My friend RJ at http://www.topplebush.com/ just sent me a very interesting riddle: “Why are right-wingers always talking about cutting down on government spending and’red tape’ yet never ever try to cut down on military spending? Aren’t the armed forces part of the government too?” Ya got me stumped there.
Here’s another riddle I can’t seem to solve: How come us salt-of-the-earth American types who protest against all the banksters’ outrageous crimes get thrown in jail, while the criminals themselves are given ”get out of jail free” cards like it was Christmas? Except, of course, for Martha Stewart.
More riddles: “Why is it okay for Al Qaeda to be the good guys in Syria and Libya — but are the bad guys in Lower Manhattan?” I’m all confused.
Why is it okay to tax middle-income Americans for an arm and a leg but not okay to tax rich people? “I wonder.” https://www.youtube.com/watch?
How come everybody bitches and moans about the obesity epidemic and the cancer epidemic and the heart attack epidemic and the autism epidemic and the bi-polar epidemic but still live on junk food, never exercise and watch too much TV? And still have enough balls left to complain about single-payer healthcare? Can someone please explain this? http://www.indiegogo.com/
How come American taxpayers get to pay for the costs of demolishing Christian and Muslim homes in East Jerusalem yet can’t get any tax relief when our own homes are being demolished in Detroit and Cincinnati?
How come statistics (and election results and Fox News) show that Americans are definitely being dumbed down these days, but no one wants to spend any money on improving American kindergartens — let alone on upgrading our colleges. What ever happened to Sputnik?
Why do people fear climate change so much but still happily drive their gas-hogs around like there’s no tomorrow?
How come I can’t resist playing free-cell solitaire by the hour when I should be out doing the laundry and saving the world?
How can anybody in their right mind vote for any candidate that spends millions of dollars on getting elected? You would think that if a politician had that kind of money he (or she) might want to just retire to the Bahamas. Or give it to us.
“Why does America need to own approximately 800 military bases throughout the ’Free World’?” Hell, if the freaking world is all that free, surely it doesn’t need all those American soldiers to keep it in line? And why does all this so-called freedom always end up costing us taxpayers trillions of dollars as well?
And how come most of “our” jobs are now located in places like China, Haiti and Burma? Isn’t that a really long commute?
And please explain the riddle of how all the top American industrial jobs here at home are now mostly being performed by prison labor? While the 1% sucks down Oxycontin and Prozac legally and the rest of us all get busted for using medical marijuana — just to make sure they have a large enough prison labor supply in jails?
And why are American labor unions that help the working class being given such a bum rap, but when Wall Street and War Street form unions that destroy the fabric of America’s economy, it’s called “Capitalism” and “Showing Initiative” – not welfare for the rich?
And why are the RepubliDems always saying that the fiscal cliff is a bad thing? If it is spozed to be such a terrible disaster, then why in the freak did they create it in the first place?
And why does 2013 still feel so much like 2012?
In his recent New York Times op-ed piece, Princeton professor and regular columnist for The New York Times Paul Krugman observed:
“The American economy is still, by most measures, deeply depressed. But corporate profits are at record high. It’s simple: profits have surged as a share of national income, while wages and other labor compensation are down. The pie isn’t growing the way it should — but capital is doing fine by grabbing an ever-larger slice, at labor’s expense.”
And then he adds with almost shocked incredulity: “Wait – are we really back to talking about capital versus labor? Isn’t that an old-fashioned, almost Marxist sort of discussion, out of date in our modern information economy?”
This is exactly the conflict that Marx identified as the fundamental, inescapable contradiction of the capitalist system that would eventually create the conditions of its downfall: there is a tendency for the owners of businesses, the capitalists, to accumulate ever-vaster wealth while the people who work for them experience a declining standard of living.
Marx supported this conclusion by offering a description of the fundamental operating mechanism of capitalism. Capitalism is based on the principle of private ownership and competition. Private businesses compete with one another for customers, and those who fail to attract a sufficient number eventually perish. But in order to attract customers, businesses must maximize the quality of their product while minimizing its price. If two products embody the same quality but one is cheaper, customers, in pursuit of their self-interest, will purchase the cheaper version, all other factors being equal.
This means that capitalists must constantly attempt to minimize the price of their product simply for the sake of their own survival. If a business devises a way to lower costs, it can capture the market. But, as Marx pointed out, labor costs are a huge factor in determining the price of a product. So those businesses that minimize labor costs can prevail in the dog-eat-dog world of capitalism. For this reason, a downward pressure on wages and benefits is always operating to one degree or another.
But Krugman made no reference to this aspect of Marx’s analysis and instead identified two other factors that contribute to the growing inequality in wealth between capitalists and workers, both of which are discussed by Marx.
The first factor involves the introduction of technology into the labor process, i.e. “labor-saving” technology. In other words, machines replace workers or reduce the amount of skill required in the labor process. To give a current example, software has been developed that analyzes legal documents at a fraction of the time it takes lawyers while costing much less. Accordingly, many well-paid lawyers lose their jobs to such software. Living during the industrial age, Marx supplied many such examples.
Krugman referred to his second explanatory factor that increases inequality between capitalists and labor as the “monopoly power” of large corporations where “increasing business concentration could be an important factor in stagnating demand for labor, as corporations use their growing monopoly power to raise prices without passing the gains on to their employees.” Here Krugman is approaching the heart of Marxist theory.
Krugman is basically arguing that large corporations use their power to override purely economic trends and simply demand that their employees work for less. But this is precisely the point of Marxism, although from the other direction. Marx persistently argued that capitalism could not function without the willingness of the working class to perform the work. When workers organize and engage in collective action by withholding their labor, the balance of power shifts in favor of the workers who can then demand higher wages as a condition for their return to work, as the ILWU (International Longshore and Warehouse Union) recently did on the West Coast and the teachers did in Chicago.
Amazingly, Krugman never mentions the decline of organized labor as a huge factor explaining the decline of the standard of living of working people, adding that there has been so little discussion of these developments. But others, especially former Secretary of Labor Robert Reich, have discussed these trends and identified the decline of labor as a major factor.
In the 1930s when labor unions were tenaciously fighting for working people, huge gains were made in terms of salaries and benefits. They conducted militant sit-down strikes and mobilized tens of thousands of people from the community to support labor’s struggles. Their successes were to a large degree responsible for the emergence of the so-called middle class that thrived in the 1950s and 1960s.
Workers who are organized, acting both collectively and forcefully, can change the economic landscape. But once organized labor becomes complacent and relaxes its guard and ceases to struggle, the laws of capitalism ineluctably grind down their gains and the growing inequality returns until workers again rise up.
Marx argued that eventually workers would see the futility of this repeating cycle, reject capitalism altogether, and begin to construct a socialist society built on entirely humanistic and democratic principles.
In a recent New York Times article on unionizing workers at the bottom of the pay scale, a union organizer was quoted as saying, “We must go back to the strategies of nonviolent disruption of the 1930s.” Currently organized labor is all but dying out. Strikes are like an endangered species. Rather than engaging in militant struggles, union members are urged to elect Democrats who then call on workers to accept sacrifices.
AFL-CIO President Richard Trumka has called on working people “to fight like hell” to resist cuts to Social Security and Medicare. But these are just words. To this date, the unions have failed to mobilize their members to stage massive demonstrations across the country against cuts to these popular social programs – demonstrations that could culminate in hundreds of thousands of working people descending on Washington, D.C. to make their demands clear to the Obama administration and the rest of the politicians. Without the unions taking the lead in this struggle, there is little individual workers will be able to accomplish. And if the unions refuse to return to their more militant roots but remain invisible, economists like Paul Krugman will continue to ignore their existence and overlook their current historic failure to defend working people.
Why, then, are government policies internationally still pursuing extremist measures? In the U.S., a third round of excess money printing —called Quantitative Easing — began recently in which banks are directly profiting by unloading their toxic mortgages on the Federal Reserve’s balance sheet (another backdoor bailout paid by taxpayers).
After the U.S. presidential election, both Democrats and Republicans are committed to different versions of historic cuts to social services, education, Medicare, unemployment benefits, and very likely Social Security. This bi-partisan plan is often referred to as a “grand bargain,” the details of which both parties are still haggling over.
In Europe things are no better. After the Euro Zone central bank promised investors its full backing to bailout all Euro Zone members — by printing money — the world economy sighed a heavy relief. But still the Euro Zone — along with the U.S. — is pursuing a two-pronged solution for an extreme economic crisis: austerity measures and the less-discussed “structural reforms.”
What are these policies? Austerity is simple enough: government cuts to social spending, health care, education, pensions, etc. — to balance heavily indebted public budgets (at the expense of working people, rather than taxing the rich and corporations). Austerity can also be achieved through privatization, where once publicly run programs/facilities are sold cheaply to private firms to make a profit, thus taking the cost off the government’s budget.
Structural reforms on the other hand are meant to boost economic (corporate) growth, by government intervention in commodity markets — most commonly the labor market. It’s called structural reform because markets are usually relatively stable. For example, the labor market is deep-rooted in powerful social forces — wages, benefits, and working conditions are heavily influenced by unions, who use their organization and strike threat to pressure corporations and governments to pay living wages. Non-union workers benefit directly by the unions’ ability to alter the national labor market, since non-union companies have to compete with union companies for workers, who naturally go where wages are higher. Professional, higher-paid workers benefit too, since society expects them to get higher wages than, say a carpenter.
In Europe, structural reforms targeting the labor market — alongside austerity measures — are rousing the unions and broader community into the streets with massive demonstrations: Spain, Portugal, Greece, and other countries are fighting reforms that politicians are euphemistically calling “labor market flexibility.” This simply means that unions will be undermined by their inability to protect workers’ jobs, making firing easier (“flexibility”), which results in compelling workers into accepting lower wages and benefits.
The pro-corporate Economist magazine reports about Portugal:
“With his decision to finance a reduction in company [corporate] costs through a sharp cut in workers’ take-home pay, Pedro Passos Coelho, Portugal’s prime minister, appears to have taken reform past the limit of what is deemed acceptable by large sections of the electorate.”
“… [President] Hollande has given union leaders and bosses until December to negotiate [anti-union] labor-market changes. On the table are various options, including making it possible for firms [corporations] to reduce hours and salaries in a downturn against a guarantee of job security, along the lines introduced by [Germany's prime minister]… in 2003.”
“… the new [labor] law makes it easier and cheaper to lay off workers. For most firms, maximum lay-off payments [unemployment benefits] will be reduced from 42 months’ pay to 12 months… it will hugely boost business confidence.”
Reducing unemployment benefits is a very popular labor market structural reform for the 1%, since it makes workers more desperate for work, and thus more accepting of low-wage jobs — consequently lowering workers’ power in the labor market overall, as wages are lowered nationally.
And while Europe’s austerity and structural reforms are on the front page of international media — due to the giant protests and general strikes against them — the exact same policies have been pursued by the U.S. with barely a murmur. Were it not for the labor upsurges in Wisconsin and more recently Chicago, these policies would be completely off the public’s radar.
The Wisconsin uprising was in response to a labor-market structural reform pursued by Republicans, denying unions bargaining rights — effectively destroying the union. Democrats, however, are pursuing anti-labor structural reforms — weakening unions — as national policy also, though less directly, by demanding that unions across the country take massive concessions in wages and benefits — a slower, yet more effective form of labor market restructuring.
The teachers in Chicago went on strike against another form of anti-labor structural reform pursued by both Democrats and Republicans. The media-hype around “firing bad teachers” is really a labor-market reform in disguise; the real intention is to bust unions, who are only able to stay strong by their ability to protect the jobs of their members (of course there already exists ways to fire bad teachers).
Teacher merit pay is yet another labor reform measure aimed to weaken unions, since it effectively lowers wages by preventing raises (there is zero evidence that merit pay raises education standards, or that charter schools outperform public schools). It means that every teacher’s salary is negotiated individually, and it allows management to punish its critics by denying them merit pay raises.
The teachers are especially targeted in the U.S. because they are the strongest union in the country, due to their numbers, organization, and connections to the community. If they are forced to give “structural” concessions, other unions will be heavily pressured to do so, and thus the labor market will be altered to the benefit of the corporations.
The labor reform attacks — combined with austerity budget cuts — are happening in different forms on a city, state, and federal level with the full backing of the Democrats and Republicans (there is no “debate” in the presidential election about education policy). Thus, if not for the Wisconsin and Chicago struggles, there would be little social consciousness around these issues.
The reasons that austerity and structural adjustment have not produced a Europe-like movement yet is because most labor unions have increasingly accepted these concessions without putting up a real fight. Many labor leaders would simply rather accept these policies, since fighting them would put them in conflict with their “friends,” the Democratic politicians pursuing these anti-labor policies.
Hopefully, the post-Occupy movement can show the labor movement the way forward. On November 3rd there will be protest demonstrations against austerity in a number of cities across the country. These protests are targeting the ongoing state by state cuts — and federal post-election cuts — to education, transportation, health care, social programs, and public-sector workers. The protests are challenging the very concept of austerity, as working people refuse to pay for the crisis created by the rich and corporations. There is a potential for these protest demonstrations to teach the American public the word “austerity,” assuming they are large enough and connect with the broader community that directly experiences these policies.
Regardless of the results of November 3, demonstrations about the austerity issue in the U.S. will inevitably continue, since even mainstream economists mostly agree that there will be no return to the pre-recession economy. The policies of austerity and structural reform — along with war — are long-term survival strategies of capitalism, which is evolving to survive a global-wide crisis of corporate growth rates by creating a “new normal” of social expectations: lower wages and fewer social programs.
The first step in fighting these measures is mobilizing working people and the broader community in massive Europe-like demonstrations. This tactic educates the whole nation about the issues, which would otherwise remain in the dark. Once the 99% is in the streets together screaming collective demands with a united voice, the movement will decide how best to act, whether it be the general strikes or new political parties that have emerged in Europe.
The U.S. post-election austerity surprises will give new opportunities for millions of people to get into the streets. They will no longer be able or willing to remain ignorant about the nation’s new normal.
We will all swallow our cup of corporate poison. We can take it from nurse Romney, who will tell us not to whine and play the victim, or we can take it from nurse Obama, who will assure us that this hurts him even more than it hurts us, but one way or another the corporate hemlock will be shoved down our throats. The choice before us is how it will be administered. Corporate power, no matter who is running the ward after January 2013, is poised to carry out U.S. history’s most savage assault against the poor and the working class, not to mention the Earth’s ecosystem. And no one in power, no matter what the bedside manner, has any intention or ability to stop it.
