Saturday, 31 July 2010

Welfare reforms are 'onslaught on the vulnerable'

Campaigners say benefits changes will cost some families hundreds of pounds a year and make others homeless

By Brian Brady, Whitehall Editor

Sunday, 1 August 2010

Criticism of Iain Duncan's Smith's welfare reform gathered pace this weekend, with campaigners claiming many thousands of families will be forced into poverty by the changes.

The National Housing Federation (NHF) claimed the plan to impose a cap on housing benefit payments amounted to an "onslaught on the vulnerable", which would cost more than 900,000 low-paid people an average of £624 a year – forcing them into debt or homelessness.

The impact of the cap will be felt UK-wide the federation said, but it also warned that a number of large cities in the north of England would be particular black spots.

The warning came as parent groups claimed that thousands more families will be forced to repay tax credits. Currently, credits are based on a family's own estimate of income in the coming year and they are allowed to earn up to £25,000 more than that figure before they have to repay the excess. But the Chancellor, George Osborne, has announced the "clawback" threshold will fall to £10,000 next April and to £5,000 by the end of 2013, raising the prospect of families facing demands for huge repayments to the Treasury.

Lee Healey, a benefits expert, said the changes would have a dramatic impact on poorer families. He said: "I expect overpayments to rocket, and for many more people to be hit with an overpayment of their tax credits."

Mr Duncan Smith, the Work and Pensions Secretary, last week announced a wide-ranging reform of Britain's "antiquated" benefits system, proposing better incentives for people to return to work, and to cut down on bureaucracy.

Last year more than a million families were overpaid child or working tax credit but the Government eventually wrote off more than £2bn from the amount owed. The Independent on Sunday has established the Government expects the overpayments bill to soar by more than £700m in the three years to 2013-14.

Kate Bell, of the lone parents' charity Gingerbread, welcomed the overall plans but added: "We'd like to see a system that takes overpayments out of the system, where people do not have to deal with that stress."

The NHF also gave a guarded welcome to Mr Duncan Smith's proposal to amalgamate benefits into one payment. The welfare reforms will limit housing benefit to £400 a week on homes with four or more bedrooms, £340 for a three -bedroom home, and £250 a week for a two-bedroom home. They will also mean that instead of people on housing benefit being able to claim rent in line with properties in the bottom half of the local private rented market, they will be able to claim rent only in line with the bottom third of properties.

The NHF chief executive, David Orr, said: "Ministers have said consistently since taking office that they will do their utmost to protect the most vulnerable – and yet the introduction of the housing benefit caps will clearly lead to an onslaught on some of the most vulnerable groups in society. The changes could see hundreds of thousands of vulnerable people fall into debt, forced out of their homes and neighbourhoods and crammed into overcrowded ghettos. Many others will simply become homeless."

The NHF analysis revealed hundreds of thousands of the unemployed and low-paid single parents would be hit by the changes. It found that 18,870 people would lose out in Birmingham, 15,610 in Leeds, 12,620 in Liverpool and 10,210 in Manchester.

Mr Orr added: "The proposal to roll all benefits into one is good in principle but we want to see how this will be implemented to ensure that they support people into work, without putting rent payments at risk."

Thursday, 29 July 2010

Leaks expose criminal war

End U.S. occupation of Afghanistan

By John Catalinotto

Published Jul 28, 2010 3:14 PM

The media explosion following the publication of reports of some 90,000 classified cables between U.S. officials may accelerate the struggle to end the imperialist occupation of Afghanistan.

Those thousands of people in the U.S. who have paid close attention to Afghanistan may have already known that the occupation was criminal, was based on a fraudulent argument and was collapsing. Now tens of millions of people share this knowledge. No longer can elected or appointed officials claim ignorance of U.S.-NATO war crimes or the war’s disastrous path.

The strategy debate within and outside the Barack Obama administration and the Pentagon had already hit the news. Gen. Stanley McChrystal’s firing and his replacement by Gen. David Petraeus made it public. This latest media blitz now brings it before the entire population of the U.S. and its reluctant NATO allies. It turns the generals’ crisis into a public debate.

Millions now also know that someone within the military machine, acting on a desire to stop U.S. war crimes, leaked these documents to the Wikileaks organization. There are undoubtedly others in the virtual belly of the militarist beast who understand their responsibility to humanity and will expose the truth and stop the crimes. The anti-war forces have a duty to defend these whistle-blowers and inspire others to follow suit.

Timing the publication

Wikileaks had arranged to release the 90,000 documents, covering the period from 2004 to 2009 in Afghanistan, to three powerful corporate media. The New York Times in the U.S., the Guardian in Britain and Der Spiegel in Germany, after analyzing and editing the documents over some months to remove some names, released them July 26. The Times had also informed the Obama administration on July 23 that it would publish them.

There followed secondary reports in thousands of newspaper and broadcast media stories, which are continuing on July 27. These stories have also evoked strong reactions from the U.S., Afghan and Pakistani governments.

The Obama administration attacked Wikileaks’ publication of the material, calling it “a crime” and claiming Wiki- leaks’ anti-war history makes it biased. The administration also claims that the documents put U.S. forces at risk, although no names are used and the cables involve no current operations.

The Times, which has supported the U.S. occupation of Afghanistan from October 2001 to the present day, put its own biased spin on the data. The Times’ coverage has minimized the importance of the information exposed in the cables and focused attention on the alleged role of Pakistan supporting the Taliban. This approach draws attention away from U.S.-NATO war crimes against Afghan civilians and the complete lack of a legitimate justification for the occupation.

The Guardian has a more nearly balanced coverage. This paper has published more articles critical of the occupation of Afghanistan. The Guardian has provided a type of indexing, making it possible to locate specific cables. If one were to read each cable in only three minutes, reading 12 hours a day, it would take over a year to read them all.

Pentagon Papers 2?

When Daniel Ellsberg released “the Pentagon Papers” in 1971 to a public that already opposed or had doubts about the U.S. war on Vietnam, their publication accelerated the anti-war movement. Ellsberg has likened the Wikileaks release to the scale of the earlier Pentagon Papers, although he points out that they don’t reveal top secret policy decisions.

The Pentagon Papers exposed the Lyndon Johnson administration’s lies about an alleged North Vietnamese patrol boat attack on U.S. destroyers in the Tonkin Gulf in August 1964. Johnson used this phony story as a pretext to bomb two major North Vietnamese cities, Hanoi and Haiphong, and to escalate the war.

Those active in the anti-war movement knew of this fraud long before the Pentagon Papers were released in 1971. Following the first bombing raids in 1964, Workers World editor-in-chief Deirdre Griswold and contributing editor Fred Goldstein stayed up all night to write a leaflet for Youth Against War and Fascism that nailed the alleged attack as a phony pretext for expanding the war. This writer distributed that leaflet at an all-day protest at the United Nations the next day.

But it took seven years of a failed criminal war and ever growing protests to make the Pentagon Papers happen. In turn, their publication exposed the fraud to the entire population, adding to the protests that helped to finally end the war. A small revolutionary group swimming against the tide then became the flood.

Perhaps the Wikileaks publication will inspire continued exposures of the criminal plans of the U.S. administrations to invade and occupy Afghanistan and Iraq at horrible costs to the local populations and to thousands of U.S. youths.

Defend the whistle-blowers

It is also important that anti-war forces defend those in the military and government who make the truth available to the public and expose the criminal war conspiracies of the various administrations. A GI who allegedly released these documents and an earlier video to Wikileaks, Spc. Bradley Manning, is currently being held in Kuwait by the Army. A petition supporting him can be signed at the International Action Center website (, among others.

Articles copyright 1995-2010 Workers World. Verbatim copying and distribution of this entire article is permitted in any medium without royalty provided this notice is preserved.

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Friday, 23 July 2010

Protofascism comes to America: The rise of the Tea Party


Published: ARAB NEWS
Jul 23, 2010 01:06 Updated: Jul 23, 2010 01:06

SAN DIEGO: Is the Tea Party racist? Democrats who play liberals on TV say it isn't. Vice President Joe Biden says the Tea Party "is not a racist organization" per se, but allows that "at least elements that were involved in some of the Tea Party folks expressed racist views."

Right-wing Congresswoman Michele Bachmann has received permission to form an official Tea Party Caucus in the US House of Representatives. It's official. The Tea Party matters.

So: Is it racist? Certainly a sizable minority of Tea Partiers' "take America back" rhetoric is motivated by thinly disguised resentment that a black guy is president. As for the remainder, their tacit tolerance of the intolerant speaks for itself. "Take America back" from whom? You know whom. It ain't white CEOs.

Yes. The Tea Party is racist. Obviously.

But racism is only one facet of a far more sinister political strain. It's more accurate to categorize the Tea Party as something the United States has never seen before, certainly not in such large numbers or as widespread.

The Tea Party is a protofascist movement.

Robert O. Paxton defined fascism as "a form of political behavior marked by obsessive preoccupation with community decline, humiliation or victimhood and by compensatory cults of unity, energy and purity, in which a mass-based party of committed nationalist militants, working in uneasy but effective collaboration with traditional elites, abandons democratic liberties and pursues with redemptive violence and without ethical or legal restraints goals of internal cleansing and external expansion."

Typical Tea Party rants fit the classic fascist mold in several respects. America, Tea Partiers complain, is falling behind. Like Hitler, they blame leftists and liberals for a "stab in the back," treason on the home front. The trappings of hypernationalism - flags, bunting, etc. - are notably pervasive at Tea Party rallies, even by American standards. We see "collaboration with traditional elites" - Rush Limbaugh, Congressmen, Republican Party bigwigs (including the most recent vice presidential nominee) - to an extent that is unprecedented in recent history.

Tea Partiers haven't called for extralegal solutions to the problems they cite - but neither did the National Socialists prior to 1933. Then again, they're not in power yet. Wait.

One major component is missing: aggressive militarism. Certainly most Tea Partiers support America's wars and the troops who fight them. But Tea Partiers focus on domestic issues. Similarly, the Nazis didn't make much of their aggressive intent until after they seized power.

Because it has no central leadership and because it's easier to attract new members if you never say anything specific enough to turn anyone off, ideological vagueness is a defining characteristic of the Tea Party movement. Indeed, ideological imprecision tends to increase as you move from left to right on the political spectrum.

