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Friday, April 29, 2011

The Bipartisan Citizen Beat Down and the End of Democracy

The Bipartisan Citizen Beat Down and the End of Democracy

April 29th, 2011

Michael Collins

Both political parties are manifestly hostile to citizens. This hostility reduces electoral participation to just over 50% of the voting age population for presidential elections and less than 40% for off-year congressional elections. The absence of 50% to 60% of those eligible to vote creates minority rule and threatens the legitimacy of any ruling party. Truly, every election ratifies the rejection of both parties.

Citizens are the foundation of functional democracies. The notion of the individual citizen is disparaged by some as an anachronism, a fanciful label from the 18th century that means little today. Democrats and Republicans parse voters by race, region, religion, and, to a lesser extent, income. These groups and subgroups within them are the building blocks of electoral victory according to the common wisdom.

Nevertheless, a vibrant democracy relies on individual citizens who give legitimacy to the nation state every day through their broad ascent to the laws, civil and criminal, and their willing participation in politics and civil obligations, formal and informal.

Citizens Consistently Reject the Political Process and Rulers

From 1980 through 2010, off-year elections showed a 37% average turnout. Presidential elections had a slightly higher participation, averaging 53% since 1980.

We were told that 2008 would break turnout records. When the dust settled, voter turnout was only two points higher than 2004. Only 38% of eligible voters turned out for the 2010 congressional elections.

The forbidden fact about public rule in the United States is simple and obvious: it is nothing more than perpetual battle between two minority factions that consistently fail citizens. Major changes in power represent voter punishment of the most recent failed rulers, while the largest faction, non-voters, consistently make the most profound statement about governance - it's not worth the trouble of voting.

The Bipartisan Beat Down

The non-voters and many of those who vote reluctantly have good reasons for their clear dissatisfaction with the political system.

Candidates are compromised before every single election by the uniform bias towards those with the greatest ability to make campaign contributions. Money is the first election hurdle. Those elected say that, at most, money buys access, a damning admission that is short of the truth. Money buys votes, legislation, regulation and other favors from the government, all used to preserve and expand the interests of those with the most money to give.

Once elected, the compromised servants are more interested in their true constituents, their big money patrons, than they are in the public.

Those elected give us wars that the majority reject or would have rejected had they received even the barest outline of the rationales for war.

Those elected cut long-standing benefits in order to maintain government subsidies for their contributors. Democrats countered the Republican proposal to destroy Medicare with a kinder, gentler set of austerity proposals. Social Security is also in the bipartisan cross hairs. Republicans long to privatize the system while Democratic leaders endorse the findings of a presidential commission co-chaired by two Wall Street minions who started with two assumptions. Benefits cuts were necessary and the military budget and bailouts were off limits. The cruel dialectic swings between nothing and nothing much at all.

Flat income, when adjusted for inflation, and no new jobs, when adjusted for population growth are the work product of those who rule in our name.

The elected dismiss threats to the environment of hand then offer remedies in the form of energy policies that produce more pollution.

The rights and protections supposedly guaranteed by the Constitution remain in tatters despite electoral changes. Habeas corpus is in limbo. Electronic surveillance becomes an option whenever authorities feel the need. They just file a motion with a secret federal court in Washington, DC and get the warrant (if they have time to bother). Torture continues as a sanctioned government program.

Citizens who just say no to voting or who vote with little expectation of change know these fundamental truths. Our votes do not matter. Our public servants are really privateers working for moneyed interests. Ultimately, there is no moral obligation or intellectual honesty on the part of rulers. They promote an ongoing fraud that has severely damaged the country. These so-called public servants have taken things so far down the road to ruin; there may be no achievable solution.

There is no law to protect us. We are at the whim of the financial elite, the author of our troubles.

There is no national hope, no future, and no redemption as long as the current system remains in place controlled by those with large accumulations of money.


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Tuesday, April 26, 2011

How Nonviolence Protects the State

April 25, 2011 at 19:05:14

How Nonviolence Protects the State

By Dr Stuart Jeanne Bramhall (about the author)

How Nonviolence Protects the State is the title of a 2007 book by Peter Gelderloos. It can be downloaded free at http://zinelibrary.info/files/How%20Nonviolence%20Protects%20The%20State.pdf

As a long time activist, I have always been troubled by the militant nonviolent perspective that dominates the progressive movement in the US . In some circles, the taboo is so absolute that activists are systematically demonized for even raising the subject. I tend to get suspicious whenever I see the politically correct thought police swing into action -- especially when they embrace views that are clearly counterproductive to successful organizing (the US left, in contrast to other countries, is a shambles). An arbitrary taboo against specific topics is often a sign that your movement has been infiltrated, either by Cointelpro or left gatekeeper agents.

The systematic misrepresentation of Gandhi's and Martin Luther King's views on violence also puzzles me. Neither were militant pacifists. Gandhi clearly articulated situations in which he would advocate violence as a strategy. Whereas as Mark Kurlansky describes in 1968, King employed violence strategically in some of his marches (in which female protestors slapped cops to provoke a violent overreaction) to maximize media attention.

Likewise I have never understood the failure to distinguish between property destruction and interpersonal violence. If anything progressive organizers come down harder on activists who break shop windows (because of its greater harm to corporate interests?) than those who get into scuffles with cops or counter protestors.

Alienating the Working Class

As an organizer, however, what bothers me most is that militant nonviolence is totally alien to working class culture and creates a major stumbling block in drawing blue collar workers into the movement for change. We try to recruit working class activists by appealing to their deep resentment over the unfairness of wage exploitation and privilege. Then we outlaw their natural reaction -- to level that privilege by destroying property and looting (to reclaim what they believe is rightfully theirs) or bashing a cop or security guard who is manhandling them or standing between them and food for their kids. I have repeatedly seen blue collar activists marginalized and demonized in these debates. And yet people wonder why they are drawn to the Tea Party movement (which isn't bound by politically correct niceties) rather than the left.

Reviving the Debate

Obviously I'm extremely pleased to see Gelderloos, American Indian Movement activist Ward Churchill, environmental activist Derrick Jensen and even the culture jamming group Adbusters revive the debate. In 2007 Churchill released the second edition of Pacifism as Pathology: Reflections on the Role of Armed Struggle in North America . This can also be downloaded free at http://www.cambridgeaction.net/images/c/c7/Pacifism_As_Pathology.pdf

AIM activist Ward Churchill by RAIM-Denver

Moreover I am unsurprised to learn that the taboo against violent protest isn't a totally spontaneous development in the American progressive movement. As in the case of alternate media outlets that refuse to report on 911 or the JFK assassination, there is increasing evidence that government-backed left gatekeeping foundations have carefully inserted themselves into roles where they dominate the dialogue around the issue of violence.

The Role of Left Gatekeeping Foundations in Promoting Nonviolence

Australian journalist and researcher Michael Barker is one of the most prolific writers about the role of CIA, Pentagon and State Department linked foundations in the nonviolent movement. The ones he has followed most closely are the National Endowment for Democracy, the US Institute for Peace, the Albert Einstein Institute, the Arlington Institute, Freedom House, the NED-funded Human Rights Watch, the International Republican Institute, and the International Center for Nonviolent Conflict (http://www.greenleft.org.au/node/38214).

Most of the research into these foundations focuses on their work overseas, particularly their active role in creating "color" revolutions in Eastern Europe and elsewhere. However as Barker points out, the ICNC also has major influence, via its workshops, literature and documentaries, on progressive organizing in the US .