If you insist on participating in the cash-drenched charade of a two-party democratic election at least be clear about what you are doing. You are, by playing your assigned role as the Democratic or Republican voter in this political theater, giving legitimacy to a corporate agenda that means your own impoverishment and disempowerment. All the things that stand between us and utter destitution—Medicaid, food stamps, Pell grants, Head Start, Social Security, public education, federal grants-in-aid to America’s states and cities, the Women, Infants, and Children nutrition program (WIC), Temporary Assistance for Needy Families and home-delivered meals for seniors—are about to be shredded by the corporate state. Our corporate oligarchs are harvesting the nation, grabbing as much as they can, as fast as they can, in the inevitable descent.
We will be assaulted this January when automatic spending reductions, referred to as “the fiscal cliff,” begin to dismantle and defund some of our most important government programs. Mitt Romney will not stop it. Barack Obama will not stop it.
And while Romney has been, courtesy of the magazine Mother Jones, exposed as a shallow hypocrite, Obama is in a class by himself. There is hardly a campaign promise from 2008 that Obama has not broken. This list includes his pledges to support the public option in health care, close Guantanamo, raise the minimum wage, regulate Wall Street, support labor unions in their struggles with employers, reform the Patriot Act, negotiate an equitable peace between the Israelis and the Palestinians, curb our imperial expansion in the Middle East, stop torture, protect reproductive rights, carry out a comprehensive immigration reform, cut the deficit by half, create 5 million new energy jobs and halt home foreclosures. Obama, campaigning in South Carolina in 2007, said that as president he would fight for the right of collective bargaining. “I’d put on a comfortable pair of shoes myself, I’ll … walk on that picket line with you as president of the United States of America,” he said. But when he got his chance to put on those “comfortable pair of shoes” during labor disputes in Madison, Wis., and Chicago he turned his back on working men and women.
Obama, while promising to defend Social Security, also says he stands behind the planned cuts outlined by his deficit commission, headed by Morgan Stanley board member Erskine Bowles and former Sen. Alan Simpson, a Wyoming Republican. The Bowles-Simpson plan calls for cutting 0.3 percentage points from the annual cost-of-living adjustment in the Social Security program. The annual reduction would slowly accumulate. After a decade it would mean a 3 percent cut. After two decades it would mean a 6 percent cut. The retirement age would be raised to 69. And those on Social Security who continued to work and made more than $40,000 a year would be penalized with further reductions. Obama’s payroll tax cuts have, at the same time, served to undermine the solvency of Social Security, making it an easier target for the finance corporations that seek to destroy the program and privatize the funds.
But that is just the start. Cities and states are frantically staving off collapse. They cannot pay for most pension plans and are borrowing at higher and higher interest rates to keep themselves afloat. The country’s 19,000 municipalities face steadily declining or stagnant property tax revenues, along with spiraling costs. Annual pension payments for state and local plans more than doubled to 15.7 percent of payrolls in 2011 from 6.4 percent a decade ago, according to a study by the Center for Retirement Research at Boston College. And local governments, which made some $50 billion in pension contributions in 2010, face unfunded pension liabilities of $3 trillion and unfunded health benefit liabilities of more than $1 trillion, according to The Nelson A. Rockefeller Institute of Government. State and local government spending fell at a rate of 2.1 percent in the second quarter of this year, according to the Commerce Department. It was the 11th consecutive quarterly reduction in expenditures. And in the past year alone local governments cut 66,000 jobs, mostly those of teachers and other school employees, reported The Wall Street Journal, which accumulated this list of grim statistics.
The costs of our most basic needs, from food to education to health care, are at the same time being pushed upward with no control or regulation. Tuition and fees at four-year colleges climbed 300 percent between 1990 and 2011, fueling the college loan crisis that has left graduates, most of them underemployed or unemployed, with more than $1 trillion in debt. Health care costs over the same period have risen 150 percent. Food prices have climbed 10 percent since June, according to the World Bank. There are now 46.7 million U.S. citizens, and one in three children, who depend on food stamps. The U.S. Immigration and Customs Enforcement agency under Obama has, meanwhile, expelled 1.5 million immigrants, a number that dwarfs deportations carried out by his Republican predecessor. And while we are being fleeced, the Treasury Department and Federal Reserve Bank has since 2008 doled out $16 trillion to national and global financial institutions and corporations.
Fiscal implosion is only a matter of time. And the corporate state is preparing. Obama’s assault on civil liberties has outpaced that of George W. Bush. The refusal to restore habeas corpus, the use of the Authorization to Use Military Force Act to justify the assassination of U.S. citizens, the passing of the FISA Amendments Act to monitor and eavesdrop on tens of millions of citizens without a warrant, the employment of the Espionage Act six times to threaten whistle-blowers inside the government with prison time, and the administration’s recent emergency appeal of U.S. District Judge Katherine Forrest’s permanent injunction of Section 1021(b)(2) of the National Defense Authorization Act give you a hint of the shackles the Democrats, as well as the Republicans, intend to place on all those who contemplate dissent.
But perhaps the most egregious assault will be carried out by the fossil fuel industry. Obama, who presided over the repudiation of the Kyoto Accords and has done nothing to halt the emission of greenhouse gases, reversed 20 years of federal policy when he permitted the expansion of fracking and offshore drilling. And this acquiescence to big oil and big coal, no doubt useful in bringing in campaign funds, spells disaster for the planet. He has authorized drilling in federally protected lands, along the East Coast, Alaska and four miles off Florida’s Atlantic beaches. Candidate Obama in 2008 stood on the Florida coastline and vowed never to permit drilling there.
You get the point. Obama is not in charge. Romney would not be in charge. Politicians are the public face of corporate power. They are corporate employees. Their personal narratives, their promises, their rhetoric and their idiosyncrasies are meaningless. And that, perhaps, is why the cost of the two presidential campaigns is estimated to reach an obscene $2.5 billion. The corporate state does not produce a product that is different. It produces brands that are different. And brands cost a lot of money to sell.
You can dismiss those of us who will in protest vote for a third-party candidate and invest our time and energy in acts of civil disobedience. You can pride yourself on being practical. You can swallow the false argument of the lesser of two evils. But ask yourself, once this nightmare starts kicking in, who the real sucker is.
Chris Hedges, whose column is published Mondays on Truthdig, spent nearly two decades as a foreign correspondent in Central America, the Middle East, Africa and the Balkans. He has reported from more than 50 countries and has worked for The Christian Science Monitor, National Public Radio, The Dallas Morning News and The New York Times, for which he was a foreign correspondent for 15 years.
Source: Chris Hedges | Truth Dig
With the November elections right around the corner, the millions of unemployed and under-employed have little reason to care. Aside from some sparse rhetoric, neither Democrats nor Republicans have offered a solution to job creation. Most politicians seem purposefully myopic about the jobs crisis, as if a healthy dose of denial might get them through the electoral season unscathed.
In reality, the jobs crisis continues unaddressed, and threatens to get worse after the election. The post-election “fiscal cliff” of social cuts — “triggered” by Obama’s debt commission —will pull the economy below the current treading-water phase, drowning millions more workers in America in unemployment and hopelessness. In addition, two million more long-term unemployed — those lucky enough to still receive benefits — face the very likely possibility of having their benefits ended due to the trigger cuts.
But this is all part of the plan. The current jobs crisis is not accidental; there are public policies that could be implemented — such as a federal jobs program — that would stop unemployment in its tracks. Both parties agree that this cannot be done for the same reason: high unemployment is desirable since it acts as a sledgehammer against wages, lowering them with the intent of boosting profitability for corporations. Creating this nationwide “new normal” takes time.
Until corporations have an ideal environment to make super profits — aside from the short-term money printing of the Federal Reserve — unemployment will remain purposefully high. The Feds massive money-printing program — called Quantitative Easing (QE) — is a desperate move that risks super inflation, yet is deemed necessary until politicians implement the economic new normal for workers in America.
This policy is referred to as an “adjustment” period by some economists. Corporations and their puppet politicians have used the recession to start implementing the new normal of lower wages, reduced benefits, and fewer social programs on a city, state, and federal basis. In order to complete this national adjustment, expectations for working people must be drastically lowered, so that they’ll be less likely to be angry and fight against this onslaught.
This was Bill Clinton’s intention when he told the Democratic National Convention, “The old economy isn’t coming back.” Most people in America have yet to realize this, but the economic policies of the Democrats and Republicans reflect a conscious plan to push wages down and shred the safety net to fit the “new economy” standards sought by corporate America.
Because corporations only hire workers in order to make profit, businesses today are sitting on trillions of cash, waiting for a sunnier day to invest in labor. The lower the wages of workers in America, the brighter the skies for corporations’ bottom line. It is this basic economic interest driving the jobs crisis, as politicians only offer solutions that “encourage businesses to invest” rather than creating immediate solutions for working people.
But millions of people are waiting for sunnier days too. A large number are seeking to wait out the recession by returning to school and are now graduating; a record 30 percent have bachelor degrees, a number that is expected to rise. The increasing number of graduates will drive up unemployment, while those lucky enough to find jobs aren’t finding one capable of paying off their massive student loans. The trillion-dollar student loan business is yet another example of wealth transference from bottom to top: students borrow money from the wealthy, and pay them back with interest, sometimes exorbitant interest.
The Bureau of Labor Statistics indicates that there are 12.5 million people who are officially unemployed but an additional 9.5 million who are “unofficially” unemployed — those who are not actively looking for work, “discouraged workers,” part-time workers who want full-time work, etc. The number is almost certainly higher. These workers are not counted in the “official” unemployment numbers, and this unofficial number is getting worse. In August 2012, 368,000 more workers joined this illustrious group by dropping out of the labor force, i.e., they gave up looking for a job and thus are no longer counted as unemployed, in this way giving Obama “positive news” since the unemployment numbers actually improved!
These workers are often referred to as “unemployable,” meaning that they are usually over fifty years of age or under 30 and are tarnished with a lack of job experience or an excess of it. Corporations can now have an abundance of workers to choose from, and are being extra picky on whom they hire, if anybody.
The new “private sector” jobs that Obama constantly brags about are much lower paying than the jobs they are replacing. According to a study performed by the National Employment Law Project, 58 percent of all new post-recession jobs come with wages below $14.00 an hour, i.e. a not a living wage.
For those millions unable to find jobs, their future lies in either dependence on family or the state, or a risky life in the informal economy, which implies the possibility of imprisonment.
The reason that many labor and community groups have not fully explained the above facts — nor protested against them — is because they are “embarrassing” to the Democrats. Labor unions have gone into pre-election hibernation, ignoring reality as they push their members to campaign for the president who is overseeing this economic “new normal.”
The still-sputtering economy is expected to grind to a halt post-election, with average working people again footing the bill. But millions of Americans are experiencing the politics of the 1%, and drawing conclusions; ever since the recession government policy has been aimed at benefiting the wealthy and corporations, while working people have only experienced layoffs, lower wages and benefits, and slashed public services. To stop this dynamic of austerity working people must unite and protest in massive numbers, like the working people of Europe.
In Portland, Oregon, such a demonstration is being planned, pre-election, by a coalition of community groups to “stop the cuts,” for debt relief, and against the above national policy of austerity for working people. By highlighting the bi-partisan nature of the attack against working people, the community organizers in Portland hope to educate the community to take action, so that working people are prioritized. Let the wealthy pay for their crisis.
It’s impossible to exaggerate the national importance of the teachers’ struggle in Chicago. If the Chicago teachers’ union — 26,000 members strong — goes on strike, many critical yet ignored political issues will go into the national spotlight, exposing nastiness that many politicians and labor leaders would like ignored until after the presidential elections.
Such a strike would also have the potential to rejuvenate U.S. labor unions by showing them a way out of the never ending wage and benefit concessions demanded by private and public employers. In fact, the Chicago teachers have the potential to become the most important labor struggle in decades, based on the timing, political context, and national relevance of their fight.
U.S. labor unions are in the fight of their lives, especially in the public sector, where their existence literally hangs in the balance. Constant city, state, and federal budget deficits — largely the result of multiple tax breaks for corporations and the rich — have been used as excuses to attack the wages and benefits of public employees, drastically weakening their unions to the point where “ending collective bargaining” is fast becoming a likely outcome.
Teachers are the strongest sector of public employees, based on their numbers, cohesiveness, and ties to the community. Thus, teachers have been directly targeted via budget cuts and Obama’s “Race to the Top” Education policy, which blames “bad teachers” (and the unions that protect them) for poorly performing students, while conveniently ignoring the more obvious predictors of poverty and the constant defunding of public education.
The education policies of President Obama and the Democrats will be put on trial if a strike takes place, since the Chicago teachers are fighting against the Democratic Mayor — Obama’s former Chief of Staff Rahm Emanuel — who is most urgently implementing the Democrat’s so-called “Race to the Top” education reforms — an education program that aims to privatize public education while decapitating teachers’ unions.
Race to the Top forces money-hungry states to compete for a measly $4 billion of federal money. The winners are those states that inflict the most self-harm by firing “bad” teachers and closing “failing” schools. Obama is accomplishing more in one campaign than the anti-public education right wing has accomplished in decades.
Race to the Top encourages the closing of neighborhood public schools and opening up across town private charter schools, where the rich will have access to all the amenities offered at public schools while the poor will be warehoused in a drab environment lacking resources — without sports and other extracurricular activities, no art or music, no counseling or psychological services, etc. Obama’s Race to the Top envisions education “reform” to mirror free market ideology, where services once deemed essential are now to be sold as commodities to those who can afford them.
The Chicago Teachers Union website discussed the possibility of a strike and explained its national implications. Aside from the many demands on their wages and benefits, “teachers are concerned about the Board’s plan to close over 100 neighborhood schools and create a half public-half charter school district.”
Chicago Teachers Union President Karen Lewis explains:
“Whenever our students perform well on tests, [Chicago Public School] moves the bar higher, tells them they are failures and blames their teachers. Now they want to privatize public education and further disrupt our neighborhoods. We’ve seen public housing shut down, public health clinics, public libraries and now public schools. There is an attack on public institutions, many of which serve low-income and working-class families.”
Lewis has correctly made the link behind the attack on the teachers and the national attack on working people in general a key aspect of the Chicago teachers’ campaign.
Behind the Democrat and Republican war on “bad teachers” is a war on labor unions. It seems that the only solution being offered to the so-called “bad teacher” problem is the complete undermining of unions: the Democrats want to make firing teachers easier and make them work for “merit pay,” two poisons for working people.
Unions are strong because members are united. This is done, in part, by making pay raises equitable, to prevent both discrimination and the employer from dividing the union. Unions believe that all members who are capable of doing the work should get pay raises based on their work experience. Merit pay is a right-wing device aimed at this bedrock principle of unionism, to prevent most teachers from getting any pay raises while dividing the workplace against itself by giving wage hikes to those who are least active in the union and denying them to teachers who are strong union supporters and critical of management.