On the left, communists are specific to a fault. (This is why the Left is factionalized.) Programs, five-year plans and one tract after another are the (increasingly boring) order of the day under socialism. Moving right, bourgeois organizations such as the two major US political parties have platform planks and principles, but tend to be mushy and flexible. As we move to the far right, as under Hitler, ideas become grand, sweeping, meaningless slogans (take the nation back! death to the traitors!). What should be done is nominally whatever needs doing (i.e., whatever the Leader orders).

Umberto Eco's 1995 essay "Eternal Fascism" describes the cult of action for its own sake under fascist regimes and movements: "Action being beautiful in itself, it must be taken before, or without, reflection. Thinking is a form of emasculation."

Note Republican Sen. John Cornyn's choice of words when he defended Tea Partiers against charges of racism: "I think it's slanderous to suggest the vast movement of citizens who have gotten off the couch and showed up at town hall meetings and Tea Party events, somehow to smear them with this label, there's just no basis for it."

Tea Partiers deserve praise for having gotten "off the couch." They've shown up. That's what matters! Never mind that they're stupid. Never mind that many - those who get quoted in the media, anyway - are painfully ignorant and uneducated.

As an added bonus, Sen. Cornyn's statement both demonstrates "effective collaboration with traditional elites" and another entry from Eco's checklist: "Disagreement is treason." Or slander. Whichever Ann Coulter book title floats your boat.

Eco also discusses fascism's "appeal to a frustrated middle class, a class suffering from an economic crisis or feelings of political humiliation, and frightened by the pressure of lower social groups." Guard the borders! Deport the immigrants! Mexicans are stealing our jobs!

So much anger. It's too bad that the (justifiable) rage of the white male middle-class is directed against their fellow victims. It's worse that they're playing into the blood-soaked hands of their own oppressors.

- Ted Rall is the author of "The Anti-American Manifesto," to be published in September by Seven Stories Press. His website is

Wednesday, 21 July 2010

Belfast Asda song row worker murdered two catholics

By Aidrian Rutherford
Wednesday, 21 July 2010
Belfast Telegraph

An Asda employee at the centre of a row over The Sash is a double UVF killer who murdered two Catholic brothers more than 30 years ago.

William Hunter was reinstated to his job as a checkout operator at the company’s north Belfast store yesterday, days after being sacked for telling a driver to play the loyalist song.

His dismissal sparked four days of protests outside the store on the Shore Road, with supporters claiming he was “the salt of the earth” and “an asset to Asda”.

But it has been revealed that Hunter carried out one of the most brutal attacks of the Troubles, when he murdered John and Thomas McErlane after luring them to a flat in Mount Vernon.

Speaking to the Belfast Telegraph this morning, their brother Gerard McErlane said he was not convinced Hunter had changed.

“I was very annoyed when I heard about him wanting The Sash played,” he said.

“I said to myself he’s still a bigot, he’s still trying to incite hatred, especially in Asda where there’s a mixed community going in and out of it.

“People talk about him being friendly and the salt of the earth, but I know the way my brothers were set up to be killed. It was brutal, bigoted, sectarian murder. I wonder if Asda knew about him. I wonder what they will do about him.”

Asda declined to comment when contacted today, with a spokeswoman stating the company did not discuss individuals.

“We take care not to discuss our colleagues in public, particularly in matters that are clearly as sensitive as these,” she said.

Hunter, who has worked at the checkouts at Asda for seven years, was dismissed after claims he told a driver to play the Sash instead of pop music.

Protests were held outside Asda on the Shore Road on Friday, Saturday and Sunday. Hunter won an appeal yesterday to return to his job after he “expressed regret” for “the unintentional offence caused” for his comments.

Billy Hutchinson, a former PUP Assembly member, who was among the demonstrators, had said Hunter was “really well-liked” and not the type of person to act in a sectarian manner.

Mr Hutchinson was not available for comment this morning.

John (29) and Thomas (19) were shot twice in the back of the head in 1975 while playing cards with Protestant work colleagues at a flat close to the Asda store where Hunter now works.

Two gunmen burst into the flat and ordered everyone there to lie on the floor. The two brothers were shot in the head as they lay on the ground. The murders were claimed by the Protestant Action Force, a cover name for the UVF.

Hunter was sentenced to life for what the trail judge described as “a dastardly act”, but was freed 14 years later. During the trial it emerged he and others had spent months trying to lure the victims to Mount Vernon.

Read more:

Thursday, 15 July 2010

A turning point in the Middle East

Thursday, June 3, 2010

PSL Editorial

The Freedom Flotilla massacre has made it absolutely clear that the status quo in the Middle East is unsustainable. While the details of the diplomatic fallout are still somewhat unclear, and Israel’s propaganda machine is hard at work trying to control the damage, things cannot continue on as they were. The date May 31, 2010—when nine brave activists lost their lives while trying to deliver aid to blockaded Gaza—might become a key turning point in the history of the Palestinian-Israeli conflict.

On the face of it, it appears that little has changed. As in the past, the White House is providing diplomatic and political cover for Israeli war crimes. The entire United Nations Security Council, which currently includes Turkey and Lebanon as members, would have openly condemned Israel were it not for the U.S. representative’s stubborn opposition. It looks like the murderous assault on the Freedom Flotilla, like the genocidal siege on Gaza in 2008-2009, will go unpunished.

But behind the surface, Israel faces some very real problems. Their brazen massacre could not have come at a worse time for their international standing. While neither the Israeli or U.S. governments will admit it, Israeli Prime Minister Benjamin Netanyahu was undoubtedly told that he was not welcome in Washington on the day of the flotilla massacre. Considering the U.S. government’s strategic aims in the Middle East—its ongoing occupation of Iraq, its tenuous relationship with Turkey, its support for dictators in Egypt, Jordan and Saudi Arabia and pro-U.S. forces in Lebanon—it would be too much of a political liability for Obama to be seen shaking the hand, still wet with blood, of the Israeli leader.

The massacre has further polarized politics within Turkey, Israel’s long-time ally in the region, between a military leadership historically aligned with Israel and a population that identifies strongly with the Palestinian struggle. Egypt has opened up the Rafah Crossing (at least temporarily), eliminating a major pillar of the Gaza blockade. Britain and other leading European imperialist powers have reversed course and called the blockade “unsustainable.”

These should be seen as part of a larger process that has unfolded since Israel unsuccessfully invaded Lebanon in 2006. The Israeli war machine could not defeat Hezbollah, thus shattering the myth of Israeli military invincibility. Two years later, Israel launched another assault on the densely populated and economically strangled Gaza Strip.

But despite the horrific human loss that Israel inflicted on the Palestinian people, it too was a political setback. People throughout the world condemned the barbaric attack. In the last few years, the Boycott-Divestment-Sanctions (BDS) campaign has picked up, as has the international campaign to defeat the Gaza blockade. As a result, Israel is undoubtedly more isolated than in any other period.

Internally, the Palestinian people have continued their resistance and steadfast determination to reclaim their homeland. In demographic terms, the Palestinian population continues to outpace that of the Israelis; it has become increasingly difficult to preserve even the fiction of “democracy” in the Jewish-only apartheid state of Israel. Palestinian parties were banned from running in the last Israeli elections and there is open discussion of stripping Palestinians of citizenship rights.

In this context, Israeli politics have shifted sharply to the right. Not only was the right-wing Netanyahu elected, continuing settlements in East Jerusalem and the West Bank, but also far-right, fascistic political forces have received top-level positions in government.

The final point to make about the Flotilla Massacre is the one that the corporate media will never make: It is the people’s struggle that changed the situation. There have been years of fruitless diplomatic negotiations and conferences over the Palestinian-Israeli conflict. But it was the 700 people on those ships, the millions of Palestinians who have refused to give in over decades and the growing international movement that stands behind them, who will change history.

The nine martyrs who lost their lives on May 31 did not die in vain! They join a long list of heroes whose names will be enshrined and celebrated when Palestine is finally free.

Wednesday, 14 July 2010

Belfast riots continue for third night, shots fired at police

Nationalist protesters build barricades in the street during clashes with police in Belfast.

Northern Ireland politicians unite to condemn 'thuggery and vandalism' after shots were fired at police

Haroon Siddique and agencies, Wednesday 14 July 2010
Police in Belfast have come under gunfire for a third successive night, with Northern Ireland's political leaders condemning those behind the violence.

In Ardoyne, the scene of Monday night's major disturbances, a lone attacker armed with a handgun fired four to six shots as police clashed with masked men. No one was injured by the shots, which witnesses said appeared to have been aimed at a police surveillance camera recording the rioters.

Police officers in the nationalist area of north Belfast responded with water cannon as they came under fire from petrol bombs and at least one homemade grenade.

Northern Ireland's first minister, Peter Robinson, and the deputy first minister, Martin McGuinness, denounced the "thuggery and vandalism" of the rioters and defended their political efforts to ease tensions over controversial parades. Violence surrounding 12 July Orange Order marches left 82 officers injured.

The Northern Ireland police assistant chief constable, Alistair Finlay, had earlier criticised politicians for failing to be "proactive" in addressing the problems posed by the marching season. "We didn't see joined-up, strategic leadership," he said.

Police have blamed dissident republicans opposed to the peace process for the violence that reached a height in Ardoyne on Monday night, where police came under sustained attack. In the most serious incident of the night a female police officer had a concrete block thrown at her head. She remains in hospital where she is said to be stable.

Robinson, the Democratic Unionist party leader, and McGuinness of Sinn Féin issued a joint statement condemning the violence and highlighted their efforts to secure a lasting solution over the marches.

"I am disgusted at the outright thuggery and vandalism that has taken place over the course of the last 48 hours," said Robinson.

"There is no excuse and no place for violence in civilised society. Both the deputy first minister and I have been, and will continue, to work for a resolution of the difficulties around parading."

McGuinness said they were working on legislation that would provide a framework for contentious parades.

Robinson added: "I am disappointed to hear some of the comments from ACC Finlay and look forward to meeting with the chief constable shortly to discuss the events of the last 48 hours and ACC Finlay's unhelpful and unacceptable remarks.

"We must keep our entire focus on defeating those who would seek through violence and destruction to drag us back."

Yesterday police worked successfully with community representatives in the nationalist Short Strand, Markets and lower Ormeau areas to tackle attempts by youths to spark violence.

The vast majority of parades pass off peacefully on 12 July, the height of the loyal orders' marching season.

But in a relatively small number of areas parades continue to cause tensions between rival communities.

