Come hear Fred Goldstein, author of Low-Wage Capitalism, lead a workshop on: High-Tech Globalization and Low-Wage Capitalism: System in Crisis & Prospects for Workers’ Fightback
Among the topics Goldstein will address: globalization ● the world-wide wage competition ● the “jobless recovery” ● the nature of the economic crisis ● why capitalism cannot revive ● the Republic Window and Doors plant occupation ● the Jobs March in Pittsburgh ● strategies for a fightback ● the revolutionary socialist perspective
Time: 11:40 – 12:40
Place: St. Francis College, Brooklyn, NY - Room 4404
Directions: Take number 2 or 3 train to Clark St.
Fred Goldstein will be conducting the workshop at: URPE CONFERENCE IN BROOKLYN, NY Economic Crisis: Radical Analysis and Radical Responses
Morning Segment: RADICAL ANALYSIS Keynote Speaker: Dr. David Harvey (CUNY) Workshops on causes, mechanisms, and effects of the capitalist crisis
Afternoon Segment: RADICAL RESPONSES Keynote Speaker: Hon. Charles Barron (New York City Council) Workshops on popular responses to the crisis
"Low-Wage Capitalism is truly outstanding, starting with the first sentence in Chap. 1. Hits us like a body punch, and provides the perfect context for what we all need to know about the evolving conditions of workers and their struggles. I know of no book in this area that covers so much, so clearly and - when it comes to what is to be done - so convincingly. Deserves the widest readership."
Job Loss/Homelessness Up - CAPITALISM'S LATEST CRISIS
Come hear about the nuts and bolts of this economic crisis - where it came from and how union members, activists and social justice organizations can unite and fight.
Fred Goldstein, author of Low-Wage Capitalism, is on tour and will be speaking at SEIU Local 721 here in Los Angeles to talk about his groundbreaking new book and present a Marxist view of the capitalist crisis.
A debate is heating up in the ruling class over whether or not an economic recovery is coming. Workers should be aware of two important points: first, the global picture of the capitalist crisis points in very drastic directions; and second, whatever recovery the bosses are talking about is a recovery for the profit makers and not the workers.
Those grasping at hope are basing themselves on Wells Fargo’s new profit reports, U.S. trade figures, housing sales, industrial production and other indicators that have mildly improved over the past several weeks.
However, a new study entitled “A Tale of Two Depressions” undermines the various optimistic scenarios put forward and points in the opposite direction. It compares the current decline in industrial production, the fall in world trade and the collapse of the stock markets with what occurred during the Great Depression. The comparison is on a global basis, not just for the United States. While the Depression of the 1930s was also a global crisis, the world capitalist economy has become much larger and far more interdependent in the age of globalization.
The study was prepared by Barry Eichengreen, professor of economics and political science at the University of California, Berkeley, and Kevin H. O’Rourke, professor of economics at Trinity College, Dublin. Both work with the Center for Economic and Policy Research, and the study was written in answer to New York Times columnist Paul Krugman, who is characterizing the present crisis as a recession.
1930s and today
The study tracks the measures of world industrial output, world trade and global stock markets for nine months beginning in June 1929. It takes June 1929 as the starting point because that is when world capitalist production reached its peak and started to decline.
The study then tracks the same three indicators for nine months in the present period, beginning in April 2008 when world industrial production also peaked.
It shows that industrial production is declining at least as rapidly as it did during the earlier depression, world trade is falling even more rapidly, and global stock markets are showing the same rate of decline.
The stock markets are much less reliable indicators because they can fluctuate over the short term based on speculation. But the fundamentals of capitalist production and world trade are the basis of the capitalist global economy and the profit system.
Production is the key
A decline in industrial production means a decline in capitalist exploitation of the workers and the production of profits, on which the entire system runs. Exporting by the big imperialist countries—like the U.S., Germany, Japan and France—is an attempt on the part of each country to overcome its own internal crisis of overproduction. When world trade falls, it is a sign that overproduction has become global.
The authors hold out hope that all the money the government is pouring into the economy and the banks will keep the crisis from reaching Great Depression levels. They do not, however, chart the fall in employment or discuss the conditions of the working class.
Louis Uchitelle, writing in the April 7 New York Times, cites figures from the Bureau of Labor Statistics to show that “More than 24 million men and women, or 15.6 percent of the labor force, are either hunting for work or working fewer hours than they would like to work, or are too discouraged to seek work.”
Actually, because the Clinton administration ruled that any worker “discouraged” from looking for work for more than a year should no longer be counted, this figure is really closer to 30 million.
While it is hard to compare today’s statistics with those from the Great Depression era, Uchitelle showed that the number of unemployed or underemployed workers has grown by 10 million in the past year. In 1930, official unemployment was 8.9 percent. It rose sharply to 25 percent by 1933.
This is clearly the result of capitalist overproduction. Manufacturers are using only 68 percent of U.S. industrial capacity, the lowest level since records were first kept in 1948. So far, according to Uchitelle, there is a shortfall of $1 trillion in sales that would be required to get production back to capacity.
To do that would take years, “even if the nation’s employers stopped shedding more than 600,000 jobs a month, as they have done since December, and began hiring robustly,” writes Uchitelle. Instead, all projections are for unemployment to continue rising in the future.
Layoffs continue
Meanwhile, states are cutting budgets for vital services across the country. Tent cities are springing up from Olympia, Wash., to Sacramento and Fresno, Calif., to Nashville, Tenn., to St. Petersburg, Fla. The rate of home foreclosures is increasing. Millions of workers are lining up at job fairs to learn how to fill out resumes and take interviews, but there are no jobs.
In short, while some investors may be profiting, there has been no recovery for the masses, and none is in sight.
In a sign of the deep decline of U.S. capitalism, the Treasury Department is demanding that General Motors and Chrysler shrink their industrial base. GM has been told to go from 17 assembly plants down to 12 or even fewer—a decline of 33 percent. It means more lost jobs, but not only at GM. It means shrinkage and unemployment in steel, rubber, glass, plastic, computer chips, fabric, small businesses that survive on orders from the assembly plants, closing of dealerships and so forth.
This kind of contraction is also going on in the housing industry, where millions of units sit unsold, and in the retail industry, where chain stores are closing. Layoffs are continuing in the high-tech sector and other industries central to U.S. capitalism.
At best, the capitalist economists may find some daylight of profitability for the bosses and bankers, but none can find a way out of mass unemployment, even with a recovery.
Uchitelle showed that overproduction lingered until the end of the Depression years, citing Robert Gordon, an economist at Northwestern University. “The Roosevelt economy also languished well below full capacity, Mr. Gordon said, until the summer of 1940 when France fell to Hitler’s armies. From then until the attack on Pearl Harbor, 18 months later, a galvanized administration more than doubled federal outlays—soon accounting for $1 of every $4 spent in the country—and the United States entered the war with its economy operating at almost full capacity.”
In other words, U.S. capitalism, after 10 years of depression, could only restore production and employment by preparing for and eventually going to war. The profit system had hit a wall. It was dragging society and the workers and the oppressed down to an existence of permanent mass unemployment and poverty.
This is what present-day capitalism has to offer the working class as the current global crisis deepens. Waiting for the system to recover and put an end to the suffering of the people is a pipedream.
The only way out of this crisis is through creating broad unity of the workers and the communities that are being hammered by the bosses and bankers in order to mobilize a class-wide fightback.
Fred Goldstein, author of the recently published book, Low-Wage Capitalism, is on tour in California.
He will be introduced at the Modern Times Bookstore in San Francisco on Tuesday, April 14 by well-known author and activist Michael Parenti. The event will be at 7:30 PM, 888 Valencia Street. For more information contact (415) 738-4739.
Goldstein will be speaking and signing books at the Malcolm X Library in San Diego on Saturday, April 18, 3 PM, 5148 Market Street. Contact (619) 527-3405, the library for details.
Among other events in Los Angeles, the Workers World LA chapter will host a forum for Goldstein on Friday, April 24, 7 PM at 5274 W. Pico Blvd. (between Fairfax and LaBrea), 2nd Floor. He will give a Marxist analysis of the current economic crisis, the fight back and the need for a socialist perspective. For details contact (310) 677-8647.
Michael Parenti in discussion with Fred Goldstein, author of Low-Wage Capitalism: Colossus with feet of clay
Critically acclaimed by Howard Zinn, Goldstein provides a sorely-needed and accessible analysis of the roots of the current global economic crisis, its implications for workers and oppressed peoples, and the strategy needed for future struggle. Known as a “tough, hilarious, right-on mix of scholar and street,” Michael Parenti is a leading critical voice around issues of imperialism and U.S. interventionism. (World View Forum)
While talk about signs of a possible economic recovery drove the stock market up for four weeks in a row, beginning March 10, it is clear that the recovery being talked about was a recovery of the bosses and bankers, not the workers.
Three quarters of a million workers lost their jobs during those four weeks, but the financiers and speculators were driving up the markets based upon reports of increased profitability among the banks and a rise in activity in the bond market.
On April 3, the day the Labor Department announced that 663,000 workers had lost their jobs in the month of March, the Dow Jones Industrial Average of stocks went up 49 points, capping a four-week rise. Then the market started going down again, based on reports of a decline in corporate profitability.
This clearly shows differences in what a recovery means to Wall Street and what it means to workers. Bosses want higher profits to roll in, while workers want their jobs back, their homes back and their futures back. That is why the big business media can talk about signs of recovery while unemployment is growing.
True unemployment is 19.8 percent
In fact, real unemployment is completely underplayed in the big business media in order to hide the extent of the crisis among the workers. According to the headlines, unemployment has risen to an official 8.5 percent. Much less publicity is given to the number 15.6 percent—the other official number—which includes discouraged workers and those forced to work part time although they need a full-time job.
Taking these percentages, the unemployed and underemployed amount to 24 million, not 13.2 million. But even this figure is a gross underestimation of the true unemployment crisis.
A release by Martin Weiss, a financial consultant, reveals that the figures for “discouraged workers” are a complete underestimate. (moneyandmarkets.com, April 6) Weiss quotes a finding by John Williams of ShadowStats.com: “During the Clinton administration, ‘discouraged workers’—those who had given up looking for a job because there were no jobs to be had—were redefined so as to be counted only if they had been ‘discouraged’ for less than a year. This ... defined away the bulk of the discouraged workers.”
In short, a worker who has been discouraged for more than a year disappears from the unemployment statistics altogether. Based on this fact, Williams estimates that actual unemployment is 19.8 percent, or close to 30 million.
The prospect for a capitalist recovery any time soon is highly unlikely, given that manufacturing is plunging downward, not just in the U.S. but worldwide. Even optimistic bourgeois experts expect economic decline and an increase in the number of unemployed by at least half a million a month for the foreseeable future. In fact, there is no economist who can point to a path out of the present crisis.
At best, the hope is that the massive injection of government funds into the banks, plus another stimulus package over and above the $787 billion package already enacted, will be able to slow down the crisis and stabilize the system within the next two years.
But an important point for the working class, the oppressed, and all progressive and revolutionary forces to hold on to is the fact that even a mild, artificially forced capitalist recovery based on government spending would still leave the workers in crisis.
‘Mother of all jobless recoveries’
The working class is trapped in a capitalist system that is in a permanent crisis. For example, a Wall Street Journal article on March 28 talked about tentative signs that the bottom had been reached in the recession. The article discussed various statements by bankers and indicators from government statistics that could mark a turn toward “positive growth”—meaning a capitalist business upturn with rising profits. It went on to say:
“But a turn toward positive growth is not the same as a recovery, particularly with the current 8.1 percent unemployment rate at a quarter-century high and marching higher by the month. Nariman Behravesh, chief economist at HIS Global Insight ... says unemployment could hit 10.5 percent by late next year, even if the economy is growing at a 3 percent rate by that point.
“‘What comes next, I’m afraid, will be the mother of all jobless recoveries,’ said Bernard Baumohl, chief global economist at the Economic Outlook Group in Princeton, N.J. ‘While we may emerge from recession from a statistical standpoint later this year, most Americans will be hard pressed to tell the difference between a recession and recovery the next 12 months.’”
Of course, capitalist experts cannot predict, and have never been able to predict with any degree of certainty, the way their economy will perform over the long run. Marxists, knowing the contradictions of capitalism, knowing that consumption cannot keep up with production for profit under capitalism, understand that overproduction and crisis is inevitable. This is the type of crisis that is ravaging workers all over the world on the largest scale since the Great Depression. So all talk of a recovery is highly premature.
For example, in the U.S. today the crucial automobile industry, which is central to the economy, can sell at a profit only half the number of cars it was built to produce. No sales mean no profits. No profits mean shut down production. That means layoffs, destruction of factories, more poverty, less sales and the crisis deepens.
The same is true of the housing industry. Millions of houses cannot be sold for a profit even as tent cities of the homeless are multiplying around the country. The housing industry, like the auto industry, ripples out into all areas of the economy. The foreclosure crisis, in which millions are losing their homes, means not only a rise in homelessness but a rise in unemployment among all the workers affected by the collapse in housing construction.
Because capitalism has created a widespread, interconnected process of producing everything, a truly global network of production, every layoff in a central industry brings layoffs throughout the global network that those industries depend on. Thus U.S. and world unemployment are both rising. The World Bank estimates that up to 50 million workers could lose their jobs this year.
Workers can only recover by fighting back
None of this is a recipe for capitalist recovery—quite the opposite. The working class cannot wait for the automatic processes of capitalism to revive, save the situation, and wipe out unemployment, poverty and hunger.
Right now workers in Enfield, Britain, and Belfast, Ireland, have occupied Visteon auto parts plants to demand severance pay and other rights. This follows a similar occupation by the Waterford Crystal workers in Ireland, who themselves were following the example of the Republic Windows and Doors workers who seized their plant in Chicago in December.
The self-action of the working class, organizing from below to resist this vast wave of layoffs, shift cuts, shortening of hours, as well as foreclosures and evictions, is the only way forward.
The battle cry of “A Job Is a Right” must be raised everywhere and the bosses must be stopped.
There must be mass mobilization and coordinated struggle by an alliance between the oppressed and impoverished communities and the workers to stop the bosses from shutting down, from picking up and leaving and destroying lives and communities.
Every penny of the trillions of dollars for the banks should be turned over to relieve the economic suffering of the people by creating real government jobs programs with living wages and benefits—not just crumbs handed down after the capitalists divide up the money from the stimulus package among themselves and take their profits.
This is the only way to push the crisis back where it belongs, onto the backs of the rich profiteers and off the backs of the working class and the oppressed.
They created this crisis. They must pay. Bail out the people, not the banks!
Goldstein is author of “Low-Wage Capitalism.” Information about the book can be found at the Web site www.lowwagecapitalism.com.
There is nothing like the smell of a trillion-dollar bonanza to send the stock market through the roof. Wall Street has struck it rich with the Obama administration’s blatantly pro-banker, pro-investor program to revive the capitalist economy.
The so-called Public-Private Investment Plan, crafted and presented by Secretary of the Treasury Timothy Geithner, intends to make a trillion dollars available to the biggest banks, hedge funds, private equity funds and other investors, supposedly to get the banks to lend money to businesses and consumers again.
The essence of the plan has two sides to it. First, bribe hedge funds, private equity funds and others in the shadow banking system who have been sitting on the sidelines with trillions of dollars—by offering them government money and loan guarantees to purchase bad bank assets. Second, bribe the banks to sell investors these bad loans by offering to pay far more than they are worth.
So the rich get a deal from the Treasury both ways.
The banks are holding onto $2 trillion in bad loans resulting from their speculation on the great housing and real estate bubble. They don’t want to sell these bad loans at anywhere near their vastly reduced worth because they would have to declare them as big losses. Up to now they have been refusing to sell and have been holding out for more.
Meanwhile, hedge funds, private equity funds and other investors are holding onto trillions of dollars, which they keep in government bonds and other secure investments. They don’t want to lend this money to help workers or businesses or anybody. These moneybags are sitting on the sidelines, looking for mergers or buyouts, while clipping the interest coupons.
Geithner, Lawrence Summers—Obama’s chief economic adviser—and company came up with a brilliant modification of the plan to buy so-called “toxic assets” crafted by former Treasury Secretary Henry Paulson during the Bush administration.
Here is an illustration of one part of Geithner’s plan. “It works like this, according to the Treasury Department fact sheet: Imagine that a bank wants to sell mortgage loans with a $100 million face value. The FDIC [Federal Deposit Insurance Corporation] would auction the loans to private bidders. Suppose the winning bidder offered $84 million. The private investor would put up $6 million, Treasury would put up $6 million, and the FDIC would guarantee $72 million worth of loans.” (Washington Post, March 23)
No matter if things go well or bad—in other words, whether the assets can be sold at close to $84 million or if they completely fail and not a penny can be collected—the bank still gets its $84 million. If things go well, the investors make a killing on a $6 million investment. If things go bad, the government gets stuck with the loan to pay off, while the investors walk away with a minimum loss (which they will write off their taxes). In addition, the private fund managers get to retain control over the investment.
There is another type of deal in the plan in which the government matches the private investors dollar-for-dollar and also provides loans to go with it. This is for the bad mortgage-backed securities.
Make a trillion dollars subject to these giveaway terms and it is guaranteed to send the stock market through the roof—at least for a moment.
Giveaway vs. ‘nationalize’
There are so many problematical issues involved with this plan that its prospect for success, even on the terms projected by Geithner and his allies, seems highly doubtful to more cautious sections of the ruling class.
The giveaway plan represents a victory of the Geithner/Larry Summers faction over the “nationalization” current in the ruling class establishment. In this sense it represents a victory of the faction closest to the big banks on Wall Street that are in the deepest trouble.
The nationalization current, more properly described as those for receivership, is not so closely tied to the direct interests of these banks and has a broader view of the needs of their class and the financial system in this present crisis. Their views are sharply opposed to the Geithner/Summers adventure.
This current wants to stop pouring money indiscriminately into banks that are already insolvent, change the management, force them to declare losses, restructure them, take a stake in the banks and then hand them back to private owners and collect dividends. This view was recently propounded by Thomas M. Hoenig, president of the Federal Reserve Bank of Kansas City, in a paper entitled “Too Big Has Failed.” It is easy to see how unpalatable such a view would be to Citigroup and other large banks.
It is the normal function of the capitalist state and the bourgeois political parties to protect the interests of the capitalist class as a whole and their system. This is the way the state has conducted itself, by and large, during previous lesser crises: the Latin American debt crisis, which endangered the U.S. banking system during the Reagan administration; the savings and loan crisis of the late 1980s and early 1990s; and the 1995 Mexican bailout crisis, when U.S. investors were threatened by the collapse of the Mexican peso.
A ruling class consensus was arrived at on each occasion and the Treasury Department and Federal Reserve System took the necessary measures to deal with the situation and avert a collapse.