Behind the Democrat’s urge to “fire bad teachers” is a deeper assault on unions. Labor unions cannot exist as a fighting force to defend the membership without seniority rights, which protect older workers with higher salaries and minorities from being targeted and fired, and similarly protect union activists. If an employer can easily fire a worker, it will always be an older worker or “trouble making” union activist.
Teachers’ unions are aware of these union-specific threats; they’ve been fighting against Republicans for years who have been trying to implement them. But now the Democrats have adopted the Republicans’ anti-union policies, and many teachers’ unions have been paralyzed as a result.
Although the national teacher unions have voiced their support for the Chicago teachers, they are also actively campaigning for President Obama, the architect behind the anti-union crusade that aims to crush the Chicago teachers. This blatant hypocrisy is just one reason why the Chicago teachers will have to shake up the labor movement.
National union leaders have failed to put forth a vision to inspire the labor movement. The decades-long friendship with the Democrats has soured as the Democrats have adopted long-standing Republican attitudes to unions: Democratic governors across the country have attacked public employee unions in tandem with Obama’s anti-union Race to the Top education policy. Because unions are strongest in the public sector, these policies amount to a planned decapitation of the labor movement.
Instead of waging a relentless battle against these Democrat-inspired attacks, most unions have made giant concessions in the form of wages and benefits, thus undermining the confidence their members have in their union. Most union leaders have chosen not even to discuss this deadly assault on unions because it is coming from the Democrats. The Chicago teachers are saying “no more,” and exposing the Democrats in the process.
If the strike occurs and becomes a powerful, city-stopping movement like Wisconsin before it, the November presidential elections will have a new significance. Democrats and Republicans alike will be forced to pick sides: both will choose against the teachers.
It will be made clear to millions of people that the Democrats and Republicans share identical views on public education and labor unions — they both want them destroyed.
Most importantly, the very labor unions who are wasting their members’ dues money by giving it to the Obama campaign will have to choose sides too; hopefully many of them will take a break from phone banking and door knocking for Obama to hold Chicago solidarity rallies in their own cities to give extra energy to the struggle.
Ultimately, the Chicago teachers’ struggle will set a nationally powerful precedent. If the teachers win through militant struggle, unions everywhere will be inspired to copy their tactics and organize their communities and members alike towards common social goals, fighting hand in hand. However, if the union loses, the opposing side will be galvanized at labor’s expense, and the downhill slide for labor will continue, dragging down the wages and benefits of non-union members in the process.
One key lesson from this experience is that labor unions can be transformed relatively quickly. A small group of union activists within the Chicago teachers’ union — the Caucus of Rank and File Educators (CORE) — were organized in order to make their union stronger, and were elected by the membership to lead the union. In a few years time CORE has transformed the union into a strong, fighting organization, capable of defending its members’ wages and the community’s schools. The union has reached out to the community and explained the perils of charter schools in order to draw the community into the struggle. This has laid the foundation for encouraging the community to participate in the picket lines and large support rallies so that the teachers are not isolated but have the obvious support of the public. Many in organized labor have watched the transformation take place and are learning from it. The Chicago teachers are educating the whole labor movement on the real meaning of unionism.
We are only days away from the showdown.
A fascinating shift has happened in the U.S. mainstream media: After a year of anti-Syria war propaganda and lies, glimmers of truth are making their way into the public’s view. This may be too little too late: the country is being torn at the seams into the nightmare of ethnic-religious cleansing and massacres.
After non-stop war mongering, The New York Times took a second to wipe the blood off its hands to report the true state of things in Syria. Apparently, the previous, ongoing reports about the Syrian army indiscriminately massacring citizens in the city of Homs was simply a lie, repeated over and over.
It now turns out that the exact opposite was true.
In actuality, many of the refugees fleeing Homs were persecuted Christians, attacked by members of the Free Syrian Army, who have been killing religious minorities in an attempt to recruit hard-line Sunnis in Syria as they wage a religious war against the Syrian secular state.
Because the Free Syrian Army did not emerge from a popular revolution — but instead the pocketbooks and arsenal of Saudi Arabia — the war to destroy the Syrian government had to be waged as an ethnic-religious war. Saudi Arabia has a long history of exporting its rare extremist form of Sunni Islam, Wahhabism, as a political tool to help overthrow unfriendly governments.
The U.S. has a long-standing alliance with Saudi Arabia in this effort, a dynamic that, over the years, has given birth to both the Taliban and Al Qaeda. The U.S. refuses to stop using this strategy because it’s incredibly effective at overthrowing “unfriendly” governments, while keeping large sections of the Middle East stalled in the formative years of Islam, which keeps a good check on any political activity from working people, since in Saudi Arabia protests, labor unions, and civil rights are illegal.
The persecuted religious minorities in Homs view the Syrian government as their ally against the U.S. media-darling “liberators” of the Free Syrian Army, puppets of Saudi Arabia’s foreign policy.
The opinion pages of The New York Times laid out the facts better than any previous reporting:
“As Saudi Arabian arms and money bolster the [Free Syria Army] opposition, the 80,000 Christians who’ve been ‘cleansed’ from their homes… in Homs Province in March by the Free Syrian Army have gradually given up the prospect of ever returning home.”
“The [Free Syria Army] rebels’ conduct [ethnic cleansing] has prompted at least some Sunnis who had supported the rebels and once-wavering Syrians to pledge renewed loyalty to Assad. Many who once regarded the regime as a kleptocracy now view it as the best guarantor of Syria’s endangered [ethnic-religious] pluralism.”
This sudden somersault of facts has been long known to both the U.S. government and the media. The New York Times continues:
“Washington is aware of the scale of the problem [religious fanaticism and minority persecution]. As early as June 2011, Robert Stepen Ford, the U.S. ambassador to Syria, briefed his counterparts in Damascus about Al Qaeda’s penetration of the opposition forces. By still ploughing ahead with its support for Saudi Arabia’s effort to destabilize Syria, Washington, far from assisting Israel or weakening Iran, is helping to fuel a humanitarian crisis that will come back to haunt the United States.”
To summarize: U.S. politicians from both parties have lied to the public about the true nature of the conflict in Syria, because it benefited them politically to see a non-U.S. ally destroyed by ethnic-religious barbarism.
Finally from The New York Times:
“The seeming indifference of the international community to the worsening condition of Syria’s religious minorities — and the near total absence of censure of the opposition forces by the Western governments arrayed against Assad — is breeding a bitter anti-Americanism among many secular Syrians who see the United States aligning itself with Saudi Arabia, the fount of Wahhabism [extremist Sunnis], against the Arab world’s most resolutely secular state.”
There you have it. It took over a year but suddenly the Syrian war isn’t so black and white, good guys versus bad guy. The Syrian government is by no means to be glorified, but the utter devastation that is being brought to the country was done so on a false premise, by foreign backers — Saudi Arabia and the U.S. — who wanted nothing except to see the country annihilated so that Iran would be isolated and easier to topple. To sell this bloodbath as an advance of democracy — as U.S. politicians and media have done — is beyond hypocritical; it falls under the category reserved for those who are labeled war criminals.
I’m sure most Americans are mighty proud of the fact that Julian Assange is so frightened of falling into the custody of the United States that he had to seek sanctuary in the embassy of Ecuador, a tiny and poor Third World country, without any way of knowing how it would turn out. He might be forced to be there for years. “That’ll teach him to mess with the most powerful country in the world! All you other terrorists and anti-Americans out there — Take Note! When you fuck around with God’s country you pay a price!”
How true. You do pay a price. Ask the people of Cuba, Vietnam, Chile, Yugoslavia, Iraq, Iran, Haiti, etc., etc., etc. And ask the people of Guantánamo, Diego Garcia, Bagram, and a dozen other torture centers to which God’s country offers free transportation.
You think with the whole world watching, the United States would not be so obvious as to torture Assange if they got hold of him? Ask Bradley Manning. At a bare minimum, prolonged solitary confinement is torture. Before too long the world may ban it. Not that that would keep God’s country and other police states from using it.
You think with the whole world watching, the United States would not be so obvious as to target Assange with a drone? They’ve done it with American citizens. Assange is a mere Aussie.
And Ecuador and its president, Rafael Correa, will pay a price. You think with the whole world watching, the United States would not intervene in Ecuador? In Latin America, it comes very naturally for Washington. During the Cold War it was said that the United States could cause the downfall of a government south of the border … with a frown. The dissolution of the Soviet Union didn’t bring any change in that because it was never the Soviet Union per se that the United States was fighting. It was the threat of a good example of an alternative to the capitalist model.
For example, on January 21, 2000 in Ecuador, where almost two-thirds live in poverty, a very large number of indigenous peasants rose up in desperation and marched to the capital city of Quito, where they were joined by labor unions and some junior military officers (most members of the army being of indigenous stock). This coalition presented a list of economic demands, seized the Congress and Supreme Court buildings, and forced the president to resign. He was replaced by a junta from the ranks of the new coalition. The Clinton administration was alarmed. Besides North American knee-reflex hostility to anything that look or smells like a leftist revolution, Washington had big plans for a large military base in Manta (later closed by Correa). And Colombia — already plagued by leftist movements — was next door.
The US quickly stepped in to educate the Ecuadorean coalition leaders as to the facts of Western Hemispheric imperial life. The American embassy in Quito … Peter Romero, Assistant Secretary of State for Latin America and Western Hemispheric Affairs … Sandy Berger, National Security Adviser to President Clinton … Undersecretary of State Thomas Pickering … all made phone calls to Ecuadorian officials to threaten a cutoff in aid and other support, warning that “Ecuador will find itself isolated”, informing them that the United States would never recognize any new government the coalition might set up, there would be no peace in Ecuador unless the military backed the vice president as the new leader, and the vice president must continue to pursue neoliberal “reforms”, the kind of IMF structural adjustment policies which had played a major role in inciting the uprising in the first place.
Within hours the heads of the Ecuadorian army, navy and air force declared their support for the vice president. The leaders of the uprising fled into hiding. And that was the end of the Ecuadorian revolution of the year 2000.1
Rafael Correa was first elected in 2006 with a 58% majority, and reelected in 2009 with a 55% majority; his current term runs until August 2013. The American mainstream media has been increasingly critical of him. The following letter sent in January to the Washington Post by the Ecuadoran ambassador to the United States is an attempt to clarify one of the issues.
Letter to the Editor:
We were offended by the Jan. 12 editorial “Ecuador’s bully,” which focused on a lawsuit brought by our president, Rafael Correa, after a newspaper claimed that he was guilty of ordering troops to fire on innocent citizens during a failed coup in 2010. The president asked the publishers to release their evidence or a retraction. When they refused, he sued, as any citizen should do when recklessly wronged.
No journalist has gone to prison or paid a significant fine in the five years of the Correa presidency. Media criticism — fair and unfair, sometimes with malice — of the government appears every day. The case involving the newspaper is on appeal. When the judicial process ends, the president has said, he will waive some or all of the penalties provided he gets a retraction. That is a common solution to libel and slander cases in the United States, I believe.
Your writer uses obnoxious phrases such as “banana republic,” but here is the reality of today’s Ecuador: a highly popular, stable and progressive democracy for the first time in decades.
Nathalie Cely, Washington
No shelter from the drones of infinite justice or the bacteria of enduring freedom
Afghanistan president Hamid Karzai said recently that he had had an argument with Gen. John Allen, the top US commander in Afghanistan, about the issue of American drone attacks in Afghanistan, following yet another deadly airstrike that killed a number of civilians. Karzai asked Allen an eminently reasonable question: “Do you do this in the United States?” The Afghan president added: “There is police action every day in the United States in various localities. They don’t call an airplane to bomb the place.”2
Karzai’s question to Allen was rhetorical of course, for can it be imagined that American officials would bomb a house in an American city because they suspected that certain bad guys were present there? Well, the answer to that question is that it can be imagined because they’ve already done it.
In Philadelphia, Pennsylvania. On May 13, 1985, a bomb dropped by a police helicopter burned down an entire block, some 60 homes destroyed, 11 dead, including several small children. The police, the mayor’s office, and the FBI were all involved in this effort to evict an organization called MOVE from the house they lived in.
The victims were all black of course. So let’s rephrase our question. Can it be imagined that American officials would bomb a house in Beverly Hills or the upper east side of Manhattan? Stay tuned.
And what else can we imagine about a society that’s been super militarized, that’s at war with much of the world, and is convinced that it’s on the side of the angels and history? Well, the Boston transit system, MBTA, recently announced that in conjunction with Homeland Security they plan to release dead bacteria at three stations during off-hours this summer in order to test sensors that detect biological agents, which terrorists could release into subway systems. The bacterium, bacillus subtilis, is not infectious even in its live form, according to the government.3
However, this too has a precedent. During five days in June, 1966 the Army conducted a test called “A Study of the Vulnerability of Subway Passengers in New York City to Covert Attack with Biological Agents”. Trillions ofbacillus subtilis variant niger were released into the subway system during rush hours, producing aerosol clouds. The report on the test noted that “When the cloud engulfed people, they brushed their clothing, looked up at the grate [at street level] and walked on.”4 The wind of passing trains spread the bacteria along the tracks; in the time it took for two trains to pass, the bacteria were spread from 15th Street to 58th Street.5 It is not known how many people later became ill from being unsuspecting guinea pigs because the United States Army, as far as is known, exhibited no interest in this question.
For the planned Boston test the public has not been informed of the exact days; nor is it known how long the bacteria might linger in the stations or what the possible danger might be to riders whose immune system has been weakened for any reason.
It should be noted that the New York subway experiment was only one of many such experiments. The Army has acknowledged that between 1949 and 1969, 239 populated areas from coast to coast as well as US overseas territories were blanketed with various organisms during tests designed to measure patterns of dissemination in the air, weather effects, dosages, optimum placement of the source, and other factors. Such testing was supposedly suspended after 1969.6
Government officials have consistently denied that the biological agents used could be harmful despite an abundance of expert and objective scientific evidence that exposure to heavy concentrations of even apparently innocuous organisms can cause illness, at a minimum to the most vulnerable segments of the population — the elderly, children, and those suffering from a variety of ailments. “There is no such thing as a microorganism that cannot cause trouble,” George Connell, assistant to the director of the Centers for Disease Control and Prevention, testified before the Senate in 1977. “If you get the right concentration at the right place, at the right time, and in the right person, something is going to happen.”7
The United States has used biological weapons abroad as well, repeatedly, not for testing purposes but for hostile purposes.8 So what will the land which has the highest (double) standards say when such weapons are used against it? Or when foreign drones hit American cities? Or when American hi-tech equipment is sabotaged by a cyber attack as the US has now admitted doing to Iran? A year ago the Pentagon declared that “computer sabotage coming from another country can constitute an act of war. … If you shut down our power grid, maybe we will put a missile down one of your smokestacks,” said a US military official.9
“The true hypocrite is the one who ceases to perceive his deception, the one who lies with sincerity.” – André Gide, French Author, 1869-1951
Barack Obama, his mother, and the CIA
In his autobiography, Dreams From My Fathers, Barack Obama writes of taking a job at some point after graduating from Columbia University in 1983. He describes his employer as “a consulting house to multinational corporations” in New York City, and his functions as a “research assistant” and “financial writer”.