Robinson and McGuinness were central to negotiations at Hillsborough Castle earlier this year that brokered deals on the devolution of policing powers and on creating new legislation on parades.

Last week the Orange Order rejected the draft proposals that would replace the government-appointed Parades Commission with a new system to broker local solutions to parade standoffs.

Margaret Ritchie, the leader of the nationalist Social Democratic and Labour party, said rioters had caused "a massive trail of destruction", but she blamed parade proposals by the DUP and Sinn Féin for adding to instability.

Tuesday, 13 July 2010

Israel and the U.S.: who is whose tool?

From A World To Win News Service

28 June 2010. A World to Win News Service. The American international policy professors John Mearsheimer and Stephen Walt, who are critical of U.S. support for Israeli settlement expansion and its attacks on Lebanon and Gaza, argue that "the unmatched power of the Israel lobby" distorts U.S. foreign policy. Many people outraged by these crimes have been influenced by their still widely circulated article "The Israel Lobby" that first appeared in The London Review of Books in 2006 (available at and was later expanded into a book published in 21 countries.

Their work contains much useful information about the links between the U.S. and Israel. Yet their basic theory turns reality upside down. The truth is that Israel exists largely thanks to the U.S., because it plays an essential role in American domination in the Middle East and its current quest to "stabilize" an unjust and unacceptable situation for the people. In arguing that "American interests" would be better served by less uncritical support for Israel, Mearsheimer and Walt do not really confront the nature of the U.S.—a monopoly capitalist country whose wealth and power are inextricably linked to a global empire of exploitation and oppression. Nor do they thoroughly deal with the nature of Israel as a colonial settler state whose existence itself is no more defensible than the apartheid regime in South Africa.

This greatly weakens their critique of the U.S.-Israel nexus and reduces it to wishful thinking. That's especially dangerous at a time when the U.S. is trying to have it both ways, to do everything possible to support Israel's continued existence and aggression and at the same time try to appear as a friend to the Palestinians.

Despite their academic prominence, these two scholars have been the object of a Zionist hate campaign and an intellectual boycott, especially in the U.S. It is shameful that so many writers and public figures who explode in the face of any criticism of Israel have tried to silence Mearsheimer and Walt by pinning the label of anti-Semitism on them. But while these two consider themselves critical friends of Israel, it is true, as their attackers realize and they do not, that once you start to analyze Israel from the point of justice for all, the whole Zionist enterprise can be called into question.

In fact, their argument is essentially similar to the all-too-common idea among the masses of people in the world and the U.S. itself, that U.S. crimes in the greater Middle East and beyond can be explained by "Jewish pressure groups" rather than a system that basically can't work any other way.

The following reply to Mearsheimer and Walt was written in April by Stephen Maher, who describes himself as a graduate student at the American University School of International Service who has lived in the West Bank. We are reprinting it from his blog and While we do not share some important elements of his analysis, we welcome both his basic conclusion and his method of taking all the facts into account and testing ideas against reality.

Many of Israel's critics blame an "Israel lobby" for the near-total complicity of the U.S. in Israeli annexation, colonization and cleansing programs in the occupied West Bank. This complicity continues to the present, despite the "row" that erupted after the Israeli government humiliated U.S. Vice President Joe Biden by announcing the construction of 1,600 settlement units in occupied East Jerusalem while he was visiting the country. Indeed, despite the apparent outrage expressed by top White House officials, the administration has made clear that its criticism of Israel will remain purely symbolic. However, as we shall see, the lobby thesis does little to explain U.S. foreign policy in the Middle East.

Years after Noam Chomsky, Stephen Zunes, Walter Russell Mead and many others published their critiques of the Stephen Walt and John Mearsheimer "Israel lobby" thesis, many of the sharpest critics of Israel continue to attribute U.S. foreign policy in the Middle East to the influence of the lobby. Given the prevalence of the Israel lobby argument, and the latest diplomatic confrontation between the U.S. and Israel, it is important to revisit the flaws in the thesis, and properly attribute U.S. behavior to the large concentrations of domestic political and economic power that truly drive U.S. policy.

U.S. foreign policy in the Middle East is similar to that which is carried out elsewhere in the world, in regions free of "the lobby's" proclaimed corrupting effects. The inflated level of support that the U.S. lends Israel is a rational response to the particular strategic importance of the Middle East, the chief energy-producing region of the world. By building Israel into what Noam Chomsky refers to as an "offshore U.S. military base," it is able to protect its dominance over much of the world's remaining energy resources, a major lever of global power. As we shall see, those blaming the lobby for U.S. policy once again misunderstand the U.S.'s strategic interests in the Middle East, and Israel's central role in advancing them.

Geopolitics and the U.S.-Israeli relationship

A central claim of the "Israel lobby" thesis is that the "lobby," however defined, overwhelmingly shapes U.S. policy towards the Middle East. Thus, if the argument were true, its proponents would have to demonstrate that there is something qualitatively unique about U.S. policy towards the Middle East compared with that in other regions of the world. Yet upon careful analysis, we find little difference between the purported distortions caused by the lobby and what is frequently referred to as the "national interest", governed by the same concentrations of domestic power that drive U.S. foreign policy elsewhere.

There are states all around the world that perform similar services to Washington as Israel, projecting U.S. power in their respective regions, whose crimes in advancing Washington's goals are overtly supported and shielded from international condemnation. Take for instance the 30 years of U.S. support for the horrors of the Indonesian invasion and occupation of East Timor. In addition to the use of rape and starvation as weapons, and a gruesome torture regime, Indonesian president Suharto slaughtered 150,000 persons out of a population of 650,000. These atrocities were fully supported by the U.S., including supplying the napalm and chemical weapons indiscriminately used by the Indonesian army, which was fully armed and trained by the U.S. As Bill Clinton said, Suharto was "our kind of guy."

Daniel Patrick Moynihan, U.S. ambassador to the UN at the time of the Indonesia invasion, later wrote that "the Department of State desired that the United Nations prove utterly ineffective in whatever measures it undertook" to end the butchering of the East Timorese, a goal he carried out with "no inconsiderable success." Yet this support was not due to the influence of an "Indonesia lobby." Rather, planners had identified Indonesia as one of the three most strategically important regions in the world in 1958, as a result of its oil wealth and important role as a link between the Indian and Pacific oceans.

In some regions, as in Latin America where U.S. clients like Guatemala, Honduras, and El Salvador, and terrorist armies like the Nicaraguan Contras, spent years murdering defenseless peasants demanding basic human rights, the threat is mostly one of "successful defiance"; that is, a country defying U.S. orders and getting away with it. Should the U.S. tolerate one such case, the logic goes, it will embolden resistance to its dictates elsewhere. The danger underlying such defiance—referred to as "the threat of a good example" by Oxfam—is that a country will implement a successful model for independent development, refusing U.S. dictates and seeking to direct much-needed resources to serve the needs of the domestic population instead of wealthy foreign investors.

Such thinking is deeply institutionalized and exhibited by U.S. policy worldwide, going back to the very beginnings of the modern imperial era after World War II. It was clear from early in the war that the U.S. would emerge as the dominant world power in its aftermath, and so the State Department and Council on Foreign Relations began planning to create a post-war international order in which the U.S. would "hold unquestioned power." One way it planned to do so was gaining control of global energy resources, primarily those of Saudi Arabia, which were referred to at the time as "the greatest material prize in history" by the U.S. State Department.

As Franklin Roosevelt's "oil czar" Harold Ickes advised, control of oil was the "key to postwar political arrangements" since a large supply of cheap energy is essential to fuel the world's industrial capitalist economies. This meant that with control of Middle Eastern oil, particularly the vast Saudi reserves, the U.S. could keep its hand on the spigot that would fuel the economies of Europe, Japan and much of the rest of the world. As U.S. planner George Kennan put it, this would give the United States "veto power" over the actions of others. Zbigniew Brzezinski has also more recently discussed the "critical leverage" the U.S. enjoys as a result of its stranglehold on energy supplies.

Thus in the Middle East it is not simply "successful defiance" that the U.S. fears, nor merely independent development. These worries are present as well, but there is an added dimension: should opposition threaten U.S. control of oil resources, a major source of U.S. global power is placed at risk. Under the Nixon administration, with the U.S. military tied down in Vietnam and direct intervention in the Middle East to defend vital strategic interests unlikely, military aid to pre-revolution Iran (acting as an American regional enforcer) skyrocketed. Amnesty International's conclusion in 1976 that "no country has a worse human rights record than Iran" was ignored, and U.S. support increased, not because of an "Iran lobby" in the U.S., but rather because such support was advancing U.S. interests.

Strategic concerns also led the U.S. to support other oppressive, reactionary regimes, including Saddam Hussein's worst atrocities. During the Anfal genocide against the Kurds, Iraqi forces used chemical weapons provided by the U.S. against Kurdish civilians, killed perhaps 100,000 persons, and destroyed roughly 80 percent of the villages in Iraqi Kurdistan, while the U.S. moved to block international condemnation of these atrocities. Again, supporting crimes that serve the "national interest" set by large corporations and ruling elites, and shielding them from international criticism, is the rule, not the exception.

It is no coincidence that the U.S.-Israel relationship crystallized after Israel destroyed the independent nationalist regime of Gamal Abdel Nasser in a pre-emptive attack in 1967, permanently ending the role of Egypt as a center of opposition to U.S. imperialism. Since before World War II, Saudi Arabia had happily served as an "Arab facade," veiling the hand of the true ruling power on the Arabian peninsula, to borrow British colonial terminology. With Nasser's Arab nationalist rhetoric "turning the whole region against the House of Saud," the threat he posed to U.S. power was serious. In response, the State Department concluded that the "logical corollary" to U.S. opposition to Arab nationalism was "support for Israel" as the only reliable pro-U.S. force in the region. Israel's destruction and humiliation of Nasser's regime was thus a major boon for the U.S., and proved to Washington the value of a strong alliance with a powerful Israel.

This unique regional importance is one reason for the tremendous level of aid Israel receives, including more advanced weaponry than that provided to other U.S. clients. Providing Israel with the ability to use overwhelming force against any adversary to the established order has been a pivotal aspect of U.S. regional strategy. Importantly, Israel is also a reliable ally—there is little chance that the Israeli government will be overthrown and the weapons end up in the hands of anti-Western Islamic fundamentalists or independent nationalists as happened in Iran in 1979.