Crisis has deep roots
But the magnitude of this global crisis is so vast, and the power of the banks involved, the extraordinary deterioration of their financial conditions, and their desperation to save themselves at all costs is so great, that the Obama administration has been dragged into a most questionable scheme.
The administration has become entrapped by the narrow interests of Goldman Sachs, Citigroup, AIG, Merrill Lynch and their ilk to the point of throwing trillions of dollars at them to keep these specific banks afloat, at the expense of using these funds to bolster the system as a whole.
This could have dire political consequences in the long run for President Barack Obama himself.
Not that any amount of funding could significantly turn this capitalist crisis around in the long run. It is fundamentally caused by a global crisis of capitalist overproduction, which has been aggravated and intensified by the financial crisis.
The present crisis is profound. It represents the end of a 70-year era of upward development of the productive forces by U.S. and world capitalism that was propelled by military spending, imperialist globalization, destruction of the standard of living of the workers of the world, technological attacks on jobs, devastation of the environment, plus massive credit and indebtedness. These forces have run their course and no bailout or stimulus package can change these fundamentals.
But a trillion dollars is a lot of money. It could fund measures to ameliorate the crisis to some extent if strategically placed—particularly if it were given directly to the masses, either as wages for a jobs program or as direct assistance or to cancel the mortgages of the millions facing foreclosure and to restore the foreclosed families to their homes.
What workers won in the 1930s
One need go back to the administration of Franklin D. Roosevelt to get a sense of the kind of temporary relief for the workers that could be administered—even though Roosevelt was never able to solve the crisis of capitalist overproduction, except through war.
Economist James Galbraith in a Washington Monthly article of March 9, “No Return to Normal,” cites one study showing that the Roosevelt government “hired about 60 percent of the unemployed in public works and conservation projects that planted a billion trees, saved the whooping crane, modernized rural America, and built such diverse projects as the Cathedral of Learning in Pittsburgh, the Montana state capitol, much of the Chicago lakefront, New York’s Lincoln Tunnel and Triborough Bridge complex, the Tennessee Valley Authority and the aircraft carriers Enterprise and Yorktown. It also built or renovated 2,500 hospitals, 45,000 schools, 13,000 parks and playgrounds, 7,800 bridges, 700,000 miles of roads, and a thousand airfields. And it employed 50,000 teachers, rebuilt the country’s entire rural school system, and hired 3,000 writers, musicians, sculptors and painters, including Willem de Kooning and Jackson Pollock.”
No faction of any significance in the ruling class is debating this question for now because the class struggle is dormant and the masses have not yet risen up against their conditions as they did during the Great Depression. But that is because the crisis is only in its early stages. Roosevelt is known for his concessions to the workers because the workers won those concessions by mass struggle. Obama has no such situation right now and is hewing to a generally conservative line of approach. This could change.
In addition, the issue of the AIG bonuses has sharpened the political situation. Fearing the masses and because their own connections to the big banks are coming out, the Democratic Party politicians in the House of Representatives became hysterical in their denunciations of the bonuses to AIG executives, as did a significant number of Republicans. They all engaged in a public attack on corporate bosses and, by implication, on their own paymasters.
The situation may be quieted somewhat now that some of the executives are returning the bonuses. But this political outburst showed that the right-wing forces are straining at the bit to become champions of the “little people” and supposed adversaries of the “greedy bankers” as a way of getting at the Obama administration. They hope crisis will create an opening for a right-wing, racist revival. The working class must be on the alert for this and not be sucked in by any of this demagogy.
‘A dangerous year’
The entire government plan is predicated on a revival of the capitalist economy and the housing market. This is what will presumably make the bad assets go up in value, when people start buying houses again and bidding up the prices. In fact, an announcement that first-time housing sales went up helped fuel a buying frenzy on Wall Street.
But the Wall Street Journal of March 23 wrote about the rise in home sales that “nearly half of the sales occurred in the foreclosure/vulture market. So, home sales are up, but it’s heavily dominated by bottom fishing.”
More important was a statement by the head of the World Bank, Robert Zoellick, that 2009 would be a “dangerous year.” He said on March 21 that the global economy would shrink by 1 to 2 percent during the year: “We haven’t seen a figure like that globally since the end of World War II, which really means the Great Depression.” In addition the World Bank was projecting that global trade was set to slide the most in 80 years, a decline in exports of 2.1 percent, not seen since 1982. The European economy will shrink by 3.2 percent (raised from an earlier forecast of 2 percent). Japan’s economy is projected to shrink by 5.8 percent and the U.S. economy by 2.6 percent.
Of course these projections are always subject to correction, but they have been consistently revised in a negative direction. They are confirmed by a report about global manufacturing. In Europe industrial production is down 12 percent from a year ago. In Brazil it is down 15 percent, in Taiwan a staggering 43 percent. Manufacturing fell in India for the first time in years. China’s manufacturing is down by 25 percent.
The three largest imperialist economic blocs—Europe, Japan and the U.S.—are all predicted to shrink their economies. And three of the most populous countries in the world, representing two-fifths of the world’s population, are showing a decline in industrial output.
It is clear that, despite the momentary euphoria of the profiteers on Wall Street, this crisis is not about to be solved. Even if the banks were to start lending again, the population is in ruins. No one is credit worthy because they are in debt, losing their jobs, paying medical bills, paying student loans, paying their credit card loans and/or are behind in their mortgages.
The idea that it is necessary to give these banks trillions in order to solve the crisis is either a grand illusion or outright fraud. The bailout is calculated first and foremost to save the banks while the masses sink deeper into the real crisis—the crisis of unemployment, homelessness and poverty.
The only solution is a mass mobilization to fight back against the capitalist system that is robbing people of their incomes, their homes and their very lives. The sanctity of capitalist profits is what is at the bottom of bailouts, layoffs and foreclosures. It is time to say no to capitalism.
Caleb T. Maupin writes for Maelstrom Weekly Magazine at Baldwin-Wallace College, as well as Workers World newspaper. He also maintains Caleb's Columns.
All media spotlights are on Bernard Madoff as he has pleaded guilty to all charges against him in the $50 billion Ponzi scheme. The public speculation is being directed by the big business media to focus on whether or not his wife or relatives were accomplices and whether they will get to keep their ill-gotten gains.
But consider the question of accomplices. If someone robs a bank and the security guards simply look the other way, do those guards qualify as accomplices? Furthermore, if those bank robbers did not have to worry about any alarm system because they had cohorts who disabled the alarm system, do those cohorts qualify as accomplices?
Madoff's relatives were undoubtedly in the scheme and should be in the dock with him. But that dock is missing some key defendants. Among the missing are former chairman of the SEC Christopher Cox and key staff members of the SEC in Boston and New York.
Harry Markopolos, who formerly worked for a hedge fund rival of Madoff's, gave testimony to Congress in the Madoff case just a few weeks ago in which he described in detail his repeated and futile attempts over a period of nine years to get the SEC in both Boston and New York to investigate Madoff and charge him with running a Ponzi scheme. The Wall Street Journal described and documented this process, which has now been pushed into oblivion. Markopolos told the Congress that it took him about five minutes to look at the returns that Madoff was paying and compare them to the stock market to conclude that a massive fraud was underway.
When the SEC finally did investigate Madoff in 2006, based on a submission by Markopolos of a document entitled "World's Largest Hedge Fund Is a Fraud," Madoff was let off with a few charges of technical violations and went on to continue his scheme.
In addition to the SEC, a principal defendant should be Alan Greenspan, former head of the Federal Reserve Board who used his power and influence to shield hedge funds from regulation. In 2004 he opposed even registration of hedge fund managers before the Senate committee, telling the committee that as long "as hedge funds remained the province of wealthy and institutional investors, additional oversight would not be needed."
To this group should be added the heads of the Treasury Department, the Senate and House banking committees, which refused to use their powers to intervene in the "casino" economy that developed at a dizzying pace in the last decade.
The SEC would not investigate. The Federal Reserve Board would not allow regulation. The Congress would not intervene. As protectors of the rich in general, these institutions made it possible for Madoff to carry out his $50 billion Ponzi scheme. He was able to operate under the regulatory radar because the leaders at the summit of finance capital deliberately put in place an apparatus whose job it is not to investigate, not to uncover, not to interfere with get-rich-quick speculation and gambling.
This arch criminal overstepped all boundaries and cheated his fellow millionaires and billionaires. He also ruined many ordinary workers in the institutions that went out of business once the scheme fell apart. But he was enabled at every step of the way by the SEC and all the other so-called "oversight" institutions of finance capital.
The capitalist media could dig all this up if they wanted to. But they are intent on keeping the spotlight on one individual criminal so that it won't fall on the much larger and truly powerful enterprise of the SEC-Fed-Treasury complex. These institutions have long protected the "legitimate" swindlers that deal collectively in the tens and hundreds of trillions of dollars. They are in collusion with the hedge funds, the private equity firms, the investment banks, the commercial banks, the mortgage industry, the credit card industry, and all the other loan sharks who have been allowed to operate with impunity as they bilked millions of workers with subprime mortgage fraud, usurious credit card interest, astronomical student loans, and other schemes.
This is the logic of the capitalist profit system. This is not a failure of the system. It is the system.
"Thus, in order for the capitalist in company A to beat out the capitalist in company B, the workers in company A have to out-compete the workers in company B by allowing their wages to be cut below the others -- and/or submitting to speed up or other 'productivity' measures. "The capitalists in company B then go to their own workers and tell them that in order to remain competitive with comapny A, which has just reduced its labot costs by cutting wages or benefits, the workers in company B have to at least match those cuts. And so it goes in the race to the bottom. This is the trap workers are in if their representatives buy into bourgeois ideology at the bargaining table and remain within the capital-labor framework imposed by the bosses." (Low Wage Capitalism, p. 264-265)
"Accepting the bosses' notion that labor must subordinate its demands to the overriding necessity of capital to remain competitive and profitable is a self-defeating ideology." (Low Wage Capitalism, p. 265)
"To hold the workers responsible for the profitability of capital is to demand that they agree to intensify their own exploitation to solve the crisis of their exploiters. This must be explained to the workers. They can easily comprehend it." (Low Wage Capitalism, p. 266)
"The question should be posed: Why must the exploited sacrifice their wages, their benefits, their working conditions, and their very jobs in order to maintain the continued prosperity of the exploiters, who have lived off the wealth created by the workers in the first place." (Low Wage Capitalism, p. 266)
Under pressure form the U.S. Treasury Department, the White House and the Ford Motor Company, the United Auto Workers leadership has taken a major backward step by making dangerous concessions that will undermine the economic conditions of their own membership.
"...suspends inflation-related pay increases and performance bonuses, allows Ford to save as much as $6.5 billion by substituting shares of its stock for cash it must pay into a new retiree health care fund and eliminates the jobs bank, a controversial program that allowed workers to continue receiving nearly full pay after being laid off. Now workers whose jobs are eliminated will receive less pay, for a shorter period, and would lose that benefit if they refuse to take a job that opens up anywhere in the country."
The UAW leadership proclaimed that the new agreement brings hourly labor costs to $55 an hour. First of all, this does not represent the wages of the workers but rather an average of overall costs to the company for retirees pensions, health care and other benefits.
But most importantly, and most dangeroulsy, the union announcement declared that this latest agreement is a step in the direction of bringing Ford pay scales down to the level of Toyota, Honda, Nissan and other overseas companies.
In other words, the goal of the negotiations is to bring the pay scale of the organized workers down to the level of unorganized workers -- to reduce the status of union workers to the status of non-union workers.
This amounts to allowing the auto bosses to push the economic crisis onto the backs of auto workers. A leadership that represents labor should be going in the opposite direction -- the direction of struggle against concessions.
Instead of negotiating to bring the conditions of their own membership down to the level of unorganized workers, what is need is a mass fightback to raise the conditions of not only the Ford workers and the auto workers, but the broader working class.
These concessions, should they be allowed to stand, do not only affect the Ford workers, they stand as a precedent for GM and Chrysler. One antidote to the concessionary drive of the profiteering auto magnates would be to shut down Ford, Chrysler, GM and all the parts plants that supply the auto industry. That would open the class struggle and push things back in a progressive direction.
If concessions were necessary after the struggle, then the union could make concessions. But no one knows what the outcome of such a struggle would be. It could be that instead of concessions there could be great gains. There is no way to determine this except by fighting back.
To make concessions in advance, without a fight, assures a negative outcome. What is needed is for the rank-and-file to begin to organize from below and to eventually reverse the course of retreat that has been followed for the past three decades.
Geri Jenkins, from the newly formed 150,000-Strong Nurses’ Union, representing 10 percent of the nurses in the U.S., explains that creating a national single-payer health care system, as outlined in Rep.John Conyers’s bill, HR 676, could provide medical care for everyone who is now uninsured and would create a net of 2.6 million new jobs.
The aim of the $3.5 trillion budget submitted by President Barack Obama is to slow down the massive income inequality in the country and deal with multiple crises which have accumulated for years and are now in the acute stage, such as health care, global warming and education.
The budget is a reversal of a 30-year trend in which the capitalist budget was used as a blunt instrument to carry out blatant transfers of wealth from the masses to the rich, while cutting back on every form of social spending. Its aim is to carry out long-term reforms of a progressive but limited character that include, among other things, taxing the rich, cutting taxes on the workers and the middle class, aiding students, establishing a fund to improve the health-care system and taxing polluters.
Just days after the administration presented the budget, the capitalist economic crisis showed in various ways that it is deepening dramatically. The giant insurance company AIG announced the biggest quarterly loss in corporate history: $61.7 billion. Washington had to come up with another $30 billion in bailout money for AIG, bringing the total to $180 billion. The world’s biggest insurer, AIG is in crisis because it insured so much of the bad mortgages and other bad debt floating around the globe.
A few days prior to the AIG announcement, General Motors announced it had lost $30.9 billion in 2008. The Big Three auto bosses went into negotiations with the White House to get $20 billion more in bailout money. Together, GM, Ford and Chrysler lost $53.4 billion in 2008. Meanwhile, U.S. demand for vehicles fell to its lowest level in 25 years.
Citigroup, the largest private bank in the U.S., had to come to Washington for its third bailout. This time the government had to buy a 36 percent stake in the bank to keep it afloat.
Profits and production swoon
On March 2, the Dow Jones average on the stock market hit its lowest point since 1997, dropping below 6,800. This drop directly reflected the economic situation. Profits are sinking. Profits in the fourth quarter of 2008 fell 37 percent at the 457 companies in the S&P 500 that have reported quarterly results. The 74 financial companies reporting lost a combined $50.5 billion. Business investment in equipment and software fell 28 percent in the fourth quarter and exports declined. Manufacturing declined for the 13th month in a row in February.
The government also revised its estimate of how steep the downturn was in the fourth quarter of 2008. It now estimates that the gross domestic product (GDP) dropped 6.2 percent, rather than the 3.8 percent originally stated. This was the biggest drop in any quarter since the fall of 1982, when a drastic downturn saw unemployment rise to more than 10 percent. Although the total number of jobless for February has not yet been announced, there was a sharp rise in weekly unemployment claims to 600,000 new claims each week. This indicates that the overall figure will rise by even more than the half-million-plus jobless added in each of the previous three months. (Wall Street Journal, Feb. 28)
The U.S. numbers were in synch with the global picture. The big capitalist powers in Europe and Japan are all in crisis and their economic decline is steeper than that of the U.S. To make the crisis of the European capitalists even worse, their governments cannot agree on measures to fight the downturn.
The capitalist economy worldwide is clearly out of control, not only of the bosses but of all their financial officials and government institutions. It is no wonder that the word “depression” is creeping into the descriptive terminology more and more.
Obstacles to even limited reform
The Obama reform plan, limited as it is, is up against the economic crisis, which threatens to overwhelm it. But it is also up against the right-wing opposition led by Rush Limbaugh and Newt Gingrich, which is openly trying to sink the Obama program. Sections of the Republican Party have called it “class warfare,” which means instead of giving every nickel to the rich while trying to get the capitalist economy back on its feet, it contains programs that may reduce some misery for the workers.
The budget calls for a rise in taxes for those making over $250,000 a year—the top 5 percent of the population. The Bush tax cuts for the wealthy would be allowed to expire next year. The plan would raise taxes on the super-rich who run the private equity funds and hedge funds. Right now much of their profit is taxed at 15 percent, which is lower than the tax rates for their employees.
The budget, if passed as is, would wipe out $4 billion in subsidies to banks that give student loans. These funds instead would go to bolster Pell grants for students. In addition, Pell grants would be indexed for inflation and the maximum would be raised on July 1 to $5,350.
There would be increased money to detect, prevent and treat HIV-AIDS. There is $4 billion to expand health care for Native people and for the Indigenous of Alaska. There are also funds to provide food stamps to low-income elderly, to rehabilitate low-income housing, to increase allocations for Head Start and Early Head Start, and to improve health care in rural communities. (New York Times, Feb. 27)
Restores family planning funds
This budget would restore money for family planning for low-income women through Medicaid, which was removed from the stimulus package earlier under right-wing pressure.
Health-care reform is predicated on savings and on squeezing money out of the medical-industrial complex—the HMOs, insurance companies and hospitals—to create a $634 billion fund over 10 years to finance various measures. It envisages savings based on improved preventive care and a number of other measures, such as common computerized data bases for medical records.
Obama’s attack on global warming is based on forcing polluters to pay for permits giving them permission to pollute up to a given amount. These payments would fund weatherizing housing, green construction and many other projects.
But the budget, despite its reversal of the Reagan-Clinton-Bush emphasis on taking from the masses, is cautious and minimal, given the magnitude of the problems it seeks to address.
The working class, especially its most oppressed sections, and the middle class need universal, affordable, quality health care now. The trillions going to the banks in bailouts instead could be used to fund the system. The cost could be drastically reduced by cutting out the pharmaceutical industry, the insurance industry, the for-profit hospitals, the HMOs, and all the parasites that use health care as a way to line their pockets.
Setting up a 10-year fund or convening a health-care council that leaves the private capitalists in place guarantees that the health-care crisis will drag on and will result in a rotten compromise. Health care for all should be a right.
There are millions of homeless people, millions more who must live crowded together, often two or three generations in one unit, and millions who are in danger of losing their homes. To overcome this housing crisis requires the investment of hundreds of billions of dollars to insure everyone’s basic right to a livable, affordable space for themselves and their families. Housing should be a right.
Gives more money to Pentagon
One outright reactionary provision of the budget is a 4 percent increase in the Pentagon budget with new emphasis on weapons to counteract resistance movements. The military budget would rise to $534 billion from $513 billion. That would be enough to put millions of workers back to work, millions of people back in their homes, or to serve as the beginning of a national health plan.
In the midst of this terrible economic crisis, Washington is planning to keep 50,000 troops in Iraq while it escalates the war in Afghanistan and spreads it to Pakistan.