Oddly, Obama doesn’t mention the name of his employer. However, a New York Times story of October 30, 2007 identifies the company as Business International Corporation. Equally odd is that the Times did not remind its readers that the newspaper itself had disclosed in 1977 that Business International had provided cover for four CIA employees in various countries between 1955 and 1960.10
The British journal, Lobster — which, despite its incongruous name, is a venerable international publication on intelligence matters — has reported that Business International was active in the 1980s promoting the candidacy of Washington-favored candidates in Australia and Fiji.11 In 1987, the CIA overthrew the Fiji government after but one month in office because of its policy of maintaining the island as a nuclear-free zone, meaning that American nuclear-powered or nuclear-weapons-carrying ships could not make port calls.12 After the Fiji coup, the candidate supported by Business International, who was much more amenable to Washington’s nuclear desires, was reinstated to power — R.S.K. Mara was Prime Minister or President of Fiji from 1970 to 2000, except for the one-month break in 1987.
In his book, not only doesn’t Obama mention his employer’s name; he fails to say exactly when he worked there, or why he left the job. There may well be no significance to these omissions, but inasmuch as Business International has a long association with the world of intelligence, covert actions, and attempts to penetrate the radical left — including Students for a Democratic Society (SDS)13 — it’s reasonable to wonder if the inscrutable Mr. Obama is concealing something about his own association with this world.
Adding to the wonder is the fact that his mother, Ann Dunham, had been associated during the 1970s and 80s — as employee, consultant, grantee, or student — with at least five organizations with intimate CIA connections during the Cold War: The Ford Foundation, Agency for International Development (AID), the Asia Foundation, Development Alternatives, Inc., and the East-West Center of Hawaii.14 Much of this time she worked as an anthropologist in Indonesia and Hawaii, being in good position to gather intelligence about local communities.
As one example of the CIA connections of these organizations, consider the disclosure by John Gilligan, Director of AID during the Carter administration (1977-81). “At one time, many AID field offices were infiltrated from top to bottom with CIA people. The idea was to plant operatives in every kind of activity we had overseas, government, volunteer, religious, every kind.”15 And Development Alternatives, Inc. is the organization for whom Alan Gross was working when arrested in Cuba and charged with being part of the ongoing American operation to destabilize the Cuban government.
How the owners of a society play with their property
The Supreme Court of the United States has just upheld the constitutionality of President Obama’s health care law, the Affordable Care Act. Liberals as well as many progressives are very pleased, regarding this as a victory for the left.
Under the new law, people can benefit in one way or another depending on the following factors:
Their age; whether their income is at or below 133 percent of the federal poverty level; whether their parents have a health plan; whether they use tobacco; what state they live in; whether they have a pre-existing medical condition; whether they qualify to buy health insurance through newly-created market places known as “exchanges”; and numerous other criteria … They can obtain medical insurance in a “competitive insurance market” (emphasis on the “competitive”); they can perhaps qualify for various other kinds of credits and tax relief if they meet certain criteria … The authors of the Act state that it will save thousands of dollars in drug costs for Medicare beneficiaries by closing a coverage gap called the “donut hole” … They tell us that “It keeps insurance companies honest by setting clear rules that rein in the worst insurance industry abuses.”
That’s a sample of how health care looks in the United States of America in the 21st century, with a complexity that will keep a small army of lawyers busy for years to come. Ninety miles away, in the Republic of Cuba, it looks a bit different. If you feel sick you go to a doctor. You’re automatically qualified to receive any medical care that’s available and thought to be suitable. The doctor treats you to the best of his or her ability. The insurance companies play no role. There are no insurance companies. You don’t pay anything. You go home.
The Affordable Care Act will undoubtedly serve as a disincentive to the movement for single-payer national health insurance, setting the movement back for years. The Affordable Care Act was undoubtedly designed for that purpose.
- Washington Post, January 23, 2000, p.1; “The coup in Ecuador: a grim warning”, World Socialist Web Site, February 2, 2000; Z Magazine (Massachusetts), February 2001, pp.36-7 ↩
- Washington Post, June 12, 2012 ↩
- Beacon Hill Patch (Boston), “MBTA to Spread Dead Bacteria on Red Line in Bio-Terror Test”, May 18, 2012 ↩
- Leonard Cole, Clouds of Secrecy: The Army’s Germ Warfare Tests over Populated Areas (1990), pp.65-9↩
- New York Times, September 19, 1975, p.14 ↩
- “Biological Testing Involving Human Subjects by the Department of Defense”, 1977, Hearings before the Subcommittee on Health and Scientific Research of the Committee on Human Resources, US Senate, March 8 and May 23, 1977; see also William Blum, Rogue State, chapter 15 ↩
- Senate Hearings, op. cit., p.270 ↩
- Rogue State, op. cit., chapter 14 ↩
- Wall Street Journal, May 30, 2011 ↩
- New York Times, December 27, 1977, p.40 ↩
- Lobster magazine, Hull, UK, #14, November 1987 ↩
- Rogue State, op. cit., pp.199-200 ↩
- Carl Oglesby, Ravens in the Storm: A Personal History of the 1960s Antiwar Movement (2008), passim↩
- Wikipedia entry for Ann Dunham ↩
- George Cotter, “Spies, strings and missionaries”, The Christian Century (Chicago), March 25, 1981, p.321
What is the second half of 2012 going to bring? Are things going to get even worse than they are right now? Unfortunately, that appears more likely with each passing day. I will admit that I am extremely concerned about the second half of 2012. Historically, a financial crisis is much more likely to begin in the fall than during any other season of the year. Just think about it. The stock market crash of 1929 happened in the fall. “Black Monday” happened on October 19th, 1987. The financial crisis of 2008 started in the fall. There just seems to be something about the fall that brings out the worst in the financial markets. But of course there is not a stock market crash every year. So are there specific reasons why we should be extremely concerned about what is coming this year? Yes, there are. The ingredients for a “perfect storm” are slowly coming together, and in the months ahead we could very well see the next wave of the economic collapse strike. Sadly, we have never even come close to recovering from the last recession, and this next crisis might end up being even more painful than the last one.
The following are 17 reasons to be extremely concerned about the second half of 2012….
#1 Historical Trends
A recent IMF research paper by Luc Laeven and Fabián Valencia showed that a banking crisis is far more likely to start in September than in any other month. The following chart is from their report….
So what will this September bring?
#2 JP Morgan
Do you remember back in May when JP Morgan announced that it would be taking a 2 billion dollar trading loss on some derivatives trades gone bad? Well, the New York Times is now reporting that the real figure could reach 9 billion dollars, but nobody really knows for sure. At some point is JP Morgan going to need a bailout? If so, what is that going to do to the U.S. financial system?
Last week, Moody’s downgraded the credit ratings of 15 major global banks. As a result, a number of them have been required to post billions of dollars in additional collateral against derivatives exposures….
Citigroup’s two-notch long-term rating downgrade from A3 to Baa2 could have led to US$500m in additional liquidity and funding demands due to derivative triggers and exchange margin requirements, according to the bank’s 10Q regulatory filing at the end of the first quarter.
Morgan Stanley – which Moody’s downgraded from A2 to Baa1 – said a two-notch downgrade from both Moody’s and Standard and Poor’s could spur an additional US$6.8bn of collateral requirements in its latest 10Q. The bank did not break down its potential collateral calls under a scenario where only Moody’s downgraded the bank below the Single A threshold.
Royal Bank of Scotland estimated it may have to post £9bn of collateral as a result of the one-notch Moody’s downgrade to Baa1 in a statement on June 21, but did not detail how much of this additional requirement was driven by margin for swaps exposures.
The worldwide derivatives market is starting to show some cracks, and at some point this is going to become a major disaster.
#4 LEAP/E2020 Warning
LEAP/E2020 has issued a red alert for the global financial system for this fall. They are warning that the “second half of 2012″ will represent a “major inflection point” for the global economic system….
The shock of the autumn 2008 will seem like a small summer storm compared to what will affect planet in several months.
In fact LEAP/E2020 has never seen the chronological convergence of such a series of explosive and so fundamental factors (economy, finances, geopolitical…) since 2006, the start of its work on the global systemic crisis. Logically, in our modest attempt to regularly publish a “crisis weather forecast”, we must therefore give our readers a “Red Alert” because the upcoming events which are readying themselves to shake the world system next September/ October belong to this category.
#5 Increasing Pessimism
One recent survey of corporate executives found that only 20 percent of them expect the global economy to improve over the next 12 months and 48 percent of them expect the global economy to get worse over the next 12 months.
The Spanish financial system is basically a total nightmare at this point. Moody’s recently downgraded Spanish debt to one level above junk status, and earlier this week Moody’s downgraded the credit ratings of 28 major Spanish banks.
According to CNBC, Spain’s short-term borrowing costs are now about three times higher than they were just one month ago….
Spain’s short-term borrowing costs nearly tripled at auction on Tuesday, underlining the country’s precarious finances as it struggles against recession and juggles with a debt crisis among its newly downgraded banks.
The yield paid on a 3-month bill was 2.362 percent, up from just 0.846 percent a month ago. For six-month paper, it leapt to 3.237 percent from 1.737 percent in May.
Needless to say, this is very, very bad news.
The situation in Italy continues to deteriorate and many analysts believe that it could be one of the next dominoes to fall. The following is from a recent Businessweek article….
The euro zone’s third-biggest economy is seen as the next domino at risk of toppling after the European Union’s June 9 deal to lend Spain $125 billion in bank bailout funds. Yields on Italy’s 10-year government bonds reached 6.2 percent on June 13, up from just 4.8 percent in March. By pushing up Italy’s borrowing costs out of fear of default, investors are making a default more likely.
A recent Fortune article detailed some of the economic fundamentals that have so many economists deeply concerned about the Italian economy right now….
The main glaring risk threats that could propel Italy down the path to become Europe’s next domino is the size of country’s outstanding debt (at €1.9 trillion or 120% of GDP); the mountain of debt it has to roll over in the next 12 months (nearly €400 billion); and the market’s cracking credibility around Prime Minister Mario Monti’s ability to reduce the country’s fiscal footprint and spur growth.
Further, fear around Italy’s creditworthiness, which has recently been expressed by near cycle highs in sovereign CDS spreads and government yields on the 10-year bond, follow some rather glaring negative fundamentals over recent quarters and years: declining GDP over the last three consecutive quarters; a rising unemployment rate (especially among its youth); deterioration in labor market competitiveness; and increased competition for export goods to its key trading partners.
I have written extensively about the financial nightmare that is unfolding in Greece. Unemployment has soared past the 20 percent mark, youth unemployment is above 50 percent, the Greek economy has contracted by close to 25 percentover the past four years and now Greek politicians are saying that a third bailout package may be necessary.
The tiny island nation of Cyprus has become the fifth member of the eurozone to formally request a bailout. This is yet another sign that the eurozone is rapidly falling apart.
German Chancellor Angela Merkel continues to promote an austerity path for Europe and she continues to maintain hervery firm position against any kind of eurozone debt sharing….
Merkel, speaking to a conference in Berlin today as Spain announced it would formally seek aid for its banks, dismissed “euro bonds, euro bills and European deposit insurance with joint liability and much more” as “economically wrong and counterproductive,” saying that they ran against the German constitution.
“It’s not a bold prediction to say that in Brussels most eyes — all eyes — will be on Germany yet again,” Merkel said. “I say quite openly: when I think of the summit on Thursday I’m concerned that once again the discussion will be far too much about all kinds of ideas for joint liability and far too little about improved oversight and structural measures.”
In fact, Merkel says that there will be no eurobonds “as long as I live“. This means that there will be no “quick fix” for the problems that are unfolding in Europe.
#11 Bank Runs
Every single day, hundreds of billions of dollars is being pulled out of banks in southern Europe. Much of that money is being transferred to banks in northern Europe.
Financial advisers and private bankers whose clients have accounts too large to be covered by a Europe-wide guarantee on deposits up to 100,000 euros ($125,000), are reporting a “bank run by wire transfer” that has picked up during May.
Much of this money has headed north to banks in London, Frankfurt and Geneva, financial advisers say.
“It’s been an ongoing process but it certainly picked up pace a couple of weeks ago We believe there is a continuous 2-3 year bank run by wire transfer,” said Lorne Baring, managing director at B Capital, a Geneva-based pan European wealth management firm.
How long can these bank runs continue before banking systems start to collapse?
#12 Preparations For The Collapse Of The Eurozone
As I have written about previously, the smart money has already written off southern Europe. All over the continent major financial institutions are preparing for the worst. For example, just check out what Visa Europe is doing….
Visa Europe is holding weekly meetings to discuss scenarios in the event the euro zone collapses, joining other companies that are preparing for a potential breakup of the currency bloc.
Chief Commercial Officer Steve Perry said Tuesday that management at the U.K.-based credit-card company meets weekly to explore various possible outcomes, including a total collapse of the euro zone.
#13 Global Lending Is Slowing Down
All over the globe the flow of credit is beginning to freeze up. In fact, the Bank for International Settlements says that worldwide lending is contracting at the fastest pace since the financial crisis of 2008.
#14 Sophisticated Cyber Attacks On Banks
It is being reported that “very sophisticated” hackers have successfully raided dozens of banks in Europe. So far, it is being estimated that they have stolen 60 million euros….
Sixty million euro has been stolen from bank accounts in a massive cyber bank raid after fraudsters raided dozens of financial institutions around the world.
According to a joint report by software security firm McAfee and Guardian Analytics, more than 60 firms have suffered from what it has called an “insider level of understanding”.
What happens someday if we wake up and all the money in the banks is gone?
#15 U.S. Municipal Bankruptcies
All over the United States there are cities and towns on the verge of financial disaster. This week Stockton, California became the largest U.S. city to ever declare bankruptcy, but the reality is that this is only just the beginning of the municipal debt crisis….
Stockton, California, said it will file for bankruptcy after talks with bondholders and labor unions failed, making the agricultural center the biggest U.S. city to seek court protection from creditors.