To fully understand the role of International Center for Nonviolent Conflict (ICNC) and its sister foundations in promoting a de facto taboo on violent protest in the North America, it's helpful to understand the role they have played in galvanizing the "color" revolutions in the Philippines, Eastern Europe and elsewhere now the Middle East and North Africa. According to Australian journalist and research Michael Barker (http://www.greenleft.org.au/node/38214), this role (in the Philippines , Nicaragua , Chile and Haiti ) was first identified in William I. Robinson's groundbreaking 2006 book Promoting Polyarchy. "Polyarchy" is defined "low intensity democracy" -- a form of government that replaces violent coercive control with the type of ideological control (i.e. brainwashing) that Noam Chomsky describes in Manufacturing Consent. As Ward Churchill (in Pacifism as Pathology) and Peter Gederloo (in How Nonviolence Protects the State) clearly articulate, white middle class activists have very complex psychological reasons for their dogmatic attitude towards political violence. However I feel it's also important to look at the role played by the US government and the corporate elite in covertly promoting these attitudes.

In Promoting Polyarchy, Robinson describes how the CIA, the FBI and other intelligence agencies were pressured to cut back on many of their more repressive covert activities (i.e. covert assassination) as a result of Church committee reforms enacted in the 1970s. This resulted, in 1984, in the creation of the National Endowment for Democracy (NED), which works closely with the CIA and the US Agency for International Development (the USAID is a well-documented conduit for CIA funding), as well as other "democracy manipulating" foundations, such as US Institute for Peace, the Albert Einstein Institute, the Arlington Institute, Freedom House and the International Republican Institute. Robinson specifically outlines how these US-based "democracy manipulating organizations" orchestrated "non-violent" revolutions in the Philippines and Chile to prevent genuinely democratic governments from coming to power, as well as sabotaging democratically elected governments in Nicaragua and Haiti (where they caused the ouster of the Sandinista government and the populist priest Jean Bastion Aristide).

Since then numerous studies have furnished further examples where these organizations have infiltrated and "channeled" (i.e. co-opted) the genuine mass movements that form naturally in countries dominated by repressive dictators. The goal is to make sure they don't go too far in demanding economic rights (for example, labor rights or restrictions on foreign investment) that might be detrimental to the interests of multinational corporations. All the "color" revolutions in Eastern Europe , which also received substantial funding from George Soros' Open society Institute, have been a major disappointment owing to their failure to bring about genuine change (see http://original.antiwar.com/justin/2006/09/29/the-color-revolutions-fade-to-black/).

The ICNC's PBS Documentary

Barker's work goes further than Robinson's, examining the effect of the ICNC in particular, on progressive organizing within the US . He points to the phenomenal influence of the 2000 book and PBS documentary (and now computer game) A Force More Powerful: A Century of Nonviolent Change.

The ICNC is understandably defensive about research by Barker and others linking them to the NED and other "democracy manipulating" foundations. In fact their website devotes an entire page "Setting the Record" straight http://www.nonviolent-conflict.org/index.php/about-icnc/setting-the-record-straight, in which they refute these studies. Their main argument is that they receive no NED or other foundation or government funding. This is totally factual, as they're entirely funded by their co-founder Peter Ackerman, a member of the Council on Foreign Relations, and his wife Joanne Leedom-Ackerman. Ackerman earned his fortune as a specialist in leveraged buyouts, the second highest paid in Wall Street history (Michael Milken made more but wound up in jail.)

Why Is the ICNC Seeking to Oust Hugo Chavez?

Barker refers to the argument over the source of their funding as whitewashing, especially in view of the recent collaboration between the ICNC and the Albert Einstein Institute in training members of the Venezuelan resistance seeking to oust democratically elected Hugo Chavez.

As Barker points out, both Ackerman and his wife and ICNC co-founder Jack Duvall have a long history of working for and with the other "democracy promoting" foundations. In addition many of the vice presidents and other officers they hire to run the ICNC have connections with US or foreign military/intelligence or other "democracy promoting" foundations.

This is clear from the following two diagrams, which summarize the "democracy manipulating" and military intelligence links of the couple who fund the ICNC (see http://quotha.net/node/1606 and http://quotha.net/node/1609 for a detailed explanation of each of these links and an explanation of their role in "democracy manipulating"):

Peter Ackerman's "democracy manipulating"links by Quotha

Joanne Ackerman's "democracy manipulating" links by quotha

Democracy manipulating links of other ICNC officers by Quotha


A detailed description of ICNC co-founder Jack Duvall's "democracy manipulating" links can be found at http://www.sourcewatch.org/index.php?title=Jack_DuVall


I am a 63 year old American child and adolescent psychiatrist and political refugee in New Zealand. My recent memoir THE MOST REVOLUTIONARY ACT: MEMOIR OF AN AMERICAN REFUGEE www.stuartbramhall.com describes the circumstances that led me to leave (more...)

The views expressed in this article are the sole responsibility of the author
and do not necessarily reflect those of this website or its editors.

Capitalism and Class Struggle

Dissident Voice: a radical newsletter in the struggle for peace and social justice

Capitalism and Class Struggle

The class struggle continues to play a central role in the process of capitalist accumulation, albeit it takes different forms depending on the socio-economic context. In order to map out the unfolding of the class struggle, it is necessary to specify key concepts related to the (a) varied conditions and dominant sectors of capital in the global economy, (b) nature of the class struggle, (c) the principle protagonists of class struggles, (d) character of the demands, and (e) mass struggles.

Capitalist accumulation is unfolding in a very uneven pattern with important consequences for the nature and intensity of the class struggle. Moreover, the particular responses by workers and especially the capitalist state to the general condition of the economy has shaped the degree to which class struggle intensifies and which of the two major “poles’ (capital or labor) has taken the offensive.

Conceptual Clarification

In analyzing contemporary capitalism, the most striking distinction is between three radically different conditions facing the capitalist system. These include countries experiencing (a) high growth, (b) stagnation, and (c) deep crises.

High growth capitalist countries are sharply divided between those which are (a) commodity boomers, largely exporters of agro-mineral-energy products, mostly found in Africa and Latin America and (b) manufacturing exporters – largely found in Asia (China, India, South Korea).

Crises economies can be sub-divided into three groups.

(a) Fast recovery economies include Germany and the Nordic countries, which, after dipping into negative growth have expanded their industrial exports and are growing rapidly since 2010.

(b) Slow recovery or stagnant economies, include USA, Great Britain, France and Italy which have touched bottom, recovered profits especially in the financial sector, but have made little or no progress in reducing unemployment, expanding manufacturing, and increasing overall growth.

(c) Prolonged and deep crises economies, includes Portugal, Spain, Greece, the Baltic and Balkan countries, which are bankrupt, with rising double digit unemployment (between 15%- 20%) and negative growth. They carry a heavy debt burden and are implementing severe austerity programs designed to prolong their economic depression for years to come.

Just as there are uneven patterns of capitalist development, the same is true with regard to the class struggle. There are several key concepts that need to be taken into account in the analysis of class struggle.

First, there is the distinction between ‘class’ and ‘mass’ struggle. In Latin America there are many instances of multi-sectoral worker, peasant or public sector struggles led by class anchored organizations. At times these class based movements become ‘mass struggles’ incorporating heterogeneous groups (street vendors, self-employed, etc.). The contemporary Arab revolts are mostly mass struggles generally without class leaderships or organizations, or in some cases led by ‘youth’ or ‘religious organizations’.

Secondly, there is the distinction between ‘offensive’ and ‘defensive’ class struggles where class organizations either fight to extend their social rights and increase wages or struggle to preserve or limit the loss of wages and living standards.

The class struggle is a two way proposition: while workers and other exploited classes struggle from below, ruling classes and their states engage in class struggle from above to increase their profits, productivity and power.

The class struggle takes various forms. The majority of class struggles today are over ‘economic issues’, including an increasing share of national income. A half decade ago throughout Latin America, as is the case today in the Arab countries, the class or mass struggle was/is primarily political, a struggle to overthrow oppressive neo-liberal and repressive regimes.

