Human Rights and iPhones

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

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

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

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,
zoltanzigedy@gmail.com

THE TYRANNY OF BONDS

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

zoltanzigedy@gmail.com

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
zoltanzigedy@gmail.com

Debt, Greece, and the Fight Back

Debt means different things to different people. For a family with two modest income jobs (if they're lucky enough to have jobs), a mortgage and two kids in college, debt is the only route to having a reasonable standard of living with some guarantee of the satisfaction of health care needs or other insurances against the contingencies of life. Debt and its burdens count as a withdrawal against future income and wealth. For most people – and most people fit this profile to some extent – mortgages, credit cards, home equity loans and other forms of borrowing – are the only bridge to a level of comfort available to the previous generation of working people.

For the professional and small business class – what Marx called the petite-bourgeoisie – debt is the mechanism that provides a standard of living that establishes a common bond and identity with the very rich. Jumbo mortgages, expensive car loans, small business loans, and lines of credit support membership in the clubs, associations, and parties of the wealthy, while greasing the track of access to business and social contacts.

But in the stratosphere of economic life – with the very rich and monopoly corporations – debt plays an entirely different role. At this rarified level of economic life, debt is an important – very important - tool for the accumulation of wealth. Apart from collecting the interest on the debt of everyone else, the very rich use the easy access to “other people’s money” to finance mergers and acquisitions, leverage investment opportunities, and influence and exploit the direction of economic events.

Economic textbooks celebrate the access to borrowed funds as the spigot for entrepreneurial initiative and bootstrap risk-taking, but this is merely a doctrinaire distortion of debt’s actual role. Even in the heralded dot.com boom and the popularization of venture capital as the debt-driven fuel for innovation and business creation, borrowed money was funneled into financial speculation and acquisition more than productive activity. The collapse of NASDAQ stocks saw the destruction of enormous reservoirs of unreal wealth – not unreal because it was fictitious, but unreal because it was obligations against future economic activity that would never be realized. That is to say, it was, broadly speaking, financial debt.

As economic data demonstrates and the current crisis underscores, debt-reinforced financial speculation plays a larger role in the capitalist economy than at any time in the past. In the US, in particular, financial activity nearly dominated the economy before the crash, accounting for over forty per cent of profits. Much of this explosion of activity was both speculative and debt-driven. Despite much inflamed rhetoric about taming it, the truth is that financial speculation marches on unabated: half of US corporate profits were derived from the financial sector in the last quarter.

Greece

In the fall of 2009, the media spotlight fell upon the fiscal health of Greece, a mid-level economy in the European Union. The newly elected social-democratic PASOK government revealed that the former conservative government had substantially understated the budget deficit. While tongues wagged, this revelation only exposed what everyone knew but never spoke. With only a few exceptions, every EU government ran budget deficits far beyond the EU guidelines. Moreover, in the face of an enormous world-wide economic downturn, deficit spending was the order of the day, urged by every responsible economist. The revised budget deficit as a percentage of GDP, while exceeding most EU countries, was less than Ireland’s and not that much greater than Spain’s and the UK’s. Total debt as percentage of GDP was also – roughly on the level of Italy – but not that much more than some other countries. In fact, Japan’s debt/GDP level is nearly double Greece’s. The next big fiscal challenge facing Greece was to be the redemption of 8.5 billion euros of Greek bonds on May 19, 2010, seven months after the budget announcement. Nonetheless, Greece became the poster child for fiscal irresponsibility. And a ferocious attack was launched on Greece from many quarters.