But most telling about the Obama budget are its projections regarding the tax increases for the rich and its economic predictions. The tax cuts for the rich are not scheduled to go into effect until 2011. The reason, according to the administration, is that this is when the economy will recover.
The two-year wait is bad enough. But even more important is the definition of “recovery” in the budget. It projects that the capitalist economy will grow by 3.4 percent in 2010. Most experts consider this a wildly optimistic estimate. But even if that were to come true, the budget forecasts that after the recovery there will still be 7.9 percent unemployment–higher unemployment than during the present crisis.
No recovery foreseen for workers
In short, the budget is looking to bring about a recovery for the capitalist class. It expects an increase in production and in profits, but leaves the working class with massive unemployment, which is especially severe in the Black, Latin/o, Asian and Native communities. Right now a total of 24 million people are either unemployed or underemployed, according to the Center for Labor Market Studies and Northeastern University. Official unemployment was 7.6 percent as January ended, and is expected to reach 8 percent at the next announcement. So this budget means that a “recovery” of the capitalist economy in terms of economic growth could leave more than 20 million workers unemployed or underemployed.
This is a recovery strictly for the bosses. The multinational working class should take a look at these projections and see what the government and the financial experts have in store. The only way to get a working class recovery is to open up a mass struggle for jobs—not in 2010 or 2011, but right now.
It is becoming clearer every day that the capitalist class has no solution to the present crisis, either short term or long term. The short-term stimulus will not work and the long-term forces that have in the past pushed capitalism forward are exhausted.
It is clear from this that the multinational working class, through independent mass action, is the only force that can intervene to stop the layoffs, foreclosures and evictions and that the workers must do so in order to save themselves from being driven deeper into poverty.
Right now the mood of the capitalist class and its advisers and commentators has gone from panic and shock to gloom and despair.
Just as in the Great Depression, the financial system—the heart of capitalism, which pumps money through its arteries—has seized up in bankruptcy. When it is working normally, this heart pumps money into the system of industry, services and commerce to finance the exploitation of the workers and the sale of the products of their labor. From this exploitation profits flow back in the form of money into the treasuries of finance capital, and from there the money recirculates in order to finance more exploitation and bring in more profits.
The crisis of overproduction has slowed the normal circulation of profits back to the financial heart, leaving the system in desperate need of sustenance to keep functioning. To make matters worse, not only has this normal flow of the profits from exploitation back into the coffers of the banks dwindled, but their arteries are clogged with undetermined trillions of dollars of bad debts acquired in wildly excessive lending and secured by fictitious paper assets—fictitious because they have no underlying real value.
The financial authorities have tried with all their might to get this heart running again through bailouts—injections of money, loan guarantees, forced mergers—but the vital organ of banking still shows only a faint sign of life.
Why ‘nationalization’ is on the table
Both major schools of capitalist economic practitioners and advisers, including liberal neo-Keynesians like Paul Krugman and reactionary, supply-side Milton Friedmanites like Alan Greenspan, are now converging, under the pressure of the crisis, toward concluding that there is a need to “nationalize” the biggest banks, which everyone knows are insolvent. Nationalization, in the version being proposed, amounts to the seizure of the banks by the government, the nationalization of their bad debts, and then the return of the debt-free banks back to the hands of the parasitic financial swindlers.
But even if this could be agreed upon and carried out, the ruling class fears, correctly, that lending during a capitalist depression is like “pushing on a string.” Lending to companies that have no markets for their products brings no profit. Lending to workers who have lost their jobs or are surviving on low pay brings no profit. Lending to students who won’t have a job when they graduate will bring no profit. So the “nationalization” of the banks is an attempt to treat a financial symptom when the disease itself is overproduction as a result of the system of production for profit.
It is beginning to dawn on the bankers, brokers and bosses that they are staring into the void of an economic crisis in which, more and more each day, the protracted forces of economic downturn seem to completely overwhelm the prospects for recovery. Each economic stimulus or bailout measure announced by the Obama administration seems to be immediately dwarfed by announcements on the growing magnitude of the crisis.
Can’t find an engine for recovery
Pessimism is mounting because none of the experts can discern an engine for a recovery, even three or four years in the future. By April, this will be the longest continuous downturn since the Great Depression, surpassing the recessions of 1973 to 1975 and 1980 to 1982, and there is no real end in sight.
Those who predict that growth will return at a given time—say the end of 2010 or the end of 2011—are whistling in the dark and they know it. They have had to change their predictions downward over and over again since the crisis started in December 2007. They cannot see into the next quarter, let alone two years hence.
This is because the system of private property is anarchic and unplanned, based on corporate secrecy and the unbridled rivalry for profits.
The ruling class, government officials and bourgeois economic “experts” have endured so many sudden catastrophic drops in the stock market, so many mortgage company failures, so many reports of the biggest banks asking for and getting untold sums of money, so many profit declines, so many grave unemployment reports, so many foreclosure reports, etc., that they seem to alternate between panic over what’s happening at the moment and a state of long-term gloom and despair over the future.
Take this article in the Washington Post datelined Feb. 18:
“Markets around the world plunged Tuesday as evidence mounted that the global economic crisis is worsening.
“Japan is suffering its worst downturn in 35 years. The British economy is facing its sharpest decline in almost 30 years. Germany is slumping at its worst pace in nearly 20 years. Meanwhile the job market in the United States, at the epicenter of the global downturn, is the worst in decades. And emerging economies are contracting at a pace few had predicted just months ago. ...
“The sharpness of the global slowdown has alarmed economists, who see no obvious engine for recovery.” Absolutely nothing to drive a recovery!
Paul Krugman’s column published Feb. 19 in the New York Times was tellingly entitled “Who’ll Stop the Pain?” Referring to the minutes of a recent meeting of the Federal Reserve Board, he wrote that his eye was caught “by the following chilling passage. ... ‘All participants anticipated that unemployment would remain substantially above its longer-run sustainable rate at the end of 2011, even absent further economic shocks; a few indicated that more than five to six years would be needed for the economy to converge to a longer-run path characterized by sustainable rates of output growth and unemployment.’”
Krugman is a Nobel Prize winner in economics and a neo-Keynesian advocate of even greater government stimulus spending and nationalization of the banks. He said he has been obsessing lately over “What’s supposed to end this slump? No doubt this too will pass—but how, when?”
To find a model that he hoped would eventually work to get U.S. capitalism out of the crisis, Krugman had to go back to the recovery from the crash of 1873. That was in the era of competitive capitalism, before the dominance of monopoly and finance capital.
Another comment in the Federal Reserve minutes that bears noting is that once the economy starts expanding again, it will be an “unusually gradual and prolonged” recovery.
This gloom is based upon the mounting figures surrounding the crisis. The International Labor Organization based in Geneva said that if unemployment continues at its present rate of growth, 18 million to 30 million workers worldwide could lose their jobs in 2009. But if the situation deteriorates, the number could rise to 50 million. The IMF has predicted that world output will fall in 2009 for the first time since World War II.
The ruling class concern over the economic crisis has nothing to do with sympathy for the workers and oppressed who suffer the pain. A protracted depression means a decline in production, which means a decline in profits, a rise in unemployment and the prospect of eventual working-class rebellion. This is the double nightmare that haunts them about the future.
Comparisons to Great Depression
Many comparisons are made with the Great Depression. The pundits console themselves with the drastic number of 25 percent unemployed at the depths of the depression in 1933 and an average of 17 percent for the decade. Compared to those numbers, they say, we are a long way from the Great Depression.
But a numerical comparison cannot be made at this point. The major financial authorities, including the Federal Reserve Board, the IMF and, recently, the attendees at the elite World Economic Forum in Davos, are coming to agree that this is still the early stage of the crisis.
Another comparison can be made that comes closer to the essence of the present crisis and the prospects for recovery.
The Great Depression came three decades after U.S. capitalism had first entered a period of crisis, inaugurated by the depression of 1893 to 1897. Long-term growth factors consisting of the building of the railroads, the brutal removal of the Native people in order to expropriate the land, the annexation of half of Mexico and the conquest of the so-called “frontier,” among other things, had exhausted themselves. Capitalism was unable to regenerate through the normal cycle of boom-bust-recovery. It took the rise of U.S. imperialism, signified by the Spanish-American War, to rescue the system.
The war brought a surge in the export of capital and in imperialist superprofits extracted from the superexploited people in the colonies: Cuba, Puerto Rico, Central and Latin America, the Philippines, Guam, Samoa, Hawaii, China and elsewhere. Imperialist expansion was the underlying factor that gave U.S. capitalism restored profitability and the material basis for recovery. This is what allowed a new surge in the development of technology and the productive forces.
The development of the assembly line, standardization and interchangeability of parts, and further electrification of the country gave rise to mass production industries. Automobiles, radios, refrigerators and other appliances were produced in the U.S. alongside a growing export of capital.
World War I and U.S. loans to Europe after the war brought in profits. A postwar slowdown was overcome by the brief but wild prosperity of 1923 to 1929, fostered by credit and speculation in land and stocks. But the long-term factors of development were exhausted when the worldwide crisis of overproduction finally brought the system down in 1929. The ruling class was never able to mount a sustainable capitalist recovery.
The bourgeoisie now senses, although they cannot precisely articulate it, that the present crisis resembles the Great Depression not just in the growing unemployment, the financial crisis of the banks and the bursting of the speculative bubbles, but in the fact that both crises came as all the driving forces of capitalist recovery had exhausted themselves. Therein lies the fundamental similarity.
Mass protests against the global economic crisis are spreading.
Protests recently toppled the government of Iceland. There have been militant protests against unemployment in Greece, Chile, Latvia and Bulgaria. A general strike in France on Jan. 29 compelled the government to give money to the automaker Citroën in return for a promise not to lay off workers.
As the crisis deepens in the United States, the multinational working class, unions, community organizations, students and youth must not be lulled into inactivity waiting for the $787 billion stimulus package, signed on Feb. 17, to take effect.
It is understandable that millions of workers who voted for Barack Obama are anxiously hoping that the legislation will bring them some assistance and relief from the dire economic circumstances they face. Some are unemployed and running out of benefits. Others, particularly public workers, are in danger of losing their jobs and health care.
In addition to the millions of unemployed workers and the people who have lost their homes, there are millions more who were impoverished even before the crisis and are hoping that the stimulus package will help them.
What workers get directly
Many features of the package are aimed at immediate relief. They are the very measures the Republicans focused on trying to cut back, evoking the rightful outrage of workers and all progressives.
Among many other provisions, the final bill stipulates $40 billion for extended unemployment benefits through Dec. 31, 2009. It increases these benefits by $25 a week and funds job training. It sets aside $20 billion to increase food stamp benefits by 14 percent. It includes $3 billion in temporary welfare payments and $14 billion for a one-time $250 payment to Social Security recipients, people on Supplemental Security Income, and veterans receiving disability and pensions. (USAToday.com)
There is aid to students, to workers who have lost their health care, to states to keep their sinking budgets from going completely under, and other measures that, altogether, are supposed to create 3.5 million jobs.
The bill is designed to entice states into expanding their unemployment benefits to include part-time workers, workers who have been forced to leave the job for family reasons, and workers who are in training.
Better than nothing—but still a pittance
Of course, any increase in assistance to workers is better than no increase at all. When you are unemployed or falling into poverty, every dollar counts. The workers are in desperate need and should take everything they can get.
But considering that the working class has created all the wealth of this society in goods and services yet now is living with a huge deficit, the workers are entitled to a lot more than the paltry sums being talked about.
According to government statistics, the unemployment rate went up to 7.6 percent in January. It is expected to continue growing for the foreseeable future, certainly for the rest of 2009 and into 2010.
A rate of 7.6 percent means 11.5 million jobless workers. Let’s assume that the annual wage of these workers was $40,000—which is a little less than the average wage and represents mere survival for a family of four.
If the jobless rate remains at the present level for the next year, the officially unemployed will have lost $460 billion in wages. This does not include the millions who are unemployed but not counted because they have given up looking for work. Add them in and the figure rises to $500 billion.
It is important to note that “total unemployment”—an official government figure that also includes those estimated to have dropped out of the workforce from discouragement about finding a job and those forced into part-time work—is actually 13.9 percent. At that rate, more than 20 million people are unemployed or underemployed. Of those, only 4.8 million are receiving unemployment benefits from the states and 1.7 million are receiving federal special supplementary benefits.
That means that 14 million unemployed or underemployed get no unemployment insurance.
Bankers get lion’s share
The situation is only going to get worse. The number of unemployed is far surpassing the limited plans for job creation. For the first time since 1939, the number of unemployed has grown by more than half a million per month for three months in a row. While the stimulus package is supposed to create 3.5 million jobs over the next two years, 3.6 million jobs have already been destroyed since the crisis began in December 2007.
To make matters worse, the government’s plan to bail out the banks aims to squander $2.5 trillion—three times the amount of the stimulus plan. The excuse for this fund is to “loosen up the credit markets.”
The fact that the government has given the banks trillions of dollars in direct cash and loan guarantees certainly entitles Washington to tell the banks: “Lend, or else.” But everyone knows that banks will not lend in an economy that is going under. There is no profit in lending in a shrinking economy and that is what banks do—make profit.
So why give trillions of dollars to greedy, profit-gouging bankers to “help” the economy? They are less than useless and have proven it by wild, fraudulent speculation that has ended up in disaster.
That money is being taken away from the stimulus package. It is being taken away from funds needed to keep people in their homes. It should be used to create a real jobs program. The multinational working class needs a direct jobs program. Unemployment insurance, if you’re lucky enough to get it, has a time limit and is not enough to live on. What workers need most right now is jobs at a living wage and an affordable home.
This is what the $2.5 trillion bailout should be spent on—every nickel of it.
Save workers, not profits
The secret truth that no one in the government dares say out loud is that most of these big banks are probably insolvent already. They should have been declared bankrupt long ago because the debts on their books are not worth much more than pennies on the dollar. The bailout is meant to keep these crooks from going under.
These millionaires and billionaires are worrying that they may be down to their last $100 million or so. Meanwhile, millions of workers are worrying about how to pay their rent, their mortgages, their bills for food, medical care, credit cards, auto loans, student loans and so on.
Only after decades of economic attacks on the multinational working class is the capitalist government hastily coming forward with a pittance in aid. These band-aids have nothing to do with concern for the workers. They are meant to save the profit system.
The help the government is offering is a pittance in comparison to what is needed.
The workers and their communities must form alliances everywhere to fight back.
This is an emergency!
The federal government and every state and local government have provisions in their charters or constitutions mandating the authorities to render assistance to the residents of a state or locality in time of emergency. The profit-addicted capitalist class has created emergencies everywhere–of unemployment, poverty, homelessness, medical crises and hunger.
An outstanding example of fightback is the Detroit Moratorium Now! campaign. The organizers have been carrying on a campaign of mass demonstrations and popular agitation to force the government to pass legislation to declare an emergency and stop foreclosures and evictions. The campaign has influenced the political atmosphere in Michigan to the extent that the Wayne County sheriff recently found a legal reason under the provisions of the Troubled Asset Relief Program to refuse to execute any more foreclosures.
Mass layoffs in times of unemployment create a threat to survival, a true emergency for the workers, their families and the communities that depend on their income.
State and local governments have given hundreds of billions of dollars in tax breaks, infrastructure and other enticements to get corporations to build in their areas in order to promote jobs and economic activity. Every one of these companies that closes down or cuts shifts is in violation of such an agreement. The community and the workers have every right to enforce the agreement by demanding that the plants stay open and the jobs remain.
In general, the right to a job should be recognized as a right of all workers. Every worker who has worked for a boss has contributed to the wealth of the employer and the creation of the enterprise. The workers have property rights to their jobs, since they have created the property by their labor.
Inextricably bound to this right is the right to occupy the workplace, the way the Republic Windows and Doors workers did in Chicago and the way the Waterford-Crystal workers have done in Kilbarry, Ireland.
There are innumerable legal ways to assert the rights of workers. But the only way to make those rights legally enforceable is for mass organization and struggle to compel the employers and the governments to meet their obligations to the people.
On becoming president, Barack Obama proclaimed his job creation goal to be 3 million jobs over the next two years. Yet in the last two months alone nearly 1.2 million jobs have been lost: 577,000 in December and 598,000 in January. The December figure was revised upward by the government, which had originally estimated it at 533,000. Economists expect the monthly number to be even worse in February.
With each new layoff announcement, the target number for jobs to be created goes up. The latest target is 4 million, even though right-wing Republicans are whittling down the stimulus package.
The official unemployment number has jumped from 7.2 percent to 7.6 percent. But this is not the total unemployment number, which includes those who have stopped looking for work and those working part time because they cannot find full-time work. That has jumped from 13.5 percent to 13.9 percent.
In effect, this means that to achieve full employment for the approximately 154 million people in the workforce, some 21.4 million new full-time jobs would be needed now—and this number is growing rapidly each month.
Every worker should do the math. The so-called stimulus package, even assuming that it could meet its goals, appears more and more anemic compared to the momentum of the crisis, which is growing each week, each month. Creating relatively few jobs at a snail’s pace leaves tens of millions of workers unemployed and underemployed. Tens of millions more are vulnerable to becoming part of the unemployment statistics.
Every new grim announcement by the government on unemployment, foreclosures, evictions, homelessness, the loss of health care, hunger, record numbers applying to hard-pressed food banks, an increase in child poverty, etc., should become a big wake-up call for the multinational working class to get organized for a fightback.
Actions being planned
One important attempt to begin the crucial fightback is taking place in New York City where the Bail Out the People Movement is forging a grassroots alliance for struggle and calling a national action against the bankers on Wall Street on April 3 and 4. While the mobilization is targeting the bankers, it has a broad program with a focus on stopping the layoffs. Hundreds of endorsers and contingents are coming aboard from every region of the country.
Along the same line, a network of local coalitions in cities around the country, from New York to Boston to Los Angeles, is organizing to make May Day 2009 a day of struggle and unity to fight back against attacks on immigrant workers and to strengthen the struggle against the economic crisis. Many of these coalitions played key roles in the great May Day 2006 strike/boycott of millions of immigrant workers.
At this moment a delegation representing 250 workers, most of them immigrants, who sat in at Republic Windows and Doors in Chicago is touring the country. These workers occupied the plant for five days until they won their severance pay and back pay. They are telling their inspiring story to standing-room-only gatherings of trade unionists and activists. The workers are from the United Electrical Radio and Machine Workers, Local 1110. The tour is sponsored by Jobs with Justice.
The boldness of Local 1110 inspired the solidarity of the labor movement and the political movement. These workers set a living example of reviving a tactic–the sit-down strike—that was used in the 1930s on a massive scale to win the greatest victories in U.S. labor history.
Local 1110 carried out its sit-down strike in Chicago in the midst of a growing economic crisis. But these workers are not unique. All over the country there are rank-and-file workers, lower-level union officials, shop stewards and trade union activists at all levels, as well as sympathizers with the labor movement, looking for a way to fight back.