Today, with the increased independence of Europe, and the hungry economies of India and China growing at breakneck speed along with their demand for dwindling energy resources, control over what is left is more crucial than ever. In the September 2009 issue of the Asia-Africa Review, China's former Special Envoy to the Middle East Sun Bigan wrote that "the U.S. has always sought to control the faucet of global oil supplies," and suggested that since Washington would doubtless work to ensure that Iraqi oil remained under its control, China should look elsewhere in the region for an independent energy source. "Iran has bountiful energy resources," Bigan wrote, "and its oil gas reserves are the second biggest in the world, and all are basically under its own control" (emphasis added).

It is partially as a result of this independence that Israel's strategic importance to the U.S. has increased significantly in recent times, particularly since the Shah's cruel, U.S.-supported dictatorship in Iran was overthrown in 1979. With the Shah gone, Israel alone had to terrorize the region into complying with U.S. orders, and ensure that Saudi Arabia's vast oil resources remain under U.S. control. The increased importance of Israel to U.S. policy was illustrated clearly as its regional strategy shifted to "dual containment" during the Clinton years, with Israel countering both Iraq and Iran.

With Iran developing technology that could eventually allow it to produce what are referred to in the February 2010 Quadrennial Defense Review as "anti-access weapons" or weapons of mass destruction that prevent the U.S. from being able to freely use force in any region of the world, this is a crucial moment in Washington's struggle to seize control of Iran. This confrontation, stemming from the desire of the U.S. to control its oil and destroy a base of independent nationalism, makes U.S. support for Israel strategically crucial.

The "Israel lobby" and U.S. pressure

If we adopt "the lobby" hypothesis, we would predict that the U.S. would bend to Israel's will when the interests of the two states diverge, acting against its "national interest." Yet if U.S. policies in the Middle East were damaging its "national interest," as proponents of the lobby argument claim, that must mean that such policies have been a failure. This leads one to ask: a failure for whom? Not for U.S. elites, who have secured control of the major global energy resources while successfully crushing opposition movements, nor for the defense establishment, and most certainly not for the energy corporations. In fact, not only is U.S. policy towards the Middle East similar to that towards other regions of the world, but it has been a profitable, strategic success.

Indeed, the U.S.'s policy towards Israel and the Palestinians is not to achieve an end to the occupation, nor to bring about respect for Palestinian rights—in fact, it is the actor primarily responsible for preventing these outcomes. To the U.S., Israel's "Operation Defensive Shield" in 2002 had sufficiently punished the Palestinians and their compliant U.S.-backed leadership for their intransigence at Camp David. While the Palestinian Authority was already acting as Israel's "subcontractor" and "collaborator" in suppressing resistance to Israeli occupation, in the paraphrased words of former Israeli Foreign Minister Shlomo Ben Ami, former Israeli Prime Minister Ariel Sharon's deliberate destruction of Palestinian institutions provided the opportunity to rebuild them, and ensure an even greater degree of U.S. control.

The settlement and annexation programs help guarantee Israeli control over the most valuable Palestinian land and water resources, ensuring Israel will remain a dominant society not easily pressured by its neighbors. To help achieve these goals, the U.S. shields Israeli expansion behind a "peace process" in hopes that given enough time the Palestinians will concede more and more of what was once theirs. The primary concern is to present the appearance that the U.S. and Israel are ardently crusading for peace, battling against those who oppose this noble objective. Though it is true that people across the region are appalled and outraged by Israeli crimes, such anger is a small consideration next to the strategic gain of maintaining a strong, dependent ally in the heart of the Middle East.

The reconstitution of an even more tightly controlled Palestinian Authority, with General Keith Dayton directly supervising the Palestinian security forces, enabled the U.S. to meet these goals while more effectively suppressing resistance to the occupation. Likewise, redeploying Israeli soldiers outside of Gaza allowed Sharon a free hand to continue the annexation of the West Bank while being heralded internationally as a "great man of peace."

The treatment of Israel by the mainstream U.S. media is also standard for all U.S. allies. Coverage in the corporate press is predictably skewed in favor of official U.S. allies and against official enemies, a well-documented phenomenon. Thus, proponents of the lobby thesis are missing the forest for the trees. What they see as the special treatment of Israel by the mainstream press is actually just the normal functioning of the U.S. media and intellectual establishment, apologizing for and defending crimes of official allies while demonizing official enemies.

Of course, this is not to argue that there are not organizations in the U.S., like the American Jewish Committee, Anti-Defamation League and AIPAC [the lobbying group American Israel Public Affairs Committee] that seek to marginalize dissent from Israeli policy in every forum possible. Rather, I am pointing out that the power of these groups pales in comparison to other, far more powerful, interests and concerns. While the AJC or ADL may mobilize for the firing of a professor critical of Israel, for example, that argument is amplified by the elite-owned and controlled press because doing so serves their interests. Likewise, AIPAC can urge unwavering support for Israel on the part of the U.S. government, but without the assent of other far more powerful interests, like the energy corporations and defense establishment, AIPAC's efforts would amount to little. U.S. policy, like that of other states, is rationally planned to serve the interests of the ruling class.

Israel could not sustain its aggressive, expansionist policies without U.S. military aid and diplomatic support. If the Obama administration wanted to, it could pressure Israel to comply with international law and resolutions, join the international consensus, and enact a two-state solution. While the "Israel lobby" thesis conveniently explains his failure to do so and absolves U.S. policy-makers of responsibility for their ongoing support of Israeli apartheid, violence and annexation, it simply does not stand up under closer scrutiny.

A World to Win News Service is put out by A World to Win magazine (, a political and theoretical review inspired by the formation of the Revolutionary Internationalist Movement, the embryonic center of the world's Marxist-Leninist-Maoist parties and organizations.

Monday, 12 July 2010

Debate over role of unions opens in China

By Deirdre Griswold

Published Jul 11, 2010

Strikes at foreign-owned companies in China continue to proliferate.

Factory workers at Mitsumi Electric, a Japanese-owned company, walked out on July 1 demanding a wage increase. Some 30 of the young workers, mostly women, then sat down at the main entrance to the plant, located in northeast China in Tianjin, the sixth-largest city in the country with a population of nearly 12 million.

Even as U.S. business media are starting to warn that, if strikes continue and wages rise in China, some companies will pull out and go elsewhere, the workers’ struggle is gaining sympathy in the Chinese media and among high-level government officials.

A July 2 China Daily report on the Mitsumi walkout explained the workers’ grievances:

“One [worker] told Xinhua News Agency earlier that he received just 1,500 yuan (US$220) a month despite working on Saturdays and putting in two hours of overtime every workday.

“One employee, who declined to be named, told China Daily she earns only 700 yuan per month, which is below Tianjin’s minimum wage. ... The factory is the latest high-profile target in the slow-burning but persistent labor unrest that has been rocking foreign-owned companies, often left vulnerable by their position in complex supply chains and a tightening labor market. ...

“No specific law in China defines strikes as legal or illegal, but it is clear that authorities discourage such activity. However, those who have been taking the risks have been winning rewards.

“Workers in South China’s Honda engine gear factory won a 24-percent wage increase after a two-week strike. Those in Pingmian Textile Group factory in Central China also got a 25-percent pay hike after a two-week strike.

“Liu Kaiming, the executive director of the Institute of Contemporary Observation, said the government should remain neutral whenever there is friction between management and workers.

“‘Local governments in South China generally realize that a crackdown is not the right reaction to a labor dispute,’ Liu said.

“‘It’s one reason the Honda strike could end with an agreement on salary increases. Local governments in Central China should learn from this.’

“There also have been calls to urge Chinese labor unions to play a more active role in protecting workers’ legal rights and improving their wages and working conditions.”

Growth of class antagonisms

This brief mention in the Chinese press of the role of local governments and the official trade unions gives a glimpse of the class struggle going on within the state structures as China’s young workers assert themselves and demand improvements in wages and conditions.

For more than three decades, since adopting a long-term policy of “market socialism,” People’s China has opened up to foreign imperialist investment as a way of acquiring the capital to develop a modern industrial infrastructure and raise the standard of living. It has also allowed Chinese entrepreneurs to open businesses and grow rich. Within the last decade, capitalists have been allowed to join the Communist Party.

The official position is that these warring class interests can be accommodated peacefully within a mixed economy. The state still controls heavy industry, the basic levers of finance and the infrastructure, and is developing the economy according to a centralized plan.

However, especially in the past decade, the wealth gap between the workers and this new bourgeoisie has widened enormously. The presence of millionaires with ready cash has led to widespread corruption of officials and an erosion of the socialist principles on which the Chinese Revolution was based.

Burgeoning working class

At the time of liberation in 1949, China’s working class was a small group in an overwhelmingly peasant country. Just 2.4 million out of 8 million workers were organized into unions.

Since then, the number of workers in China has increased over 35 times.

The All-China Federation of Trade Unions is the officially recognized organization of the workers. As of 2008 it was the largest labor federation in the world, with 212 million members out of a total workforce of 287 million workers. It represented workers in 3.8 million enterprises. At least 70 percent worked in privately owned enterprises. (

In the last two years, unions in the federation have successfully negotiated contracts for workers at a number of foreign-owned companies, including Wal-Mart and Yum Brands (owner of KFC and Pizza Hut), both of them notoriously anti-union U.S. firms.

The recent strikes that have broken out are not officially sanctioned by the ACFTU. However, a debate is raging within China over the federation’s role, particularly with regard to labor disputes.

This is inferred by the disappearance from the federation’s website of documents pertaining to labor disputes and migrant labor. It would appear that its positions on these topics are being revised. But there is also explicit evidence of a vigorous ideological debate among present and former unionists.

A “Position Statement of Old Revolutionaries on the Present Upsurge of Worker Action in China,” issued on June 6, called on the Communist Party, the People’s Congress, the State Council and all compatriots to support the Honda workers’ just struggles and declared that “unions should clearly stand on the side of the working class to represent and uphold the interests of the working class as prescribed by the constitution.” (

The statement was signed by five well-known “old revolutionaries,” including Han Xiya, former alternate secretary of the Secretariat of the ACFTU.

This statement is very different in tone from reports in the Western media, including both the commercial press and social-democratic leaning publications, which push the building of “independent unions” in China and write off a role for the ACFTU in fighting for the workers’ demands.

In the imperialist press, this dismissal of the ACFTU is often coupled with references to the “independent” Polish union called Solidarity, which became an important vehicle in the counter-revolutionary movement there. Most U.S. unions were caught up in support for Solidarity — which was manipulated by the CIA and led the Polish workers into a trap.