With these concepts in hand, we cannot proceed to analyze the relationship between countries and regions in varying degrees of crises or growth and their relationship to the varying degrees and types of class struggle.

Uneven Development and Class Struggle

The countries experiencing high growth, whether in Asia based on manufacturing or in Latin America based on the agro-mineral export boom, are facing a growing offensive economic class struggle over a greater share of the growing economic pie. In China under pressures from below, wages and salaries have exceeded 10% growth, and in some regions 20%, over the past decade,1 while in Latin America, workers in Bolivia and elsewhere demand over 10%.2 In large part high growth is accompanied by inflation3 which erodes nominal increases offered by the state and employers. Especially provocative are sharp increases in the prices of basic foodstuffs, energy and transport which directly impinges on the everyday life of workers.

Among the most promising signs of the advance of the class struggle are the real and substantial socio-economic gains achieved by workers over the past decade in Latin America. In Argentina unemployment has declined from over 20%to less than 7%, real wages have risen by over 15%, the minimum wage, pensions and medical coverage have increased substantially and trade union membership has expanded. Similar processes on a lesser scale have taken place in Brazil: unemployment has fallen from 10% to 6.5% (March2011), the minimum wage has increased over 50% over the past 8 years, and several hundred landed estates have been occupied and expropriated because of the direct action of the Rural Landed Workers Movement. In Latin America, while social revolutionary politics have declined since the mid, 2000’s the economic class struggle has been successful in extracting substantial reforms that improve the livelihood of the working class and impose some constraints on neo-liberalism’s rapacious exploitation of labor, in sharp contrast to what is occurring in Anglo-America and Southern Europe.

In the stagnant ‘developed’ imperial countries, the state has proceeded to impose the entire cost of the ‘recovery’ on the backs of workers and public employees, reducing employment, wages and social services, while enriching bankers and the corporate elite. The US, England and France have witnessed a sharp class offensive from above which in the face of feeble opposition from a shrinking bureaucratized trade union apparatus has largely reversed many previous social gains by labor.4 Essentially the struggles of labor are defensive, attempts to limit the roll back but lacking the class political organization to counter-attack reactionary budgetary measures which cut social programs and reduce taxes for the rich, widening class inequalities.

The most intense class struggles have taken place in the countries with the deepest economic crises, namely, Greece, Spain, Ireland and Portugal. In these countries the ruling class has reversed a half century of social and wage gains in the course of 3 years in order to meet the criteria of the Western bankers and the IMF. The class offensive from above led by the State has been met with a number of general strikes, numerous marches and scores of protests but to no avail.5 The corporate-state elite, led in most cases by Social Democratic politicians, have privatized public firms, slashed millions of public employees, raised unemployment levels to historic heights (Spain 20%, Greece 14%, Portugal and Ireland 13%) and channeled tens of billions into debt payments.6

The crises has been seized by the ruling class as a weapon in reducing labor costs, transferring income to the top 5% of the class hierarchy and increasing productivity, without reactivating the economy as a whole. GNP continues ‘negative’ for the foreseeable future, while austerity undermines domestic demand, and debt payments undermine local investment to reactivate the economy.

The political crises of the rentier-autocratic-corrupt Arab client regimes is manifested in the mass popular democratic movements – on the offensive – toppling regimes in Egypt and Tunisia, to begin with, and challenging the pro-imperial state apparatus.7 In Egypt and Tunisia, pro-imperial autocracies were overthrown but new popular democratic regimes reflecting the new mass protagonists of political change have yet to take power. In the rest of the Arab world, mass revolts in Yemen, Bahrain, Algeria, Jordan, Syria and elsewhere have pressed forward against imperial armed autocracies, raising the spectre of democratic as well as socio-economic changes.

The US and EU imperial powers initially caught off guard have proceeded to launch a counter-attack, intervening in Libya, backing the military junta in Egypt and attempting to impose ‘new’ collaborator regimes to block a democratic transition.8 The mass struggle, influenced by Islamic and secular forces, have a clear program of rejection of the political status quo, but, lacking a class leadership, have not been able to pose an alternative political economic structure beyond vague notions of “democracy.”9

In summary, growth accompanied by a rapid increase in national income and resurgent inflation has been much more conducive to offensive class struggle from below than ‘crises’ or ‘stagnation’, which at best, has been accompanied by ‘defensive’ or rear guard struggles. In part the theory of ‘relative deprivation’ seems to fit the idea of rising class struggle, except that the kind of struggle is mainly ‘economistic’ and less aimed at the state per se. Moreover, the methods of struggle are normally strikes for higher wages. This is most evident in Argentina, Brazil, Chile and Peru where intense struggles have taken place over narrow economistic demands. The exception is the community based Indian struggles in Peru and Ecuador against the state and foreign mining companies exploiting and contaminating their land, air and water.

Nevertheless, several caveats are in order. The working class in Bolivia, experiencing a dynamic growing agro-mineral export, boom, launched a ten day general strike (April 6-16, 2011) over wages.10 The prolonged strike over time, turned ‘political’ raising questions about the legitimacy of the Morales regime among some sectors. In part this is due to the fact that wage increases are fixed by the government. According to the principle workers organization (COB) the raises dictated by the regime were below the rise in the prices of the basic family food basket. Hence, what began as an economic struggle became politicized. Likewise, in the case of Peru,with a dynamic mineral export economy, the neo-liberal Garcia regime experienced sharp economic and ecological confrontations with mine workers and Indian communities. In the run-up to the Presidential elections of 2011, the struggle became highly political, with a plurality of working and peasant class voters supporting Humala the center-leftist candidate.11 In high growth countries depending on big foreign owned mining companies and substantial Indian communities, class conflict combines with ecological, class, national and ethno-community demands.

In other words the distinctions drawn earlier between offensive/defensive and economic/political class struggles are fluid, subject to changes as the struggle and its context changes.

The dramatic rise of the class struggle in high growth China reflects the growing labor shortages in the coastal regions, the huge profits to a new class of billionaires ,the intense exploitation of labor and the entry of a ‘new generation’ of young workers with alternative options to working in a ‘single plant.’12 The ‘socialization’ of large concentrations of workers in big plants, in close proximity, facilitates collective action. Sharpening inequalities, especially in light of the rapid growth of super rich capitalists linked to corrupt political officials and unresponsive state controlled trade unionists has led to ‘spontaneous’ direct class action.13 The radicalizing impact of inflation is evidenced by the outbreak of a large scale strike of truckers in China’s biggest port Baoshan in Shanghai; the workers were protesting rising fuel costs and port fees. According to one report, “Chinese officials have warned that soaring prices and rampant inflation and official corruption pose the greatest threat to Communist Party rule.14

Politically oriented trade union struggles have recently come to the fore in Venezuela, where the Chavez government has emphasized the ‘worker content’ of the “Bolivarian socialist revolution.” This has encouraged workers striking in private firms to demand the expropriation of intransigent capitalists as well as change in the management of public firms replacing bureaucratic technocrats with workers.15

The least developed class struggle is in the ‘stagnant’ United States. A combination of low union density (93% of private sector workers are not unionized), highly repressive labor legislation, a self-perpetuating millionaire trade union leadership totally dependent on the capitalist Democratic Party inhibits the development of class consciousness except in ‘local pockets’ of resistance.16 The rapid erosion of wages has been combined with heightened exploitation (fewer workers increasing production) and the shredding of the last vestiges of the social net (social security and medical plans for the over 65 aged population).17

One could argue that high per capita income per se is not a sufficient reason to assume a weakening of class struggle, as France and Italy have more general strikes than England even as per capita income is higher. What is crucial is the institutional links between trade unions and labor/social democratic parties on the one hand and the free association of factory based worker assemblies on the other. In the US and UK stagnation and reaction are linked to the subordination of labor to neo-liberal Social Democratic/Democratic parties; while in France and Italy the trade unions have closer ties to the factory assemblies and retain a higher degree of class autonomy.18

In other words there is no iron rule that ties particular forms of class struggle to the dynamism or stagnation of the economy – what needs to be included is the degree of independent class organization capable of raising the level of struggle amidst volatile economic and political changes.