Vast network of potential power
There are now 16 million workers in the organized labor movement. There are tens of thousands of local unions around the country, thousands of them under attack by the waves of layoffs. There are hundreds of municipal and regional labor councils whose members are under siege or living in fear of layoffs, shortened hours and demands for concessions.
This vast network of potential working class power is lying dormant as the top labor leaders try to avoid mobilizing the workers to push back. The labor leadership is understandably focused for the moment on pushing through a legislative victory for the Employee Free Choice Act, which legalizes the card check system for union organizing. But this measure, important as it is in the day-to-day campaign to organize unions, will not meet the urgent needs of the millions falling under the ax of layoffs or losing their health care and their homes on a daily basis.
Most importantly, these measures fail to blunt future layoffs. The layoffs arise from the urgent needs of the capitalists to preserve their profits and cut their losses.
The rank and file must get organized within their locals, within their unions and within the union movement as a whole and unite with the communities and activists all over the country to develop a genuine fighting force. Neither John Sweeney of the AFL-CIO nor Andrew Stern of SEIU/Change to Win has represented the labor movement or the working class as a whole in this crisis.
French workers set example
These leaders should contemplate what just took place in France, where 2.5 million people, led by the unions, struck and/or marched to demand priority be given to protecting and creating jobs. The French workers shut down major cities, from Paris to Marseilles, as all the unions united for a show of strength. Of course, the French working class movement has a great tradition of class struggle.
But the workers in the U.S. have a history of struggle as well. During the 1930s they carried out marches and rallies of the unemployed. The Workers Alliance and the Unemployed Councils put hundreds of thousands of people who had been evicted back in their homes. They carried out citywide general strikes. The workers initiated hundreds of sit-down strikes. This is a history and tradition that can and must be revived.
The bosses, bankers and their “experts” are fully aware of this history, more so than are most workers at the moment. That is one of the reasons they were so anxious to settle the Republic Windows and Doors sit-down: the fear that it would become contagious in the midst of a layoff crisis.
Each time they announce a new figure for layoffs that is “the highest” since 1983, or 1972, or declare the crisis to be the “worst since the Great Depression,” they keep their fingers crossed that the working class in general, including the oppressed—the African American, Latina/o, Asian and Native communities—will get frightened, demoralized and retreat into trying to deal with the crisis on an individual basis.
But everyone knows in their bones that this crisis cannot be fought on an individual basis. Organization is the most important weapon that the working class and the oppressed have.
The capitalist system is in the midst of a major, global crisis of overproduction. There is a glut of commodities that cannot be sold because the entire capitalist class all over the world, in the race for profits, has lowered wages and increased production. That is what is called capitalist anarchy of production.
In the auto industry the global capacity could produce 90 million autos a year. Present production is 66 million a year. Semiconductors are used in everything from iPods to airplanes, yet the semiconductor industry is operating at 66 percent of capacity. Even the oil industry is operating far below capacity.
Why? Because the masses do not have the money to purchase the vast inventories of commodities that have been built up by their own labor as the bosses race for profits and market share. So production shuts down. Plants and offices are destroyed or sit idle.
The only thing that can change the course of the crisis is the conscious, organized intervention of the workers and the communities to defend themselves–to demand the right to a job, to housing, to health care, to education and to social services of all kinds.
The process of getting organized for struggle is a difficult one. But there is no other course. The only social force that can bail out the workers, the only force that is going to stop the layoffs, the foreclosures and evictions, the racist attacks, the sexist inequality of wages and abuse of women, the raids on undocumented workers—that is going to stop all forms of oppression—is the might of the organized, multinational working class.
While it's good that the Congress has taken upon itself to extend unemployment benefits, this does little to no good when American employment law is tilted in favor of the employer.
It's time that the Congress work to pass a new employment law that recognizes that a contract is inherent in each employment relationship, and enforce the social obligations employers undertake when they choose to hire people to do work they benefit from.
Why is it that Congress is willing to spend trillions of dollars to remove risk from lives of people who are being paid to taken on uncertainty, yet have done nothing to provide certainty to the millions of Americans who work for wages? read full post
Today's Wall Street Journal reports that President Obama has placed limits on the salaries of executives at firms that are receiving large-scale bailout funds from the Federal government:
Under the new rules, companies that receive "exceptional assistance" from taxpayers may not pay any top executive more than $500,000 a year. Any additional compensation would have to be in restricted stock that will not vest until taxpayers have been repaid. (Wall Street Journal)
No one can object to limiting the salaries of bankers; but this announcement raises many questions.
First, while penalizing some bankers, who gets the money that they would have gotten? Shouldn't this money be turned over to a fund to help the millions facing foreclosure and unemployment.
Second, if the government can use Executive power to impose its will on private businesses, why stop there? Why not order them to stop foreclosures and plant closings? RealtyTrac currently lists 1.5 million foreclosed homes being held by banks in the U.S.
Third, why not demand that banks free up bailout money and other funds, to make them available in low-interest loans to workers, students, and families in desperate need of a real bailout. The whole justification of the TARP was to free up money to 'get the economy going again,' but banks are not lending money. They've even refused to disclose what they've done with the money that they've received. In front of Congress, the new Secretary of the Treasury Timothy Geitner has defended the banks' refusal to tell what they've done with $350 billion of taxpayers' money.
One thing that is known about what they did with some of the money, is that they made loans of $25.4 billion to finance the merger between pharmaceutical giant Pfizer and Wyeth.
Pfizer’s bid is being financed by four banks that received federal bailout money: Goldman Sachs, JPMorgan Chase, Citigroup and Bank of America, the people involved in the deal said. Such banks have been criticized for not doing more lending since they received the government aid.
Barclays, which acquired Lehman Brothers out of bankruptcy in the fall, is also providing financing, these people said.
Fourth, while in Miami, more than 1,000 people lined up for 35 firefighting jobs, and the Los Angeles Times reports that U.S. companies announced 241,749 layoffs last month, it has come to light that U.S. financial institutions are sitting on $3.9 trillion, which is more than four times the amount of the projected stimulus package. This money is sitting in money market accounts, earning interest for wealthy investors. The Federal government should use the same authority that it used to limit executive pay to force these investors and institutions to make this money available to put people back to work and back in their homes.
According to the Boston Globe, the "stimulus" package currently being debated in the Senate will create, at most, 3 or 4 million jobs.
As part of its hard sell, the White House this afternoon released job-creation estimates for Eastern states from the economic recovery package.
It said that of the 3 million to 4 million jobs the plan would save or create, 800,000 of them would be in 10 Eastern states.
The estimates include 83,000 jobs in Massachusetts, 44,000 in Connecticut, 17,000 in New Hampshire, 16,000 in Maine, 13,000 in Rhode Island, and 8,000 in Vermont.
Three or four million jobs will not even put a dent in the growing unemployment crisis.
The official unemployment rate, which was 7.2 percent at the end of 2008, is expected to shoot up rapidly in the coming months. However, there is a less publicized but also official figure called “total” unemployment—and it has already reached 13.4 percent. This number includes people who couldn’t get anything but part-time work when they need to work full time, plus the millions who have stopped looking altogether, termed “discouraged” workers. This means, out of a total workforce of 154 million, that 20 million workers are unemployed.
At the present rate, millions more will lose their jobs in the coming months. Last year 2.6 million lost their jobs—a huge number but still deceptively low when trying to project what will happen this year because, of the 2.6 million, 2 million lost their jobs just in the last four months of 2008.
The 20 million workers already considered unemployed or underemployed—and this figure is sure to rise in the new year—will have to wait for the stimulus package to go into effect. Meanwhile, 1.5 million people enter the work force each year. This means that the "stimulus" program won't put any dent in the 20+ million people who will be out of a job.
Working people and their organizations need to organize to demand a real jobs program - one that puts people directly to work, instead of just throwing money at big corporations and government bureaucracies.
By the time the stock market closed on Jan. 26, 11 large U.S. corporations had announced a total of 60,000 new layoffs in just that one day.
Caterpillar, the largest manufacturer of construction and mining equipment in the world, announced 20,000 layoffs, or 18 percent of its global work force.
Home Depot, the largest home equipment dealer in the U.S., announced 7,000 layoffs and the closing of 34 of its high-end EXPO Design Centers.
Sprint Nextel will lay off 8,000, or 13 percent of its workforce.
The giant drug company Pfizer is projecting 8,300 layoffs after its $68-billion purchase of another huge pharmaceutical, Wyeth.
Toward the end of the day Texas Instruments announced another 3,400 layoffs, 12 percent of its workforce, and there was a belated announcement that IBM had sent out pink slips to another 2,800 workers.
Caterpillar, which had sales of $12.92 billion last quarter and is a bellwether for the economy because of its global reach and its crucial role in construction worldwide, predicted that 2009 would be its worst year since the end of World War II.
Altogether, large U.S. companies publicly announced more than 170,000 layoffs (see accompanying chart) in the first four weeks of this year, but hundreds of thousands more are expected to be added when the government releases its monthly statistics early in February.
As workers lose their incomes, the defaulting on mortgage payments, credit cards, auto loans and student loans keeps rising. As the defaults rise, the bad debts on the books of the banks go up. The deepening crisis of the workers aggravates the financial crisis of the bankers.
Gov’t rushes to save banks
The capitalist government in Washington has not been trying to solve the banks’ problem of insolvency by rushing to the aid of the millions of workers who are defaulting on their debts and losing their homes and jobs. Instead, it has put limited aid to the workers on the slow track while it rushes to find ways to bolster the banks.
Citigroup and Bank of America had merely to apply to the government, filling out a perfunctory request form, and they immediately received $45 billion each in installments, with guarantees of $300 billion and $100 billion, respectively, to cover bad debts. Other banks have received similar handouts, adding up to hundreds of billions of dollars in direct infusions of capital and in bad debt guarantees.
As fast as the Obama administration draws up plans for its stimulus package, the deterioration of the economic situation outpaces these modest plans to deal with it.
So far $700 billion has been officially appropriated for the financial crisis. But, according to an article in the Washington Post of Jan. 24, “with the economy deteriorating rapidly, financial companies are incurring trillions of dollars in losses on failing mortgage loans and other assets, forcing the federal government to consider substantially expanding its response to the crisis. ... Leading economists and lawmakers calculate that hundreds of billions more could be required.” There is talk of raising the official bank bailout fund to $1 trillion—in cash.
As for the foreclosure crisis, the administration has officially pledged $50 billion to help homeowners avoid foreclosures. But Goldman Sachs estimates there is more than $1 trillion outstanding in bad mortgage debt. At a private luncheon on Jan. 22, economists were talking about needing $250 billion for the foreclosure rescue program.
“Foreclosures have skyrocketed,” according to the Post, “with an estimated 8 million families expected to lose their homes over the next four years.”
Losing 500,000 jobs per month
Mark Sandy of Moody’s Economy.com told the Post: “Conditions are eroding far more rapidly than anyone anticipated. ... The job market is now consistently losing 500,000-plus jobs per month, something you couldn’t have envisioned eight to 12 weeks ago. Losses in the banking system over the last week or two have been much larger than people had been expecting. We’re coming to the realization that these things are self-reinforcing and the problems aren’t developing in a linear way. They’re getting worse very rapidly.”
The bourgeois “experts” cannot fathom their own system. They are utterly taken aback when capitalism behaves the way it has been behaving since the first real global collapse in 1825.
The capitalist system goes through a cycle of expansion that leads to a glut of goods, stocks, land deals and so on that always ends up in a crash. As each capitalist or capitalist grouping fights for market share of commodities, gambles on speculative gains in the stock market, the bond market, the real estate market, etc., things always end up in a catastrophe, which the bosses then push off onto the workers.
As capitalism has decayed under imperialism, has become more financial, more parasitic, more speculative, the tendency increases for the crashes to be more devastating.
Only the tunnel vision of capitalists driven by profit lust could keep them and their experts from seeing the inevitable end of this anarchic system of production and finance:
• No capitalist knows if the commodities produced can be sold.
• No one knows if the stock they buy will go up or down.
• No one knows when the upward cycle of speculative buying and selling of land or houses will reverse itself and come crashing down with a vengeance.
Furthermore, it was clear to all who wished to see that selling junk mortgage bonds around the world to institutions, municipalities and states alike, while calling them AAA, highest-rated, could only result eventually in a global crisis.
The financiers who stand at the pinnacle of capitalist society, the bankers who control the financial resources of society and therefore dictate the fate of hundreds of millions of workers all around the world, have used those resources in a mad race after profits—by any speculative, fraudulent means necessary. And they have brought the system to ruin.
Now the capitalist government must step in with trillions taken from the workers and the middle class and bail out the banks, because that is the only way they can conceive of under present circumstances to bail out the capitalist profit system.
Government intervention shows above all, however, that bankers are completely unnecessary to the functioning of society. Their only role is to get rich by financing exploitation and debt.
What capitalist ‘nationalization’ means
Right now “nationalization” of the banks is being discussed. It is a measure of the feeling of powerlessness to control their own capitalist system that economists, politicians and advisers are even contemplating the very thought of nationalization of the banks. In the days before this crisis, no one in the establishment would have dared to introduce this idea, even into the most private conversation. The word “nationalization” was not in the vocabulary of U.S. bourgeois society.
But this crisis has forced sections of the ruling class to think the unthinkable.
Nationalization under the capitalist class, that is, the takeover and running of a bank or an industrial corporation or an industry, has historically been used for the purposes of rescuing the capitalist bank or enterprise from complete ruin. The goal has been to take it over temporarily, put the enterprise back on its feet until it becomes profitable again, and then sell it back to the bosses.
In other words, it has been used to strengthen the system of exploitation when some aspect of the system has become weakened.
The nationalization of the major enterprises of British industry after World War II is a classic example. It was carried out by successive Labor governments with understandable popular support from the workers and was presented as a socialist measure. But it left the capitalist ruling class intact. Once the economy had completely recovered, Prime Minister Margaret Thatcher began to give back to private capitalists what was profitable.
Time for a people’s fightback
In the meantime, workers are losing their homes and livelihoods. They are being battered from pillar to post on a daily basis by the inhuman wave of layoffs and foreclosures. The capitalist government in Washington and the financial authorities at the Treasury Department and the Federal Reserve Board have already given the banks over a trillion dollars and are now rushing to give them more on an emergency basis.
What is the real emergency, which needs immediate attention? It is that tens of millions of workers and their families are rapidly being driven to the wall by the economic crisis. Social tensions are increasing. Racist killings and beatings are increasing, especially by the police. Arrests of the poor are rising as more workers are driven to commit crimes of survival. The scapegoating of immigrant workers is growing under the impact of the crisis.
The workers and the oppressed are not just losing paper wealth. They do not have millions of dollars stashed away in personal wealth to be tapped for a rainy day. They are losing the means to sustain living.
The only way out of this crisis for the working class is to organize a massive fightback.
A movement is taking shape to launch peoples’ assemblies and community-labor alliances whose aim is to broaden the struggle by uniting the various movements into a common front.
This is an essential first step for the workers and oppressed to put their needs on the agenda, ahead of the Wall Street billionaires.
The record wave of layoffs that seemed to peak in December is continuing into 2009.
At the same time, hundreds of billions of dollars in aid are flowing from Washington to the banks and corporations, not to the unemployed. Reviving corporate profits has taken precedence over providing desperately needed jobs or calling for an immediate end to foreclosures and evictions.
Circuit City announced it is laying off 34,000 workers by the end of March—the largest mass firing since the current crisis began. This second-largest electronic retailer in the U.S. is closing 557 stores.
Just in the first two weeks of this year a series of other layoffs has been announced.
Motorola, which laid off 3,000 workers last October, has announced another 4,000 jobs will be cut. Hertz announced 4,000 jobs will go worldwide. ConocoPhillips will lay off 1,350, Pfizer 2,400, WellPoint 1,500, Saks 1,000 and Neiman Marcus 375. Advanced Micro Devices (AMD), Blue Cross/Blue Shield and other large companies are also scheduled to announce new rounds of layoffs.
These are only the most publicized firings.
The official unemployment rate, which was 7.2 percent at the end of 2008, is expected to shoot up rapidly in the coming months as the bosses continue the onslaught without mercy.
However, there is a less publicized but also official figure called “total” unemployment—and it has reached 13.4 percent. The first thing to remember about this figure is that it amounts to 20 million workers. It includes people who couldn’t get anything but part-time work when they need to work full time, plus the millions who have stopped looking altogether, termed “discouraged” workers.
At the present rate, millions more will lose their jobs in the coming months. Last year 2.6 million lost their jobs—a huge number but still deceptively low when trying to project what will happen this year because, of the 2.6 million, 2 million lost their jobs just in the last four months of 2008.
There is no question that an emergency jobs program, which would involve the immediate direct hiring of millions of workers at living wages, with benefits, and a freeze on layoffs, is urgently needed to stave off the growing crisis of the working class and the oppressed people.
However, instead of reaching out directly to assist the workers who are suffering from the capitalist crisis, Washington and Wall Street are reaching out to bolster the capitalist system and aid the capitalists who caused the crisis in the first place.
Why ‘stimulus’ can’t work
Wall Street told the incoming Obama administration to get hold of the $350 billion fund Congress passed to bail out the banks and use it to clean up their bad loans. In addition, the Democrats have submitted an $825 billion “stimulus” package.
There are many progressive features to the package, such as increases in Pell grants, reduction of payroll taxes for workers, rural assistance, additional food stamp aid and unemployment insurance. But these features, including the declared goal of creating 3 million jobs in the next two years, are utterly inadequate to meet the massive crisis that is unfolding at a rapid rate.
The package calls for $550 billion in direct spending over two years. Some 90 percent of this spending will go through private capitalists. The bill sets up contract procedures and deadlines that range from one year to more than two years for fulfillment. It has no mandatory hiring or wage requirements, save a nebulous “prevailing wage” stipulation. There is no requirement to stabilize employment by requiring that workers be retained for any period of time, nor any funds to provide such stability.
The 20 million workers already considered unemployed or underemployed—and this December figure is sure to rise in the new year—will have to wait for the stimulus package to go into effect. When it does, they will then have to compete for an estimated 1.5 million jobs to be created this year while the government bureaucracies at the local, state and federal levels negotiate contracts with competing capitalist interests and their lobbyists seeking to get a piece of the pie.
None of these bosses has the goal of providing good jobs at living wages with benefits. To them, the goal is to revive and maximize profits.
The entire process is corrupt, agonizingly slow, and totally uncertain as far as the workers are concerned. Furthermore, whatever hiring these bosses do could be cancelled out within a year or less by the drying up of funds or shrinking of the market.
The working class and the communities have no other recourse but to begin organizing on a mass basis to demand jobs now—at living wages.
