prove JP Morgan's foreknowledge of mortgage fraud. Meanwhile, JP has bought immunity by claiming victimhood!

In a brazen statement of contempt for justice, Attorney General Eric Holder excuses banker criminality because “...if you do bring a criminal charge, it will have a negative impact on the national economy, perhaps even the world economy.”
 
Will “...have a negative impact...?

Has Holder conveniently forgotten that banking industry practices nearly crushed the global economy five years ago?

Maybe the generous contributions that the financial industry makes to both political parties better explains this blind spot in the criminal justice system. Maybe the incentives spread thickly among the Washington legislators by bank lobbyists account for the apparent immunity. Certainly the charming, boyish grin of JP Morgan Chase CEO Jamie Dimon seems ever welcome in the halls and chambers of government.

It would be unfair to JP Morgan Chase to not note that the other mega-banks are equally criminal in their practices. Just in the last two weeks, CitiBank has incurred a $30 million fine and reached a $395 million settlement, while New York is suing Wells Fargo.

In its entirety, the pattern of mega-bank irresponsibility and criminality is breathtaking. Even more shocking is the realization that these institutions are not above the law, but actually own the law!

To give some perspective, the welfare system in the US-- known since its New Deal inception in1935 as Aid to Families and Dependent Children-- was deemed too expensive, wasteful, and unnecessary by the Clinton Administration and its Gingrich-led Republican legislative rivals in 1996. Accordingly, they dramatically cut a program that provided a floor to the living standards of over 12 million people, 8.4 million of whom were children. In 1996, the program cost a little over $20 billion (under $30 billion in 2012 dollars).

The fines and settlements made by JP Morgan Chase over the last 3 years alone would have paid for over half of the total annual cost budgeted for welfare before its radical surgery at the hands of the bi-partisan government!

Add in the fines and settlement costs of the other serial criminals of the financial sector and we could likely fund a robust welfare system today.

Surely, this is a world turned upside down, a world devoid of compassion for the poor and the needy and blind to the corruption of the rich and powerful.

With Reagan-era ideologues finding happy, well paying jobs with think tanks, big media, and universities, the drum beat of “welfare reform” swept the US in the late eighties and early nineties. They blamed welfare for increasing unemployment, creating dependency, unmarried mothers, and violent crime. The symbol of welfare abuse was the unmarried African American mother of young children living off food stamps and a welfare check. Popular media amplified and exaggerated this image.

And the liberals?

They mounted a tepid campaign of measures to shrink the welfare roles, a campaign that prominent observers like Arthur Schlesinger Junior labeled Reagan-emulating “me-tooism”. He denounced the Democrats as Republican “fellow-travelers.” Thus, it should be no surprise that “welfare as we knew it” was gone by 1996.

With no one to speak for her, it was so easy to demonize a young mother and her innocent children. The cowardly, spiteful courtiers of our ruling class won the one-sided battle to cast millions of this nation's most disadvantaged into greater insecurity.

But Jamie Dimon and his banker cohorts needn't fear the self-righteousness or the indignation of those executive and legislative child abusers who found it so easy to undercut the welfare of children. Their multi-billion-dollar criminality goes unpunished and will go unpunished by the Administration and the two-party legislators who govern our lives. They continue to blatantly rob and prey on us with impunity, knowing that a tolerable spanking is the most they will ever face.

Today, those same legislators of both parties are looking to cut other elements of the social safety net. And the game is the same as it was twenty years ago: the Republicans raise unfounded, irrational fears (in this case, debt, bankruptcy, economic chaos) and the Democrats offer a feeble defense and make an eager “compromise.” Yes, they are coming after our Social Security, Medicare, and Medicaid.

In the short run, we have to raise hell before they make their grand “compromise.” But in the long run, we have to find and vote for real peoples' candidates and not corporate Democrats. You'll recognize them when they campaign to put the bankers in jail and nationalize the banks!

Zoltan Zigedy
zoltanzigedy@gmail.com



Friday, September 20, 2013

Class against Class


Every commentator of every stripe concedes that US workers have been battered over the last five years since the onset of the global economic crisis. What most fail to concede is that the battering was the direct result of a one-sided class war.