Imperialism, Inter-Capitalist and Class Struggle

Despite the economic crises of 2007-2009, that shook most – but not all – of the major neo-liberal capitalist centers – the capitalist class in Europe and North America came out stronger than ever. Following prescriptions laid out by the International Monetary Fund, the major private creditor banks and the Central Banks, the entire burden of debt payments, fiscal deficits and trade imbalances, incurred by the neo-liberal regimes was laid on the backs of the working and salaried classes. Similar class selective austerity measures were applied throughout the “periphery” of Eastern and Southern Europe. The result was a radical restructuring of pensions, wages, social relations of production — the entire ensemble of state class relations. As a consequence a veritable ‘peaceful electoral’ socio-economic counter-revolution from above has occurred that heightens exploitation of labor by capital while concentrating income in the top 10% of the social pyramid.

The imperial countries of the US and Europe facing intensifying competition from the BRICS (especially China) and the industrializing countries of Asia and rising commodity prices, have turned toward seeking ‘competitiveness’ via intensified internal exploitation, greater pillage of the public treasury and imperial wars.

Nevertheless, this inter-capitalist competition is having an inverse effect, raising incomes among workers in the BRICS and lowering living standards in the established imperial centers. This is because the BRICS invest in the productive economy while the imperial centers waste trillions in military and speculative activity.19

One should make a caveat regarding the competition between imperial and BRIC countries, insofar as there are thousands of financial, commercial, technological and manufacturing threads linking them together. Nonetheless, the conflicts between social formations are real, as are the nature of the internal class cleavages and configurations. Imperialism as it is played out today is a burden to working class advance.20 For now the internal dynamic of the rising economic powers seem to provide them with the capacity to finance domestic growth expanding overseas trade and wage concessions to the emerging working class demanding a share of the growing income pie.


While on the surface there is a decline of revolutionary political class struggle from below, there is the potential for economic struggles to become political in so far as inflation erodes gains and political leaders fix rigid ‘guidelines’ on wage advances. Secondly, as Venezuela illustrates, political leaders can provide conditions which favor the advance from economic to political class struggle.

The most dynamic political class struggle today comes from above – the systematic assault on wages, social legislation, employment and working conditions launched in the US, Spain, Greece, Ireland, Portugal, England and the Baltic/Balkan states. There the economic crises has yet to precipitate mass revolt; instead we see defensive actions, even large scale strikes, attempting to defend historic gains. This has been an unbalanced struggle where the capitalist class holds political and economic institutional levers backed by the international power of imperial banks and states. The working class has little in the way of comparable international solidarity.21 The most helpful signs in the global class struggle is found in the dynamic direct action of the Latin American and Asian working class. Here steady economic gains have led to the strengthening of class power and organization. Moreover, the workers can draw on revolutionary traditions to create the bases for a re-launching a new socialist project. What could detonate a new round of political and economic class warfare from below? The resurgence of inflation, recession, repression, and ever deepening cuts could force labor to act independently and against the state as the embodiment of this regressive period.

  1. On workers struggle in China see “Workers call the tune” Financial Times 2/22/11, p. 3 also Financial Times, 2/16/11 “Chinese wages increased 12.6% between 2000-2009 according to the ILO.” []
  2. La Jornada, 4/8/11 Bolivian Workers Confederation demanded 15% wage increase. In 2010, Bolivia had the greatest number conflicts in 41 years. El Pais, 4/16/11. []
  3. “Emerging markets inflation surge” Financial Times, 4/14/2011, p. 1 “Beijing poised to let renminbi rise to fight inflation, Financial Times, 4/17/2001, p. 3. []
  4. On Obama’s Fiscal Year 2012 budget compare New York Times, 4/13/11 and 2/14/11. The later budget speech emphasizes over $4 trillion in cuts over 10 years largely affecting the social net, a major concession to right wing Republican extremists. []
  5. The Greek workers have organized over 6 general strikes between 2009-2011 see DROMOS (The Road) Athens weekly over that period. Spanish workers organized two general strikes in 2010, Portugal one and Ireland one major march. []
  6. Data compiled from International Labor Organization Reports on Employment 2010-11. []
  7. See All Jazeera Feb – March 2011. On the repressive role of the new military junta see Al Jazeera 4/7/2011. []
  8. Reuters, 2/14/11. Washington’s behind the scenes maneuvers to install a former Mubarak loyalist Field Marshall Tatawi as head of the junta is a blatant example. []
  9. The incapacity of the Arab social movements to take state power repeats a similar problem earlier in the decade in Latin America. See James Petras and Henry Veltmeyer, Social Movements and State Power (London: Pluto 2005). []
  10. On the general strike in Bolivia see “Central Obrera declaran huelga general” [La Jornada, (Mexico City)] April 8, 16, 2011. []
  11. On the first round of the Peruvian presidential elections and center-left populist winner Ollanta Humala see BBC, “Peru facing polarizing election as populists face off.” April 12, 2011. []
  12. According to one account “rising labor costs are an issue (in China). There is job opportunity everywhere there is much less need for migration. Financial Times, 3/18/11, p. 22. []
  13. On Chinese billionaires see Forbes, March 2011. As a result of “a rash of disputes between May and August (2010) employers were hit by strikes or other problems. This resulted in pay raises notably a 30% increase at Foxcomm the Taiwanese manufacturer.” Financial Times, 2/16/11, p. 3. []
  14. Financial Times 4/23-24/11 p1. []
  15. Correo de Orinoco, Caracas, Venezuela (English edition weekly) April 3-9, 2010. []
  16. The general strike of Wisconsin public sector workers in March 2011 was the exception to the rule, a first of its kind, induced by the Republican governor and legislature’s effective abolition of collective bargaining rights. Except for a one day strike of the San Francisco long shore workers unions and a few sporadic protests in other states, the US confederation of labor AFL-CIO has not mount3ed a single national public demonstration,instead relying on multi-million dollar funding of Democratic politicians. []
  17. Congressman Ryan a Republican has proposed the privatization of social security and the senior health program (Medicare) and a draconian reduction of spending for health care for the poor and disabled. President Obama followed up with his version of regressive social cuts somewhat on a lesser scale but in the same direction. See Obama speech to the American people White House press release April 3, 2011. New York Times, April 14, 2011, p. 1. []
  18. Discussions with shop delegates and Luciano Vasapolla, secretary of the militant Italian trade union movement. “Reto di communisti,” Rome, Italy. May 1, 2009. []
  19. On the negative impact of the financilization of capital and military spending on the productive economy see Michael Chossudovsky and Andrew Gavin Marshall, eds., The Global Economic Crises (Montreal: Global Research 2010) ESP. Ch. 3, p. 72-101 and Ch. 9, p. 181-211. []
  20. For a clear exposition of the relation of imperialism and domestic decay see James Petras and Morris Morley, Empire or Republic? American Global Power and Domestic Decay (New York: Routledge 1995). []
  21. The “World Social Forum” and other such “left forums” are mainly speech-making opportunities for the chattering classes made up of academics and NGO’ers. In most cases the foundations and sponsors explicitly prohibit them from taking a political position, let alone organize material support for ongoing class struggles. None of the major working class general strikes in Europe, Latin America, or Asia has ever received material support from the perpetual left forum attendees. The decline of workers internationalism has not been in any way replaced by the international gatherings of these disparate forces. []

James Petras, a former Professor of Sociology at Binghamton University, New York, owns a 50-year membership in the class struggle, is an adviser to the landless and jobless in Brazil and Argentina, and is co-author of Globalization Unmasked (Zed Books). Petras’ most recent book is Zionism, Militarism and the Decline of US Power (Clarity Press, 2008). He can be reached at: jpetras@binghamton.edu. Read other articles by James, or visit James's website.