Its celebrated leader, Lech Walesa, was rewarded by becoming president of a capitalist Poland. The shipyard workers he had misrepresented in Gdansk lost their jobs when the yard was bought by imperialist investors, stripped of its equipment and then closed down.

Such “independence” is not what workers striking today in China want.

Next: Where is China heading?

Articles copyright 1995-2010 Workers World. Verbatim copying and distribution of this entire article is permitted in any medium without royalty provided this notice is preserved.

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Sunday, 11 July 2010

It's fun to kill in Afghanistan, says top US commander

By Kim Sengupta, Defence Correspondent
Saturday, 10 July 2010

The US military, still recovering from the shock of the sacking of General Stanley McChrystal, its top commander in Afghanistan – is facing fresh problems over revelations that another top commander declared that it was "fun to shoot people" in Afghanistan.

A video of General James Mattis making his comments was yesterday spreading through the Muslim world at a fraught time in Afghanistan for the US and it's Western allies. General Mattis has been named as successor to General David Petreaus as head of US Central Command. General Petraeus is moving to Afghanistan after McChrystal's sacking over derogatory remarks made about President Obama to Rolling Stone magazine. But General Mattis has yet to be confirmed by the US Senate. The general led the controversial US military assault on the Iraqi city of Fallujah in 2004.

The comments which have come back to haunt him were made at a leadership seminar in 2005. He said: "Actually, it's a lot of fun to fight. You know it's a helluva hoot. I'll be right up front with you. I like brawling. You go into Afghanistan, you get guys who slap women around for five years because they didn't wear a veil ... guys like that ain't got no manhood left anyway. So it's a hell of a lot of fun to shoot them."

Saturday, 10 July 2010

Gulf Coast Disaster: Capitalist Profit Drive Kills

Big Oil, White House—Partners in Crime
Workers Vanguard No. 961
2 July 2010

Eleven oil workers died a horrible death on April 20 when the British Petroleum (BP) Deepwater Horizon rig exploded in the Gulf of Mexico. The workers were not represented by a union; their safety in this dangerous job was in the hands of a corporation notorious for cutting corners to save money. As media reports and eyewitness accounts from survivors have made clear, a crucial piece of safety equipment, the blowout preventer, was malfunctioning. Oil worker Tyrone Benton, one of the survivors, told the BBC’s Panorama program that he had spotted a leak and that BP and the rig’s owner, Transocean, were informed. But as AOL News (21 June) put it, “repairing the control pod would have meant stopping drilling work on the rig, which was costing BP $500,000 a day to operate.”

Since April 20, two cleanup workers have died. One of them, despondent over the destruction to his livelihood, committed suicide. The death toll will climb. Cleanup workers are being exposed to deadly chemicals, including an oil dispersant so toxic it’s been banned in Europe. The disaster is ruining the lives of countless working men and women—longtime black and white residents, Native Americans, immigrant Vietnamese fishermen—whose way of life is sinking in the oil-filled waters and wetlands of the Gulf, where beaches are covered with filthy oil globs (“tarballs”).

Many of those involved in the cleanup effort, which includes prison convict labor, are getting sick. At least eleven have been hospitalized with symptoms related to exposure to inhaled irritants. Respirators have not been issued. BP at first threatened to fire cleanup workers who brought their own, including those involved in burning off oil or working near areas where toxic dispersants are being used. BP also initially gagged cleanup workers through contracts barring them from talking to the media. Earlier, Transocean workers on the rig had to sign forms asserting that they did not witness the explosion—the one they just survived.

The Gulf Coast disaster is enormous, incalculable. It is ravaging a region that continues to reel from Hurricane Katrina and its aftermath—a man-made disaster that exposed the venality, class arrogance and utter contempt of the capitalist rulers for black, poor and working people. Today, oil continues to gush into the Gulf of Mexico at a rate of 60,000 to upward of 100,000 barrels a day. Even if the plan for drilling a relief well is successful, it won’t be ready until the end of August at the earliest. Marine life has been devastated, imperiling some of the richest fisheries in the world. The Gulf Coast disaster has long since surpassed the 1989 Exxon Valdez spill off Alaska’s coast, the effects of which continue to be felt, both in terms of a ruined fishing industry and in illnesses suffered by cleanup workers and local residents.

Save a million dollars or so, kill eleven workers: such is the deadly math of the oil barons and the government that serves their interests. It’s not a matter of this or that “energy policy,” or who is running the regulatory agencies, all of which are totally interpenetrated with the corporations. Under Barack Obama as under George W. Bush and their predecessors, whether Democratic or Republican, the government exists to serve the interests of the tiny class of capitalists who derive their obscene wealth from exploiting labor. At the heart of the Gulf Coast disaster is the naked drive for profit that drives the irrational capitalist system.

Criminality Upon Criminality

As Rolling Stone (24 June) documented in its article “The Spill, the Scandal and the President”:

“BP shaved $500,000 off its overhead by deploying a blowout preventer without a remote-control trigger—a fail-safe measure required in many countries but not mandated by MMS [Minerals Management Service], thanks to intense industry lobbying. It opted to use cheap, single-walled piping for the well, and installed only six of the 21 cement spacers recommended by its contractor, Halliburton—decisions that significantly increased the risk of a severe explosion. It also skimped on critical testing that could have shown whether explosive gas was getting into the system as it was being cemented, and began removing mud that protected the well before it was sealed with cement plugs.”

As the New York Times (21 June) documented in depth, to save money BP directed Transocean to remove a layer of redundancy from the blowout preventer and replace one of its secondary rams with a “test ram” that would reduce the time it took to conduct certain well tests. That preventer was supposedly the last line of defense, “but the line did not hold.”

On April 2, Obama declared that oil rigs “don’t cause spills.” Eighteen days later, the Deepwater Horizon went up in flames. Since the spill, Obama has worked overtime to protect BP, even as he prattled on about looking for “whose ass to kick.”

In fact, the Obama administration stands out for its special relationship with BP, which donated more to his 2008 election campaign than to the McCain-Palin ticket. The administration purveyed ludicrously low estimates of the oil spilled and intimidated government scientists who pointed to higher numbers. Obama’s vaunted $20 billion escrow fund to be paid by BP over the next four years is a drop in the bucket compared to the actual cost of the devastation. More to the point, the fund is designed to help protect BP from potentially losing hundreds of billions in lawsuits.

The Minerals Management Service—now renamed the Bureau of Ocean Energy Management, Regulation, and Enforcement—supposedly regulates the oil industry for the Department of the Interior. The MMS provides a literal definition to being in bed with one’s adversary (as in sex and cocaine parties for executives). Two months after Obama took office, the agency dutifully approved BP’s application for its Deepwater Horizon well, a work of fiction that promised, among other things, to protect such animals as walruses, sea otters and sea lions. Needless to say, such cold-water mammals do not exist in the semitropical Gulf.

White House residents change, but not the role of the government and its agencies. The Rolling Stone exposé quoted a representative of Public Employees for Environmental Responsibility, which represents federal whistle blowers: “Employees describe being in Interior—not just MMS, but the other agencies—as the third Bush term.”

BP—with its track record of workers maimed and killed through cost-cutting and ruthless speedup and its CEO Tony Hayward, a study in capitalist swinemanship—is easy to hate. A 2005 explosion at a BP refinery in Texas killed 15 workers and injured 170, while in November 2009 a pipeline at Prudhoe Bay, Alaska, ruptured. But BP is no exception to the functioning of this industry—whether the owners are American, British or anything else. In the eyes of the capitalist cutthroats, fatalities in the dangerous extractive industries are just so much collateral damage. On April 2, less than three weeks before the Deepwater Horizon disaster, five workers were killed in an explosion at Tesoro’s oil refinery plant in Anacortes, Washington. Three days later, 29 miners died in an explosion at the Upper Big Branch coal mine in Raleigh County, West Virginia.

The destruction wrought by oil and mining companies spans the globe. A big difference between the explosion in the Gulf of Mexico and other disasters is that this one hit right off the U.S. coastline. In Nigeria’s Niger River delta, some 1.5 million tons of oil—50 times the pollution unleashed by the Exxon Valdez disaster—has been spilled over the last half century. Oil companies in the region, including U.S.-owned Chevron and ExxonMobil, are protected by government and private troops who not only wage war against rebels but also mete out repression against residents seeking redress for the oil giants’ ravages. A New York Times (16 June) article reported: “The oil pours out nearly every week, and some swamps are long since lifeless. Perhaps no place on earth has been as battered by oil, experts say, leaving residents here astonished at the nonstop attention paid to the gusher half a world away in the Gulf of Mexico.” The article quoted a Nigerian official who said, “Whatever cry we cry is not heard outside of here.”

Industrial murder and environmental devastation are endemic to the workings of the capitalist system. Only when the working class rips industry from the hands of the capitalists and establishes a planned socialist economy on a world scale will the enormous resources of the planet be put to use for all of humanity. When the workers rule, technology and productive resources will be expanded to overcome scarcity and provide a decent life for all. The fight for a socialist future requires forging revolutionary workers parties that will lead all the exploited and oppressed in proletarian revolution.

Labor: Organize the Oil Industry!

Across the U.S., an estimated 177 workers on average die every day from work-related causes. As we noted following the Upper Big Branch mine explosion, outfits like the Mine Safety and Health Administration “do not exist to protect workers. While occasionally giving the employers a slap on the wrist, they serve to breed faith in the agencies of the ruling class as a substitute for union struggle” (“Industrial Murder in West Virginia,” WV No. 957, 23 April).

The trade unions are the only effective safeguard working people have against the rapaciousness of the capitalist bosses. It is necessary to fight for the union organization of the oil industry, for union safety committees able to shut down production at any point. This is a question of life and death for oil and gas workers, who between 2002 and 2007 suffered a work fatality rate that was seven times the average for all occupations.

Organizing the oil extraction industry will be no easy task. The bosses, backed by the capitalist state, are hell-bent on keeping the industry union-free. Large numbers of oil workers used to be represented by the Oil, Chemical and Atomic Workers union, which in 2005 became part of the United Steelworkers union (USW). Today, a June 15 AFL-CIO posting on the Gulf disaster admits, “offshore exploration, production and service industry in the Gulf of Mexico, to the best of our knowledge, is 100 percent nonunion.”

