Thousands in Wisconsin demonstrate against cuts

Over the past two days, thousands of workers in a number of cities and towns in Wisconsin have demonstrated against a bill backed by Governor Scott Walker that would force drastic pay cuts on nearly 175,000 state, local and university employees, and effectively outlaw their right to strike. The Republican governor has put the National Guard on alert and has threatened to deploy them in order to implement his demands.

Police estimated 13,000 demonstrated outside the state capitol in Madison on Tuesday, far exceeding the expectations of the public sector unions who called the rally as a lobbying effort to sway a handful of Republican legislators to oppose Walker’s bill. Protesters began arriving at noon, including hundreds of students who walked out of a local high school and marched miles to join the protest.

Tuesday’s Madison demonstration follows a march on the capitol estimated at 1,100, led by University of Wisconsin graduate students, which took place the day before. Another large demonstration is expected to take place in Madison on Wednesday, with workers and students busing in from throughout the state. Large protests have also taken place in Milwaukee, Eau Claire and Superior.

The bill, which could pass through the state legislature as early as today, would require workers to almost double their deductions for health care and retirement benefits. According to various analyses, these added contributions would equate to anywhere from an 8 to 20 percent pay cut.

The measure would also make strikes among state workers illegal, giving the governor unilateral authority to fire workers who “participate in an organized action to stop or slow work,” or who “are absent for three days without approval of the employer.” It would remove the right of unions to negotiate pensions, retirement and benefits, and would prohibit the union dues check-off for government workers. These changes would also apply to childcare workers, home health care workers, and employees of the University of Wisconsin system and its hospital arm.

The bill also ends health insurance coverage and retirement benefits for temporary workers hired by the state, apparently including certain categories of graduate student labor.

Both the magnitude of the cuts and the provocative way Walker has demanded them have created a backlash among Wisconsin workers and youth. In announcing his preparations to deploy the National Guard the governor implicitly threatened violence against those opposing the draconian cuts, saying the troops were “prepared … for whatever the governor, their commander-in-chief, might call for. I am fully prepared for whatever may happen.”

In the face of this provocation the unions that organized the demonstrations—the American, Federation of State, County and Municipal Employees (AFSCME), the Wisconsin Education Association and the American Federation of Teachers—have offered no strategy to fight, insisting instead that protesters appeal to state Republicans and Democrats to rein in Walker.

But Democratic governors in New York, California and other states are imposing draconian cuts too, along with the Obama administration on the federal level. Walker’s predecessor, Democrat Jim Doyle, in 2009 demanded massive cuts to the state budget, including a 5 percent across-the-board funding cut to state agencies, reducing aid to public schools by $290 million, laying off hundreds of state workers and imposing a two-year pay freeze on the remainder.

The World Socialist Web Site spoke to two University of Wisconsin graduate students who participated in Tuesday’s Madison demonstration, Scott Prinster of the Department of the History of Science and Jacquelyn Gill of the Geography Department.

“You had the food service workers and the teachers and the childcare providers and Teamsters and pipefitters,” Prinster said. “It’s a reminder of how broadly destructive the budget cuts are. It was inspiring to see how many different people were working for the same thing.”

Gill echoed these sentiments. “What was so powerful to me about today’s rally was that so many people came together from all over Wisconsin,” she said. “The state has a reputation of being blue [Democrat] in Madison, and to a lesser extent Milwaukee, and bright red [Republican] in the rest of the state. I stood with iron workers, Oscar Mayer plant workers, firefighters (who are exempt from the bill, but came out anyway in support), teachers, state and municipal employees, nurses—everyone.”

The mass protests in Egypt that led to the downfall of dictator Hosni Mubarak were very much on the minds of the Wisconsin demonstrators, who held signs with slogans like “Protest Like an Egyptian,” “If Egypt Can Have Democracy, Why Can’t Wisconsin?” and calling the governor “Hosni Walker.”

A day earlier, a protest of several hundred took place in Milwaukee, Wisconsin’s largest city, at the University of Wisconsin-Milwaukee. Teaching assistants there could see pay cuts as high as 20 percent, and many research assistants would lose their health insurance coverage completely.