This article was posted on Tuesday, April 26th, 2011 at 8:00am and is filed under Capitalism, China/Tibet, Classism, Europe, Neoliberalism, Resistance, South Ixachilan (America).

Profit Trumps Democracy in Takeover of Benton Harbor, Michigan


by Roger Bybee

There is no place in the United States that more cruelly illustrates the intensifying conflict between corporate power and democracy than Benton Harbor, Mich., the first city to be placed under what some Michiganders call “financial martial law.”

About 100 Benton Harbor residents and supporters protested the opening of Whirlpool's "Jack Nicklaus signature golf course" in Jean Klock Park, on August 10, 2010. (Photo by Daymon Hartley/VoiceofDetroit.net) In March, Michigan Gov. Rick Snyder won approval of Public Act 4, which permits him to declare that a city is in fiscal crisis and then to appoint an overseer with unlimited powers including the elimination of existing union contracts. Significantly, chief sponsors of Public Act 4 were State Rep. Al Pscholka, who was a former aide to Whirlpool heir U.S. Rep. Fred Upton, and also "a former vice president for one of the major entities involved in building the luxury golf development," The Rachel Maddow Show reported last week.

One of the first battlegrounds in Benton Harbor is the Jean Klock Park: Will it continue to be a public facility on Lake Michigan for poor kids or will it be converted into the massive proposed Harbor Shores golf course, condo and marina development?

Benton Harbor's population is 92% African-American and deeply impoverished by the de-industrialization of the city and surrounding area. Whirlpool’s recent plant shutdown is the most recent, crushing blow as the corporation continues to expand significantly in low-wage plants in Mexico, despite taking $19 million in federal recovery funds. Benton Harbor is plagued by the lowest per capita income in Michigan ($8,965), with 42.6 percent of the population living below the poverty line, including a majority of kids under age 18.

Like a set of other overwhelmingly poor and black cities whose economic hearts have been torn out by de-industrialization—such as East St. Louis, Ill., Gary, Ind., Chester, Pa.—Benton Harbor‘s plight was largely ignored by the state legislature (although past Democratic Gov. Jennifer Granholm staged a more limited intervention into the city's troubled finances.).

But Benton Harbor was selected as the first target for takeover. With new emergency financial manager Joseph Harris making all decisions unilaterally, elected bodies like the City Council and School Board can meet, but cannot make any decisions. The votes of neither elected bodies nor Benton Harbor voters simply do not count; the sole decider is Harris.

State Rep. Fred Dunhal, interviewed by MSNBC's Rachel Maddow, views the takeover legislation as part of a national drive by a new crop of fiercely right-wing governors, exemplified by Snyder, Wisconsin’s Scott Walker and Ohio’s John Kasich.

Their goal is to virtually eliminate any forces that counter corporate domination of state and local government.

“This is part of a national agenda,” said Rep. Dunhal. “It involves breaking the contracts of unions and interfering with the ability of cities to make their own decisions.“


With Michigan already staggering from the effects of de-industrialization, the Great Recession hammered the state relentlessly with blow after blow. Every mass layoff caused by the recession means more job losses down the street and less tax revenue to cover rising social needs associated with rising hunger, homelessness, disappeaing healthcare coverage and increasing violence both within the home and on the street.

About 100 other cities, villages and townships are on the verge of fiscal collapse, along with 120 school districts, said Dunhal. Long-suffering Detroit is due for a $179 million cut in state aid thanks to Gov. Snyder, and it too looks vulnerable for a takeover.

Snyder is taking a step normally unthinkable for a Republican: He is raising taxes to the tune of $1.7 billion. But these tax increases are not designed to ease the pain of the recession or address the state's budget deficit. The tax increases will come at the expense of seniors who lose their property tax credits, the poor who are deprived of Earned Income Tax Credits, and people who want to make tax-deductible donation to public universities.

Incredibly, Snyder is also planning on handing out $1.8 billion to corporations in new tax cuts. While these corporate subsidies will be handed out in the name of “job creation,” a half century of using this approach nationally shows a pattern of abject failure when viewed from the national level.

"Success" in pirating a plant from another state comes at the expense of another region; the $70 billion annually spent on tax cuts and other incentives fail to secure long-term, high-wage employment from foot-loose corporatioins always on the hunt for a better deal; and the tax incentives drain state governments of revenues needed for schools and healthcare, as Greg LeRoy documents in The Great American Job Scam.

However, rather than take steps to address the fiscal crises breaking out all over the state, Snyder’s strategy will leave him in a position to take over more and more of the state’s cities and towns and school districts. He can thus fundamentally reshape Michigan through his appointees by breaking union contracts, substituting private voucher schools for public schools, sell off or lease public assets (e.g., parks, public buildings, power plants, etc.), and privatize water and power systems.


One contentious issue in Benton Harbor is the fate of the Jean Klock Park, where developers want to complete a full-scale private golf course. The land was originally given to Benton Harbor in 1917 by the Klock family in honor of their daughter who died at a very young age. At the ceremony where the land was given over to the city, John Nellis Klock, the girl’s father, movingly made clear his intentions and those of his wife:

The giving of this park to the city of Benton Harbor has been to Mrs. Klock and myself, the happiest moment of our lives. The deed of this park in the courthouse of St. Joseph will live forever. Perhaps some of you do not own a foot of ground, remember then, that this is your park, it belongs to you. …The beach is yours, the drive is yours, the dunes are yours, all yours. It is not so much a gift from my wife and myself, it’s a gift from a little child. See to it that the park is the children's.

John Klock believed strongly, “There is little joy in piling up money that you do not need, and so the majority of my earnings have been spent in providing beaches, parks, churches and schools." But to Harbor Shores developers close to the Whirlpool Corp., the Klocks' dedication of the park appears to be merely an obstacle to their profits.

The developers have gained enough land in the park for a three-hole private golf course designed by golfing legend Jack Nicklaus. In exchange, Harbor Shores developers swapped the city with land owned by Whirlpool that turned out to be highly contaminated; "taxpayers are now paying for the cleanup of that land through a brownfield redevelopment credit worth millions of dollars," according to a local blogger and activist.

Fortunately, the developers’ plan is being fought both in the courts and at the grassroots level by community and environmental groups. But the courts have seemed remarkably pliable in response to the developers' claims about proper public use of parkland.


Thus far, the Michigan martial-law plan closely follows Naomi Klein’s description of corporate elites’ practice of “disaster capitalism” as discussed in her superb book Shock Doctrine. When a disaster strikes—be it the 1973 military coup in Chile or the 2005 Katrina hurricane—it inevitably disorients and disorganizes a population. It creates an opportunity for corporate elites to rush in with plans for a new economic order that would never gain majority support if majority rule and democracy were functioning.

Rev. Jesse Jackson, who has been helping Benton Harbor organizations to resist the state takeover just as he aided workers in Wisconsin to fight against Scott Walker’s union-busting efforts, has called attention to Gov. Snyder's use of fiscal problems to justify terminating democracy in Benton Harbor:

There's nothing about the economic crisis that says we should decimate a democracy for a dictatorship. Tyrants often, in the name of emergency, will suspend democracy and seize control of all levels of the government.