Need for a direct jobs program
Millions are already unemployed. Millions more face layoffs unless an immediate, direct jobs program is put in place. It can be done. During the Great Depression of the 1930s, government jobs were put in place within two weeks after job programs were set up.
It won’t happen automatically. “Jobs or income” must become a mass demand, backed up by mobilizations, jobs marches and organizing the unemployed, in unity with the employed, who also need the security of jobs or income.
Regarding the bank bailout fund, $20 billion in cash and $100 billion in government-absorbed losses have been promised to Bank of America, which had already received $25 billion earlier. Citicorp is expected to announce $10 billion in new losses, which the government will absorb. Citigroup has already received $45 billion in bailout money and the government has given it a guaranteed backup of $300 billion to cover problematic loans.
The $350 billion bailout doesn’t include these huge new backup commitments. Its goal is to make the banks solvent by dealing with hundreds of billions—the investment bank Goldman Sachs says it’s more like $1 trillion—of remaining bad loans.
The fact is that these bad loans on the books of the banks are for the most part a mirror image of the suffering of the masses. Why are the loans of Citicorp, Bank of America and other banks going bad? Because of credit card defaults, auto loan defaults, student loan defaults, mortgage loan defaults and every other kind of unpayable debt. As people lose their jobs, have their wages and salaries cut, lose their health care, etc., they sink deeper and deeper into debt.
The bankers and the rich investors behind them are losing paper wealth, but their “balance sheet” problems arise from the direct material suffering of the masses. The working class and the middle class are unable to pay their bills, are losing their homes, their cars, their electricity and gas, their health coverage and every other means of survival.
Banks don’t lend when markets are glutted
The handout to the banks is being justified as an attempt to get them to start lending to companies and consumers, which will then get the economy rolling again. But this is a complete fiction. The problem of lending arises not from arbitrary stubbornness by the bankers. It arises from the lack of opportunity of the banks and the corporations to make profit once a crisis of capitalist overproduction hits, with its rising inventories and falling sales leading to falling production. After all, the bankers are in business to make profit.
The term “overproduction” has nothing to do with whether people need goods. It is when more commodities have been produced than can be marketed—i.e., sold at a profit.
The crude facts of capitalist overproduction are obvious. The U.S. auto industry has gone from producing 16 million cars annually to 13.2 million last year, and is expected to drop to 12 million or less this year. Steel production, which is a barometer of the economy, dropped from 2 million tons in November to 1 million tons in December. In recent decades, hundreds of thousands of steel workers were laid off as the industry consolidated and shrunk itself. Now, overproduction has hit again. It is estimated that 20,000 steel workers will be laid off in the coming period.
The overproduction of housing and the consequent crisis in the construction industry and all its ancillary industries is getting worse with each foreclosure.
Giant technology companies like Motorola, Nortel, AMD and Intel are suffering losses due to overproduction and hence executing layoffs. Under those conditions, the banks see no profit in lending, no matter how much money the government hands them.
In fact, they are using their bailout money not for lending but to strengthen themselves financially. According to a New York Times survey of two dozen banks, “The overwhelming majority saw the bailout program as a no-strings-attached windfall that could be used to pay down debt, acquire other businesses or invest for the future.”
At a recent conference at the Palm Beach Ritz-Carlton, “Bankers mingled with investment analysts at an ocean-front luxury hotel, where the agenda featured evening cocktails by the pool and a golf outing at a nearby country club.” They were there to discuss the bailout funds. Referring to the government’s Troubled Asset Relief Program, conference organizer John C. Hope III, chairperson of the Whitney National Bank of New Orleans, said, “We see TARP as an insurance policy.” Hope figures that, “No matter how bad it gets, we’re going to be one of the remaining banks.” (New York Times, Jan. 18)
So much for lending, job creation and recovery.
The “crisis” of the bankers and bosses is calmly discussed at luxury watering holes, while the workers are suffering the greatest attack in three generations.
The only way to get a real working-class recovery program is to organize to shake up the entire capitalist system until the bosses are forced to provide jobs and/or a livable income.
Goldstein is author of the recently published book, “Low-Wage Capitalism: Colossus with Feet of Clay,” which can be ordered through www.lowwagecapitalism.com.
The intensifying capitalist crisis, which is bringing greater and greater suffering daily, is leaving the workers and the oppressed with no alternative but to organize a fightback. The deadly waves of unemployment, foreclosures, homelessness, hunger and repression are spreading while the ruling-class politicians and experts debate over the terms of the so-called “stimulus package.”
With 533,000 jobs lost in December, official unemployment went up to a 16-year high of 7.2 percent. The annual job loss for 2008 was over 2.59 million, the highest since World War II. The rapid rate of layoffs has brought the official number of unemployed to 11.1 million workers.
Unemployment of Black men over the age of 20, which was already officially double-digit, jumped from 12.1 percent to 13.4 percent in December. For African-American youth from 16 to 19, the figures were a staggering 32.2 percent rising to 33.7 percent in the same month. White youth unemployment also rose to 18.7 percent.
The rarely published figure of “total unemployment” grew from 12.6 percent to 13.5 percent. Total unemployment includes those workers forced to take part-time work who need full-time jobs as well as workers who are known to have become so discouraged that they have stopped looking for work.
The average number of hours worked was down to 33.3 in December, the lowest since these records were first kept in 1964.
The most important aspect of the December figures is that December is usually a month of increased hiring, even during slow times, as retailers gear up for holiday sales, manufacturers put on additional workers to fill rush orders for inventory, and the restaurant and entertainment industries have higher sales.
Instead, December saw the biggest decline in retail sales since record keeping began in 1970, despite price-slashing sales of 50 to 70 percent off and buy-one-get-one-free offers. The International Council of Shopping Centers estimated that 148,000 retail stores shut down in 2008. It projected that another 73,100 retail stores will shut down in the first six months of 2009. The closures would result in the loss of 625,000 to 800,000 retail jobs. (Washington Post, Jan. 9)
‘Stimulus program’ smaller than a band-aid
Considering the catastrophic wave of unemployment, with at least 20 million jobless or severely underemployed right now, and the prospects for a massive increase in the coming period, all the speculation about whether the “stimulus package” will add 3 million or 3.5 million jobs over the next two years seems utterly inadequate.
The government figure of 11.1 million unemployed, or 7.2 percent, is based upon a workforce of 154 million. The more realistic “total unemployment” figure cited above of 13.4 percent equals 20.6 million, according to the government.
Furthermore, the stimulus package now being projected amounts to $775 billion. Of this, 40 percent is in tax cuts, which are not necessarily going to create jobs. And, worst of all, 90 percent of the spending is to go to private capitalists. So it is largely a handout to the capitalists in the hope that they will create enough jobs.
With all the talk about studying the New Deal, this program takes an opposite approach to that of the Roosevelt administration. While the New Deal was purely a band-aid, filled with limitations and flaws and calculated to save capitalism by preventing a mass uprising of the workers, the Works Progress Administration (WPA) nevertheless provided direct jobs to 8 million workers during the decade, or one-fifth of the workforce. At any given time, anywhere from 2 million to 3 million workers were employed by the government in these programs—the equivalent of 9 million to 10 million today.
The present plans for government spending set up a situation in which some 20 million unemployed workers will have to compete for 1 million to 1.5 million jobs in the coming year—assuming that the job creation projections are anywhere near correct. Such a situation in which workers are desperately seeking scarce jobs will tend to lower wages, set worker against worker and help the bosses.
The workers should of course take advantage of any opportunity to get new jobs created to help feed themselves and their families. But they must not sit back and let the economic “experts” in Washington and Wall Street dictate the terms of the economic package. They must get organized to impose their own economic demands on the capitalist government.
They could start by demanding that every nickel of the more than $1 trillion already given to the banks be taken back and made available for jobs and services to the workers and the communities. The banks are so arrogant that they won’t even tell the government what they are doing with this money.
From bailout to fightback
The struggle is in its early stages and the workers are on the defensive. It is natural that at this stage popular organizations want to take advantage of the term “bailout” to expose the handouts to the banks and the bosses. But, as the struggle progresses, the concept of the capitalist government bailing out the people has to be shifted to the concept of the workers fighting back.
The funds to stem the crisis have to be put under the supervision of the workers, the unions, community organizations and other mass organizations—and not the bosses. It is the masses who are suffering from the crisis. They should be empowered to deal with it.
Only the masses will enforce a living wage, job guarantees, union rights, anti-racist practices and rights for women workers. The capitalists are skilled and experienced at manipulating government subsidies that are supposed to go for creating jobs. Instead they turn things around to maximize their profits. Relying on profiteering capitalists—and there is no other kind!—to save the working class is the worst possible course to pursue.
There must be a movement toward creating organs of popular power at the local, regional and national level to stop the layoffs and defend the workers’ right to a job; to demand a guarantee of jobs or income; an end to foreclosures and evictions; to organize the unemployed and the employed into a united movement demanding jobs for all.
As the crisis unfolds, the question must be raised, what is the cause of the crisis? Paul Krugman, a liberal economist, cites the fact that the U.S. economy could create $30 trillion worth of goods and services in the next two years. That would be sufficient to vastly reduce unemployment.
Krugman, who recently won a Nobel Prize for economics, restricted his commentary to a criticism of Barack Obama’s economic program. He brushed by the fundamental question. He did not bother to ask why, when there is the economic capacity to employ all the workers, is unemployment going through the roof?
The answer is that while the U.S. economy can produce $30 trillion worth of goods and services, it is in the form of commodities that must be sold for profit and only for profit. Human need means nothing to capitalism.
It is not as if the masses of people do not need the $30 trillion worth of goods and services. In fact, right now they are being deprived of the very means of life by an economic storm artificially created by capitalism itself.
The masses have been impoverished for more than 30 years by union busting, wage and benefit cuts, massive destruction of jobs at living wages and their replacement by low-wage jobs. At the same time the corporations have vied with each other to capture markets and sell more and more—purely to make more profit. They fostered every kind of debt—credit card debt, mortgage debt, auto loan debt and so on—to keep the profits rolling in.
Finally the entire edifice has come crashing down in a crisis of capitalist overproduction. There are too many autos to sell at a profit. There are too many houses to sell at a profit. There is too much steel to sell at a profit. And so on. It has led to the wave of layoffs, foreclosures, evictions, hunger and homelessness.
As a system of exploitation for profit, capitalism itself is at the bottom of the crisis. As the workers and the oppressed awake to demand their rights, the ultimate aim must be the destruction of capitalism and the erection of a system run for human need, not for profit. That system is socialism.
Goldstein is the author of the recently published book “Low-Wage Capitalism: Colossus with Feet of Clay.” See lowwagecapitalism.com for information about the book and how to order it.
From remarks made during the Dec. 9 membership meeting of the New York branch of Workers World Party.
I would like to comment on the arrest of Illinois Gov. Rod Blagojevich this week.
It is certainly true that his arrest, coming in the midst of the UE workers’ sit-in at Republic Windows and Doors, was aimed at the UE workers, particularly since it came a day after Blagojevich was shown all over television standing outside the plant with the workers.
The occupation of Republic in Chicago, the Smithfield victory, the UAW struggle— the ‘Obama effect’ has stimulated hope among sections of the working class, especially the most downtrodden.
It is also true that the arrest was timed to prevent Blagojevich from carrying out his threat to suspend all transactions of the state with Bank of America, which he had announced the day before.
But I want to call attention to another important aspect of the arrest. It was directed against Barack Obama.
There has been much talk about whether or not Obama is going to initiate a “New Deal.” We don’t know what he is going to do. Regardless of his politics, regardless of his appointments—and we do not take responsibility for anything he may do—two days before the arrest, Obama did what no president has done since the Roosevelt administration. He came out unequivocally in favor of the UE workers and publicly stated that their demands should be met.
It is generally agreed that from a legal point of view U.S. Attorney Patrick Fitzgerald acted prematurely. He publicized a mere complaint. There have been no grand jury proceedings, no indictment, only a complaint filled with hearsay. The extraordinary thoroughness that Fitzgerald applied in the case of G. Gordon Liddy was thrown out the window. This time Fitzgerald sacrificed preparation for political timing.
The investigation into Blagojevich has been underway for six years. Why suddenly make it center stage on that day of all days? When UE workers in Chicago are engaged in a plant occupation, are supported by Obama and the governor and, what is most important, when the bosses are in the midst of a campaign to break the United Auto Workers union.
The action may have been directed to help Bank of America, but what do Bank of America and all the bosses know about sit-ins and plant occupations? They are more keenly aware of their role in the history of the U.S. class struggle than the workers.
They know that the greatest plant occupation in the history of this country was carried out by the UAW in 1936 and 1937. They know that this sit-in brought General Motors to its knees. They know that this occupation changed the face of the labor movement and won the right to industrial organization—and that it took place in Flint, Mich.
The bosses know that workers all around the region can quickly be reminded of this—especially as they see the attacks coming at them from all sides.
Obama’s statement of support was made in the midst of a struggle in which workers were claiming the right to seize private property, the property of Republic Windows and Doors, the property of the bosses, and hold it as part of protecting their own assets in the fight for their jobs. What could be more anathema to the bourgeoisie as they carry out round after round of layoffs?
While Obama carefully restricted his support to the workers’ right to their severance pay under federal law, nevertheless, it was a great morale builder for the workers.
This raid, dragging the governor to jail at six in the morning, was calculated to warn Obama not to do anything like this ever again. The fact that the future president of the United States utters a word in support of struggling workers during an oncoming depression is inflammatory in the extreme, as far as the bosses are concerned. It gives ammunition and encouragement to the rank and file and any militant leaders in every union to open up a struggle to save their jobs and to block concessions.
But more importantly, this plant occupation, this heroic sit-in, even though it involved only 250 to 300 workers, was taking place in the midst of a major campaign, by virtually all factions of the ruling class, to break the United Auto Workers union and force intolerable concessions down their throats.
Obama made his remarks not only in the midst of the UE plant occupation but at the height of the campaign to use the crisis of General Motors and Chrysler as a battering ram against the auto workers. Different factions of the ruling class have different approaches. But the fact is that the UAW is the big issue of concern, the overriding issue of the class struggle right now.
Negotiations for the auto bailout broke down when Senate Republicans demanded that the UAW bring wages and benefit levels down to those at Toyota, Honda and Nissan—all nonunion plants, mostly in the South. When UAW President Ron Gettelfinger could not agree to such onerous terms, negotiations over the bailout collapsed. But the right-wing senators were speaking the mind of most of the ruling class, which has been beating the drums for the UAW to make concessions since the question of the auto bailout first came up.
What has this to do with arresting Blagojevich and making the indictment against him public? It was calculated to put an end to any support by Obama for workers and to the plant occupation itself.
What did the Bank of America and JPMorganChase, Republic’s other creditor, want? They wanted this occupation off the front pages. They wanted the workers out of the plant. They did not want anything to prolong it, especially encouragement from Obama.
The minute they had the opportunity, they surrendered to the demands of the workers for severance pay and benefits owed in order to put an end to the occupation. They wanted to stem the virus of working-class resistance and plant occupation before it could spread—especially to the rest of the Midwest.
Of course, the workers had every right to take the settlement. This alone was a major victory. The Bank of America never gives anything to anybody. Without the struggle, they would never have given a nickel to anyone. Bank of America is throwing people out of their homes, denying credit, and laying off 30,000 to 35,000 of its own workers.
So let’s not forget what this attack on Blagojevich was about. It was an attempt to defuse the struggle of the workers and take it out of the limelight. And it was a warning to Obama to stay out of it.
Workers, no matter whether class-conscious or not, were in support of the UE workers. The occupation was universally supported among the workers and much of the middle class. It became a popular cause. Politicians and others jumped on the bandwagon.
Furthermore, it cannot be regarded as a mere coincidence that at this same moment the Smithfield workers in the right-to-work, anti-union state of North Carolina voted, after 15 years and numerous unsuccessful attempts, to have the United Food and Commercial Workers represent them.
This could be attributed to “the Obama effect” because of the hope and optimism his victory has stimulated among sections of the working class, especially the most downtrodden. Forget about what he may or may not do in the future.
During the great upsurge of the 1930s, organizers seized on the conciliatory attitude of the Roosevelt administration towards labor, telling workers, “President Roosevelt wants you to join the union.” Of course this was an exaggeration, but a believable one. The capitalists are supremely conscious of this potential.
This arrest and attack on Blagojevich cannot be seen in any other context than as an attack on Obama, on the autoworkers and on the working class as a whole. Right now, Fitzgerald has said that Obama is in the clear and has nothing to do with the scandal. But at the same time, the investigation is ongoing. The threat is always there to escalate the struggle further in the direction of the Obama administration—not only out of bourgeois political factionalism but also to push him back from any ideas about further supporting workers in struggle.
This is what class-conscious workers must keep in mind as they view this whole public relations extravaganza.
A final thought. The heroic struggle of the UE workers may not be over. They are still in it in the sense that they have not given up the idea of saving their jobs. Doing this with a down payment from the Bank of America and raising the rest of it from workers’ funds may have a difficult future in a capitalist environment. But it leaves open the possibility to renew demands that the Bank of America, the banks in general and the capitalist government use bailout money to keep the plant open.
The workers are still in it and we should keep our powder dry and be ready to do everything to support them if another chapter unfolds in this important struggle.
Goldstein is author of the newly released book “Low-Wage Capitalism—Colossus with Feet of Clay.”
"Low-Wage Capitalism by Fred Goldstein is a most timely and important work, as the working class prepares for a ¨fightback¨ during the greatest crisis of capitalism since the great depression."
Clarence Thomas, Executive Board ILWU Local 10 and co-chair of the Million Worker March Movement
This is from Michael Moore's appearance on Keith Olberman last night. Moore cited the Roosevelt administration's orders to the auto industry during World War II requiring the auto companies to suspend auto production and produce war material, tanks, motorized armored vehicles, jeeps,etc. He used this as an example of how Washington could order the auto industry to produce green autos, railroad cars, subway cars, buses and other means of mass transportation.
Moore's point was that this would not only save jobs, but create jobs. He pointed out the auto bosses' plan is to take $34 billion from Washington in return for destroying jobs. Destroying jobs "has been their plan for 30 years."
This concept could be taken up by the United Auto Workers, the steel workers, the rubber workers, glass workers, etc and turned into a demand that the government use whatever bailout money is required, including the money that is being handed to the banks, to keep open the auto industry and keep the auto workers working. This should apply across the board to the millions of workers affected by the current crisis in the auto industry.
Moore called for all the management to be fired and for Washington to take over the companies. But Washington is still run by big business and the workers would be subject to the capitalist state as their boss. The surest way for the workers' to protect their interests, would be for the workers themselves to take control of the industry!
When Barack Obama first began his campaign back in 2006, he and his advisors and backers in the establishment had as a priority trying to deal with long-neglected aspects of U.S. capitalist society that were in decay and were endangering the world position of U.S. imperialism.