From every perspective, measured by every economic indicator, all US workers-- those organized into trade unions and those not-- have been hammered relentlessly. Unemployment, measured by the government's least telling index, remains unconscionably high. Labor force participation, a better measure of the job picture, continues to decline. And the jobs that do become available are unprecedentedly part-time, low-paying, or temporary.

Wages are stagnant or declining in every sector and labor's share of national wealth continues to atrophy. Benefits are under attack with workers’ contributions to existing benefits growing and employers’ share shrinking.

The oft-cited road to success for working class youth-- a college education-- has proven fool's gold. The average student is saddled with $25,000 in student debt and a marginal job that retards getting out of debt and capturing meaningful savings.

At the same time, a “recovery” has occurred: production and national wealth have rebounded to and surpassed their pre-crisis levels. Profits and profit growth are well above historic levels and trends. And the stock market has revived energetically.

The widely heralded “recovery” has only been a recovery for the very wealthiest. A recent study by the formidable economic research team of Saez and Piketty shows that 95% of the income benefits of this one-sided recovery have accrued to the top 1% of income recipients. The other 99% must settle for a tiny share of the meager remaining 5% gain in income!

That US workers’ fate and the fate of their employers and their minions are on two separate, divergent tracks is undeniable. That these two tracks are sustainable is entirely a different matter, a matter to be settled when workers embrace a fight back in the struggle between classes.

While pundits from across the political spectrum acknowledge the huge and growing chasm between the rich and working people (see, for example, Paul Krugman's Rich Man's Recovery, The New York Times), they offer little by way of explanation and even less toward addressing and correcting the condition.

Instead, they deplore and regret, condemn and rue the sorry plight of working people in the face of burgeoning wealth channeled to the privileged. They trot out a host of tired, ineffective nostrums that consistently evade changing the dynamics that invariably generate growing inequality. Slogans like “tax the rich” warm the blood, but get no political traction. And on the rare occasion when tax increases and the like survive political mine fields, the rich find ways to evade them. Given the political power that inequality confers to the wealthy, it should be no wonder that even modest reformist proposals are decisively aborted by the best “public servants” that monopoly corporations and their wealthy owners can buy.

What, then, are the dynamics that generate inequality? What really accounts for the ever widening income and wealth game between a tiny minority and the vast majority of US citizens?

No understanding of economic inequality in a global capitalist economy can begin without an acknowledgment of class. The existence of social classes is the unwelcome analytic tool that capitalist apologists devote careers to denying. Media savants and academic authorities choke on the word “class.” To them, class division is a distant memory of hereditary aristocrats and down-trodden peasants. Surely, they affirm, the rise of representative government has eradicated class distinctions.

To avoid the obvious, liberals and so-called “progressives” have created a class that simply hangs in the air, absent any supporting structures: the middle class! A favored idea embraced by politicians, top labor leaders, and social workers, the middle class is said to shrink, decline, or disappear; yet no one tells us where the lost members go!

This slick trick hopes to mask the simple fact that the US is not a classless society.

Contrary to popular mythology, social life in the US is not all harmony and bliss. Instead, it is one of conflicting and incompatible interests. Moreover, the sharpest differences, the differences that determine material well-being, are differences of social class. The great contribution of Marxism is to reveal exactly how class is best understood-- not as social position, profession, or subjective perception, but as a material relation between employer and employee. That is, the most useful discrete divide is between those who engage the labor of others and those who provide that labor. The former constitutes a class of employers and their minions; the latter-- a much larger group-- constitutes the working class.

Even a casual reflection on the relation between the two classes in capitalist society exposes a sharp and irreconcilable difference of interest. Those who employ labor share no other goal than maximizing the profit of their enterprises. Put simply, from the Mom and Pop store to the largest monopoly corporation, owners are in business to make money. While small enterprises are limited in scope and intensity, larger enterprises, especially those with investors and shareholders, are driven relentlessly to achieve greater and greater rates of profit and sums of profit.

It is the logic of capitalism to reduce the costs of economic activity and command a greater share of that activity for the owners, investors, and shareholders. From the perspective of the worker, “reducing costs” translates into a relentless attack on the wages and benefits of the working class. The less that must be shared with the worker, the more that can go toward profit.