“The city is fiscally insolvent and must seek Chapter 9 bankruptcy protection,” Stockton said in a statement released yesterday after its council voted 6-1 to adopt a spending plan for operating under bankruptcy protection.
#16 The Obamacare Decision
The U.S. economy is already a complete and total mess, and now the Obamacare decision is going to throw a huge wet blanket on it. All over America, small business owners are saying that they are going to have to let some workers go because they cannot afford to keep them all under Obamacare. It would be hard to imagine a more job killing law than Obamacare, and now that the Supreme Court decision has finally been announced we are going to see many businesses making some really hard decisions.
#17 The U.S. Election
It is being reported that Barack Obama is putting together an army of “thousands of lawyers” to deal with any disputes that arise over voting procedures or results. It certainly looks like this upcoming election is going to be extremely close, and there is the potential that we could end up facing another Bush v. Gore scenario where the fate of the presidency is determined in court. This campaign season is likely to be exceptionally nasty, and I fear what may happen if there is not a decisive winner on election day. The possibility of significant civil unrest is certainly there.
We definitely live in “interesting” times.
Personally, I am deeply concerned about the September, October, November time frame.
The other day, Joe Biden delivered a speech in which he made the following statement….
“It’s A Depression For Millions And Millions Of Americans”
And what Biden said was right for once. Millions of Americans are out of work right now and millions of Americans have fallen out of the middle class in recent years. If you have lost everything, it does feel like you are living through a depression.
When people lose everything, they tend to get desperate. And desperate people do desperate things – especially when they are angry.
A whole host of recent opinion polls have shown that anger and frustration in the United States are rising to unprecedented levels. The ingredients are certainly there for an explosion. Someone just needs to come along and light the fuse. We truly do live in frightening times.
Let us hope for the best, but let us also prepare for the worst.
Source: The Economic Collapse
In Robert E. Gamer’s book “The Developing Nations” is a chapter called “Why Men Do Not Revolt.” In it Gamer notes that although the oppressed often do revolt, the object of their hostility is misplaced. They vent their fury on a political puppet, someone who masks colonial power, a despised racial or ethnic group or an apostate within their own political class. The useless battles serve as an effective mask for what Gamer calls the “patron-client” networks that are responsible for the continuity of colonial oppression. The squabbles among the oppressed, the political campaigns between candidates who each are servants of colonial power, Gamer writes, absolve the actual centers of power from addressing the conditions that cause the frustrations of the people. Inequities, political disenfranchisement and injustices are never seriously addressed. “The government merely does the minimum necessary to prevent those few who are prone toward political action from organizing into politically effective groups,” he writes.
Gamer and many others who study the nature of colonial rule offer the best insights into the functioning of our corporate state. We have been, like nations on the periphery of empire, colonized. We are controlled by tiny corporate entities that have no loyalty to the nation and indeed in the language of traditional patriotism are traitors. They strip us of our resources, keep us politically passive and enrich themselves at our expense. The mechanisms of control are familiar to those whom the Martinique-born French psychiatrist and writer Frantz Fanon called “the wretched of the earth,” including African-Americans. The colonized are denied job security. Incomes are reduced to subsistence level. The poor are plunged into desperation. Mass movements, such as labor unions, are dismantled. The school system is degraded so only the elites have access to a superior education. Laws are written to legalize corporate plunder and abuse, as well as criminalize dissent. And the ensuing fear and instability—keenly felt this past weekend by the more than 200,000 Americans who lost their unemployment benefits—ensure political passivity by diverting all personal energy toward survival. It is an old, old game.
A change of power does not require the election of a Mitt Romney or a Barack Obama or a Democratic majority in Congress, or an attempt to reform the system or electing progressive candidates, but rather a destruction of corporate domination of the political process—Gamer’s “patron-client” networks. It requires the establishment of new mechanisms of governance to distribute wealth and protect resources, to curtail corporate power, to cope with the destruction of the ecosystem and to foster the common good. But we must first recognize ourselves as colonial subjects. We must accept that we have no effective voice in the way we are governed. We must accept the hollowness of electoral politics, the futility of our political theater, and we must destroy the corporate structure itself.
The danger the corporate state faces does not come from the poor. The poor, those Karl Marx dismissed as the Lumpenproletariat, do not mount revolutions, although they join them and often become cannon fodder. The real danger to the elite comes from déclassé intellectuals, those educated middle-class men and women who are barred by a calcified system from advancement. Artists without studios or theaters, teachers without classrooms, lawyers without clients, doctors without patients and journalists without newspapers descend economically. They become, as they mingle with the underclass, a bridge between the worlds of the elite and the oppressed. And they are the dynamite that triggers revolt.
This is why the Occupy movement frightens the corporate elite. What fosters revolution is not misery, but the gap between what people expect from their lives and what is offered. This is especially acute among the educated and the talented. They feel, with much justification, that they have been denied what they deserve. They set out to rectify this injustice. And the longer the injustice festers, the more radical they become.
The response of a dying regime—and our corporate regime is dying—is to employ increasing levels of force, and to foolishly refuse to ameliorate the chronic joblessness, foreclosures, mounting student debt, lack of medical insurance and exclusion from the centers of power. Revolutions are fueled by an inept and distant ruling class that perpetuates political paralysis. This ensures its eventual death.
In every revolutionary movement I covered in Latin America, Africa and the Middle East, the leadership emerged from déclassé intellectuals. The leaders were usually young or middle-aged, educated and always unable to meet their professional and personal aspirations. They were never part of the power elite, although often their parents had been. They were conversant in the language of power as well as the language of oppression. It is the presence of large numbers of déclassé intellectuals that makes the uprisings in Spain, Egypt, Greece and finally the United States threatening to the overlords at Goldman Sachs, ExxonMobil and JPMorgan Chase. They must face down opponents who understand, in a way the uneducated often do not, the lies disseminated on behalf of corporations by the public relations industry. These déclassé intellectuals, because they are conversant in economics and political theory, grasp that those who hold power, real power, are not the elected mandarins in Washington but the criminal class on Wall Street.
This is what made Malcolm X so threatening to the white power structure. He refused to countenance Martin Luther King’s fiction that white power and white liberals would ever lift black people out of economic squalor. King belatedly came to share Malcolm’s view. Malcolm X named the enemy. He exposed the lies. And until we see the corporate state, and the games it is playing with us, with the same kind of clarity, we will be nothing more than useful idiots.
“This is an era of hypocrisy,” Malcolm X said. “When white folks pretend that they want Negroes to be free, and Negroes pretend to white folks that they really believe that white folks want ’em to be free, it’s an era of hypocrisy, brother. You fool me and I fool you. You pretend that you’re my brother and I pretend that I really believe you believe you’re my brother.”
Those within a demoralized ruling elite, like characters in a Chekhov play, increasingly understand that the system that enriches and empowers them is corrupt and decayed. They become cynical. They do not govern effectively. They retreat into hedonism. They no longer believe their own rhetoric. They devote their energies to stealing and exploiting as much, as fast, as possible. They pillage their own institutions, as we have seen with the newly disclosed loss of $2 billion within JPMorgan Chase, the meltdown of Chesapeake Energy Corp. or the collapse of Enron and Lehman Brothers. The elites become cannibals. They consume each other. This is what happens in the latter stages of all dying regimes. Louis XIV pillaged his own nobility by revoking patents of nobility and reselling them. It is what most corporations do to their shareholders. A dying ruling class, in short, no longer acts to preserve its own longevity. It becomes fashionable, even in the rarefied circles of the elite, to ridicule and laugh at the political puppets that are the public face of the corporate state.
“Ideas that have outlived their day may hobble about the world for years,” Alexander Herzen wrote, “but it is hard for them ever to lead and dominate life. Such ideas never gain complete possession of a man, or they gain possession only of incomplete people.”
This loss of faith means that when it comes time to use force, the elites employ it haphazardly and inefficiently, in large part because they are unsure of the loyalty of the foot soldiers on the streets charged with carrying out repression.
Revolutions take time. The American Revolution began with protests against the Stamp Act of 1765 but did not erupt until a decade later. The 1917 revolution in Russia started with a dress rehearsal in 1905. The most effective revolutions, including the Russian Revolution, have been largely nonviolent. There are always violent radicals who carry out bombings and assassinations, but they hinder, especially in the early stages, more than help revolutions. The anarchist Peter Kropotkin during the Russian Revolution condemned the radical terrorists, asserting that they only demoralized and frightened away the movement’s followers and discredited authentic anarchism.
Radical violent groups cling like parasites to popular protests. The Black Panthers, the American Indian Movement, the Weather Underground, the Red Brigades and the Symbionese Liberation Army arose in the ferment of the 1960s. Violent radicals are used by the state to justify harsh repression. They scare the mainstream from the movement. They thwart the goal of all revolutions, which is to turn the majority against an isolated and discredited ruling class. These violent fringe groups are seductive to those who yearn for personal empowerment through hyper-masculinity and violence, but they do little to advance the cause. The primary role of radical extremists, such as Maximilien Robespierre and Vladimir Lenin, is to hijack successful revolutions. They unleash a reign of terror, primarily against fellow revolutionaries, which often outdoes the repression of the old regime. They often do not play much of a role in building a revolution.
The power of the Occupy movement is that it expresses the widespread disgust with the elites, and the deep desire for justice and fairness that is essential to all successful revolutionary movements. The Occupy movement will change and mutate, but it will not go away. It may appear to make little headway, but this is less because of the movement’s ineffectiveness and more because decayed systems of power have an amazing ability to perpetuate themselves through habit, routine and inertia. The press and organs of communication, along with the anointed experts and academics, tied by money and ideology to the elites, are useless in dissecting what is happening within these movements. They view reality through the lens of their corporate sponsors. They have no idea what is happening.
Dying regimes are chipped away slowly and imperceptibly. The assumptions and daily formalities of the old system are difficult for citizens to abandon, even when the old system is increasingly hostile to their dignity, well-being and survival. Supplanting an old faith with a new one is the silent, unseen battle of all revolutionary movements. And during the slow transition it is almost impossible to measure progress.
“Sometimes people hold a core belief that is very strong,” Fanon wrote in “Black Skin, White Masks.” “When they are presented with evidence that works against that belief, the new evidence cannot be accepted. It would create a feeling that is extremely uncomfortable, called cognitive dissonance. And because it is so important to protect the core belief, they will rationalize, ignore and even deny anything that doesn’t fit in with the core belief.”
The end of these regimes comes when old beliefs die and the organs of security, especially the police and military, abandon the elites and join the revolutionaries. This is true in every successful revolution. It does not matter how sophisticated the repressive apparatus. Once those who handle the tools of repression become demoralized, the security and surveillance state is impotent. Regimes, when they die, are like a great ocean liner sinking in minutes on the horizon. And no one, including the purported leaders of the opposition, can predict the moment of death. Revolutions have an innate, mysterious life force that defies comprehension. They are living entities.
The defection of the security apparatus is often done with little or no violence, as I witnessed in Eastern Europe in 1989 and as was also true in 1979 in Iran and in 1917 in Russia. At other times, when it has enough residual force to fight back, the dying regime triggers a violent clash as it did in the American Revolution when soldiers and officers in the British army, including George Washington, rebelled to raise the Continental Army. Violence also characterized the 1949 Chinese revolution led by Mao Zedong. But even revolutions that turn violent succeed, as Mao conceded, because they enjoy popular support and can mount widespread protests, strikes, agitation, revolutionary propaganda and acts of civil disobedience. The object is to try to get there without violence. Armed revolutions, despite what the history books often tell us, are tragic, ugly, frightening and sordid affairs. Those who storm Bastilles, as the Polish dissident Adam Michnik wrote, “unwittingly build new ones.” And once revolutions turn violent it becomes hard to speak of victors and losers.
A revolution has been unleashed across the globe. This revolution, a popular repudiation of the old order, is where we should direct all our energy and commitment. If we do not topple the corporate elites the ecosystem will be destroyed and massive numbers of human beings along with it. The struggle will be long. There will be times when it will seem we are going nowhere. Victory is not inevitable. But this is our best and only hope. The response of the corporate state will ultimately determine the parameters and composition of rebellion. I pray we replicate the 1989 nonviolent revolutions that overthrew the communist regimes in Eastern Europe. But this is not in my hands or yours. Go ahead and vote this November. But don’t waste any more time or energy on the presidential election than it takes to get to your polling station and pull a lever for a third-party candidate—just enough to register your obstruction and defiance—and then get back out onto the street. That is where the question of real power is being decided.
Chris Hedges writes a regular column for Truthdig.com. Hedges graduated from Harvard Divinity School and was for nearly two decades a foreign correspondent for The New York Times.
Source: Truth Dig
Society as we know it will break down and collapse in a five stage process outlined here. While it can be accelerated by certain events like war, a natural disaster, pandemic, terrorist attack, or even an impending asteroid impact, history has shown that economic collapse will essentially happen in this five stage process. To survive the collapse, it is important to read and interpret the signs and understand what assets are important to the current situation so you can be prepared for the worst thereby allowing you to survive intact and with as little damage as possible.
STAGE 1. The Decay Begins
Everything is good and the economy is thriving. A high standard of living has been achieved. This is the way things should be. Goods are cheap and readily available. Everything seems to be in abundance. Stores are filled with retail items ready to be purchased. Life in general is good. The nation’s working infrastructure is solidly intact and working well. However, the idea that everyone is entitled to have what others have earned now permeates society. Redistribution of Wealth Policies are implemented and quietly woven into the fabric of society. Unchecked and under the guise of fairness and equality, these policies slowly decrease productivity and increase dependency on government entitlement and welfare programs.
- Home Value
- Investments – Stocks and bonds
- Health Insurance
- Lifestyle Image
- Good Credit Rating for Debt Accumulation
STAGE 2. The Slippery Slope
The economy goes into a slow but steadily increasing decline. Unemployment is on the rise. Ever increasing numbers of people receive government assistance in one form or another. People are paid not to work. Government spending has increased dramatically. The price of gold, silver, and other precious metals rise to prices unheard of just a few years earlier. Inflation reaches the double digit levels.
- Precious Metals, Gold and Silver coins
- Job Stability
- Elimination of debt
- Health Insurance
- Home Equity
- Automobile with good MPG
- Acquiring secluded land more than 40 miles from densely populated areas
STAGE 3. It is Going to Get Worse
The total collapse of the economy begins after a significant and prolonged decline. The government implements price controls. Shortages on essential goods become widespread. Foreclosed houses sit vacant and deteriorating by the tens of thousands. Middle class neighborhoods begin to look like slums. The government begins to print currency to pay its bills and support the tens of millions on public assistance. Inflation increases even more and unemployment exceeds 25%. Banks and businesses fail at ever increasing rates. Nobody seems to have any money. Many are now homeless. Labor unions instigate strikes, civil unrest, and large scale riots. Government services are interrupted and unreliable. Local and national infrastructure is in decay. Violent gangs begin to appear and assert themselves. The government begins confiscation of firearms from law abiding citizens. Violence is everywhere. Cities and urban areas become very dangerous places to live.