“Some speakers made allusions to the protests this month that forced the president of Egypt to resign,” the Milwaukee Journal-Sentinel reported. “A few in the crowd waved shoes in the air, a sign of disrespect in Arab culture that was used by some of the Egyptian protesters.”

The speed with which the protests have spread and grown is striking. Monday’s protest in Madison saw a crowd estimated at 1,100 march from the University of Wisconsin campus down State Street to the capitol building and to the office door of the governor. The demonstration had originally been called by a union of teaching assistants to protest cuts to the university system’s budget, but it was expanded in the wake of Walker’s provocative statements against state workers. Demonstrators chanted, “Kill this bill.”

The size of the Monday demonstration, only a tenth the size of the Tuesday event, surprised its organizers. It was evidently joined by many undergraduate students as it made its way along State Street. According to the Badger Herald, “The ranks of the protesters continued to swell throughout the march from Memorial Union to the steps of the Capitol.”

“The student body is such a powerful force, and we can contribute one of the strongest voices around that can do something about it,” said Markus Nevil, a university undergraduate.

Also on Monday, over 100 students staged a walkout from the high school in the small industrial town of Stoughton in opposition to Walker’s bill.

In Eau Claire, a standing-room only crowd numbering in the hundreds packed a junior high school auditorium on Monday, again surprising event organizers.

In the town of Superior, in the far northwestern corner of the state, 200 to 300 attended a Monday meeting in opposition to the cuts at the University of Wisconsin, Superior.

The Shame Of Being An American

The United States government has overestimated the amount of shame that it and American citizens can live down.  On February 15 “the indispensable people” had to suffer the hypocrisy of the U.S. Secretary of State delivering a speech about America’s commitment to Internet freedomwhile the U.S. Department of Justice (sic) brought unconstitutional action against Twitter to reveal any connection between WikiLeaks and Bradley Manning, the American hero who, in keeping with the U.S. Military Code, exposed U.S. government war crimes and who is being held in punishing conditions not permitted by the U.S. Constitution. The corrupt U.S. government is trying to create a“conspiracy” case against Julian Assange in order to punish him for revealing U.S. government documents that prove beyond every doubt the mendacity of the U.S. government.

This is pretty bad, but it pales in comparison to the implications revealed on February 15 in the British newspaper, The Guardian. [Curveball: How US was duped by Iraqi fantasist looking to topple Saddam, February 15, 2011]

The Guardian obtained an interview with “Curveball,” the source for Colin Powell’s speech of total lies to the United Nations about Iraqi Weapons of Mass Destruction.

Colin Powell’s speech created the stage for the illegal American invasion of Iraq.The Guardiandescribes “Curveball” as “the man who pulled off one of the greatest confidence tricks in the history of modern intelligence.” As The Guardian puts it, “Curveball” “manufactured a tale of dread.”

U.S. “intelligence” never interviewed “Curveball.” The Americans started a war based on second-hand information given to them by incompetent German intelligence, which fell for “Curveball’s”lies that today German intelligence disbelieves.

As the world now knows, Saddam Hussein had no weapons of mass destruction (WMD). The Bush/Cheney Regime, of course, knew this, but “Curveball’s” lies were useful to their undeclared agenda. In his interview with The Guardian, “Curveball,” Rafid Ahmed Alwan al-Janabi, admitted that he made the whole story up. He wanted to do in Saddam Hussein and told whatever fantasy lie he could make up that would serve his purpose.

If the Bush/Cheney Regime had really believed that Saddam Hussein had world-threatening weapons of mass destruction, it would have been a criminal act to concentrate America’s invading force in a small area of Kuwait where a few WMD could have wiped out the entire U.S. invasion force, thus ending the war before it began.