Monday, April 25, 2011

Protecting our electric grid


Opinion Contributor

Protecting our electric grid

A store attempts to do business during a New York blackout in 2006. | AP Photo
We cannot, and must not leave our nation vulnerable, like in the New York blackout (pictured), the author writes. | AP Photo

Our advanced electric infrastructure — which includes our electric grid, satellites, transportation, water, information technology and communications systems — is at risk.

The increasingly likely threat of a major electromagnetic pulse, whether man-made or natural, striking our largely unprotected electrical infrastructure could well cause long-term, widespread damage —perhaps even its destruction. This could undermine American way of life as we know it.

Our electric infrastructure touches every facet of our lives — from cooking our food to making a phone call to securing our nuclear facilities. This nation cannot function without it. As we have seen all too recently in Japan — where the electrical failure in the Fukushima nuclear plant’s cooling system led to this highly dangerous situation — a compromise to electric infrastructure can create grave problems.

The security threat posed by electromagnetic pulses, whether intentional, malicious attacks or naturally-occurring phenomena, has been well studied and documented. Two congressional commissions, the National Academy of Sciences, and several administrative departments, along with hours of congressional testimony, have now investigated the problem and issued reports.

We now know that continent-sized regions of both the U.S. and our allies could be severely damaged or thoroughly burned out by natural or malicious electromagnetic threats.

Seven U.S. government departments and agencies have now concluded that if our national electric grid is not upgraded to ensure its continuity in the event of a massive solar event — which happen about every hundred years,– or of an attack, we could face a blackout lasting four to 10 years, costing countless lives and potentially bringing cataclysmic damage to U.S. society as we know it. It could emerge as the most severe crisis in modern history.

If we do not act to protect our grid, our nation could be at the mercy of any enemy that can build, or acquire and launch, a nuclear warhead that could generate a devastating electromagnetic pulse across our nation. Or we can wait for that inevitable solar flare, which could inflict an even more devastating and widespread catastrophe on the human family.

Fortunately, there is a time when every great problem is large enough to be seen, yet still small enough to be solved. This one is no exception. We can fix it.

However, we must act now and decisively. We cannot wait for the clock to run out on such grave threats when they are now predicted by all relevant U.S. agencies.

As part of our commitment to this critical concern, on Monday and Tuesday we served as co-chairmen of the second annual world summit on infrastructure security. Rt. Hon. James Arbuthnot joined us as a co-chairman from Britain. Representatives from more than 20 nations came to the conference.

As a nation, we have always risen to the most daunting challenges, found a path to recovery and moved forward. But if large areas of our nation are deprived of electricity, water and other critical infrastructure for months or years, the destruction could be vast and recovery in question.

But with scientists and engineers now advising that the cost and complexity to bring this problem under control is modest, our course is clear: We cannot, and must not leave our nation vulnerable. We must secure our electric infrastructure now.

Rep. Yvette Clark (D-N.Y.) is the ranking member of the Cybersecurity, Infrastructure Protection and Security Technologies Subcommittee of the Homeland Security Committee. Trent Franks (R-Ariz.) serves on the Judiciary and Armed Services Committees. Both are members of the Electromagnetic Pulse Caucus and co-chairmen of the Electric Infrastructure Security Summit,

Sunday, April 24, 2011

The Economic Collapse and America’s Crumbling Infrastructure

The Economic Collapse

Are You Prepared For The Coming Economic Collapse And The Next Great Depression?

America’s Crumbling Infrastructure

One of the key signs that we are in the early stages of an economic collapse and that we are heading towards another Great Depression is America's crumbling infrastructure. The truth is that our infrastructure is literally falling apart all around us. Thousands of bridges are structurally deficient and there have already been some very high profile collapses. Over 30 percent of the highways and roads in the United States are in very poor shape. Aging sewer systems are leaking raw sewage all over the place. The power grid is straining to keep up with the ever-increasing thirst of the American people for electricity. There have already been some regional blackouts, and unless something is done quickly things promise to get even worse. The truth is that a nation's infrastructure says a lot about who they are. So what does America's infrastructure say about us? It says that we are a rusting, crumbling, decaying leftover from a better, more prosperous time.

Just consider the following facts about America's infrastructure from the Pew Research Center website.....

*According to the U.S. Department of Transportation, more than 25 percent of America's nearly 600,000 bridges need significant repairs or are burdened with more traffic than they were designed to carry.

*According to the Federal Highway Administration, approximately a third of America's major roadways are in substandard condition - a significant factor in a third of the more than 43,000 traffic fatalities in the United States each year.

*The Texas Transportation Institute estimates that traffic jams caused by insufficient infrastructure waste 4 billion hours of commuters' time and nearly 3 billion gallons of gasoline a year.

*The Association of State Dam Safety Officials has found that the number of dams in the United States that could fail has grown 134% since 1999 to 3,346, and more than 1,300 of those are considered "high-hazard" - meaning that their collapse would threaten lives.

*More than a third of all dam failures or near failures since 1874 have happened in just the last decade.

*According to the U.S. Environmental Protection Agency, aging sewer systems spill an estimated 1.26 trillion gallons of untreated sewage every single year, resulting in an estimated 50.6 billion dollars in cleanup costs.

The following are some additional facts from the U.S. Chamber of Commerce....

*A decaying transportation system costs our economy more than $78 billion annually in lost time and fuel.

*The United States must invest $225 billion per year over the next 50 years to maintain and adequately enhance our surface transportation systems. Currently, we're spending less than 40% of this amount.

*U.S. transit systems earned a D+ rating from the American Society of Civil Engineers. Transit funding is declining even as transit use increases faster than any other mode of transportation - up 21% between 1993 and 2002.

*Costs attributed to airline delays - due in large part to congestion and an antiquated air traffic control system - are expected to triple to $30 billion from 2000 to 2015.

*By 2020, every major U.S. container port is projected to be handling at least double the volume it was designed to handle.

*Throughout the United States, railroads are projected to need nearly $200 billion in investment over the next 20 years to accommodate freight increases.

Are you starting to get the picture?

America's aging infrastructure cannot handle the number of people that we have now. With the population of the United States expected to hit 420 million by 2050, there are serious questions about how the national infrastructure is going to hold up under such a strain.

Already the infrastructure in many areas of the United States is beginning to resemble that of a third world nation. The video posted below contains some of the highlights from a History Channel special about America's infrastructure from a couple of years ago that highlights many of these problems....

So can anything be done about America's crumbling infrastructure?

Of course.

State and local governments can spend the money needed to fix and maintain our infrastructure.

But that is not going to happen.


Because state and local governments are now facing unprecedented financial shortfalls.

In fact, it is more likely that expenditures on infrastructure will actually be cut.

According to a new report from the Center on Budget and Policy Priorities, after two years cutting spending on schools, health care, and other public services, U.S. states are preparing to carve even deeper into funding for 2011.

Of course the U.S. government could step in with necessary infrastructure funding, but considering the state of the U.S. national debt, it seems unlikely that state and local governments will be able to count on much more help from the folks in Washington D.C.

So what does that mean?

It means that America's infrastructure will continue to rust, decay and fall to pieces. Our grandparents and great-grandparents invested a lot of time, energy and money into building up this great nation, but now we are letting it rot right in front of our eyes.

What do you think that says about us?

Study: Most Americans Want Wealth Distribution Similar to Sweden


Study: Most Americans Want Wealth Distribution Similar to Sweden

Americans generally underestimate the degree of income inequality in the United States, and if given a choice, would distribute wealth in a similar way to the social democracies of Scandinavia, a new study finds.

For decades, polls have shown that a plurality of Americans -- around 40 percent -- consider themselves conservative, while only around 20 percent self-identify as liberals. But a new study from two noted economists casts doubt on what values lie beneath those political labels.