At this stage, the country seems pretty much beyond the point of no return. However, things can still be reversed even at this stage if the right person at the top really believes in the basic fundamental concepts of Freedom, Independence, Liberty, and Individual Rights and is not afraid to do what is necessary to reverse the current trend. He will be vilified and hated because of his attitude toward personal responsibility, cutting entitlements, and ending welfare programs. Of course, if the right person were in power and did what needed to be done, none of this would have happened in the first place.
- Gold and Silver coins
- Short term food supplies
- Short term fuel stores
- Firearms and ammo
- Plans to relocate to a secluded rural hideaway
- Small livestock – chicken, rabbit, fish…
- A close network of like minded people
- Survival knowledge and skills
STAGE 4. The Grab for Power
The collapse can transition to this stage at any time after Stage 3. Most of the middle class have lost everything. What used to be well manicured middle class neighborhoods are filled with the carcasses of empty houses damaged and destroyed by vandals. The nation’s infrastructure has been seriously neglected and is in need of a major overhaul. The power grid becomes unreliable. Rolling blackouts are a daily occurrence. You can no longer buy or sell gold or own foreign currency. Inflation is out of control. Now the economy collapses. There is a rush for everything and the shelves go empty in a matter of hours. Society falls into chaos. The control of urban areas shifts when violent gangs takeover control of the streets and urban neighborhoods. The government issues restrictive measures in an attempt to control the economy. Everything is in short supply and heavily rationed. Food and gasoline is very expensive and there are very long lines to get them when they are available. Affordable quality health care is non-existent and your job is a distant memory. You will do without what you are unable to provide for yourself. You will discover what it is to live in a third world country.
- Relocation to the rural hideaway
- Firearms and ammo
- Long term food supplies (1 year minimum)
- Adequate fuel stores
- Security plan to protect the group and assets
- Trained dog for security
- A working knowledge of survival gardening
- Survival knowledge and skills
Once all of the above has come to pass, the realization of the current circumstances at this moment must be all too obvious. It is too late to prepare at this point. What you did not acquire earlier, you are not going to possess now. Anything of value necessary for your survival has already been claimed. The situation gets worse… much worse.
Stage 5 is next… and it is not pretty.
STAGE 5. Freedom, Liberty, and Independence is Lost
The government implements martial law. Fighting between civilians and government forces break out nationwide. Maintaining more than a 30 day supply of food is considered hoarding food and is illegal. Severe poverty and starvation become a common sight. The government offers marginally acceptable food, water and shelter in exchange for your Freedom, Liberty, and Independence. Democracy ends and a Socialist form of government takes over under the guise of fixing society’s problems with the false promise that peace and prosperity will return better than it was just a few years ago. A Totalitarian regime assumes power and the individual freedoms and liberties once enjoyed by the people are completely eliminated.
- Rural Hideaway
- Security plan to protect the group and assets
- Living below the radar in a community of like minded people
- Firearms and the ability to use them
- Guard dog for security
- Survival knowledge and skills
- A working and producing garden capable of feeding 150% of the group
- A stable supply of clean water
- Vegetable seeds for long term food production and barter
- The will to live and survive in a harsh political climate
As you can see, priorities change as the world changes. Your most prized assets of today – your good credit, luxury automobile, and career are no longer important after the economy collapses.
FAILURE TO PREPARE TODAY WILL INCREASE THE MAGNITUDE OF YOUR SUFFERING TOMORROW.
It is better to prepare 10 years too early than 10 minutes too late. Many who lack vision will say that it will never happen and for those who decide to live unprepared should consider the following statement.
LACK OF PLANNING ON YOUR PART DOES NOT CONSTITUTE AN EMERGENCY ON MY PART.
Do you want to see what a 21st century economic depression looks like? Just look at Greece. Once upon a time, the Greek economy was thriving, the Greek government was borrowing money like there was no tomorrow and Greek citizens were thoroughly enjoying the bubble of false prosperity that all that debt created. Those that warned that Greece was headed for a financial collapse were laughed at and were called “doom and gloomers”. Well, nobody is laughing now. You see, the truth is that debt is a very cruel master. Greeks were able to live way beyond their means for many, many years but eventually a day of reckoning arrived. At this point, the Greek economy has been in a recession for five years in a row, and the economic crisis in that country is rapidly getting even worse. It was just recently announced that the overall rate of unemployment in Greece has soared above 20 percent and the youth unemployment rate has risen to an astounding 48 percent. One out of every five retail stores has been shut down and parents are literally abandoning children in the streets. The frightening thing is that this is just the beginning. Things are going to get a lot worse in Greece. And in case you haven’t been paying attention, these kinds of conditions are coming to the United States as well. We are heading down the exact same road as Greece went down, and the economic pain that this country is eventually going to suffer is going to be beyond anything that most Americans would dare to imagine.
All debt spirals eventually come to an end. For years, Greece borrowed huge amounts of very cheap money, but there came a point when the debt became absolutely strangling and the rest of the world refused to lend the Greek government money at such cheap rates anymore.
Greece would have defaulted long before now if the EU and the IMF had not stepped in to bail them out. But along with those bailouts came strings. The EU and the IMF insisted that the Greek government cut spending and raise taxes.
Well, those spending cuts and tax increases caused the economy to slow down. Tax revenues decreased and deficit reduction targets were missed. So the EU and the IMF insisted on even more spending cuts and tax increases.
Even after all of the spending cuts and all of the tax increases that we have seen, the debt to GDP ratio in Greece is still higher than it was before the crisis began. Today, the Greek national debt is sitting at 142 percent of GDP.
Now the EU and the IMF are demanding even more austerity measures before they will release any more bailout money.
Needless to say, the Greek people are pretty much exasperated by all of this. They created this mess by going into so much debt, but they certainly don’t like the solutions that are being imposed upon them.
Protesters in Greece are absolutely outraged that the EU and the IMF are now demanding a 22 percent reduction in the minimum wage.
Most families in Greece are just barely surviving at this point. Unfortunately, Greece is probably looking at depression conditions for many years to come.
Over the past three years, the size of the Greek economy has shrunk by 16 percent.
In 2012, it is being projected that the Greek economy will shrink by another 5 percent.
Sadly, that projection is probably way too optimistic.
Over the past couple of months, it has been like someone has pulled the rug out from under the Greek economy. Just check out the following numbers from an article in the Telegraph by Ambrose Evans-Pritchard….
Another normal day at the Hellenic Statistical Authority.
We learn that:
Greece’s manufacturing output contracted by 15.5pc in December from a year earlier.
Industrial output fell 11.3pc, compared to minus 7.8pc in November.
Unemployment jumped to 20.9pc in November, up from 18.2pc a month earlier.
I have little further to add. This is what a death spiral looks like.
Can you imagine unemployment going up by 2.7 percent in one month?
This is what a 21st century economic depression looks like.
And needless to say, civil unrest is rampant in Greece.
The following is how a USA Today article described some of the protests that we saw in Greece this week….
Scores of youths, in hoods and gas masks, used sledge hammers to smash up marble paving stones in Athens’ main Syntagma Square before hurling the rubble at riot police.
The country’s two biggest labor unions stopped railway, ferry and public transport schedules, and hospitals worked on skeleton staff while most public services were disrupted. Unions were planning protests in Athens and other cities around midday.
Greek citizens are exasperated by the endless rounds of austerity that are being imposed upon them. They wonder how far all of this is going to go.
How much higher can taxes go in Greece? Greece already has tax rates that are among the highest in Europe….
Greece has the third highest rate of VAT in Europe, second highest gas/petrol tax, third highest tax on social insurance contributions, fifth highest VAT on alcohol, highest property tax and one of the worst corporate tax rates, without the quality of living or competitiveness to match.
How much farther can government pay be cut? Greek civil servants have had their incomes slashed by about 40 percent since 2010.
How would you feel if your pay was reduced by 40 percent?
Large numbers of Greeks are rapidly reaching the end of their ropes. The following is from a recent article in the Independent….
“People are scared and haven’t really realised what’s happening yet,” George Pantsios, an electrician for the country’s public power corporation, said. He has only been receiving half of his €850 monthly wage since August. “But once we all lose our jobs and can’t feed our kids, that’s when it’ll go boom and we’ll turn into Tahrir Square.”
Instead of turning violent, others are simply giving in to despair. According tothe Daily Mail, large numbers of Greek children are being abandoned because their parents simply cannot afford to take care of them anymore. The note that one mother left with her little toddler was absolutely heartbreaking….
One mother, it said, ran away after handing over her two-year-old daughter Natasha.
Four-year-old Anna was found by a teacher clutching a note that read: ‘I will not be coming to pick up Anna today because I cannot afford to look after her. Please take good care of her. Sorry.’
Sadly, there are an increasing number of Greeks that are giving up on life entirely. The number of suicides in Greece rose by 40 percent during just one recent 12 month time period.
But we haven’t even seen the worst in Greece yet. The worst is still yet to come.
And the people of Greece are going to get angrier and angrier and angrier.
According to one recent poll, about 90 percent all of Greeks are unhappy with the interim government led by Prime Minister Lucas Papademos.
This week, that government has started to fall apart. Over just the past few days, 6 members of the 48-member government cabinet have resigned. Not only is there real doubt if the new austerity measures will be approved, there is very real doubt if this government will be able to hold together much longer.
Frustration with the EU and the IMF has reached a fever pitch in Greece. Just check out what Reuters is reporting….
In a letter obtained by Reuters on Friday, the Federation of Greek Police accused the officials of “…blackmail, covertly abolishing or eroding democracy and national sovereignty” and said one target of its warrants would be the IMF’s top official for Greece, Poul Thomsen.
So what is going to happen next in Greece?
The truth is that nobody knows.
But whatever kind of “deals” are reached, the reality is that nothing is going to keep Greece from continuing to experience depression-like conditions for quite some time.
Unfortunately, Greece is not an isolated case.
Portugal, Ireland, Italy and Spain are all going down the same path and Europe does not have enough money to bail all of them out.
To get an idea of how much money it would take to bail out the financially troubled nations of Europe, just check out this infographic that was recently posted on ZeroHedge.
A day of reckoning is coming for the United States as well. As CNBC recently noted, the U.S. debt problem is far worse than the European debt problem is.
Right now, the U.S. government is still able to borrow gigantic mountains of very cheap money and is spending money as if tomorrow will never come.
Well, just like we saw in Greece, when debt gets out of control a day of great pain eventually arrives.
What we are watching unfold in Greece right now is coming to America.
You better get ready.
Source: The Economic Collapse
The Lord High Almighty Pooh-Bah of Threats…
As we all know only too well, the United States and Israel would hate to see Iran possessing nuclear weapons. Being “the only nuclear power in the Middle East” is a great card for Israel to have in its hand. But — in the real, non-propaganda world — is USrael actually fearful of an attack from a nuclear-armed Iran? In case you’ve forgotten …
In 2007, in a closed discussion, Israeli Foreign Minister Tzipi Livni said that in her opinion “Iranian nuclear weapons do not pose an existential threat to Israel.” She “also criticized the exaggerated use that [Israeli] Prime Minister Ehud Olmert is making of the issue of the Iranian bomb, claiming that he is attempting to rally the public around him by playing on its most basic fears.” 1
2009: “A senior Israeli official in Washington” asserted that “Iran would be unlikely to use its missiles in an attack [against Israel] because of the certainty of retaliation.” 2
In 2010 the Sunday Times of London (January 10) reported that Brigadier-General Uzi Eilam, war hero, pillar of the Israeli defense establishment, and former director-general of Israel’s Atomic Energy Commission, “believes it will probably take Iran seven years to make nuclear weapons.”
Early last month, US Secretary of Defense Leon Panetta told a television audience: “Are they [Iran] trying to develop a nuclear weapon? No, but we know that they’re trying to develop a nuclear capability.” 3
A week later we could read in the New York Times (January 15) that “three leading Israeli security experts — the Mossad chief, Tamir Pardo, a former Mossad chief, Efraim Halevy, and a former military chief of staff, Dan Halutz — all recently declared that a nuclear Iran would not pose an existential threat to Israel.”
Then, a few days afterward, Israeli Defense Minister Ehud Barak, in an interview with Israeli Army Radio (January 18), had this exchange:
Question: Is it Israel’s judgment that Iran has not yet decided to turn its nuclear potential into weapons of mass destruction?
Barak: People ask whether Iran is determined to break out from the control [inspection] regime right now … in an attempt to obtain nuclear weapons or an operable installation as quickly as possible. Apparently that is not the case.
Lastly, we have the US Director of National Intelligence, James Clapper, in a report to Congress: “We do not know, however, if Iran will eventually decide to build nuclear weapons. … There are “certain things [the Iranians] have not done” that would be necessary to build a warhead. 4
Admissions like the above — and there are others — are never put into headlines by the American mass media; indeed, only very lightly reported at all; and sometimes distorted — On the Public Broadcasting System (PBS News Hour, January 9), the non-commercial network much beloved by American liberals, the Panetta quote above was reported as: “But we know that they’re trying to develop a nuclear capability, and that’s what concerns us.” Flagrantly omitted were the preceding words: “Are they trying to develop a nuclear weapon? No …” 5
One of Israel’s leading military historians, Martin van Creveld, was interviewed by Playboy magazine in June 2007:
Playboy: Can the World live with a nuclear Iran?
Van Creveld: The U.S. has lived with a nuclear Soviet Union and a nuclear China, so why not a nuclear Iran? I’ve researched how the U.S. opposed nuclear proliferation in the past, and each time a country was about to proliferate, the U.S. expressed its opposition in terms of why this other country was very dangerous and didn’t deserve to have nuclear weapons. Americans believe they’re the only people who deserve to have nuclear weapons, because they are good and democratic and they like Mother and apple pie and the flag. But Americans are the only ones who have used them. … We are in no danger at all of having an Iranian nuclear weapon dropped on us. We cannot say so too openly, however, because we have a history of using any threat in order to get weapons … thanks to the Iranian threat, we are getting weapons from the U.S. and Germany.”