Since the dawn of capitalism, workers have recognized the divergence of interest between profit maximization and realizing their desire to improve their economic standing. They have understood the necessity of fighting to both maintain and expand their share of the fruits of economic activity. The history of labor is a history of the development of the instruments (unions, political parties), techniques (unity, strikes, demonstrations), and ideology (class, class consciousness, class struggle) necessary to secure a greater share of the surplus generated by the labor process. And among the most advanced, visionary workers, a world entirely free of the employer/employee relationship, a world without exploitation, a world of common, social ownership, is the goal.

Thus, we can and should measure the success or failure of the working class movement by how well it has fared in the battle with employers for a greater share of that surplus.

And by that measure, or any other, not only the last five years have been a disaster, but the previous three decades as well. Income and wealth distribution has shifted dramatically in favor of the employer class and its attendants. The rich are winning a class war for the lion's share of socially produced wealth. The working class is losing even the gains of the past.

How does this happen?

While the employers have mounted an aggressive assault on workers' wages and benefits, ostensible workers' organizations have failed workers.

The Democratic Party enjoyed the support of the working class thanks to both real and imagined gains won through the New Deal of the 1930s. In the ensuing years, that high point of labor-friendliness dissipated, with its last echoes embodied in the 1976 Democratic Party platform. Of course that platform was betrayed by the Democrat President-elect, James Carter. Never again did the Democratic Party embrace labor's cause, despite Don Quixote-like efforts by Jesse Jackson in subsequent years. While establishment Democrats mocked Reagan's lame “trickle down” economics, a decade later they celebrated the same idea with their absurd slogan that “a rising tide lifts all boats.”

Obama, the latest political “friend” of labor, has so far failed to deliver anything of significance to workers in the five years of his administration, nothing that might have reversed the grinding, painful decline of working class standards of living.

Certainly the top leaders of the trade union movement have served workers no better. Accordingly, they have been punished for their failure by a sharp decline in union membership, a decline that has lead them to panic before their own fate.

Of course their concerns, born of self-preservation, are nothing compared to the devastation of the working class inflicted over the last four decades. Their failure to use the available tools of class struggle, their reliance on cozy arrangements with bosses, and their identification with the health and flourishing of corporations are policies that have proven severely injurious to the working class.

Collaboration that links the fate of the working class to the fate of the corporations has paid off handsomely... for the corporations. A recent study summarized in The Wall Street Journal submits that by the end of this decade, “Adjusted for productivity, average labor costs will beat Japan by 18%, Germany 34%, and France 35%.” The study doesn't bother to mention what this will mean for US workers, of course. Their losses to the gods of competitiveness are capitalists' gains!

To take an example, US auto sales have soared to levels unseen since before the economic crisis first struck. Corporate profits are growing at a record pace.

How do they do it?

First, the US auto industry received massive tax-payer bailouts from the Obama administration, but only on the condition that they close plants and lay off workers! So much for the Democratic Party friends of labor.

Secondly, the industry produces the same amount of vehicles with less than 80% of the former workers, a forced-march increase in productivity.

And thirdly, at United Auto Worker unionized plants, the union submitted to deep concessions. Entry level UAW workers now make $15.78 an hour, a rate commensurate with an annual wage a mere 12% above the level defined by the Federal government as “living in or near poverty.” Once, the UAW wage and benefit package was the gold standard of industrial unionism!

Because of their total capitulation to the auto industry bosses, the leaders of the once proud UAW have resorted to pursuing the organization of the Chattanooga, Tennessee Volkswagen plant by sneaking through the back door. They hope to use a European Union regulation and their cozy relation with the company to secure recognition. How else to “win” a non-union shop when union and non-union wages are virtually equal? (Actually, when relative costs-of-living are factored, they are sometimes better in non-union plants).

Indeed, there is no class war when one side is always in retreat. The rout can only be reversed if workers shed their blind support for the Democratic Party and vigorously exercise their independence. The rout can only be reversed when workers transform their unions into class-struggle weapons and launch a counter-offensive.

The future doesn't have to continue with the past.

Zoltan Zigedy
zoltanzigedy@gmail.com