Like locusts, financial speculators descended upon Greece. Default insurance on Greek bonds rose from $120,000 on $10 million in September, 2009 to $425,000 in February, 2010 and over $900,000 on April 27. The yield spread between German 10 year bonds and their Greek counterparts grew from 1.3 in September, 2009 to 4 points in February, 2010, peaking at 5.17 on April 22 – a fateful day when trading in Greek bonds virtually stopped. In a rather tepid defense of speculative traders, The Wall Street Journal conceded that in November, “A wide array of financial firms now launched aggressive bearish bets against Greek bonds and the euro, too – some seeking to profit and some just to protect themselves.” Interestingly, the Journal notes that others seeking to protect themselves simply sold off their holdings in Greek bonds at that time, a move that softened the market for Greek bonds and assuredly increased the value of the “bearish bets”. Big players in credit default swaps in “late 2009 and early 2010 included Goldman Sachs Group Inc., Barclays, Spain’s Banco Santander and France’s Credit Agricole SA.” Unmentioned in the Journal apology for speculators was the pregnant fact that investors in credit default swaps (“bearish bets”) need have nothing to protect and only profits to gain, a now established modus operandi of the ubiquitous Goldman Sachs. As for the euro, speculators decidedly moved markets, betting against it. The same Journal article reported that “By February 9, Chicago Mercantile Exchange contracts betting on a decline in the euro against the dollar outnumbered positive bets by a record of over 54,000, according to CFTC [Commodity Futures Trading Commission] data.” It was no wonder that an exasperated Greek Prime Minister, George Papandreou, blamed “traders and speculators” for Greece’s woes.

With speculative capitalism, manipulation trumps perception and reality. The Bank for International Settlements (BIS) is the keeper of sovereign debt statistics, responsible for supplying data to all institutions – including the International Monetary Fund – regarding the debt of all countries. A curious thing happened this spring: “Then, on April 22, BIS released its fourth-quarter report. In the latest count European bank exposure to Greece dropped by tens of billions of dollars, led by Swiss banks’ exposure that plummeted 95% to $3.7 billion”, according to The Wall Street Journal (4-25-10). Remember, April 22 was the critical day when Greek bond trading nearly came to a halt. With nearly one-third of total Greek debt disappearing overnight, one would think that markets would have reacted; none did. With European banks miraculously reduced in exposure to Greece’s woes, one would look for some good news in euro currency trading; none appeared. “’We don’t fully understand the marked reduction in Swiss bank exposure to Greece’ Citigroup chief economist Willem Buiter, a former Bank of England official, wrote in 70-page report published this week on Europe’s sovereign-debt problems”, offered The Wall Street Journal.

The point here is not that the Greek debt was bogus – likely it was simply distributed differently than the BIS reported – but that perception had no effect on the debt or currency markets. The speculative attack on Greece continued relentlessly.

The speculative onslaught was expressed in other ways. As The New York Times reported on May 9, 2010: “The crisis, by contrast [to other debt-induced crises], seemed to ricochet from country to country in seconds as traders simultaneously abandoned everything from Portuguese bonds to American blue chips. On Wall Street on Thursday afternoon, televised images of rioting in Athens to protest austerity measures only amplified the anxiety as the stock market plunged nearly 1,000 points.” Despite the Times calculated attempt to bring the victims – the outraged Greek citizenry – into the explanation, the speed and scope of the financial onslaught underline the role of financial speculation. In Greece, the Acropolis still stood, but the financial world was in shambles despite an announced bailout of $146 billion the week before. Seemingly, nothing could satisfy the speculators – the same voracious beasts that brought the US economy to its knees in 2008 – once they had tasted blood.

The European Response

What began as a scold over $236 billion of Greek debt and a budget deficit of under $30 billion in the fall of 2009 morphed into a $955 billion euro-zone wide bailout package in May of 2010. How could a small cut in the Euro-body develop into a gaping, life-threatening wound half a year later?

Earlier in the global crisis, I wrote of the danger of “centrifugal forces” in the European Union undercutting any effort to construct a common solution to the crisis. Indeed, I projected “that these centrifugal forces… threaten to disrupt it [the EU], if not break it apart.” By that claim, I meant that the differently scaled economies of the constituent states with different levels of development, with different national and cultural values, with different standards of living, with different approaches to the market, etc. would prove to be an obstacle to a common program. In short, European integration was both mythical and incomplete. It was these “centrifugal forces” that made the EU, beginning with the contrived Greek crisis, easy prey for the speculative wolves.

In the US, when the banking system sagged and threatened to collapse under the weight of rampant financial speculation, the government anointed the largest institutions as “too big to fail” and supported this anointment with massive infusions of federal funds. This commitment effectively drove the speculative wolves from the door. At the same time, political forces and the labor movement in the US missed a golden opportunity to cage the speculators and socialize the financial sector. It must be remembered that sufficient public funds were made available to effectively buy the financial giants when they were on their knees. The opportunity is gone and these banks and speculators are now barking at the European door along with their global counterparts.