And throughout these years, regularly, Israeli and American officials have been assuring us that Iran is World Nuclear Threat Number One, that we can’t relax our guard against them, that there should be no limit to the ultra-tough sanctions we impose upon the Iranian people and their government. Repeated murder and attempted murder of Iranian nuclear scientists, sabotage of Iranian nuclear equipment with computer viruses, the sale of faulty parts and raw materials, unexplained plane crashes, explosions at Iranian facilities … Who can be behind this but USrael? How do we know? It’s called “plain common sense”. Or do you think it was Costa Rica? Or perhaps South Africa? Or maybe Thailand?
Defense Secretary Panetta recently commented on one of the assassinations of an Iranian scientist. He put it succinctly: “That’s not what the United States does.” 6
Does anyone know Leon Panetta’s email address? I’d like to send him my list of United States assassination plots. More than 50 foreign leaders were targeted over the years, many successfully. 7
Not long ago, Iraq and Iran were regarded by USrael as the most significant threats to Israeli Middle-East hegemony. Thus was born the myth of Iraqi Weapons of Mass Destruction, and the United States proceeded to turn Iraq into a basket case. That left Iran, and thus was born the myth of the Iranian Nuclear Threat. As it began to sink in that Iran was not really that much of a nuclear threat, or that this “threat” was becoming too difficult to sell to the rest of the world, USrael decided that, at a minimum, it wanted regime change. The next step may be to block Iran’s lifeline — oil sales using the Strait of Hormuz. Ergo, the recent US and EU naval buildup near the Persian Gulf, an act of war trying to goad Iran into firing the first shot. If Iran tries to counter this blockade it could be the signal for another US Basket Case, the fourth in a decade, with the devastated people of Libya and Afghanistan, along with Iraq, currently enjoying America’s unique gift of freedom and democracy.
On January 11, the Washington Post reported: “In addition to influencing Iranian leaders directly, [a US intelligence official] says another option here is that [sanctions] will create hate and discontent at the street level so that the Iranian leaders realize that they need to change their ways.”
How utterly charming, these tactics and goals for the 21st century by the leader of “The Free World”. (Is that expression still used?)
The neo-conservative thinking (and Barack Obama can be regarded as often being a fellow traveler of such) is even more charming than that. Listen to Danielle Pletka, vice president for foreign and defense policy studies at America’s most prominent neo-con think tank, American Enterprise Institute:
The biggest problem for the United States is not Iran getting a nuclear weapon and testing it, it’s Iran getting a nuclear weapon and not using it. Because the second that they have one and they don’t do anything bad, all of the naysayers are going to come back and say, “See, we told you Iran is a responsible power. We told you Iran wasn’t getting nuclear weapons in order to use them immediately.” … And they will eventually define Iran with nuclear weapons as not a problem. 8
What are we to make of that and all the other quotations above? I think it gets back to my opening statement: Being “the only nuclear power in the Middle East” is a great card for Israel to have in its hand. Is USrael willing to go to war to hold on to that card?
Please tell me again … What is the war in Afghanistan about?
With the US war in Iraq supposedly having reached a good conclusion (or halfway decent … or better than nothing … or let’s get the hell out of here while some of us are still in one piece and there are some Iraqis we haven’t yet killed), the best and the brightest in our government and media turn their thoughts to what to do about Afghanistan. It appears that no one seems to remember, if they ever knew, that Afghanistan was not really about 9-11 or fighting terrorists (except the many the US has created by its invasion and occupation), but was about pipelines.
President Obama declared in August 2009: “But we must never forget this is not a war of choice. This is a war of necessity. Those who attacked America on 9/11 are plotting to do so again. If left unchecked, the Taliban insurgency will mean an even larger safe haven from which al Qaeda would plot to kill more Americans.” 9
Never mind that out of the tens of thousands of people the United States and its NATO front have killed in Afghanistan not one has been identified as having had anything to do with the events of September 11, 2001.
Never mind that the “plotting to attack America” in 2001 was devised in Germany and Spain and the United States more than in Afghanistan. Why hasn’t the United States bombed those countries?
Indeed, what actually was needed to plot to buy airline tickets and take flying lessons in the United States? A room with some chairs? What does “an even larger safe haven” mean? A larger room with more chairs? Perhaps a blackboard? Terrorists intent upon attacking the United States can meet almost anywhere, with Afghanistan probably being one of the worst places for them, given the American occupation.
The only “necessity” that drew the United States to Afghanistan was the desire to establish a military presence in this land that is next door to the Caspian Sea region of Central Asia — which reportedly contains the second largest proven reserves of petroleum and natural gas in the world — and build oil and gas pipelines from that region running through Afghanistan.
Afghanistan is well situated for oil and gas pipelines to serve much of south Asia, pipelines that can bypass those not-yet Washington clients, Iran and Russia. If only the Taliban would not attack the lines. Here’s Richard Boucher, US Assistant Secretary of State for South and Central Asian Affairs, in 2007: “One of our goals is to stabilize Afghanistan, so it can become a conduit and a hub between South and Central Asia so that energy can flow to the south.” 10
Since the 1980s all kinds of pipelines have been planned for the area, only to be delayed or canceled by one military, financial or political problem or another. For example, the so-called TAPI pipeline (Turkmenistan-Afghanistan-Pakistan-India) had strong support from Washington, which was eager to block a competing pipeline that would bring gas to Pakistan and India from Iran. TAPI goes back to the late 1990s, when the Taliban government held talks with the California-based oil company Unocal Corporation. These talks were conducted with the full knowledge of the Clinton administration, and were undeterred by the extreme repression of Taliban society. Taliban officials even made trips to the United States for discussions. 11 Testifying before the House Subcommittee on Asia and the Pacific on February 12, 1998, Unocal representative John Maresca discussed the importance of the pipeline project and the increasing difficulties in dealing with the Taliban:
The region’s total oil reserves may well reach more than 60 billion barrels of oil. Some estimates are as high as 200 billion barrels … From the outset, we have made it clear that construction of the pipeline we have proposed across Afghanistan could not begin until a recognized government is in place that has the confidence of governments, leaders, and our company.
When those talks stalled in July, 2001 the Bush administration threatened the Taliban with military reprisals if the government did not go along with American demands. The talks finally broke down for good the following month, a month before 9-11.
The United States has been serious indeed about the Caspian Sea and Persian Gulf oil and gas areas. Through one war or another beginning with the Gulf War of 1990-1, the US has managed to establish military bases in Saudi Arabia, Kuwait, Bahrain, Qatar, Oman, Afghanistan, Pakistan, Uzbekistan, Tajikistan, Kyrgyzstan, and Kazakhstan.
The war against the Taliban can’t be “won” short of killing everyone in Afghanistan. The United States may well try again to negotiate some form of pipeline security with the Taliban, then get out, and declare “victory”. Barack Obama can surely deliver an eloquent victory speech from his teleprompter. It might even include the words “freedom” and “democracy”, but certainly not “pipeline”.
Love me, love me, love me, I’m a Liberal (Thank you, Phil Ochs. We miss you.)
Angela Davis, star of the 1960s, like most members of the Communist Party, was/is no more radical than the average American liberal. Here she is recently addressing Occupy Wall Street: “When I said that we need a third party, a radical party, I was projecting toward the future. We cannot allow a Republican to take office. … Don’t we remember what it was like when Bush was president?” 12
Yes, Angela, we remember that time well. How can we forget it since Bush, by all important standards, is still in the White House? Waging perpetual war, relentless surveillance of the citizenry, kissing the corporate ass, police brutality? … What’s changed? Except for the worse. Where’s our single-payer national health insurance? Nothing even close. Where’s our affordable university education? Still the most backward in the “developed” world. Where’s our legalized marijuana — I mean really legalized? If you think that’s changed, you must be stoned. Where’s our abortion on demand? What does your guy Barack think about that? Are the indispensable labor unions being rescued from oblivion? Ha! The ultra-important minimum wage? Inflation adjusted, equal to the mid-1950s.
Has the American threat to the environment and the world environmental movement ceased? Tell that to a dedicated activist-internationalist. Has the 50-year-old embargo against Cuba finally ended? It has not, and I can still not go there legally. The police-state War on Terror at home? Scarcely a month goes by without the FBI entrapping some young “terrorists”. Are more Banksters and Wall Street Society-Screwers (except for the harmless insider-traders) being imprisoned? Name one. The really tough regulations of the financial area so badly needed? Keep waiting. How about executives of the BP Oil Spill Company being arrested? Or war criminals, mass murderers, and torturers with names like … Oh, I don’t know, let’s see … maybe like Cheney or Bush or Rumsfeld or Wolfowitz or someone with a crazy name like Condoleezza? All walking completely free, all celebrated.
“A major decline of progressive America occurred during the Clinton years as many liberals and their organizations accepted the presence of a Democratic president as an adequate substitute for the things liberals once believed in. Liberalism and a social democratic spirit painfully grown over the previous 60 years withered during the Clinton administration.” — Sam Smith13
“A change of Presidents is like a change of advertising campaigns for a soft drink; the product itself still tastes the same, but it now has a new ‘image’.” — Richard K. Moore
- Haaretz.com (Israel), October 25, 2007; print edition October 26
- Washington Post, March 5, 2009
- “Face the Nation”, CBS, January 8, 2012; see video
- The Guardian (London), January 31, 2012″
- “PBS’s Dishonest Iran Edit”, FAIR (Fairness and Accuracy in Reporting), January 10, 2012
- Reuters, January 12, 2012
- Video of Pletka making these remarks
- Talk given by the president at Veterans of Foreign Wars convention, August 17, 2009
- Talk at the Paul H. Nitze School for Advanced International Studies, Washington, DC, September 20, 2007
- See, for example, the December 17, 1997 article in the British newspaper, The Telegraph, “Oil barons court Taliban in Texas“. For further discussion of the TAPI pipeline and related issues, see this article by international petroleum engineer John Foster.
- Washington Post, January 15, 2012
- Sam Smith was a longtime publisher and journalist in Washington, DC, now living in Maine. Subscribe to his marvelous newsletter, the Progressive Review.
Sometimes it explodes. But social explosions are rare events. Are the Wall Street protests and their nationwide copycats an explosion or just a flare up? For an explosion to happen there must be not only explosive material, but plenty of oxygen to feed the fire. For social movements this means that enough working people, students, and unemployed find the necessary unity and inspiration to push through obstacles and maintain enthusiasm. The Wall Street protests have ingredients that can create such unity but the threat of extinguishing it is real.
Although many of the Wall Street protesters are following the tactics of the Arab Revolutions, they’ve begun on a higher plane politically. The Arab dictatorships made for an easy target and helped unify working people against the regimes; the Wall Street protesters, however, have already identified the money interests behind the bad government in the U.S. — a very similar money interest that rules post-Mubarack Egypt that Egyptians are still mobilizing to dethrone.
But the political head start of Occupy Wall Street doesn’t mean they can skip over the need to unify working people in the Egyptian way. The need for concrete political demands becomes all the more important now that the financial elite is the target. And although the Occupy Wall Street movement has put forth some excellent demands, they have not elaborated specific policies that would achieve these demands. Some examples of their demands include: “Ending wealth inequality, ending homelessness, ending poverty, and ending political corruption.”
The protesters might think that making the demands broad enough will open the gates to a wider number of people. But these demands create two dangers: 1) working people may simply view the demands as unattainable, since all people would like to end poverty but see no way to achieve it. 2) vague demands invite political opportunists into the fold, who would like to join the movement in order to kill it.
For example, President of the group Rebuild the Dream, Van Jones, has recently pushed his Democratic Party-friendly organization into the Occupy Wall Street fold. And although Rebuild the Dream puts forth some progressive demands, its ultimate purpose is to mobilize people to re-elect President Obama, a puppet of Wall Street.
If Occupy Wall Street openly identifies both Democrats and Republicans as being in the pockets of Wall Street, opportunists like Jones would find no platform to push their nefarious ulterior motives. In the same way that many rich Egyptians exploited the anti-Mubarack protests for their own ends, the U.S. protests face a similar threat, though better disguised.
More specific demands would also help to accelerate the number of labor unions who join the movement. It must be noted that the union-inspired explosion in Wisconsin and smaller flare-ups around the country helped create the kindling for the sparks on Wall Street. The more unions that join the movement, the more logs go on the fire, and the more ability to reach out via labor’s resources to the wider oppressed community. It is no surprise that the labor unions in Egypt — after having helped activate the younger activists via strike waves — are now leading the charge, post-Mubarack, with a new, larger flurry of strike activity. If Occupy Wall Street made a special effort to attract union support, the movement as a whole would benefit greatly.
Some examples of labor-friendly demands that Occupy Wall Street might consider were recently endorsed by the Oregon AFL-CIO state convention, itself based on a resolution passed by the San Francisco Labor Council that calls for mass mobilizations to demand: “Make no cuts or concessions in wages, benefits, and social welfare programs; Tax Wall Street Banks, large and multi-national corporations, and the wealthiest Americans at both the federal and state level; make public investments in education, rebuilding of infrastructure, and public transit improvements.”
Although it is good to demand “end unemployment,” it’s better still to demand “tax the rich to create jobs and save social programs.” Not only would such demands attract more labor unions, it would keep union leaders honest; some union leaders have a bad habit of focusing on “foreign trade” and specifically China instead of the corporations and banks inside the U.S. The same labor leaders have an equally bad habit of supporting Wall Street-owned Democrats, making “political independence” an especially necessary position of the movement. Moreover, these demands give a people a sense of what immediate steps could be taken to move from the present to a better future, and they give a sense of where the obstacles lie to a better future: the wealthy elite who want to preserve their privileges.
Finally, union support is crucial because in order for working people to indefinitely occupy something — without fear of losing their jobs — a unified labor movement would need to be organized enough to go on strike and join the street protesters, something that can only happen now on the weekends.
Ultimately, the Occupy Wall Street protests have already succeeded. The movement has successfully re-focused the nation’s debate on who ruined the economy and who should be targeted, shifting blame away from immigrants, unions, and other groups of working people, like public employees. The protests have also re-fueled working people’s energy after the post-Wisconsin letdown, activating the energies of many who want to collectively organize for progressive change in the interests of working people.
But all movements either grow or shrink. A large Occupy Wall Street march across the Brooklyn Bridge on October 1st resulted in 700 arrests. Through such tactics the police intend to chip away at the movement until they feel strong enough to strangle it. The Occupy Wall Street movement must attract a growing number of allies or face an inevitable smothering.
Every social movement faces countless obstacles by those in power. Although brute force is used to stifle movements when they become especially effective, more subtle methods are typically employed. Diverting movements to adopt ineffective strategies and “safe” ideas is the normal way people in power keep others powerless. When applied to the barely-moving labor movement, these methods are becoming increasingly important, as workers strive to defend themselves against attacks on their wages, benefits and social programs such as Social Security, Medicare and Medicaid. Before working people can become powerfully independent, they must first shake off the shackles of bad ideas and fake solutions.