The festering issues of health care, global warming and energy, declining education, antiquated infrastructure, the global isolation of U.S. imperialism and many others were on the agenda for a future Obama administration, which was supposed to “reach across the aisle” and work out bipartisan solutions. But these were all policy issues, issues of capitalist decay arising during a period when bourgeois politics has been in a factional logjam, unable to resolve anything other than to hand the corporations whatever they asked for and attack the workers and the oppressed—during the Clinton as well as the Bush administrations.
Now, as Obama gets ready to take office, the policy issues he wanted to address all have to be subordinated to an acute systemic crisis that is global in scope and historical in proportion.
Some 1.2 million workers have lost their jobs so far this year. Unemployment has jumped from 6.1 percent to 6.5 percent and is projected to soon rise to over 7 percent. Consumer spending dropped a record 3 percent in October. Retailers are girding for the worst shopping season on record.
Citibank has just announced 10,000 new layoffs [two days after this speech, the number rose to 53,000—ed.]; Sun Microsystems has announced 6,000 new layoffs; Circuit City, the second-largest electronics retailer in the country, closed down 155 stores and is filing for bankruptcy; and the second-largest mall operator in the country, General Growth Properties, which operates 200 malls in 44 states, is on the verge of bankruptcy.
Intel, the largest microchip maker in the world, has suffered a major decline in revenue. Caterpillar, the largest construction equipment maker in the capitalist world, is planning for a downturn. GE, a giant multinational conglomerate, is planning to cut back investment and workers.
The auto industry is in crisis, with sales dropping and losses and layoffs rising. General Motors is hinting at bankruptcy in a public relations campaign to get a bailout from the Treasury—also a dangerous game of psychological warfare against the United Auto Workers, as the company is trying to set the stage to reopen contracts and get major concessions. GM recently announced it will end health care coverage for 100,000 white-collar retirees by the end of the year.
As the G-20 meet in Washington, the capitalist economies of Europe and Japan are in recession. This is the first time since World War II that the three major centers of imperialism—the U.S., Europe and Japan—have gone into recession within the same year. Japan, with the second-largest economy in the capitalist world, has had six consecutive months of contraction; Germany, the fourth-largest economy, has had six.
China, Brazil, Russia and India, the world’s most populous countries, have also had major declines in growth in the last quarter.
It is evident that there is a crisis of production and employment in the entire economic system.
The cause of the crisis can be reduced to two words: capitalist exploitation.
Why are all the toxic mortgages and other debt-backed securities going bad? Because they were based on collecting the future wages of the workers. Mortgage debt, credit card debt, school loan debt, auto loan debt, debt to pay medical bills, and all the other debts were bundled up and sold around the world. After 30 years of falling wages and a growing consumer credit system, the working class has become deeply indebted. African-American, Latin@, Asian and Native workers have suffered the most, especially single women.
Interest and fees on working-class debt have become a major source of profit for finance capital. The capitalist class, in its various forms as lenders, mortgage brokers, credit card companies, banks, auto finance companies and so on were taking advantage of the dire needs of workers in order to promote credit. These money grubbers turned around and resold the workers’ IOUs in bundles to make a quick profit.
Meanwhile, other sections of the capitalist class were intensifying the exploitation of workers on the job by busting unions, cutting wages and benefits, shortening hours, laying off and outsourcing to contract labor. The medical insurance industry, pharmaceuticals, hospitals, all raised costs to boost profits. Agribusiness and the oil barons raised the price of food and fuels, fueling inflation in the things workers need to live.
Sooner or later the whole debt structure had to collapse—and the cause was capitalist exploitation, i.e., the profit system.
The capitalist class has become more and more reliant upon debt as an artificial means of counteracting the growing problem of capitalist overproduction. As technology improves, the increased rate of exploitation and the worldwide wage competition drive wages down everywhere, making it harder for the capitalist system to generate a strong boom that can create jobs. This has become a long-term trend and signifies a new phase in the general crisis of capitalism.
Historically a capitalist recovery begins slowly as inventories are liquidated and then surges until there is another bust. Engels described the process of the classical capital bust-boom-bust cycle in his great work, “Socialism: Utopian and Scientific.”
His description still holds today, but with this modification. In the past several decades, the boom part of the cycle has become weaker and weaker. And it is this phase that creates a labor shortage, providing workers with jobs and putting them in a stronger position to bargain for higher wages.
The debt-fueled housing boom is an example of how U.S. capitalism has reached a stage of dependence upon debt to artificially stimulate the economy. The recovery from the last recession was a jobless recovery. From 2001 to 2004, after the dot-com collapse, profits were slowly recovering but jobs were still being lost. To pump up the economy and avoid a “double dip,” a lapse into a second recession, the Federal Reserve pumped billions of dollars of credit into the system by lowering borrowing costs for the banks. Much of the cheap money was used to finance the housing boom.
A housing boom is one of those areas, similar to auto, that ripples through the economy and multiplies jobs. It can help temporarily to push back a downturn. But the housing boom was all based on easy credit and speculation. It was bound to end. The price of housing went up. The supply went up. Soon there were more houses on the market than could be sold. A crisis of overproduction in housing ensued and the collapse followed, precipitating the credit crisis and the banking crisis that followed.
Without the housing boom, the economic crisis of overproduction might have come sooner.
If the present crisis were caused by financial manipulation alone, it could be cured by financial measures. But the Treasury under Secretary Henry Paulson and the Federal Reserve under Ben Bernanke have poured hundreds of billions into U.S. banks and are promising hundreds of billions more.
The German central bank has poured billions into their economy. The Bank of London has nationalized banks and also poured in hundreds of billions in bailout money. None of this has stopped the growing momentum of layoffs and short hours.
Why? Because this crisis is a crisis of overproduction. Bernanke can lower the interest rate to zero—Japan may do just that shortly. But even zero interest rates cannot produce lending if the workers are broke and there are no profits to be made in the marketplace. As they say on Wall Street, you can’t push a string.
Why would banks lend in an environment of economic crisis? It is not lack of funds or a matter of distrust that is keeping them from lending. Layoffs lead to lower spending which leads to lower profits and more layoffs. That is the classical capitalist cycle, but now it is gripping the entire capitalist world at once. There are no markets that are not shrinking. There is no haven in the world capitalist economy for investment and sales sufficient to pull them out of the crisis.
This is what globalization looks like in a period of contraction.
No one knows where this crisis is going. The Obama administration and the new regime of financial advisors may take measures to ease the foreclosure crisis and put some money into workers’ pockets. They may even try to create jobs building infrastructure. Of course, as a party, we support measures that will ease the suffering of the workers and the oppressed. But we also know that band-aids cannot overcome the contradictions of capitalism.
The beginning of a capitalist downturn hits the workers hard. The early phase of the struggle is defensive, to ward off the onslaught of layoffs and keep people in their homes. This was the course that the struggle took during the depression of the 1930s with the formation of the unemployed councils, and the move by working-class organizations to put hundreds of thousands of families back in their homes when they were evicted.
Our comrades in Detroit, Los Angeles, Boston and around the country are taking the initiative to begin those defensive struggles.
Later in the thirties came an offensive struggle with general strikes in San Francisco, Toledo and Minneapolis in 1934 and finally the great sit-down strikes of 1936 and 1937, which turned the tide in favor of the working class as a whole. We must be clear about what phase we are in, while retaining our revolutionary socialist perspective.
When the USSR and Eastern Europe collapsed, WWP chair Sam Marcy initiated a process of ideological rearmament—a study of Marxist and Leninist theory—in the anticipation that there would be a wholesale retreat from the revolutionary communist perspective.
From that period up until the onset of the present crisis, we have had to wage theoretical arguments to defend our position that the system of private property, in which a tiny group of millionaires and billionaires controls the means of life for billions of people around the globe, contains the seeds of crisis and disaster for the worldwide working class and the oppressed. With this current crisis, the question is no longer theoretical. The world capitalist crisis opens the door to struggle and to promoting socialism as the answer.
The workers need to own this vast, global system of production that they operate 24 hours a day and run society for human need and not for profit. This is the only way to abolish exploitation, racism, national oppression, sexism and patriarchy, oppression of LGBT people, imperialist war and intervention, and to tear down the walls of the prisons and their death houses.
"With the capitalist system demonstrably unfair,irrational, and prone to intermittent crises,it is useful, indeed refreshing, to see a Marxist analysisof globalization and its effects on working people.Fred Goldstein's LOW-WAGE CAPITALISM does exactly that ."- Howard Zinn
"Lucid, deeply accurate and informative, as relevant and useful as a book can be, Goldstein offers a compelling analysis of theexploitative world of global corporate capitalism." - Michael Parenti, author of Contrary Notions
“From the point of view of Filipino workers in the United States, the largest exploited and abused Filipino workforce outside the Philippines, with over 4 million in the country, we are pleased with the expose of imperialist globalization as the main culprit of global forced migration. The Philippines remains a semi-feudal and semi-colonial country, a result of centuries of colonial plunder by Western powers and their cultivation of local reactionary puppets to the dictates of imperialist globalization. Only by understanding capitalism and monopoly capitalism can we understand the root causes of global poverty and migration.”
This is a must read book for those seeking answers to the current crisis in world capitalism. With the economic meltdown of 2008, the very future of the system of international finance capital has been thrown into question....
Goldstein, utilizing marxist economic analysis, has approached this crisis from the standpoint of those who are most seriously affected: the working class, the nationally oppressed and women. The author makes the case in very simple and straight forward language that the crisis is one of capitalist overproduction.
According to Goldstein: "This cycle dictates that, during periods of capitalist expansion, the powers of production increase ever more rapidly while the powers of consumption of society expand only gradually. Sooner or later production outstrips consumption. Profit does not arrive in corporate bank accounts until sales take place. If commodities cannot be sold at a profit, inventories pile up, production stops, workers are laid off, and a crisis ensues. That is the crude dynamic of the capitalist crisis of overproduction." (pp. xi-xii)....
Not only does Goldstein analyze the character of the modern-day capitalist crisis but he is bold enough to put forward a set of possible demands that can serve as a rallying point for a national and international fightback movement. Looking at the recent struggles that have taken place over the last three decades during the decline, he firmly believes that the present crisis can be reversed through a proactive approach by the working class and the oppressed. read the full review
This book helps us to understand the root of the present neoliberal globalization - a new stage of the international capitalist crisis - especially right after two very important events in the late twentieth century: the scientific-technological revolution in production, communications, and transportation, and the demise of the Soviet Union and Eastern Europe - to which can be added the energy, environment and food crisis with great detrimental repercussions for workers.
Neoliberal globalization which was imposed by U.S. imperialism devastated and dominated Latin American economies forcing millions of workers to emigrate to the U.S. looking for jobs. They found exploitation and humiliation.
"160 years after the publication of the Communist Manifesto, Fred Goldstein takes on the challenge of applying Marxist political economy to the burgeoning crisis of capitalist globalization in the 21st century. Not only does he provide a concise analysis of the recent period, but the author is bold enough to advance what could very well be the outlines of a fight back program for workers and the oppressed that will guarantee a socialist future."
- Abayomi Azikiwe, Editor Pan-African News Wire Contributing Editor for Workers World
"We need to get this book into the hands of every worker. It clearly explains the capitalist economic threat to our jobs, our pensions and our homes. But, even more importantly, it shows us how we can fight back and win!"
- David Sole, President UAW Local 2334, Detroit, Michigan
Tres cuartos de millón de trabajador@s ya han sido despedid@s este año, incrementando la cifra oficial de desempleo a más de 9 millones. Billones (millones de millones) de dolares en fondos de retiro han desaparecido en la bolsa de valores en los últimos meses. Más de 10.000 hogares están siendo embargados al día y los desahucios no cesan. El dinero para préstamos estudiantiles se ha agotado. La deuda de tarjetas de crédito está a un nivel sin precedente. El desempleo está subiendo al igual que los precios de los alimentos, las utilidades (gas, electricidad, agua) y la gasolina. La producción y las ventas disminuyen incesantemente. El pronóstico es que las cosas van a empeorar muchísimo más.
Todos los oficiales financieros más poderosos y l@s líderes políticos de los países capitalistas más ricos del mundo han tratado de detener el devastador avance de esta tormenta económica. Han fracasado. La crisis se siente como una fuerza de la naturaleza. Barre billones de dólares en rescate para los bancos y sigue hacia adelante. Se lleva todo lo que encuentra en su camino—hogares, empleos y la vida de l@s trabajador@s.
Pero esta crisis no es una fuerza de la naturaleza. Es la fuerza del sistema capitalista en crisis.
Esta crisis comenzó cuando la burbuja de las viviendas explotó. Los bancos capitalistas prestaban dinero a los promotores inmobiliarios que buscaban obtener ganancias construyendo casas. Los mismos bancos le prestaban dinero a las compañías hipotecarias para que estas hicieran todos los préstamos posibles. La meta era la de aumentar las ganancias.
De pronto había más casas que las que l@s trabajador@s y la clase media podían comprar. El precio de las viviendas bajó. Las hipotecas no podían ser refinanciadas. L@s trabajador@s no podían pagar los agudos incrementos en intereses de los préstamos. Los bancos dejaron de dar préstamos. Millones de viviendas fueron embargadas.
En otras palabras, ¡la gente se quedó sin hogar porque había demasiadas casas! No que demasiadas casas fueran necesitadas o que ya estuvieran construidas, sino muchas casas que pudieran ser vendidas obteniendo ganancias.
Además, l@s trabajador@s que construyen estas casas y tod@s l@s trabajador@s que fabrican las cosas necesarias para éstas, están perdiendo sus empleos porque estas casas ya no se pueden vender por lucro.
Esta es la esencia de todas las crisis capitalistas que han ocurrido desde la primera crisis en 1825. Es la crisis de sobreproducción.
El desastre financiero global fue iniciado por las malas deudas hipotecarias vendidas por todo el mundo. Pero lo que las convirtió en malas deudas, en un análisis final, fue la sobreproducción de viviendas.
Ahora la crisis de sobreproducción está afectando a la industria automovilística. De la industria inmobiliaria y la automovilística se está extendiendo a toda la economía. Los mercados de valores se están desplomando debido a que los rescates financieros, los billones de dólares inyectados a los bancos, no pueden detener la crisis económica capitalista.
Capitalismo refuerza explotación y desigualdad
¿Por qué esto es inevitable? Bajo el sistema capitalista todos los medios globales de producción son propiedad privada de un grupo minúsculo de millonarios y multimillonarios. Las metas de producción son establecidas en secreto dentro de cada imperio corporativo por los ejecutivos que son los agentes de las corporaciones. La meta es la de amasar el máximo de ganancias. Pero ninguna compañía sabe cuánto se puede vender obteniendo ganancias.
A nivel corporativo la producción está planificada. A nivel de la sociedad, la producción está socializada globalmente pero sin ninguna planificación. Esto se llama la anarquía en la producción. Esto es lo que inevitablemente conduce a la sobreproducción.
La crisis es también inevitable bajo el capitalismo porque l@s trabajador@s son una clase explotada. Mientras más bajos sus salarios, más grandes son las ganancias de los patronos. Las ganancias consisten del trabajo no remunerado. Los patronos toman los productos, los servicios y la infraestructura creada por l@s trabajador@s, los venden en el mercado, pagan a l@s trabajador@s lo más poco posible y se quedan con el resto. Tod@s l@s capitalistas intentan bajar los salarios para obtener más ganancias.
La acción colectiva de la clase capitalista, ayudada por el estado, ha forzado la disminución de los salarios y las condiciones de vida de la clase trabajadora multinacional de los EEUU durante los últimos 30 años. Bajo el sistema de explotación capitalista las riquezas fluyen hacia la cumbre, y el nivel de desigualdad es obsceno.
El uno por ciento de la población de los EEUU, los súper ricos que tienen todas las llaves del poder en la sociedad, era dueño del 34,3 por ciento de las riquezas en el 2004. El 90 por ciento más pobre era dueño de un 28,7 por ciento. Las 400 personas más ricas eran propietarias de $1260 mil millones en 2006, más que los $470 mil millones en 1995.
El racismo y la opresión nacional juegan un papel importante en la distribución de las riquezas bajo el sistema capitalista. Comenzando con que los pueblos africano-americano, latino, asiático, e indígena poseían menos, ahora sufrirán más los golpes de esta crisis. Por ejemplo, la riqueza promedio (el ingreso, los ahorros y otros bienes) de los hogares según la raza en 2004 era de $140.700 para los blancos, $20.600 para los africano-americanos, y $18.600 para los latinos. Esto significa que durante la crisis económica actual, los pueblos oprimidos no tienen casi nada para amortiguar el impacto de los bajos salarios, los despidos y los desahucios.
La opresión y la discriminación económica bajo el capitalismo también afectan a las mujeres y a la gente lesbiana, gay, bisexual y transgénera. Al igual que con el racismo, los patronos utilizan el sexo y el prejuicio de género como herramienta para dividir y vencer. La creciente caza de brujas contra l@s trabajador@s indocumentad@s tiene la misma meta venenosa de dividir a l@s trabajador@s. ¿De qué otra forma puede el uno por ciento de la población dominar a l@s trabajador@s y oprimid@s fuera de sembrar división y desunión?
La unidad de clase es la pesadilla de la clase dominante. Mientras la crisis actual devora sectores más amplios de l@s trabajador@s, el potencial de alcanzar esa unidad se vuelve más fuerte.
La sed de ganancias y de explotación nacionalmente es la misma que impulsa la guerra, la ocupación y las intervenciones en el exterior. Billones de dólares han sido repartidos a las Fuerzas Armadas para proteger los intereses corporativos en el Medio Oriente, Asia, África, y Latinoamérica. El Pentágono no es nada más que el guardián del capitalismo de los EEUU alrededor del mundo –desde el Golfo Pérsico hasta África del Sur, el Pacifico y el Caribe. Y mientras el capitalismo se expande lleva en su estela la destrucción ambiental.
Cada día se ve más claro que el capitalismo como sistema económico tiene que terminar. Un sistema en el cual hay gente sin vivienda porque hay demasiadas casas, tiene que terminar. Un sistema en el que l@s trabajador@s pierden su empleo y se hunden en la pobreza porque han producido demasiada riqueza, es un sistema que debe ser destruido. Un sistema que no puede proveer ni empleo ni educación sino encarcelación a 2.4 millones de personas, la mayoría de ellas afro-americanas y latinas, es un sistema fracasado y no merece seguir un día más.
Si Cuba lo puede hacer, ¿por qué no los Estados Unidos?
Este sistema debe ser remplazado por un sistema en el cual la producción exista para cumplir con las necesidades humanas, no para obtener ganancias. La clase que produce la riqueza, la clase trabajadora multinacional, debe ser la dueña y distribuidora de esa riqueza.