Much of the blame for the European fiasco is placed on the shoulders of the German government and its “Germany first” nationalism that delayed any effective response to the speculative attack. With the largest, most advanced and most thoroughly neo-liberalized economy in the EU, the German foot-dragging on a bailout demonstrated the “centrifugal forces” that challenge a united Union.

In the end, after toying with more modest bailout proposals that might have stemmed or, at least, slowed the tide of speculative assault, the EU was forced to offer a massive backstop to the attacks, signaling a determination to meet the bets regardless of the speculative ante. In this six month casino power play, no one in the popular or financial press challenged a financial system that could so utterly threaten global economic stability; instead tiny Greece was blame for its irresponsible and profligate economic policies.

The Political Ploy

Capitalism is anathema to cooperation. The very nature of capitalist social and economic relations based upon competition and self-enrichment foreclose the possibility of common action in the economic sphere. On the other hand, capitalists eagerly work politically to achieve common ends. They unfailingly pool their resources, direct the corporate media, and craft a common plan in pursuit of political advantage. These facts, more than any others, are the foundation for the Marxist theory of a ruling class. And nothing demonstrated this political solidarity – ruling class solidarity – more clearly than capitalism’s world-wide response to the Greek debt farce. Without exception, world leaders and their corporate mouth-pieces called for debt reduction through social austerity; the capitalist class saw an opportunity to benefit from the financial debacle and it seized it. The thrust of this call was to reduce public sector spending for human needs, not spending on the military, security services, corporate subsidies, or public-private partnerships, but salaries, pensions and social welfare. New revenues were to be generated through regressive taxes that would place even greater burden on working people, while leaving corporations and the very rich only modestly discomfited.

The promise of a financial bailout and the shabby decadence of social democracy, led the Greek PASOK government to surrender with only a whimper to the savage cuts demanded by the EU and the IMF: public sector salaries are to be cut, along with benefits. The retirement age will be dramatically increased and regressive consumption taxes will be imposed. Work rules will be changed to the benefit of employers and privatization will be sought. In short, the social democratic government agreed to dismantle the social democratic safety net that Greek and European workers fought so hard to establish. Even the IMF estimates that Greek unemployment will reach 15% next year. A former advisor to the IMF, quoted in The Wall Street Journal, said that “The scope of these conditions is brutal.”

With the capitulation of the Greek government, pressure shifted to other EU governments, including those with relatively modest vulnerability to speculative encroachment. Ireland has projected cuts of 5-15% for public sector workers, nearly$1 billion in welfare benefits, and a reduction in child-benefit payments; Spain has announced 65 billion euros in cuts including a five per cent cut in public sector wages; and Portugal projects public sector wage cuts and a value added consumer tax increase. The Sarkozy government in France has announced plans to raise the retirement age from its current minimum of 60 years to 62 or 63 and the newly elected coalition government in the UK plans to make drastic cuts totaling $8.65 billion even before a new budget is offered in the coming months.

In the private clubs and corporate board rooms these “preemptive” moves are cause for celebration. From the shadows of a speculation-induced crisis remotely involving Greece, elites are witnessing the collapse of the European safety net and the immiseration of the European working class with the quiet acquiescence of Social Democratic Parties.

Ironies abound. The rush to extreme austerity in Europe will dampen any hope of economic recovery; growth will be stifled and unemployment will jump with the loss of billions of euros in consumer purchasing power. The austerity programs will necessarily result in a self-induced economic downturn. Even more ironic, the US Treasury Secretary, Timothy Geithner, and other US officials are arguing forcefully that the Europeans should not abandon the course of economic stimulation, a course completely at odds with the new-found commitment to fiscal austerity and reduced public spending. US officials fear, correctly, that a deeper downturn in Europe will scotch any chance of a US recovery.

While lobbying in Europe, Geithner is urging Germany to back away from its unilateral ban on financial market speculation. Irony of ironies, Germany tacitly recognizes the devastation caused by financial speculation: “Certain transactions that threaten the stability of financial markets should be forbidden”, according to the deputy German finance minister. This amounts to a confession that the debt crisis wracking the EU was induced by financial bets not tethered to productive investment. And Geithner’s role in opposing this ban is to protect the financial behemoths that dominate the US economy. Such are the contradictions of capitalism for all to see.