What are these misleading ideas and who benefits from them? In response to the non-functioning economy, an idea becoming popular in the mainstream media — and echoed among some labor leaders — is for the U.S. government to adopt strategies that will re-vitalize domestic manufacturing. At first sight such an idea appears “progressive,” since industrial manufacturing was the basis for the U.S. labor movement. But times have changed. The policies being proposed that would breathe new life into U.S. manufacturing would suck the life from the labor movement.
What are these policies? There are two general ideas to “boost manufacturing,” both ineffectual for working people: 1) Obama’s free-trade approach, where wages in the U.S. are driven down far enough to compete with lower-wage countries like China and India on the international free market, combined with signing bi-lateral free-trade agreements with smaller economies like Colombia, Peru, South Korea, etc. 2) Protectionist trade policies, where foreign imports are shut out of the U.S. market, giving U.S. corporations monopoly domination of the market. Sadly, U.S. labor leaders have supported both ideas to varying degrees.
For example, Obama’s anti-worker free-trade approach was displayed by his “nationalization” of General Motors and Chrysler. This move is now celebrated by labor unions as having “saved the auto industry,” but at what expense? A key aspect of the “restructuring” of the companies was the insistence that workers make far less money, so that they could be “competitive” on the global market. The result is that new hires at automobile plants — as part of the “two-tier wage system” — make $14 an hour, with far fewer benefits on the side than do incumbent workers who make twice as much. This is not a temporary measure, but the “new normal.” A recent article in the New York Times was revealingly titled: Detroit Sets Its Future on a Foundation of Two-Tier Wages:
“The new [lower wage] jobs, which are seen as long term, are being watched closely by economists, executives in other industries and Washington policy makers eager to increase employment in manufacturing and other areas…What was once seen as a desperate move [the two-tier system] to prop up the struggling auto industry is now considered an integral part of its future…” “This is not going away,” said Kristin Dziczek, a labor analyst at the Center for Automotive Research in Ann Arbor, Michigan. “It has allowed the Big Three to reduce labor costs without cutting the pay of incumbent workers. Is it good for the health and competitiveness of the companies? Yes.” (September 12, 2011).
These ideas are applicable to the entire manufacturing sector and are an integral piece of Obama’s approach to revive U.S. manufacturing. ”Auto Czar” Ron Bloom — a former Steelworkers employee — oversaw the above auto-restructuring plan. Bloom was also nicknamed Obama’s Manufacturing Emissary, meaning that his approach towards the auto restructuring was to apply to the wider economy as well. In an article about Bloom and the Obama administration’s manufacturing strategy, The New York Times reported:
“The Obama administration is counting on sharp increases in exports to buoy the nation’s manufacturers. The president has set a goal of doubling exports in the next five years.” (September 9, 2010). What the article doesn’t mention is that, for the U.S. to double its exports, U.S. workers will likely have to shrink their wages in the way that GM workers were forced to, all in the name of “competitiveness.”
The recession is performing this task of wage shrinking with amazing efficiency. Wages are shriveling as corporations and state governments use the threat of unemployment to demand concessions. Bloomberg reports:
“More than half of U.S. workers were either unemployed or experienced reductions in hours or wages since the recession began in December 2007… The worst economic slump since the 1930s has affected 55 percent of adults in the labor force…” (June 30, 2010).
This is one reason that nothing of substance is being done about the massive unemployment problem in the U.S.: it effectively drives down wages which, in turn, is good for exports and manufacturing.
The not-so-radical alternative to Obama’s free-trade approach is its opposite, restricting free-trade via protectionist trade policies. Within this category the three most frequently demanded policies from liberal economists and labor leaders are:
1) increasing taxes on foreign imports (especially China).
2) Demanding that China re-value its currency, so that U.S. corporations can increase their exports on the world market, since China’s exports will no longer be as cheap as they have been.
3) Demanding that U.S. government contracts go to U.S. corporations, instead of the bidding system that aims for the cheapest price.
Here’s how Thea Lee, deputy chief of staff to the President of the AFL-CIO, explains it:
“There are two pieces to what it would take to rejuvenate manufacturing. One is trade policy, a more restrictive approach than the free trade, open borders arrangement that we now have. The other is to reward domestic production. When the government makes a purchase, for example, the presumption should be that the first crack goes to manufacturers who stay within the United States.”
There are many reasons why these ideas are false solutions for working people. Protectionist policies fail economically because they trigger economic retaliation: if we shut out Chinese goods, then China shuts out U.S. goods, blocking the exports that were supposed to result from the action. Such a trade war implies a lower standard of living for both countries, since economic cooperation and exchanging resources — no matter how unequal — is superior to sealed borders. By blocking cheap Chinese imports, consumer goods in the U.S. would skyrocket in price, while workers wages would remain low. Also, history shows that trade wars and military wars are closely linked. Working people would end up suffering most from all of these unintended consequences.
One myth about trade is that all corporations are pro-free-trade. In fact, only the most successful multi-national corporations are for free trade, so that they can ship and sell their products with ease around the globe. There are many U.S. corporations that are anti-free trade — less competitive companies — none of which deserve working people’s support. Both free-trade and protectionist corporations are anti-worker, meaning that their profits depend, in large part, on low wages and weak benefits.
The best example of how being anti-free trade is not “progressive” is that the political far-right — including self-proclaimed fascists — eagerly advocate protectionist policies. These groups view the world through corporate-colored lenses; their trade policy is not a “progressive” exception to an otherwise reactionary worldview. They blame foreign countries and immigrants — and unions — for U.S. economic problems, but never the corporations inside their countries who dominate the economy and politics.
Why are trade policies incapable of resurrecting both manufactures and higher wages like the post World War II era? After World War II the U.S. had near-monopoly status over many industries, since their competitors had been obliterated by warfare. Now, numerous big multinationals in various countries have equal levels of capital and technology, creating a dog-eat-dog competitive struggle on the world marketplace, with low wages being the trump card for a successful manufacturing sector.
The recession has heightened the competitive tension between corporate-dominated nations in their quest to dominate foreign markets, a goal that can be achieved through free-trade agreements, military intervention, and lower domestic wages (the U.S. uses all three tactics at once). Currency manipulation — done by the U.S. and China — is becoming the new trend in this fight for markets, signaling a desperateness that comes from exhausted options. It’s possible that, during this struggle for markets, U.S. corporations may switch to protectionist policies in order to monopolize the U.S. market if they feel uncompetitive on the world market. Such a move will not be “progressive.” Whatever the trade policy, working people cannot support “their” nation’s corporations over foreign ones, since working people do not own corporations, but suffer under them.
This is the worst part about the labor movement advocating protectionist trade policies. It assumes that working people have a stake in the corporate battle for global markets. This assumption disarms the labor movement from having an independent strategy, funneling working-class energy into supporting domestic corporations against foreign competition.
If free trade and protectionism are both bad, what is the alternative? This question automatically triggers a greater questioning of capitalism itself, since both free trade and protectionism are based on the assumption that giant corporations will continue to dominate the economy, and consequently politics. As long as corporations own the economy, workers cannot overly concern themselves with how these corporate products are bought and sold. The best way for workers to challenge corporate power is not through lobbying politicians to restrict free trade, but by waging battles at the work sites and in the streets for demands that resonate with all workers. And in the final analysis, workers of each country must come to the realization that workers in other countries are their real allies, not the corporations in their own country. Until workers realize this, they will be caught in the web of the corporate agenda that has workers of each country competing against workers in other countries by accepting increasingly lower wages. But when workers in one country go on strike in support of workers in another country who are demanding higher wages, then all workers will benefit. The race to the bottom will be replaced by the race to the top.
The issue of the day for U.S. workers is how to fight for jobs, better wages, benefits, and how to save their social programs. If workers fight for these demands and ignore diversions such as trade, a powerful movement can erupt that could actually unite the majority of working people, including on an international level, and thus render the corporations powerless.
The health care crisis in the United States is getting worse with no visible end. The popular anger over unattainable or unaffordable health care has been diverted away from corporations by crafty politicians, always seeking to exploit a social disaster for their benefactors. Instead of making health care more affordable for the average person, politicians have successfully switched the messaging. Now, the purpose behind “reform” is to make health care less costly for governments and employers, at the expense of patients and workers.
This was the essence behind Obama’s health care reform. And although Republicans exploited the “individual mandate” in Obamacare to gain populist credentials, they wholeheartedly agree with the deeper philosophy of the plan, which aspires to control health care costs — for corporations and governments — by providing less health care services to those who need it. This agreement to “ration” health care aligns the two parties over the coming cuts to Medicare in Obama’s bi-partisan “Super Congress,” while also binding the two parties’ approach to health care on a state and business level.
Most workers now understand that there is a difference between apparently having health care and actually having health care: if you are technically “insured” but cannot afford doctor visits due to high deductibles and co-pays, you really aren’t insured.
This fact, applied to Medicare, has startling consequences. The New England Journal of Medicine found that, “For every 100 people enrolled in plans that raised co-pays, there were 20 fewer doctor visits, 2 additional hospital admissions and 13 more days spent in the hospital…”
When co-pays and deductibles are raised, people simply stop going to the doctor and use the emergency room as needed.
This dynamic pleased politicians because less Medicare money was being spent on doctors’ visits, but they were upset that hospital stays were more frequent. The answer? Stop paying Medicare payments to hospitals if they re-admit a patient after 30 days, a policy sure to “reduce costs.” And it worked! This aspect of Obama’s Affordable Health Care Act gives hospitals financial incentives not to admit patients and, according to Bloomberg, is a major reason that Medicare costs have dropped significantly in the past year:
“Historically, nearly 20 percent of Medicare patients have been readmitted to a hospital within 30 days of being discharged… The Affordable Care Act included, among other remedies, a modest penalty for hospitals with high readmission rates.” (August 24th, 2011).
The problem here is that re-admissions are usually medically necessary. According to a study by the Agency for Healthcare Research and Quality, only one out of ten hospital re-admissions were preventable. Hospitals are thus encouraged to deny hospital stays to those who need it, something they’ve already started. According to Case Management Monthly, hospital social workers have noticed this disturbing trend accelerate: ”Several case managers have recently received readmission denial letters…they are surprised because the readmissions in question were actually appropriate and medically necessary.” (October 1st, 2010).
Cost saving ideas like these are at the heart of Obama’s health care plan — which included massive cuts to Medicare — and further cuts to Medicare can be expected in his Super Congress. Even if the bi-partisan Super Congress is unable to agree to make massive cuts to social programs, cuts to Medicare will be automatically “triggered.” Obama tells us not to worry because the triggered Medicare cuts will affect only providers — hospitals and doctors — not patients, as if the two could be so easily separated. The above example of denied hospital re-admissions is also a case where providers were targeted for cuts but patients were the most affected.
Another way that politicians are saving health care money is by slashing Medicaid, the shared federal-state health care program that serves low-income populations. The states’ budget crises are quickly debilitating this already under-funded program, reducing availability and quality of health care for those low income people who qualify for the program. USA Today reports:
“With a shortage of doctors…[ Medicaid] patients have little choice but to use hospital emergency rooms for more routine care.” (July 5th, 2011).
Higher income workers across the country are also seeing their health care rapidly deteriorate. The shoddy health insurance that includes high deductibles and co-pays are standard to most non-union workers who’ve suffered under this pseudo insurance for years. But even these plans are being shelved. Two studies recently show that employers plan to quit offering health care plans altogether: a survey by Towers Watson showed that one out of ten companies plan to eliminate health care coverage by 2014; while a different study by the McKinsey Company showed that, by 2014, 30 percent of companies will drop their health coverage for workers.
Much of this is due again to, Obama’s Affordable Health Care act: companies were encouraged and given an excuse to drop their health care coverage because everyone would be mandated to buy their own shoddy coverage. Politicians recognized that high health care costs were hurting corporate profits, and they were determined to do something about it.
For those companies with a unionized workforce, Obama’s health care plan took special aim, taxing companies extra that offered so-called Cadillac insurance — coverage that was actually quality health insurance. But no more. This Cadillac tax doesn’t kick in till 2018, but employers are working now to make their health care plans skinny enough to avoid the tax; unions everywhere are being forced to make major concessions in the realm of health care, paying higher monthly premiums, deductibles, and other out-of-pocket costs.
Another trend in the attack on health care for employees involves the implementation of Health Engagement Models (sometimes called Health Promotion Model). This super-invasive insurance plan forces all workers to undergo a health “assessment,” and based on the results (weight, blood pressure, etc.) and health habits, workers will be forced to follow recommendations of a health “coach.” Not following the coach’s orders will result in monthly fines, as will refusing assessments or continuing to smoke or other bad habits. Plans like this are becoming popular among corporate leaders since they openly discriminate against workers who are overweight, or are older, or who smoke, and thus drive down the cost of health care of the employer. This form of plan combined with the above higher costs are quickly turning the once-quality health insurance of union workers into its opposite.
The above trends in health care are not likely to be reversed anytime soon. Some union leaders are arguing for these concessions using outworn logic, assuming that the economic crisis will soon be over, enabling unions to again demand better wages and benefits. No respected mainstream economist believes this. The current recession is expected to be longer and deeper than any since the Great Depression. Labor unions need to adjust their expectations to the facts and revise their tactics based on the changing economic landscape.
This also applies to working people in general, who cannot simply wait for jobs to be created or wages and benefits to regain their past value. Health care is a key component to a worker’s standard of living, and it is now unreasonable to expect any progressive health care reform from the Democrats or Republicans. The above policies have not improved health care, though they have decreased the cost of health care for corporations and governments, since patients are paying more for fewer services. The above policies have also not increased the number of workers with health insurance. In fact, the number of people without health care continues to grow every year, the most recent figure stands at over 52 million! Obama’s plan to force people to buy crappy insurance they couldn’t afford to actually use — if the law survives the Supreme Court — will do nothing of substance to help.
The above health care policies are the natural result of a health care system based on the principles of private profit. Corporate profits demand that companies provide the least amount of health care services at a minimal cost. From this vantage point, health care is a commodity that is bought by those who can afford it, instead of it being the human right of every person, as the U.N. Universal Declaration of Human Rights asserts. Europe has already proved that a nationwide, single payer system is vastly superior when it comes to quality, cost, availability, and results.
The single payer system did not come into existence from the benevolence of kind governments, but from the demands of people in the street. Organized workers must fight to maintain their benefits; unorganized workers must organize to fight for better insurance; and older workers/retirees must fight to maintain and expand Medicare. The logical end to such struggles would be to demand a Medicare For All system, financed by taxing the wealthy and corporations.