This is a striking indictment of the pro-capitalist trade-union bureaucracy, which has overseen a massive decline in union membership throughout industry over the last several decades. The union tops’ class collaboration is exemplified by their loyalty to the Democratic Party and their reliance on the state agencies of the class enemy. Instead of initiating a drive to organize non-union oil workers in the wake of the Gulf Coast disaster, the USW bureaucracy begged for greater government oversight—i.e., leave the lives of workers in the hands of the bosses’ political representatives.

There must be a fight for a new labor leadership, one based on a program of class struggle and political independence from the capitalist political parties and state agencies. Crucial to this perspective is the struggle against the flag-waving of the labor tops, who preach the lie of a unity of interests between American workers and “their own” exploiters, poisoning the potential for international labor solidarity. Typical is the June 15 AFL-CIO statement, which complains that the oil industry is “increasingly foreign.”

American companies are second to none in injuring and killing workers. A list of refinery fires and fatalities for 2009 and 2010 in the Steelworkers Organization of Active Retirees newsletter (Spring 2010) includes a veritable who’s who in the oil industry, with such U.S. companies as ConocoPhillips, ExxonMobil, Shell (U.S. subsidiary of Royal Dutch Shell) and Chevron as well as BP and others. The newsletter detailed 40 deaths and injuries in the petroleum industry in April alone. Three workers were injured in a fire at ExxonMobil’s Baton Rouge, Louisiana, refinery on April 14. On April 19, the day before the BP rig exploded, a contractor died in a crane accident at a Motiva Enterprises refinery in Port Arthur, Texas. On April 29, two workers and a supervisor were injured in a fire at Valero Energy Corp.’s Memphis refinery.

It was, in fact, a U.S. company that perpetrated the world’s worst industrial catastrophe. In the early hours of 3 December 1984, Union Carbide’s pesticide plant in Bhopal, India, began to leak methyl isocyanate gas and other toxic chemicals. Nearly 600,000 people were exposed, resulting in the deaths of some 15,000 human beings. The U.S. has since ignored demands that Warren Anderson, the head of Union Carbide at the time, be extradited to India.

Expropriate Big Oil! For an International Planned Socialist Economy!

The devastation in the Gulf of Mexico, the Niger Delta and elsewhere is but a piece of the picture of plunder carried out by Big Oil, which has controlled the economic fate of entire nations. It was to save Anglo-Iranian, a prior incarnation of BP, that the CIA and British imperialists overthrew the nationalist regime of Mohammad Mossadeq in Iran in 1953 after he nationalized the company’s holding in that country. (The company’s name changed the year after.) In his classic 1916 work, Imperialism, the Highest Stage of Capitalism, Bolshevik leader V.I. Lenin explained:

“Imperialism is the epoch of finance capital and of monopolies, which introduce everywhere the striving for domination, not for freedom. Whatever the political system the result of these tendencies is everywhere reaction and an extreme intensification of antagonisms in this field.”

In thrall to the “democratic” political system of American capitalist rule, the reformist left responded to the disaster in the Gulf with a new round of pleas to the Obama government. In a June 14 online statement, the Party for Socialism and Liberation (PSL) credited the Obama White House for the $20 billion escrow fund, calling this ploy “a dramatic shift in their policy towards BP” and claiming that this was the result of “mass grassroots organizing” like the PSL’s “Seize BP” campaign. Warning that this “does not mean the Obama administration is firmly against BP,” the PSL aims to stiffen the administration’s resolve through the pressure tactic of an “independent body” to control the fund “run by representatives of the fishers, shrimpers, crabbers, unions, small business people and workers in the tourism and recreation industry, local elected officials, clergy, as well as independent scientists and environmentalists.”

For its part, the International Socialist Organization (ISO) published a lengthy online piece titled “The Making of an Eco-Catastrophe” (25 June) that criticized Obama’s “concessions to the right” on oil drilling. The article concluded that the only way such concessions will stop “is if a grassroots movement puts more pressure” on Obama “from the left.” Echoing petty-bourgeois environmentalists, the article demands “an immediate halt to all deep-water drilling” and a plan to “phase out offshore drilling altogether.” The ISO calls for Congress to pass “a comprehensive energy bill,” offering advice to the capitalist rulers on how they can rearrange tax policies in favor of “green” jobs and other liberal causes.

Through their insipid pleadings, the PSL, ISO et al. promote the illusion that bourgeois—i.e., Democratic—politicians can be pressured to represent the interests of working people and the oppressed. These reformists see their role as tinkering with the machinery of the capitalist state. They appeal to the government that, as Karl Marx and Friedrich Engels explained in the Communist Manifesto, serves as “a committee for managing the common affairs of the whole bourgeoisie.” All the reformist chatter about “pressure” and “people’s committees” is an obstacle to the necessary struggle for a socialist revolution that expropriates Big Oil and all the means of production.

In the wake of the Gulf disaster, many liberals and environmentalists have renewed calls to slash oil production in favor of “renewable energy.” We wrote in “The World Oil Racket” (WV No. 535, 27 September 1991) that it is commonly assumed that the boards of directors of, say, Greenpeace, and of Exxon are fundamentally antagonistic to each other. Yet each in its own way propagates the false notion that consumption is outgrowing oil supplies. Ecology activists use this argument to push a utopian program of economic conservation and primitivism; the heirs of Rockefeller use it to justify extortionate prices and the imperialist rape of impoverished oil-producing countries.

The fact is that fossil fuels are necessary for any modern civilization. Criminal disregard for human life and ecological devastation stem from a social system in which production is based on profit rather than human need. As we stated in “The World Oil Racket”:

“The ecology activists are right in one important respect: the massive burning of hydrocarbons—whether oil or coal—is in the long term bad for the earth’s atmosphere. The answer, however, is not to save oil by cutting the living standards of North American and European working people. A planned socialist economy would carry out the scientific research required to develop safer, more efficient sources of energy (including nuclear and solar energy). But there is one absolutely necessary precondition for an energy-efficient future. The heirs of Rockefeller and sheiks of Araby must be swept into the dustbin of history.”

Friday, 9 July 2010

Economic Crisis and the Capitalist State

Liberals Push Regulation Hoax
Break with the Democrats!
For a Workers Party That Fights for a Workers Government!

Part One

(Part Two HERE)
No. 961

Throughout the capitalist world, the human cost of the worst economic crisis since the 1930s has been staggering. In the European Union (EU), where a financial crisis now threatens a renewed downturn, 23 million workers are out of work. Unemployment for those under 25 is running over 20 percent; in Spain, youth unemployment is over 44 percent.

The early stages of the current economic crisis overlapped with the 2008 hunger crisis, in which skyrocketing food prices raised the spectre of mass starvation (see “Imperialism Starves World’s Poor,” WV Nos. 919 and 920, 29 August and 12 September 2008). Since 2008, some 130 million additional people have been driven into the ranks of the chronically hungry and undernourished. In many countries food prices have barely fallen from their peaks of two years ago, and in some Asian markets staples like rice and wheat are today selling above their 2008 levels. The worldwide total of those who are desperately hungry has, for the first time, climbed to more than one billion people—roughly one-sixth of humanity.

In the U.S., the number of people classified as living in extreme poverty—those unable to provide for the most basic needs of food, shelter and health care—has risen by more than a third over the past decade and now totals 17 million. Some 15 million workers are officially unemployed, a record 46 percent of them for longer than six months. When those who are constrained to work part-time or have abandoned the job hunt are included in the count, the number rises to over 26 million—almost 17 percent of the workforce. Since the housing price bubble burst in 2007, there have been over seven million foreclosures. And the number of working people who face being thrown into the street is on the rise, with a record 932,000 foreclosures in the first quarter of this year, up 16 percent from the same period last year.

As always in racist capitalist America, black people, typically the last hired and first fired, have been hit the hardest. Even high-income black borrowers are 80 percent more likely to lose their homes to foreclosure than their white counterparts. Nationally, the jobless rate for young black men aged 16-24 has reached Great Depression levels of over 34 percent. In rust-belt states like Illinois, Wisconsin and Ohio, joblessness for blacks is running over 20 percent; in Michigan, the figure is expected to soon hit 27 percent. Nearly one out of two black men in Milwaukee is without a job. Children of immigrant, black, Latino or Native American parents are more than twice as likely as white children to be living in poverty.

Barack Obama and the banker-politicians in his administration, following in the steps of George W. Bush, showered hundreds of billions of taxpayers’ dollars on their financier friends and the auto bosses. Banks can borrow money from the Federal Reserve (the U.S. central bank) at 0.5 percent interest and purchase risk-free Treasury bonds paying 3 percent. Trying to kick-start the economy, the government is practically giving money away to the banks. This has in turn fueled a renewed speculative binge propelling a wide range of price bubbles, from corporate shares in stock exchanges to precious metals and fossil fuels—and food items.

Much of what currently looks like economic growth is in fact the froth generated by speculative bubbles. Over the past year, as millions were driven to the brink of starvation, the number of billionaires in the world increased by almost 30 percent to over 1,000. The net worth of this select club skyrocketed 50 percent and now totals a cool $3.6 trillion.

No sooner had Barack Obama signed into law his health care “reform”—a boondoggle for big business that cuts Medicare and taxes union health plans—than Washington was abuzz with talk of “retooling” Social Security by cutting benefits and increasing taxes, a task that his right-wing Republican predecessor, George W. Bush, took on without success. The New York Times (22 March) wrote that “the promise of future reductions would immediately reassure global markets fretful that the United States’ debt is already its highest since World War II.... That argument appeals to Mr. Obama.”

From the U.S. to the EU, capitalist governments are taking the ax to wages, pensions and social welfare programs in an attempt to make working people pay for the economic crisis. Simultaneously, they are mooting various financial regulation schemes in a vain attempt to overcome the sharp economic crises that are and always have been an inherent feature of the capitalist system. Chief among these measures is the much-ballyhooed bank “reform” that is passing through the U.S. Congress. When the final details were worked out, one Wall Street banker said, “We are all breathing a sigh of relief here…. We can live with this” (Financial Times, 25 June). At any rate, with the European financial crisis and the ongoing housing crisis in the U.S. threatening a “double-dip” recession, this amounts to something like moving the deck chairs on the Titanic.