According to research (PDF) carried out by Michael I. Norton of Harvard Business School and Dan Ariely of Duke University, and flagged by Paul Kedrosky at the Infectious Greed blog, 92 percent of Americans would choose to live in a society with far less income disparity than the US, choosing Sweden's model over that of the US.

What's more, the study's authors say that this applies to people of all income levels and all political leanings: The poor and the rich, Democrats and Republicans are all equally likely to choose the Swedish model.

But the study also found that respondents preferred Sweden's model over a model of perfect income equality for everyone, "suggesting that Americans prefer some inequality to perfect equality, but not to the degree currently present in the United States," the authors state.

Recent analyses have shown that income inequality in the US has grown steadily for the past three decades and reached its highest level on record, exceeding even the large disparities seen in the 1920s, before the Great Depression. Norton and Ariely estimate that the one percent wealthiest Americans hold nearly 50 percent of the country's wealth, while the richest 20 percent hold 84 percent of the wealth.

But in their study, the authors found Americans generally underestimate the income disparity. When asked to estimate, respondents on average estimated that the top 20 percent have 59 percent of the wealth (as opposed to the real number, 84 percent). And when asked to choose how much the top 20 percent should have, on average respondents said 32 percent -- a number similar to the wealth distribution seen in Sweden.

"What is most striking" about the results, argue the authors, is that they show "more consensus than disagreement among ... different demographic groups. All groups – even the wealthiest respondents – desired a more equal distribution of wealth than what they estimated the current United States level to be, while all groups also desired some inequality – even the poorest respondents."

The authors suggest the reason that American voters have not made more of an issue of the growing income gap is that they may simply not be aware of it. "Second, just as people have erroneous beliefs about the actual level of wealth inequality, they may also hold overly optimistic beliefs about opportunities for social mobility in the United States, beliefs which in turn may drive support for unequal distributions of wealth," they write.

The authors also note that, though there may be widespread agreement about income inequality, there is no agreement on what caused it or what should be done about it.

"Americans exhibit a general disconnect between their attitudes towards economic inequality and their self-interest and public policy preferences, suggesting that even given increased awareness of the gap between ideal and actual wealth distributions, Americans may remain unlikely to advocate for policies that would narrow this gap," the authors argue.

Norton and Ariely's survey was carried out on 5,522 respondents in 47 states in December of 2005. The results are to be published in the journal Perspectives on Psychological Science.

By Daniel Tencer | Sourced from 1319

Posted at April 24, 2011, 8:11 am

Saturday, April 23, 2011

The Fake Budget Debate in Washington DC: How Long to Continue the Rape, Pillage and Plunder of Main Street

April 23, 2011 at 11:26:37

The Fake Budget Debate in Washington DC

By shamus cooke (about the author)

By definition, a "debate" requires two opposing sides holding mutually exclusive opinions. In the U.S. Congress, however, real debate has all but vanished. Instead, we are subjected to endless blather that -- if you listen closely -- is a simple discussion over splitting hairs.

There can be no U.S. budget debate when both sides have already agreed that massive cuts to social programs -- including Medicare and Social Security -- will be the foundation of any plan.

With this fundamental agreement already in place, Democrats and Republicans are pathetically trying to create a division where none exists. The right wing looks especially foolish, since Obama has been furiously sprinting to the political right throughout the budget "debate," having already overtaken the right-wing deficit hawks; in response, the hawks have gotten more hawkish and restarted their rightward dash in a desperate attempt to appear in "opposition" to the right-wing President.

For example, the Republicans originally demanded that an astonishing $4 trillion be cut from the U.S. budget, mainly through cuts to social programs. Not to be outdone, Obama presented a plan that would cut $4 trillion, mainly through cuts to social programs. The furthest right are the so-called Tea Party Republicans, who want to cut $10 trillion by essentially privatizing the entire U.S. Government.

But, back to the hair splitting. Obama calls the $4 trillion Republican plan "radical," and he's right; the plan seeks to privatize Medicare, destroy Medicaid, gut other social programs, lower corporate tax rates, etc.

But Obama is a radical budget cutter too; he seeks to gut Medicare/Medicaid by $480 billion(!), slash spending for many crucial programs for the poor, and privatize public education through his corporate-sponsored Race to the Top program.

Obama is trying to make his plan seem progressive by talking about "taxing the rich," but this is a lie. Finally allowing the Bush-era tax cuts to expire is not "taxing the rich" (Bush himself planned for the cuts to have expired already, but Obama agreed to extend them.)

Obama's recent tough speech against the Republicans was the first sign of life for the President, just in time for him to begin his presidential run for 2012, which will surely be full of promises that will never see the light of day.

As the President wages a "battle" over secondary budget issues, such as how best to make $4 trillion in cuts, the main issues are already agreed upon. Economist Richard Reich helps explain:

"...the Democratic leadership in Congress refuse to refute the Republicans' big lie -- that spending cuts will lead to more jobs. In fact, spending cuts now will lead to fewer jobs. They'll slow down an already-anemic recovery. That will cause immense and unnecessary suffering for millions of Americans"

"The president continues to legitimize the Republican claim that too much government spending caused the economy to tank, and that by cutting back spending we'll get the economy going again." (April 10, 2011).

This two-party big lie is not an accident, but an expression of a deeper held belief: that the U.S. government must be directed to meet the needs of the super wealthy who own U.S. corporations. Holding this belief requires that you gut social programs (since corporations hate paying taxes) and privatize everything publicly owned (so corporations can own them for profit).

As long as both Democrats and Republicans agree to these deeper beliefs, the country will shift continually to the right, with social programs and living standards evaporating. However, the stronger that labor and community groups unite and fight to save these social programs, the harder will it be to cut them; out of such a struggle will emerge practical solutions to solving the deficit problems of the country, such as dramatically increasing the taxes on the rich and corporations so that jobs can be created and social programs saved.

Shamus Cooke is a social service worker, trade unionist, and writer for Workers Action (http://www.workerscompass.org) He can be reached at Email address removed


Shamus Cooke is a social service worker, trade unionist, and writer for Workers Action (www.workerscompass.org)

The views expressed in this article are the sole responsibility of the author
and do not necessarily reflect those of this website or its editors.

Sociopathic Wall Street Placed a Hit on Main Street, and walked away clean

April 23, 2011 at 10:11:40

Just Say Uncle: Sociopaths & Finance

By Monika Mitchell (about the author)

Monika Mitchell has recently completed her upcoming book: " Conversations with Wall Street: How to fix the financial system from inside the industry that broke it " due out in ebook Summer 2011 and print Fall 2011.

the current culture on Wall Street of irresponsibility and indifference; "sociopathic.

It is really all in the way you think about it. Is it murder or justice? Debt or equity? Budget deficit or moral deficit?

As we struggle with the do's, dont's and maybes of the continuing financial reform debate, pearls of wisdom come from the strangest places. Last week's press conference with John Travolta, John Gotti Jr. might be assumed an unusual source to derive insight. Yet Gotti Jr.'s words as he sat next to a botoxed Lindsay Lohan and Sister Victoria were profound.

"Some people say, "John Gotti was a killer, John Gotti was a gangster." Yeah, he was, but he was also a man's man, which is the most important thing. He made a choice to be something in his life and he stood true to those convictions. He never one time deviated from that path, not once."

For some reason this moving testimony from a devoted son to his misunderstood Pa reminds me of the ongoing financial reform war. The current battlefields are fought on the same issues that created the global economic crisis. Monitoring derivatives, credit ratings, capital rules, and "too big to fail" banks has kicked up another firestorm. Only three years after Bear Stearns crashed and burned under the weight of its recklessness, lawmakers are claiming that regulations to prevent another crisis are unnecessary.