Billones de dólares están siendo utilizados para rescatar los bancos y financiar al Pentágono bajo el capitalismo. Bajo el socialismo, ese dinero garantizaría que cada persona tuviera empleo e ingresos adecuados, cuidado de salud gratis, vivienda a bajo costo, educación gratis, alimentos saludables a costo razonable, y mucho más. El bienestar de la clase trabajadora multinacional sería el objetivo de la sociedad, en vez de su explotación como es bajo el capitalismo.
Si eso suena utópico, el hecho es que Cuba socialista, aunque pobre, con todas sus dificultades, ha hecho mucho por establecer estos derechos para el pueblo cubano. ¿Cómo es posible que un país que quedó empobrecido por siglos de colonialismo español y luego estadounidense, y que ha vivido 50 años bajo un bloqueo de los EEUU, pueda garantizar más derechos económicos a su pueblo que el imperialismo estadounidense con su economía de $11 billones?
¿Por qué es que el pueblo cubano tiene una expectativa de vida más larga y una tasa de mortalidad infantil más baja que le gente oprimida que vive en Harlem, en el South Side de Chicago, en Los Ángeles o en los barrios pobres de este país? La respuesta es que Cuba abolió el capitalismo, destruyó el estado capitalista en una lucha revolucionaria y tomó el camino hacia el socialismo.
La actual crisis económica está trayendo un aumento en el sufrimiento de l@s trabajador@s estadounidenses y está esparciéndose por todo el mundo capitalista. Muestra claramente la necesidad de una lucha militante por la clase trabajadora.
La clase dominante quiere poner la crisis de su sistema en las espaldas de l@s trabajador@s y oprimid@s. Pero el objetivo fundamental de la clase trabajadora debe ser hacer de su lucha una lucha para abolir la pertenencia privada capitalista de la tremenda riqueza que l@s trabajador@s han creado.
El fin de la apropiación privada de los modos de producción equivaldría a un enorme incremento en la propiedad personal y social de l@s trabajador@s. Actualmente la propiedad privada está estrangulando a la humanidad y destruyendo el planeta.
El objetivo final debe ser el de eliminar las crisis económicas, la explotación, la opresión y las guerras de una vez por todas. Y la única forma de hacer esto es establecer una sociedad socialista aquí y en todo el mundo, libre de patronos codiciosos y de desigualdad.
(Copyright 2008, Workers World. Todos los derechos reservados. Permiso para reimprimir artículos dado si se cita la fuente. Para más información escriba a: Mundo Obrero/Workers World, 55 W. 17 St., NY, NY 10011; por e-mail: ww@workers.org. WWW: http://www.workers.org)
Three-quarters of a million workers have already been laid off this year, bringing the official total of unemployed to over 9 million. Trillions of dollars in retirement funds have been wiped out in the stock market in the last few months. Over 10,000 households a day are being foreclosed, and evictions are rampant. Money for student loans has dried up. Credit card debt is at a record high. Unemployment is rising along with food, utility and gas prices. Production and sales are falling relentlessly. The forecast is for things to get worse—a lot worse.
All the most powerful financial officials and political leaders of the richest capitalist countries in the world have tried to stop the devastating advance of this economic storm. They have failed. The crisis feels like a force of nature. It brushes aside trillions of dollars in bailouts for the banks and keeps going. It is taking down everything in its path–homes, jobs and workers’ lives.
But this crisis is not a force of nature. It is the force of the capitalist system in crisis.
This crisis began when the housing bubble burst. Capitalist banks were lending money to profit-seeking real estate developers to build houses. The same banks were lending money to mortgage companies to make as many loans as they could. The goal was to boost profits.
Soon there were more houses than the workers and the middle class could buy. The prices of homes fell. Mortgages could not be refinanced. Workers could not pay the steep increases in interest rates built into their loans. Banks stopped lending. Millions of households went into foreclosure.
Put simply, people became homeless because there were too many houses! Not too many houses that were needed or already here, but too many houses that can be sold at a profit. Furthermore, the workers who build homes and all the workers who make the things that go into homes are losing their jobs because these homes can no longer be sold at a profit.
That is the essence of all the capitalist crises that have occurred since the first crisis in 1825. It is the crisis of overproduction.
The global financial meltdown was triggered by the bad mortgage debts sold around the world. But what turned those debts into bad debts, in the final analysis, was the overproduction of housing.
Now the crisis of overproduction is sweeping the auto industry. From the auto industry and the housing industry it is spreading throughout the economy. The stock markets are plummeting because the financial bailouts, the pumping of trillions of dollars into the banks, cannot stop the capitalist economic crisis.
Capitalism reinforces exploitation, inequality
Why is this inevitable? Under the capitalist system there is private ownership of the entire global means of production by a tiny group of millionaires and billionaires. Production goals are set inside each corporate empire in secret by the executives, who are their corporate agents. The goal is to amass maximum profits. But no company knows how much can really be sold at a profit.
On a corporate level production, is planned. On a society-wide level, production is socialized globally but completely unplanned. This is called the anarchy of production. This is what inevitably leads to overproduction.
The crisis is also inevitable under capitalism because the workers are an exploited class. The lower their wages are, the higher the bosses’ profits. Profits consist of unpaid labor. The bosses take the products, services and infrastructure created by the workers, sell them on the market, pay the workers as little as possible and keep the rest. Every capitalist tries to lower wages to gain higher profits.
The collective action of the capitalist class, aided by the state, has driven down the wages and living standards of the multinational working class in the last thirty years. Under the system of capitalist exploitation wealth flows to the top, and the level of inequality is obscene.
The top 1 percent of the U.S. population, the super-rich who have all the levers of power in society, owned 34.3 percent of the wealth in 2004. The bottom 90 percent owned 28.7 percent. The top 400 individuals owned $1.26 trillion in 2006, up from $470 billion in 1995.
Racism and national oppression play a major role in the distribution of wealth under capitalism. The African-American, Latin@, Asian and Native peoples had the least to begin with and will suffer the most under the blows of this crisis. For example, the median wealth (that is, savings and other assets) of households by race in 2004 was $140,700 for whites, $20,600 for African Americans and $18,600 for Latin@s. (See graphs.) This means that in this developing capitalist economic crisis the oppressed have almost nothing to fall back on to cushion the low wages, the layoffs and the foreclosures.
Oppression and economic discrimination also fall on women and lesbian, gay, bi and trans people under capitalism. Like racism, the bosses use sex and gender bias as a way to divide and conquer. The growing witch-hunt against undocumented workers has the same poisonous, divisive goal. How else could 1 percent of the population dominate the workers and oppressed other than by sowing division and disunity?
Class unity is the nightmare of the ruling class. As the present crisis engulfs wider and wider sections of the workers, the potential for bringing about that unity is growing stronger.
The drive for profit and exploitation here at home is the same drive behind war, occupation and intervention abroad. Trillions of dollars have been given to the military to protect corporate interests in the Middle East, Asia, Africa and Latin America. The Pentagon is nothing more than an enforcer for U.S. capitalism around the world–from the Persian Gulf to Southern Africa to the Pacific and the Caribbean. And as capitalism expands, it brings environmental destruction in its wake.
It is becoming clearer every day that capitalism as a system has got to go. A system in which people are homeless because there are too many homes must go. A system in which workers are losing their jobs and being plunged into poverty because they have produced too much wealth is a system that must be destroyed. A system which cannot provide jobs and education but imprisons 2.4 million people, the majority of them Black and Latin@, is bankrupt and does not deserve to continue another day.
If Cuba can do it, why not the U.S.
It must be replaced by a system where production takes place for human need, not for profit. The class that produces the wealth, the multinational working class, should own and distribute that wealth.
Trillions of dollars are now being used to bail out the banks and fund the Pentagon under capitalism. Under socialism, that money would guarantee that everyone would have a decent job and income, free health care, affordable housing, free education, low-cost transportation, healthy, reasonably priced food and much more. The well-being of the multinational working class would be the goal of society, not their exploitation as it is under capitalism.
If this sounds utopian, the fact is that socialist Cuba, poor as it is, with all its difficulties, has gone a long distance toward establishing these rights for the Cuban people. How is it possible that a country that was impoverished by centuries of Spanish and then U.S. colonial rule and that has lived for 50 years under a U.S. blockade, could guarantee more economic rights to its people than U.S. imperialism with its $11 trillion economy?
Why is it that the Cuban people have a longer life expectancy and lower infant mortality rate than oppressed people living in Harlem, Chicago’s South Side, Los Angeles or the barrios of this country? The answer is that Cuba abolished capitalism, destroyed the capitalist state in a revolutionary struggle and took the road toward socialism.
The present economic crisis is bringing increased suffering to the workers in the U.S. and is spreading around the capitalist world. It demonstrates clearly the need for a mobilized, militant, mass working-class fightback.
The bosses want to push the crisis of their system onto the backs of the workers and the oppressed. But the ultimate goal of the working class must be to turn their fight into a struggle to abolish capitalist private ownership of the tremendous wealth that the workers have created.
The end of private ownership of the means of production would mean a vast increase in the personal property and social property of the workers. Right now, private ownership is strangling humanity and destroying the planet.
The final goal must be to eliminate economic crises, exploitation, oppression and war once and for all. The only way to do that is to establish a socialist society—free from greedy bosses and inequality—here and worldwide.
Articles copyright 1995-2008 Workers World. Verbatim copying and distribution of this entire article is permitted in any medium without royalty provided this notice is preserved.
Following is an excerpt from the introduction to the forthcoming book “Low-Wage Capitalism” by Fred Goldstein to be published by World View Forum.
The Crisis within the Crisis
As the crisis mounts there will be finger pointing by politicians and pundits alike, meant to assuage the anger of the masses. Official opinion is blaming the situation on greed and on a failure of regulation. To be sure, the bankers on Wall Street are voracious and greedy. And it is obvious that the destruction of regulatory restraint on finance capital opened the door wide to an escalation of gambling and speculation—to the “casino” economy.
This deregulation began with the Reagan administration, passed a milestone in the Clinton administration with the repeal of the Depression-era Glass-Steagall Act, and continued in the current Bush administration. Alan Greenspan, former head of the Federal Reserve System, presided over much of this deregulation during his reign of 19 years, from 1987 to 2006.
But to say that deregulation is the cause of capitalist excesses is to put the cart before the horse. It is the irrepressible capitalist lust for profit itself that leads to excesses. These excesses, such as the wild speculation in stocks and land deals that led up to the market crash of 1929, led to New Deal-era regulations restricting the financiers—but only after the speculative horse was out of the barn and millions had been ruined.
The gradually accumulating need of capital to engage in speculation inevitably results in the destruction of regulatory restraint. The system itself creates excess money capital and drives it more and more toward financial speculation and investment in paper wealth that has no relationship to underlying value.
The fact is that the bankers and the rich in general have vastly increased their fortunes in the last three decades. Income inequality in the U.S. has become notorious around the world. For example, in 1976 the top 1 percent of households received 8.9 percent of total income. In 2005 the top 1 percent received 21.8 percent—the highest percentage of total household income since 1928, the year before the stock market crashed. (Inequality.org)
From 2000 to 2007 the wealthiest 400 individuals in the U.S. got a $670-billion increase in their wealth and owned $1.5 trillion. While the top 1 percent of households earn more than the bottom 50 percent, they own more than 90 percent of the wealth. (Figures from Sen. Bernie Sanders’ speech against the bailout.) These are truly staggering numbers and have profound implications for the profit system.
The working class produces all wealth, all value in society. The class struggle is really a struggle over which class will get a larger or smaller share in the social surplus created by labor. If the bosses get more, the workers get less, and vice versa. This is what makes class antagonisms irreconcilable.
Saying that there is growing income inequality in the U.S. is really a masked way of saying that there has been a broad redivision of the social surplus in favor of the capitalist class and to the detriment of the working class. The bosses and bankers have taken a larger and larger relative share and the working class has received a correspondingly smaller share.
However, the rate at which the owners of capital have accumulated this wealth exceeds the rate at which it can be reinvested profitably in productive capital. The scientific-technological revolution has made business more and more productive. The workers turn out more goods and services in less time with each new advance in technology.
Furthermore, the anarchy of production—that is, the unplanned and competitive nature of capitalist production—sends each capitalist grouping in search of greater and greater market share in pursuit of profit, to the point that they collectively produce a glut of commodities on the market and can no longer sell them at a profit. This is a fundamental feature of capitalism and cannot be eliminated.
And after the rich spend billions on yachts, jets, mansions, servants and every form of obscene luxury, they still have hundreds of billions in money capital left over. And, as Karl Marx showed, capital cannot rest, cannot remain idle. It seeks profit, and it seeks to maximize profit.
For example, the two largest industrial corporations in the U.S.—General Electric and General Motors—both have huge financial subdivisions. GE plows billions in profits into GE Capital, which invests tens of billions in loans all over the globe. GM’s financial arm is GMAC. (In 2008, to raise capital, it sold 51 percent of GMAC to Cerberus, a private equity firm.) While GM has downsized its production and forced a large part of its workforce to take buyouts, the company has expanded its lending. The same goes for Ford, Chrysler and other industrial giants. Instead of investing surplus capital in their own companies, they use it to make loans.
The collapse of the housing boom in August 2007, followed by turmoil in the capital markets, was only the latest in a series of capitalist crises.
During the Reagan administration, a severe recession in 1982 and 1983 sent unemployment above 11 percent. The capitalist class used the opportunity to begin the technological restructuring of industry, leading to millions of workers losing high-paying jobs. Reagan then stimulated the economy with $2 trillion in military spending, using Cold War propaganda to justify this huge handout to the military-industrial complex.
The economy expanded and the stock market boomed again—until it collapsed in October 1987 with record losses. Several trillion dollars of paper wealth were wiped out. An economic collapse was prevented only when Alan Greenspan, who was appointed head of the Federal Reserve in August 1987, poured tens of billions of dollars into the financial system to support the banks and the stock market on an emergency basis. This emergency rescue of the economy lasted only until 1991, when there was another recession.
However, the collapse of the USSR, also in 1991, stimulated a decade of capitalist expansion. Capital flooded into the former Soviet Union, Eastern Europe, India and other places. The upturn in economic output accelerated in the mid-1990s with the development of the Internet and related technologies. From 1995 to 2000, venture capitalists, who are really fronts for the big banks, poured billions of dollars in speculative capital into technology companies. New companies were being created on a daily basis. The stock market boomed, creating the so-called “dot-com” bubble—until the overproduction of technology led to another collapse, beginning in March 2000. From that time until October 2002, $5 trillion in paper wealth was wiped out and an economic downturn developed simultaneously.
In the 110 years since the Spanish-American war of conquest, imperialist capitalism has brought an endless cycle of wars, recessions, depressions and more wars. After each economic downturn, the system has had to resort to military expansion and financial manipulation to revive itself.
During the depression of the 1930s, Franklin D. Roosevelt tried to get the economy going with the Works Project Administration and by allowing workers’ wages to rise. But by 1937-1938, after a brief uptick, there was a second depression. Only preparations for World War II and conquest in the Pacific and Europe revived the U.S. economy.
Throughout the entire Cold War period, U.S. capitalism was dependent on military spending to keep its economy going. The growth of the military-industrial complex, with its web of prime contractors and tens of thousands of subcontractors thriving on Pentagon appropriations for war and for arms exports, was the principal means of keeping the capitalist economy from sinking into stagnation and depression.
This history illustrates that since the turn of the twentieth century, capitalism, in order to sustain itself, has had to resort to artificial measures that bring disaster in their wake, in the form of war, depression or both.
Sept. 30—The political and financial establishment of U.S. capitalism has been stunned by the failure of its initial attempt to get Congress to pass a $700-billion handout to the banks.
Against a background of bank failures in the U.S. and Europe and appeals from the White House and the Treasury secretary, the House of Representatives on Sept. 29 defeated the bailout bill, 228 to 205. Following the vote, all three U.S. stock markets had historic drops, global stock markets initially plunged, and credit markets tightened up as fear struck Wall Street.
The vote was a defeat for a triple alliance: the bankers, represented by Secretary of the Treasury Henry Paulson and Federal Reserve Chair Ben Bernanke; the Bush administration; and the Democratic Party leadership. They all had labored mightily to sell the bailout.
It is highly likely that another round of political pressure from above will lead to the banks getting their way in the long run. Already the new line coming from the corporate media is to threaten workers that there will be no paychecks unless some version of the bill is passed. But with e-mails and phone calls to politicians running against the bill by 100 and 200 to 1 before the vote, the political pressure from below has for the moment overcome Paulson, Bernanke and company.
Capitalism’s faithful parties gripped by fear
The growing economic crisis produced a political crisis in the two faithful parties of capitalism. On the one hand, the Democratic Party leadership was unable to force some 40 percent of its members to sign on to this gigantic giveaway to billionaires this time around, especially in the face of mounting foreclosures and layoffs. It was particularly noticeable that a majority of the Congressional Black Caucus and Congressional Hispanic Caucus refused to sign on.
On the other hand, the Republican right wing tried to pose as advocates for the people, spouting hypocritical demagogy against “big government” and greedy bankers. But in actuality, their proposals were to further deregulate the banking industry to allow hedge fund gamblers and private equity billionaires to enter the bailout racket.
Of course, the right-wing opposition to “big government” does not extend to the growth of the Pentagon and its trillion-dollar war in Iraq, the growth of the repressive apparatus of Homeland Security to persecute immigrants and undocumented workers, the growth of the FBI, the CIA and so on. These ideologues are only against government intervention that might put restraints on the unbridled profit-seeking activity of big business.
It is hard to tell whether these right-wingers voted “no” out of concerns of ideology or pragmatic protection of their seats in the House or both. Whatever their motives, their political rhetoric against “big government,” which used to be applauded on Wall Street, has suddenly been made obsolete by the present crisis.
The once high-and-mighty tycoons of Wall Street used to get their assistance quietly, behind the scenes, from the Federal Reserve. In the present crisis they suddenly find themselves in desperate need of openly and directly getting their hands on the entire U.S. Treasury. The bankers behind the present crisis now need to rid themselves of trillions of dollars in toxic debts that they acquired by swindling the workers and then swindling the rest of the world into buying these bad mortgages. The “no big government” right-wingers, once praised by Wall Street, are completely out of sync with the needs of their masters in the present crisis.
Whatever the ultimate fate of the bailout bill, two important things stand out. First, the working class, the oppressed, everyone who is suffering foreclosure, job layoffs, lack of health care and other hardships, must formulate their own program of demands to solve their problems. And second, the people must wage an independent struggle to fight for these demands.
What the bailout bill says
One look at the wording of the bailout bill tells why. The Democratic Party leadership tried to wrap the bill in appealing language about aid to homeowners, accountability, oversight, etc. But this is mainly deception to provide a political cover to shield the politicians in the event of an outright rebellion.