This situation amply demonstrates the truth of the statement by Karl Marx and Friedrich Engels in the 1848 Communist Manifesto that “the executive of the modern state is but a committee for managing the common affairs of the whole bourgeoisie.” This understanding represents a fundamental dividing line between ourselves—Marxist revolutionaries—and self-proclaimed “socialists” who promote illusions in the possibility of reforming the capitalist state, which in the U.S. they seek to do by exerting pressure on the Democratic Party. To such class collaborationism we counterpose the road of class struggle. The key is to break the political chains that shackle labor to the capitalist political parties and state. Break with the Democrats! For a workers party that fights for a workers government! There will be no end to the misery wrought by the capitalist rulers and their boom-bust economic system until the working class seizes power through a socialist revolution that smashes the capitalist state and erects in its place a workers state—the dictatorship of the proletariat.

Exploitation and Profit

The wealth of the capitalist class—the owners of the means of production—derives from the exploitation of labor. As Marx explained in Capital, his classic analysis of the capitalist economy, the wage-worker is constrained to sell to the capitalist his ability to work. The wage that a worker is paid corresponds to that part of the working day during which he produces the equivalent of what it costs to maintain himself and his family. The other part of the day, he works without remuneration, creating “surplus value,” which the capitalist pockets in the form of profit.

Over the past three and a half decades, in which working people in this country have largely been on the losing end of the class struggle, the rich have fabulously increased their wealth, mainly by holding down and driving down wages. Pay for production and other nonsupervisory workers—80 percent of the private workforce—is today 9 percent lower in real terms (i.e., adjusted for inflation) than it was in 1973. During that same period, labor productivity (output per worker) increased by more than 80 percent.

In short, capitalists have enormously ratcheted up what Marx called the rate of exploitation—the ratio of the share of the product of labor appropriated by the capitalists to the share represented by the worker’s wage. They did this by combining mass layoffs with extracting increased output from those workers still employed, including through forced overtime. Last year, through layoffs and short time, total hours worked decreased by 5 percent—twice as much as the 2.5 percent fall in gross domestic product. The London Economist (20 March) commented on these figures with evident approval: “America has gone on a diet: it has squeezed extra output from a smaller workforce and suffered a big rise in unemployment as a consequence.”

This likewise corresponds to Marx’s analysis of the basic laws governing the capitalist mode of production. Marx explained that the existence of a large pool of unemployed—the “industrial reserve army”—serves to restrain what he ironically referred to as workers’ “pretensions” to demand higher wages:

“The condemnation of one part of the working-class to enforced idleness by the over-work of the other part, and the converse, becomes a means of enriching the individual capitalists....

“The industrial reserve army, during the periods of stagnation and average prosperity, weighs down the active labour-army; during the periods of over-production and paroxysm, it holds its pretensions in check. Relative surplus-population is therefore the pivot upon which the law of demand and supply of labour works. It confines the field of action of this law within the limits absolutely convenient to the activity of exploitation and to the domination of capital.”

—Capital, Volume I

To make ends meet, working families have increasingly gone into debt, maxing out credit cards and borrowing against the value of their homes. Americans today owe a staggering $13.5 trillion, or around $44,000 for every man, woman and child in the U.S. Any money that families have to spare after providing for essential needs is being spent not on consumption but on trying to ease that crushing debt burden. The average U.S. household today turns over more than 17 percent of its disposable income directly to financial capitalists to pay down mortgages, credit card debt and the like.

The current crisis has been exacerbated by the deindustrialization of the U.S., already under way for several decades. Despite the massive shift of social product from labor to capital, capitalists in this country have steadily cut back on productive capacity. This country already ranks behind every industrial nation except France in the percentage of overall economic activity devoted to manufacturing—13.9 percent, according to the World Bank, down four percentage points in a decade. Since the official start of the recession in December 2007, some eight million jobs have been lost. Many if not most of those jobs are gone for good, especially in manufacturing.

Those industrial workers who succeed in finding new employment are often forced into low-paying, temporary jobs that provide no health insurance, retirement benefits or even sick days. A cover story titled “The Disposable Worker” in Bloomberg BusinessWeek (18 January) reflected the bosses’ triumphalism:

“Some economists predict it will be years, not months, before employees regain any semblance of bargaining power. That’s because this recession’s unusual ferocity has accelerated trends—including offshoring, automation, the decline of labor unions’ influence, new management techniques, and regulatory changes—that already had been eroding workers’ economic standing....

“When employment in the U.S. eventually recovers, it’s likely to be because American workers swallow hard and accept lower pay.”

Standing in sharp contradiction to its declining economic base is U.S. imperialism’s overwhelming global military hegemony. The destruction of the Soviet degenerated workers state in 1991-92 removed what had been the only significant counterweight to U.S. imperialism, which sees itself free to ride roughshod in Iraq and Afghanistan and to threaten any other regime that gets in its way. Defense of the interests of workers, blacks and immigrants in the U.S. is integrally linked to opposition to U.S. imperialism’s interventions abroad.

Capitalism’s Labor Lieutenants

What had already been an enormous increase in the rate of exploitation of workers, due to decades of giveback union contracts, two-tier wage systems and similar devices acceded to by the trade-union bureaucracy, has been further jacked up as a result of the economic crisis. Accepting the logic imposed by the capitalist system, the trade-union tops are reduced to negotiating the terms of surrender, from the union-busting auto bailout to attacks on teachers’ tenure and seniority.

Basing themselves on the mass organizations of the working class, the labor bureaucrats are at times pushed to engage in strike action. Yet their primary function is to ensure the subordination of the workers to the interests of the class enemy, especially through their fealty to the Democratic Party, of which they are a constituent part. No less than the Republicans, the Democratic Party is a party of and for the capitalist class—with the difference that the Democrats cynically pose as “friends of labor” and shed crocodile tears over the consequences of the anti-working-class measures that they themselves seek to impose.

Earlier this year, in support of Obama’s push for a “financial reform” law, the AFL-CIO tops launched a campaign, featuring an April 29 march by thousands of workers on Wall Street, demanding “Make Wall Street Pay.” A couple of weeks later, AFL-CIO president Richard Trumka told a meeting of union officials in Washington: “We can pay for the jobs we need by making Wall Street pay back those bailouts, by taxing those huge Wall Street bonuses, by closing the tax loopholes that benefit hedge fund and private equity managers...and imposing a fee on financial speculation.”

However fatuous, such schemes are premised on the notion that the Democratic administration is at bottom the friend of working people and just needs some pressure to rein in the fat cats. Though occasionally engaging in a bit of tough talk about financial regulation, the Obama administration has done—and will do—little to displease its Wall Street cronies. Avoiding serious restrictions on bankers’ pay or their ability to speculate on financial markets makes it more attractive for them to do business on Wall Street rather than in the City of London, the world’s other major financial center.

In response to mass layoffs, the pro-capitalist labor officialdom has renewed its chauvinist protectionist appeals. They pushed for and got the “buy American” clause in Obama’s “rescue” package for industry last year. Such flag-waving serves only to subordinate workers to their red-white-and-blue exploiters while driving a wedge between native and foreign-born workers. In the current economic crisis, capitalist governments in the U.S. and elsewhere have ratcheted up attacks on immigrants which, if not fought, will only further divide the working class. It is crucial for the labor movement to organize immigrant workers. We demand: No deportations! Full citizenship rights for all immigrants!

Along with liberal Democrats like New York Senator Charles Schumer, the union misleaders have been in the forefront of protectionism directed against China. In this vein, Trumka & Co. clamor against the Stalinist Communist Party regime for not revaluing its currency, the yuan (also called renminbi), upwards, claiming that its current value against the dollar undermines American exports and hence costs jobs at home.

Anti-China protectionism is directed against the bureaucratically deformed workers state that issued out of the 1949 Chinese Revolution. That revolution was a historic achievement for China’s workers and peasants and for the workers of the world, smashing capitalist/landlord rule and ripping the world’s most populous country out of the hands of the imperialist powers. Despite the rule of a privileged, nationalist bureaucracy, China’s collectivized economy has brought enormous gains to generations of workers, peasants and women. While capitalist property has made huge inroads over the last three decades of “market reforms,” nationalized property remains the core of the economy. The U.S. and other imperialist powers seek nothing less than the restoration of capitalist rule in China. The treacherous AFL-CIO misleaders aid the imperialists by their promotion of “dissidents” like Han Dongfang, who seeks to channel Chinese workers’ struggles in the direction of support to capitalist counterrevolution.

It is vital for the international proletariat to stand for the unconditional military defense of China and the other remaining deformed workers states—Cuba, North Korea and Vietnam—against imperialist and domestic counterrevolution. It is the task of the proletariat of those countries to carry out a political revolution to sweep out their nationalist Stalinist misrulers, who preach accommodation with the world capitalist order, and establish regimes based on workers democracy and revolutionary internationalism.

There has recently been an explosion of strikes by Chinese workers in foreign-owned plants like Honda and Toyota (see article, page 16). While the U.S. labor tops have been prostrate before the bosses’ attacks, the workers in the capitalist plants in China are winning gains the tried-and-true way—through class struggle! These strikes underline the need for international labor solidarity in opposition to the U.S. trade-union tops’ poisonous protectionist schemes, which divide workers along national lines.

Tea Party Reactionaries

The labor bureaucracy dutifully threw an enormous amount of union resources—money and time—into getting Obama placed in office as U.S. capitalism’s CEO. Liberal-minded workers and intellectuals expected major reforms, from universal health insurance coverage to tighter financial regulation. These expectations were reinforced by the severity of the economic crisis and the upsurge of popular hostility toward Wall Street. The reformist left—the International Socialist Organization, Workers World Party et al.—hailed Obama’s election as evidence that their program of pressuring the Democratic Party could fundamentally improve conditions for workers, blacks and immigrants. Combating such illusions, we described Obama as a “Wall Street Democrat” and wrote right after the elections: “Obama seeks to socialize the bourgeoisie’s losses on the backs of working people, while helping the exploiters appropriate the profits for themselves” (WV No. 925, 21 November 2008).

And this is precisely what has happened. With the labor movement largely prostrate, organized opposition to the Obama administration’s policies has come primarily from the far-right wing. Racist yahoos, bible-thumpers, militiamen, John Birch Society types and “birthers” (who challenge the fact that Obama was born in the U.S.)—along with a fringe of fascist white-supremacists—were mobilized by the Republican right and their media shock jocks into a loose “Tea Party” movement in opposition initially to the economic stimulus package and then the health care “reform.” But at bottom it was not about particular policy issues. This movement displays the anti-black racism, anti-immigrant nativism and sexual bigotry that have long been wielded by the American bourgeoisie to divide the working class and buttress social reaction.