A Line in the Sand

It is no exaggeration to say that the most intense and determined opposition to this capitalist ambush has come from the Greek Communist Party (KKE) and its All Workers Militant Front (PAME), a workers’ umbrella organization that unites Greece’s most militant unions and unionists. The Greek Party, since the demise of the Soviet Union, has served as the unifying center for Marxist-Leninists throughout the world and a significant force in electoral politics and revolutionary activism in Greece. Throughout the current economic crisis, the KKE has acted to defend the gains of Greek working people while calling for radical structural reforms to seize the opportunity afforded by a wounded capitalism. Unlike the maneuvering and temporizing of much of the left and Communist-lite Parties, the KKE has foregone Facebook militancy for demonstration and confrontation in the streets. Unlike the blurry all-class approach of many organizations, the KKE and PAME have struck a posture of working class partisanship with an unabashed goal of socialism. With the current violent assault on European living standards, the KKE was well-prepared to organize massive strikes and demonstrations to meet the attacks. By cajoling and shaming the more backward social democratic unions, KKE and PAME have brought hundreds of thousands of Greeks into angry and determined resistance.

As Aleka Papariga, the dynamic General Secretary of KKE said recently at a press conference:

It is a tragedy for the people to lose their rights, to see their wages being cut down despite the long lasting struggles in the previous years, despite the sacrifices that led even to blood shed. But above all it is a disgrace -and we do not believe that this will happen- these barbarous measures to pass without the people’s resistance, without the people’s counterattack and even more so to give the impression that the people consent to these measures.

On May 12, 2010, she affirmed:

Our strategy is to stop the barbaric measures being imposed as much as we possibly can under today’s conditions, to prevent them from being legitimized in people’s consciousness, for working people to disassociate from PASOK and ND and their policies, for the movement to regroup and move forward on a course of counter-attack in order to overturn today’s balance of forces, for people’s power. We are not indifferent and neutral observers but since the political balance of forces does not permit us effective intervention in favor of the people, we put priority on the movement, outside of the Parliament…

For this reason joining forces with KKE is necessary, regardless of whether working people agree with KKE on everything, or if they have questions or different viewpoints on socialism.

It is this boldness with a commitment to principled unity that separates the KKE approach from the more tepid left organizations in the EU and the US.
It has been said that early in his Presidency, Bill Clinton was told that he could not pursue a particular policy course because the bond markets would respond unfavorably. It is time for this shackle to be broken. Few have the courage to tackle this logic, but the Greek working class does under the leadership of Communists. We should all rejoice.

Further, the KKE sees success in this struggle as furthering Greek independence from the oppressive constraints of regional and international watchdogs and towards people’s power and socialism.

The example of Greece has shown the way for worker militancy in Portugal, Spain, and France. Demonstrations and strikes have been organized and called to meet the coming onslaught on working class standards of living in those countries.

We, too, in the US and other capitalist countries, should follow the Greek example. Currently, the Obama administration has a stealth plan under the innocuous name of the National Commission on Fiscal Responsibility and Reform designed to eviscerate Social Security, Medicare, and Medicaid after the November, 2010 elections. We must not only fight this but demand a strengthening of these three pillars of working class living standards.

We must go beyond a policy of awarding tax credits, encouraging contractor profiteering, and subsidizing low wage jobs to solve the unemployment crisis; we must fight for legislation establishing a shorter work week at the same pay to create the space for good paying, sustainable jobs.

We must re-establish the antiwar movement with a strong anti-imperialist voice to halt US, NATO, and Israeli aggression against countries entitled to their own peaceful course. Consider attending the inaugural United National Peace Conference in Albany, NY, July 23-25 (www.nationalpeaceconference.org).

And let us not forget our Greek comrades. I urge everyone to approach your union local, labor council, community group, movement chapter, and political organization to send messages of thanks and solidarity to the KKE (cpg@int.kke.gr) and PAME (international@pamehellas.gr).

Zoltan Zigedy
zoltanzigedy@gmail.com