In the matter of stopping foreclosures, the bill calls on the secretary of the Treasury “to encourage the servicers of the underlying mortgages ... to take advantage” of various programs to “minimize foreclosures.” In other words, foreclosure protection is completely voluntary and depends entirely on the will of the mortgage holder.
As for the authority of Paulson to run the show, the bill states that “The Secretary is authorized to ... purchase, and to make and fund commitments to purchase, troubled assets from any financial institution, on such terms and conditions as are deemed necessary by the Secretary, and in accordance with ... the policies and procedures developed and published by the Secretary.”
Paulson was the former CEO at Goldman Sachs investment bank. He is the point man for the biggest bankers. This bill would give him the sole authority to deal not only with mortgage debt, but also with “any other financial instrument that the Secretary, after consultation with the Chairman of the Board of Governors of the Federal Reserve System, determines the purchase of which is necessary to promote financial market stability.” In other words, Paulson can buy worthless credit card debt, student loan debt, auto loan debt, or any other type of debt from any financial institution that he pleases.
But the Treasury will be under no obligation whatsoever to give debt assistance to anyone but the banks.
As for oversight, not one elected official would be involved. The oversight board would consist of the chair of the Board of Governors; Paulson himself as secretary of the Treasury; the director of the Federal Home Finance Agency, created last July by Paulson; the chair of the Securities and Exchange Commission; and the secretary of Housing and Urban Development.
This is equivalent to asking the robbers to guard the vault.
The important point about this is that the Democratic Party leadership was touting this as the new, improved version of the bailout bill. But homeowners, indebted workers, students overburdened by loans, families laboring under debt incurred because of illness, job loss, or any of a hundred reasons for workers to go into debt under low-wage capitalism, wind up with nothing.
The bill was originally three pages long and gave total authority to Paulson. After days of negotiation it grew to 100 pages long and still gave authority to Paulson and his oversight committee of powerful financial officials.
Workers need their own demands
Thus it is vital for the workers to have a clear and unambiguous program of demands that meet their own needs and put the burden on the bankers and the rich to pay. There is a growing movement across the country to demand a moratorium on home foreclosures and evictions. Foreclosures are at present paramount. However, even with 10,000 people a day facing the loss of their homes, the crisis of the people goes much wider.
As the unemployment rate rises, it is urgent to demand a freeze on all workplace closings and job layoffs and an extension of unemployment benefits. There must be a freeze on utility cutoffs and a rollback in gas, food and utility prices. Workers’ pensions and savings must be protected. Working and poor people need a general cancellation of their debts and an end to repossessions and wage garnisheeing.
As the crisis of the states and cities grows, there must be a moratorium to stop cuts in the budgets of social programs. Affordable, quality health care, housing and education should be a right.
It is the workers and oppressed, the youth and the elderly who need the trillion dollars that the government wants to hand over to the bankers. The Federal Deposit Insurance Corp., which is supposed to insure individual deposits up to $100,000, just took on $40 billion in debt from Wachovia Bank. This $40 billion was the price the government paid to have Citigroup take over Wachovia and keep it from falling into bankruptcy.
That $40 billion, plus a good part of the $700 billion that the government wants to dole out to the banks, could be used to help homeowners facing foreclosure.
From a strictly capitalist point of view, aid to homeowners would transform bad debts into debts that are payable. It would actually ease the financial crisis of the system. Furthermore, by keeping people in their homes, it would keep their homes off the market and ease the glut of unsold properties.
But the bankers would rather get handouts from the government and proceed with foreclosures. They don’t want to set a precedent of granting relief to homeowners, because that could lead to an avalanche of popular demands for all kinds of relief.
It is futile to rely upon the capitalist government or the big business parties to voluntarily give assistance to the multinational working class on a scale that would make a genuine difference in the lives of the millions suffering foreclosures, layoffs and other hardships. The only way that real, profound change takes place is as a result of struggle.
No bailout is going to stop the crisis of overproduction that is overtaking capitalism today. It underlies the financial panic that is roiling not only the U.S. but Europe, Asia and the rest of the world. What Paulson and Bernanke have in mind is to slow down and manage the crisis. They want to avoid a sudden collapse, a social shock that would not only cause a sharp drop in the profits of the corporations and banks but could set off an upsurge of the mass struggle. The goal of Washington and Wall Street is to engineer a so-called “soft landing.”
But whether the economic crisis develops gradually or suddenly accelerates, the ruling class will try to shift all the suffering onto the workers. The greater the crisis of the ruling class and the rich, the more they will try to push it onto the people. The series of government bailouts is a prime example.
They began with $29 billion for JPMorgan Chase to acquire the bankrupt Bear Stearns investment bank.
Then came $200 billion more for the Freddie Mac and Fannie Mae mortgage banks.
Then came $85 billion for AIG, the insurance giant.
With the crisis spreading, the bosses now want a giveaway of $700 billion to all the banks. And that may not be enough.
They admit to at least $4 trillion in bad mortgage debts—and there’s probably more, because the bankers hide everything from each other and from the government. With each escalation of their crisis, they pile more debt upon the working class and the middle class.
Bailout of capitalism
In truth, the bailout of the banks is really a bailout of capitalism. The banks are the heart and soul of capitalism. They have engaged in an orgy of speculation for a decade. They inflated values in the stock market and flooded the world markets with worthless mortgage-backed securities. They created a mountain of fictitious capital that far outstripped the underlying real value, all of which must be created by workers working. Now that false value is beginning to collapse.
This is not capitalism “gone wrong.”
It is the fullest expression of what capitalism really is. Panics and crashes have happened throughout the history of capitalism, but now, in the age of globalization and high technology, they have reached new heights.
This system is based on profit. Profit is the be-all and end-all of capitalism. The engine of the entire system is production for profit. Getting the most profits is the aim of every capitalist, from the sweatshop owner to the largest transnational corporation.
Speculation and gambling for instant profits grows naturally out of the system. It is not an aberration or an abnormality.
The bankers who swindled the workers with subprime, deceptive, lying mortgages and then sold these mortgages off to other capitalists, gaining fees and high profits along the way, were doing what the ruling class does all the time, at every opportunity.
The starting point of capitalist exploitation and profit is money. Without money, no capitalist can hire workers or buy raw materials or inventory to set the process of exploitation and profit making into motion.
The bankers are in control of all the money in society. They sit on the boards of the corporations. They advise them and finance their loans. They sell corporate stocks and bonds on the market. The owners of productive capital and the parasitic financiers are completely intertwined with one another.
Human need is not part of their calculation. The fact that people need housing, food, jobs, education and health care means nothing to them if they cannot profit from it.
The bankers who are throwing people out of their homes are interlinked with the corporations that are laying workers off. They are tied to the utilities that are shutting people’s heat off in the winter, to the supermarket chains and agribusiness corporations that are raising food prices, and to the oil companies behind the invasion of Iraq and the high cost of gasoline.
Behind the problem of bankers’ bailouts, foreclosures and layoffs is the capitalist profit system itself.
Workers, oppressed to pay billions to bail out Wall Street
By Fred Goldstein
Published Sep 17, 2008 10:49 PM
Sept. 17—With the $85-billion government bailout of insurance giant AIG, the Federal Reserve Board and the Treasury Department have made another desperate attempt to shore up a collapsing global financial structure.
This latest attempt to rescue a huge capitalist financial firm comes on top of the $200-billion-plus bailout of the two largest mortgage banks in the world, Fannie Mae and Freddie Mac, just 10 days ago.
Secret deals stick workers with the bill
President of the Federal Reserve Bank of New York, Timothy Geithner and Treasury Secretary Henry Paulson have been huddled in round-the-clock meetings, hammering out deals. It has been done in secrecy, behind the backs of the workers and the middle class, who will get stuck with the bill. They have been working out these deals with the same loan sharks of high finance whose orgies of speculation, gambling and deception in pursuit of profit led to the crisis in the first place.
Wall Street’s speculative binge has led to a truly formidable world crisis.
Over the last three days, AIG, the largest insurance company in the world with a TRILLION dollars in assets, came within hours of bankruptcy.
Lehman Brothers, a prestigious, 158-year-old investment bank with $639 billion in assets and $613 billion in debts, went under in the largest bankruptcy in U.S. history.
Merrill Lynch, another pillar of investment banking with another TRILLION dollars in assets, averted bankruptcy only after being swallowed up by Bank of America.
Washington Mutual, the largest savings and loan in the U.S., had its bond rating reduced to junk and is on the ropes.
As the bankruptcy crisis was developing on Thursday, Sept. 11, Paulson told the bankers that the government was through stepping in and that they would have to solve the problem among themselves. That was last week. Now the U.S. government has put up another $85 billion to bail out the banks. It is a sign of crisis and weakness.
While the bailout of Fannie Mae and Freddie Mac had given relief to the holders of trillions of dollars of debt owed them by the two mortgage banks, it also put an enormous strain on the financial system and was another sign of profound weakness and fragility. Further bailouts were ruled out, the government said. It was drawing a “line in the sand.”
But Paulson’s and Geithner’s declarations made no impact on the bankers. They all pursued their own immediate interests and stonewalled their own government. In the end, while Washington let Lehman Brothers fail, AIG was another story. The Federal Reserve Board and the Treasury made a humiliating about-face and stepped in at the last minute, “fearing a financial crisis worldwide.” (New York Times, Sept. 17)
The Fed bailout of AIG is instructive about the depth of the crisis. AIG is not even a bank. It is not regulated by the federal government. The Fed had to use emergency powers to intervene, which it deemed necessary not only because AIG issues insurance policies to millions of individuals and commercial enterprises but because it also has insured over $400 billion in mortgage-backed securities and other risky investments of gamblers and speculators all over the globe.
AIG has borrowed money from many of the big banks and gambled its assets in order to make bigger profits. As the mortgages began to fail and the holders of the mortgage-backed securities began to demand their insurance payoffs, AIG’s financial position was deteriorating on a daily and hourly basis.
It is a measure of the system’s financial recklessness that an insurance company, which is supposed to be regulated to keep it conservative, precisely because it is the custodian of funds that must be available to meet the emergency needs of the insured, was free to participate in the global casino.
AIG operates in over 100 countries, has 116,000 employees—62,000 in Asia—and has private banking facilities for wealthy people. It brokers deals in stocks, manages mutual funds, owns 900 planes for its leasing business, and in general has leveraged its insurance business into a globalized, speculative operation.
Crisis of workers and oppressed is ignored
The crisis of the bankers has made sensational headlines, with hour-by-hour accounts of the agony of a handful of millionaires and billionaires on Wall Street. But the capitalist media has sidelined the real drama of mass foreclosures and layoffs affecting the lives of millions of workers.
Hundreds of billions of dollars have been doled out to bankers who got into a crisis largely because of predatory mortgage lending and the reselling of those mortgages on the global capital market. No relief has been forthcoming for the victims of the mortgage banking industry.
Little attention was paid to the news that in August there were 303,879 foreclosure filings—a 12-percent increase from the previous month and a 27-percent increase from a year ago. One in every 416 households in the U.S. received a foreclosure notice in August. In California alone there were 101,714 filings, up 40 percent from the previous month and 75 percent over a year ago.
While shedding tears over the travails of bankers, the capitalist press had no headlines about a recent study entitled “State of the Dream: Foreclosed,” which showed that the foreclosure crisis has resulted in the greatest destruction of personal wealth in history in the African-American and Latin@ communities.
According to the study, African-American borrowers have lost between $71 billion and $92 billion because of loans taken out over the last eight years. The figure for the Latin@ population, which is even higher than the African-American population, shows losses of between $75 billion and $98 billion.
Alongside the financial crisis is the growing crisis of the capitalist economy overall, as overproduction results in mounting unemployment. More than 84,000 workers lost their jobs in August, bringing the yearly total up to 605,000. More than 2 million people have been added to the jobless in the past 12 months, bringing the official total to 9.4 million out of work. Long-term unemployment is also rising.
Unemployment for Black workers reached 10.6 percent, mainly due to job losses among Black women. Unemployment among single mothers and youth is also growing. And these government figures do not include millions of discouraged workers who have given up looking for jobs.
In the midst of the credit crisis, it was announced that industrial production, the basis of jobs and income, fell in August by the most in three years. There was a 1.1 decrease in output in factories, mines and utilities. Auto production went down by 12 percent, the most in a decade.
One thing is clear from the present crisis: Neither the capitalist class, which owns all the productive wealth, nor the capitalist government, which oversees the system, is in control of the economic or the financial situation.
Each measure they take to stem the credit crisis is followed by another outbreak of panic. Each time the stock market surges, it quickly loses all its gains and more. And no matter how much the pundits declare that there is no recession, the steady growth of unemployment and the decline in production continues, regardless of any so-called “economic stimulus.”
Shift in ruling class psychology
The intervention of the capitalist government in the banking crisis has brought about a sudden shift in the psychology of the ruling class as they watch their system spinning out of control. After the capitalist system got over the crisis of the 1930s, the bosses in the U.S. began to forget why President Roosevelt had taken unprecedented measures to rescue the economy. They began to scorn any government intervention in their affairs.
Of course, they have always been ready to take handouts in many forms—subsidies, military spending, special legislation, tax cuts, etc. But they have felt themselves to be the high and mighty corporate rulers of the world.
Government intervention, they said, was for Europe and for social democrats. The European ruling classes had been rocked by the workers and by class struggle, division and war. Because the European rulers were weak and needed to be propped up by the capitalist governments, they had to submit to state monitoring of their affairs. Such a course, however, was strongly rejected by Wall Street and the giant industrialists.
This latest crisis is a huge comedown for U.S. finance capital, which is used to lecturing the other capitalist governments on the evils of government intervention. Suddenly, however, the bankers and bosses are all united, from the right wing to the moderates and liberals, in applauding the Treasury and the Federal Reserve Board for their “timely” intervention. They are submitting, grudgingly but clearly, to government oversight and monitoring in the interests of saving their system from collapse.
With this crisis, the structure of U.S. capitalism is entering a new stage. The capitalist government has begun, on a piecemeal basis at first but perhaps more systematically in the future, to absorb the liabilities and bad debts of the gambling and speculating financial oligarchy. This can only deepen the crisis in the long run by driving it deeper into the organism of U.S. capitalism.
This is bound to have not only economic but political repercussions around the world as rival imperialists see the vulnerability of the rulers in the U.S. It is bound to weaken U.S. imperialism and at the same time make it more dangerous as it seeks to get out of its crisis.
It is no accident that the Wall Street Journal on Sept. 16, in the midst of in-depth reporting on the financial crisis, ran an article entitled “Keeping Their Powder Dry: Draft Boards Hang On, Just in Case.” The Journal does not necessarily speak for the whole ruling class, nor for the Pentagon at the moment. But one reflex emerging in the midst of the crisis from some section of the ruling class is beginning to think about an expanded war drive as a solution.
With the “New World Order” stoking conflict with Russia in Georgia, invading Pakistan and escalating the war against Afghanistan, the possibility of a new military adventure should never be ruled out.
Capitalism’s basic contradiction
The Democrats want to blame things on Bush and call for more regulation. Of course the financiers have gotten the government to overturn most of the regulations, dating back to the Depression, putting restraints on their gambling operations. This deregulation started with the Reagan administration and reached a high point in the Clinton Administration. At the instigation of Citicorp and Robert Rubin, who left Goldman Sachs to become Secretary of the Treasury, the Glass-Steagall Act was repealed in 1998, under the sponsorship of now McCain economic adviser Phil Gramm. The law forbids commercial banks from becoming involved in investment banking, underwriting stocks and stock market operations, underwriting and other activities that facilitated widespread hyper-speculation of the type that preceded the Depression.
And of course the Bush administration undermined all attempts to inhibit the predatory mortgage lenders and gave a complete free hand to all manner of unregulated speculation in trillions of dollars worth of speculative gambling, which increased the overall risk in the global financial system. But, Democratic Party demagogy notwithstanding, the Bush administration is not the cause of the crisis.
Government intervention, stronger regulation of the monopolies and more “prudent” practices cannot overcome the fundamental contradiction of capitalism: private ownership of the globalized, social means of production.
It is an irreconcilable contradiction that a tiny minority control the production of the world’s wealth for their own profit. It is an irreconcilable contradiction that this global apparatus stops functioning when there is a crisis of profitability for the bosses. And such a crisis always arises, sooner or later, because of the anarchy of capitalist production.
No capitalist knows where what is produced can be sold. But in the rush for “market share” for the highest profit, each capitalist grouping is compelled to expand production.
Simultaneously, the laws of capitalism compel each capitalist to reduce the wages of the workers as much as possible. In the last three decades, the capitalist class has created a low-wage capitalist system that pits workers against each other on a global basis. This just aggravates and accelerates the contradiction of the profit system.
Under capitalism production is anarchic and eventually expands to a point where the workers cannot buy what has been produced at a price that will bring the bosses a profit. This anarchy of production is being reflected in the anarchy of the financial system in the present crisis.
In the present crisis, billionaires at the top of capitalist society may be losing part of their wealth, which really existed only on paper, but they are keeping their mansions, servants, limousines and Lear jets. It is the workers who are bearing the brunt of the economic crisis.
The only way out is the way of resistance—like the movement to stop foreclosures, which is gathering steam around the country.
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"160 years after the publication of the Communist Manifesto, Fred Goldstein takes on the challenge of applying Marxist political economy to the burgeoning crisis of capitalist globalization in the 21st century. Not only does he provide a concise analysis of the recent period, but the author is bold enough to advance what could very well be the outlines of a fight back program for workers and the oppressed that will guarantee a socialist future."
- Abayomi Azikiwe, Editor Pan-African News Wire Contributing Editor for Workers World
“From the point of view of Filipino workers in the United States, the largest exploited and abused Filipino workforce outside the Philippines, with over 4 million in the country, we are pleased with the expose of imperialist globalization as the main culprit of global forced migration. The Philippines remains a semi-feudal and semi-colonial country, a result of centuries of colonial plunder by Western powers and their cultivation of local reactionary puppets to the dictates of imperialist globalization. Only by understanding capitalism and monopoly capitalism can we understand the root causes of global poverty and migration.”
- Berna Ellorin, Secretary-General, BAYAN USA
“This book helps us to understand the root of the present neoliberal globalization - a new stage of the international capitalist crisis - especially right after two very important events in the late twentieth century: the scientific-technological revolution in production, communications, and transportation, and the demise of the Soviet Union and Eastern Europe - to which can be added the energy, environment and food crisis with great detrimental repercussions for workers.
“Neoliberal globalization which was imposed by U.S. imperialism devastated and dominated Latin American economies forcing millions of workers to emigrate to the U.S. looking for jobs. They found exploitation and humiliation. “
"We need to get this book into the hands of every worker. It clearly explains the capitalist economic threat to our jobs, our pensions and our homes. But, even more importantly, it shows us how we can fight back and win!"
- David Sole, President UAW Local 2334, Detroit, Michigan