On March 20, shortly before the Congressional vote on Obama’s health care bill, Tea Party protesters outside the U.S. Capitol yelled the “N” word at civil rights veteran John Lewis and other black Congressmen and spat on another; they confronted openly gay Congressman Barney Frank with homophobic slurs. And no sooner had Tea Party candidate Rand Paul won Kentucky’s May 18 Republican Party Senate primary than he declared that he would have opposed forcing private businesses to desegregate under the 1964 Civil Rights Act.

While partly a response to the current economic downturn, today’s Tea Party movement has roots going back to the white racist backlash against the limited gains for blacks and women, crucially including abortion rights, that resulted from the civil rights movement and other social upheavals of the 1960s. That backlash eventually took the form of opposition to “big government”—identified with court-ordered racial integration in the public schools, giving jobs to blacks and women under affirmative action programs and handing out welfare money to poor black women and their children (a demagogic lie since relatively few government funds went to the poor, black or white). This boiled over into the “tax revolt” of the late 1970s—the so-called revenge of the suburbs—which propelled Ronald Reagan into the White House and began the ascendancy of the Republican right in national politics.

It’s the Capitalist System, Not Personal Greed

At the AFL-CIO’s April 29 Wall Street demonstration, Trumka sought to appeal to workers’ justifiable outrage by denouncing the bankers’ “spirit of greed.” In fact, blaming the global economic downturn on the unbridled greed of a small number of financiers serves to divert attention from the destructive irrationality of the profit-driven capitalist system as a whole.

As Karl Marx explained, what drives the capitalist system up and down is the rate of profit: the amount of surplus value extracted from the exploitation of labor per unit of capital invested. The policies and actions of corporate management—whether of banks, industrial enterprises or retail chains—aim to maximize the return on equity—the ratio of profits to the market value of the firm’s stock.

The role of management is that of agents of the big capitalist shareholders in their corporations. If the return on equity of a given corporation declines or is substantially less than that of its main competitors, the price of its stock will fall. And woe unto management when that happens. The Sellout (2009), a book on the financial meltdown by financial journalist and TV commentator Charles Gasparino, is subtitled: How Three Decades of Wall Street Greed and Government Mismanagement Destroyed the Global Financial System. Gasparino peddles the notion that excessive greed helped cause the current crisis by leading investment bankers to take unsound risks. But Gasparino himself recounts that some CEOs of major investment banks, such as E. Stanley O’Neal at Merrill Lynch and John Mack at Morgan Stanley, were known for shying away from excessive risk before they took over the top job. They then became obsessed with increasing the bank’s return on equity. The only way they could do that given the economic environment at the time was to invest ever greater sums in mortgage-backed securities, including arcane derivatives, while amassing ever greater amounts of debt relative to the bank’s capital.

Some Wall Street executives recognized to some extent that they were in the midst of a speculative bubble but felt compelled to participate in it lest they lose out to the competition. As then-Citigroup CEO Charles Prince put it in mid 2007: “When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you’ve got to get up and dance. We’re still dancing.” And when the music did stop, the government bailed out Prince and his Wall Street cohorts.

“Socialism for the Rich”: Wall Street Bailout Revisited

A case study of how the government serves as the executive committee of the capitalist ruling class is offered by the massive bailout of the big banks and other major financial players. The story of that bailout was detailed in two books that came out last year, both written by well-informed financial journalists: David Wessel’s In Fed We Trust: Ben Bernanke’s War on the Great Panic and Andrew Ross Sorkin’s Too Big To Fail: The Inside Story of How Wall Street and Washington Fought to Save the Financial System from Crisis—and Themselves. Wessel is the economics editor of the Wall Street Journal and Sorkin is a mainstay of the business section of the New York Times.

Both books recount that the Bush administration collaborated closely with top Democratic as well as Republican officials of the Federal Reserve and Democratic Congressional leaders. Whatever right/left ideological divide exists between the two parties had, in this instance, no import whatsoever. Given the Republicans’ vocal opposition these days to Obama’s tepid proposals for additional regulation of the financial system, one might think that the visceral hostility between Republicans and Democrats would have prevented a bipartisan policy in response to the financial crisis. Quite the contrary. When the vital interests of American finance capital were at stake, the two parties acted in unison.

The three men primarily responsible for the $700 billion bailout fund called TARP (Troubled Asset Relief Program) and related measures were Treasury secretary Henry Paulson, Federal Reserve chairman Ben Bernanke and the president of the key New York branch of the Federal Reserve, Tim Geithner (now Obama’s Treasury secretary). Paulson was CEO of Goldman Sachs when in 2006 the Bush gang recruited him as their main economic point man. Paulson’s predecessor at both Goldman and the U.S. Treasury was Robert Rubin, a centrist Democrat who served as economic consigliere in the Clinton administration in the 1990s. Bernanke, known as a moderate Republican, was chosen in 2005 to replace right-wing ideologue Alan Greenspan as Fed chairman by a presidential committee headed by Dick Cheney, the Darth Vader of the Bush administration. Geithner, a centrist Democrat, was a protégé of Robert Rubin in Clinton’s Treasury. Paulson, Bernanke and Geithner worked closely together on behalf of their Wall Street masters without substantive political differences.

Bush and Cheney, for all their strident championing of “free market” capitalism, did not hesitate to invoke massive government intervention in the face of the financial collapse. To do so, they simply turned over policymaking during the crisis to Paulson and Bernanke. Likewise, Democratic Congressional leaders gave the two a green light to do what they wanted. In July 2008, Paulson told Barney Frank, a liberal Massachusetts Democrat who heads the House Financial Services Committee, that he and Bernanke were considering taking expansive and unprecedented measures in an effort to calm the increasingly troubled financial markets. Frank advised him “to ask for what you need” and promised to support him.

Defending the bailout today, Geithner and others point to the fact that almost all of the TARP money has been repaid. But the financial institutions were able to do so only because the Fed subsequently lent them some $2 trillion, taking as collateral their more “toxic” assets. The government also guaranteed some $5.4 trillion of the banks’ loans and those of other financial institutions (so-called “counterparties”) with which they do business.

Wessel, in particular, underscores that the Wall Street bailout violated the professed ideological principles not just of the Bush administration but of the American capitalist class in general. Indeed, American capitalists will support extensive government intervention in the economy when it serves their interests and is on terms they can dictate—for example, the nationalization of the American Insurance Group (then the largest insurance company in the world) and the bailouts of General Motors and Chrysler.

In this regard, Wessel quotes Gao Xiqing, the head of China’s sovereign wealth fund, who quipped: “Now our people are joking that we look at the U.S. and see ‘socialism with American characteristics’.” This is a play on “socialism with Chinese characteristics,” the term long used by the Beijing Stalinist regime to describe its own economic system, one that remains primarily based on state-owned enterprises and banks but has a large capitalist sector.

For Class Struggle to Fight Capitalist Austerity!

As happens in all economic downturns, workers’ apprehension over possible job losses has taken a toll on the already low level of labor struggle in the U.S. Last year saw the lowest level of strike activity of any year since World War II, by far. But as the experience of past economic crises also shows, that state of affairs will not last indefinitely.

It is necessary to forge a new leadership of the unions based on the understanding that there are two decisive classes in capitalist society, the proletariat and the bourgeoisie, whose interests are irreconcilably opposed. Such a leadership, fighting for the unity of the multiracial proletariat in hard class struggle, would link those struggles to defense of the social interests of black people, Latinos and other oppressed minorities.

Today the question of revolutionary leadership is sharply posed in Europe, where there has been a wave of one-day general strikes against attempts by the capitalist governments to slash the wages of public-sector workers, gut pensions and jack up sales and other taxes. Greece has had a total of six one-day general strikes so far this year. On June 24, some two million demonstrated across France as the country was rocked for the second time in a month by strikes against a government plan to raise the retirement age. In Spain, hundreds of thousands of public-sector workers struck on June 8, while in Italy the six-million-strong CGIL union federation carried out a nationwide stoppage on June 25. However, the workers’ evident combativity runs up against the political program of the labor bureaucracies, all of which have a bankrupt strategy of seeking to reform the capitalist system of exploitation. What is needed is the forging of revolutionary parties that can lead the proletariat, at the head of all the oppressed, in sweeping away the capitalist order.

This road was outlined in the 1938 Transitional Program written by Leon Trotsky, co-leader with V.I. Lenin of the October Revolution in 1917. Titled The Death Agony of Capitalism and the Tasks of the Fourth International, the document, written in the midst of the Great Depression, put forward a series of demands that provide a bridge from workers’ current consciousness and daily struggles to the need for socialist revolution. Declaring “uncompromising war on the politics of the capitalists which, to a considerable degree, like the politics of their agents, the reformists, aims to place the whole burden of militarism, the crises, the disorganization of the monetary system and all other scourges stemming from capitalism’s death agony upon the backs of the toilers,” the document stated:

“Against unemployment, ‘structural’ as well as ‘conjunctural,’ the time is ripe to advance, along with the slogan of public works, the slogan of a sliding scale of working hours. Trade unions and other mass organizations should bind the workers and the unemployed together in the solidarity of mutual responsibility. On this basis all the work on hand would then be divided among all existing workers in accordance with how the extent of the working week is defined. The average wage of every worker remains the same as it was under the old working week.”

As Trotsky laid out, the fight for employment and decent living conditions for all must point to one final conclusion: the seizure of power by the proletariat and the expropriation of the capitalist class.

The struggle for a shorter workweek under capitalism also points to a fundamental goal of communism: a radical reduction in the labor time necessary to produce the means of consumption. The setting up of an internationally planned, socialist economy will lay the basis for a qualitative development of the world’s productive forces for the benefit of all. In a future communist society, everyone (not just a privileged elite) will have the free time and material and cultural resources to fully develop their creative capacities. In his work the Grundrisse (also known as the Economic Manuscripts of 1857-58), a precursor to Capital, Marx noted how such a development of the individual will, in turn, provide for a still greater development of human productivity:

“The saving of labour time is equivalent to the increase of free time, i.e. time for the full development of the individual, which itself, as the greatest productive force, in turn reacts upon the productive power of labour....

“Free time—which is both leisure and time for higher activity—has naturally transformed its possessor into another subject; and it is then as this other subject that he enters into the immediate production process.”