Republican Senator Jim DeMint introduced "The Financial Takeover Repeal Act of 2011" in an attempt to abort the nine-month old Dodd-Frank financial regulation bill before it is born. DeMint said, "We must repeal the Democrats' takeover of the financial markets that favors Wall Street corporations, over-regulates small businesses with massive new bureaucracy and hurts consumers." The 2300 page law attempts to rein in proprietary trading, re-establish capital limits and fiduciary responsibility for executives and institutions, create transparent exchanges for swaps and derivatives--and hardly favors Wall Street.

Dodd-Frank by its sheer size does look like a bureaucratic nightmare, but after the events of 2008, there wasn't a whole lot of choice. The bill also establishes a state-of-the-art consumer financial protection bureau (the first of its kind) headed by none other than consumer hero herself, Harvard law professor, Elizabeth Warren.

Meanwhile, back at the ranch"the Democratic Senate that is, lawmakers take heat from both Tea Party Revelers and Wall Street Ranters. Jamie Dimon, CEO of the one of the largest "Wall Street corporations" on the planet, JPMorgan-Chase-me-if-you-can, says that the U.S. still has the "best financial system in the world" and Dodd-Frank is poised to "destroy that." Dimon railed against derivatives regulations threatening if the government imposes any conditions at all on derivatives trading he might pick up his swap-marbles and bring them oversees.

In Mr. D's own words, "If I can't offer you a foreign exchange swap or credit derivative at a price that you like, you will do it elsewhere. And that could be Singapore"" I guess he means it. I have heard Singapore is an amazing city even you if you can be jailed for writing a book.

Yet a brief chat with the CEO of a $14billion hedge fund based in New York warns, "We better fix it (regulate) with derivatives or that will blow us all up."

So who are we to believe? Will regulation safeguard the financial system or destroy it?

How we got here :

Only a few short years ago, a free-market evangelist in the form of Federal Reserve Chairman Alan Greenspan waxed rhapsodic over the poetry of economic anarchy claiming deregulation was the path to prosperity. Warren Buffett, arguably the most successful investor in the modern world, warned Mr. Greenspan of the dangers of unrestrained risk in exotic derivatives like Collateralized Debt Obligations (CDOs).

Buffet explained the reason that he refused to trade these products: "You create a CDO by taking one of the lower tranches of that one and 50 others like it. Now if you're going to understand that CDO, you've got 50-times-300 pages to read, it's 15,000. If you take one of the lower tranches of the CDO and take 50 of those and create a CDO squared, you're now up to 750,000 pages to read to understand one security."

Greenspan would allow no one to rain on his parade and dismissed old Warren's fears. Testifying before the U.S. Senate Banking Committee in 2003, the Fed Chair said, "What we have found over the years in the marketplace is that derivatives have been an extraordinarily useful vehicle to transfer risk from those who shouldn't be taking it to those who are willing to and are capable of doing so."

Dispersing risk is another way of saying "moving it off your books" onto someone else's books. The chief economist in the United States was encouraging market makers to pour trillions of dollars worth of toxic debt directly into the financial system. This "transfer" became the risk management tool of choice and ultimately contaminated the U.S. and global economies. It's like playing "hot-potato" with a three trillion dollar grenade. Okay, so you know this already. Why cry over spilled milk? Very simply, because the milk is still not cleaned up.

He's back . He is not exactly "back," but Alan Greenspan will not leave us alone. His latest diatribe against financial regulation is being used by lawmakers to support repealing reform. I admit there was a time when I was smitten by the deregulator's indifferent and seemingly sound brilliance. But we are all so foolish when we are young"

In a recent Financial Times Op-Ed, Greenspan writes that regulators are incapable of forecasting market risks and preventing "undesirable repercussions." He claims defensively, "No one has such skills." In his case this was most certainly true, but isn't that their job ? Greenspan collected checks for two decades to do precisely that: anticipate and regulate risks .

His solution? "The Invisible Hand." No, I mean it. It's true. After all the chaos we have been through these past few years, Greenspan reverted back to his 2006 claims that Adam Smith's 18th century version of a free market regulator was the next best thing to being there. "With notably rare exceptions ["the once-in-a-century-economic-tsunami"], the global "invisible hand" has created relatively stable exchange rates, interest rates, prices and wage rates."

I once heard that the definition of insanity is "repeating the same behavior over and over expecting different results." I am not picking on poor Alan, I'm just saying"

In an intense conversation with a couple of brilliant and innovative financial execs the other day, one man was the former head of equity derivatives for a giant global securities division. He called the current culture on Wall Street of irresponsibility and indifference "sociopathic." I was struck by the fierceness of the term and its power.

I had never attached this concept to the lack of integrity and honor in finance before so I looked up the word to see how it applied. The definition read, "A person"whose behavior is antisocial and who lacks a moral responsibility or social conscience." I was astounded. He had hit it on the head. Lacking a social and moral conscience is how we got here"

It has not been revealed yet if Dodd-Frank is "too much" or "too little," but it is clear we have to do something profound. Those like DeMint say we should do "less" and get out of the way of market makers. Others like Greenspan refuse to acknowledge mistakes and continue to insist the greatest financial crisis of our time is a "rare exception" to otherwise market perfection. As irrationally exuberant as this may seem, these men insist we go back to business as usual.

Our usual business through 2008 was to "transfer risk" from those who should never been allowed to handle it to that degree to those who were unwilling and unable to handle it at all: ordinary homeowners and the unsuspecting public . The risk was transferred successfully and rears its ugly head in record foreclosures, defaulting loans, joblessness and a growing national debt.

The financial crisis is a wake-up call for the sane among us to refuse to repeat the same mistakes that brought us here. In an enlightened society, our job is not to destroy financial markets--but to preserve them through a sustainable future.

Which brings me back to John Gotti Jr.

Junior explained that he authorized the movie about his hero father "to rewrite history -- the right way." He called his mobster father who was convicted of 13 murders, and considered by the legal psychiatric community to be a homicidal maniac, an "icon" whom he truly admired. "A man's man" with the courage of his convictions. The film's producer Nick Cassavetes called Gotti Sr. a "victim" of the system. Former heartthrob, John Travolta called the mob boss "glamorous" and "charming."

Gotti Jr. ended his brief missive with, " In the end, when he had an opportunity to say "uncle,' he believed he was right, he stood his course and he suffered greatly. "

What do we as Americans believe is right? In the wake of the financial crisis, we have turned criminals into victims and victims into criminals. Helpless homeowners are punished further and banks that entrapped borrowers into unconscionable loans are rewarded.

As a culture, we have allowed distorted and disturbing sentiments to rewrite history and convince us that crimes like murder and economic indifference are acceptable. It is okay to torture and kill dozens of your enemies. After all they deserved it. It is okay to render millions of unsuspecting homeowners bankrupt to enrich ourselves. After all they should have known better.

This brainwashing calls us to abandon our social conscience and moral responsibility as we fail to create a system where we help others not harm them. We experienced a global economic meltdown precisely because there were no rules or regulations to rein in risk. A few years later, a smear campaign reignites to tell us that what we know is true is not true. Economic rape and pillage is not a moral code to defend.

As a society, we need to redefine honor. "A man's man" is not a cold-blooded killer who destroys people's lives with abandon--nor is he a cold-blooded money man who destroys people's economic lives with glee. Instead our heroes should be men and women with a sense of honor and social conscience for the world they leave behind. Righting the wrongs of the past means we do not rewrite history. Instead we examine our mistakes and learn from them.

Don't let Hollywood or Washington convince you that murder is justice and unrestrained greed is morally sound.



Monika Mitchell is the Executive Director of Good Business International, Inc., aka GoodB, a web-based Think Tank dedicated to building better business for a better world.
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