Some Americans are so thoughtless that they would say that Saddam Hussein would never have used the weapons, because we would have done this and that to Iraq, even nuking Baghdad.  But why would Saddam Hussein care if he and his regime were already marked for death? Why would a doomed man desist from inflicting an extraordinary defeat on the American Superpower, thus encouraging Arabs everywhere? Moreover, if Saddam Hussein was unwilling to use his WMD against an invading force, when would he ever use them?  It was completely obvious to the U.S. government that no such weapons existed. The weapons inspectors made that completely clear to the Bush/Cheney Regime.  There were no Iraqi WMD, and everyone in the U.S. government was apprised of that fact.

Why was there no wonder or comment in the “free” media that the White House accused Iraq of possession of terrible weapons of mass destruction, but nevertheless concentrated its invasion force in such a small area that such weapons could easily have wiped out the invading force?

Does democracy really exist in a land where the media is incompetent and the government is unaccountable and lies through its teeth every time if opens its mouth?

“Curveball” represents a new level of immorality.  Rafid al-Janabi shares responsibility  for one million dead Iraqis, 4 million displaced Iraqis, a destroyed country, 4,754 dead American troops, 40,000 wounded and maimed American troops, $3 trillion of wasted US resources, every dollar of which is a debt burden to the American population and a threat to the dollar as reserve currency, ten years of propaganda and lies about terrorism and al Qaeda connections, an American “war on terror” that is destroying countless lives in Afghanistan, Pakistan, Yemen, Somalia, and which has targeted Iran, and which has destroyed the Bill of Rights, the US Constitution, and the civil liberties that they guarantee.  And the piece of lying excrement, Rafid al-Janabi, is proud that he brought Saddam Hussein’s downfall at such enormous expense.

Now that Rafid al-Janabi is revealed in the Guardian interview, how safe is he?  There are millions of Iraqis capable of exterminating him for their suffering, and tens of thousands of Americans whose lives have been ruined by Rafid al-Janabi’s lies.

Why does the U.S. government pursue Julian Assange and WikiLeaks for telling the truth when“Curveball,” whose lies wiped out huge numbers of people along with America’s reputation, thinks he can start a political party in Iraq? If the piece of excrement, Rafid al-Janabi, is not killed the minute he appears in Iraq, it will be a miracle.

So we are left to contemplate that a totally incompetent American government has bought enormous instability to its puppet states in the Middle East, because it desperately wanted to believe faulty “intelligence” from Germany that an immoralist provided evidence that Saddam Hussein had Weapons of Mass Destruction.

And America is a superpower, an indispensable nation.

What a total joke!

Nine Pictures Of The Extreme Income/Wealth Gap

Dave Johnson

Many people don’t understand our country’s problem of concentration of income and wealth because they don’t see it. People just don’t understand how much wealth there is at the top now. The wealth at the top is so extreme that it is beyond most people’s ability to comprehend.

If people understood just how concentrated wealth has become in our country and the effect is has on our politics, our democracy and our people, they would demand our politicians do something about it.

How Much Is A Billion?

Some Wall Street types (and others) make over a billion dollars a year – each year. How much is a billion dollars? How can you visualize an amount of money so high? Here is one way to think about it: The median income in the US is around $29,000, meaning half of us make less and half make more. If you make $29,000 a year, and don’t spend a single penny of it, it will take you 34,482 years to save a billion dollars. . . . (Please come back and read the rest of this after you have recovered.)

What Do People Do With SO Much?

What do people do with all that money? Good question. After you own a stable of politicians who will cut your taxes, there are still a few more things you can buy. Let’s see what $1 billion will buy.

Cars

This is a Maybach. Most people don’t even know there is something called a Maybach. The one in the picture, the Landaulet model, costs $1 million. (Rush Limbaugh, who has 5 homes in Palm Beach, drives a cheaper Maybach 57 S — but makes up for it by owning 6 of them.)

Your $1 billion will only buy you a thousand Maybach Landaulets.

Here are pics of just some of Ralph Lauren’s collection of cars. This is not a museum, this is one person’s private collection. You don’t get to go look at them.

Luxury Hotels

This is the Mardan Palace Hotel in Turkey, Burj Al Arab in Dubai.

Here is a photo gallery of some other expensive hotels, where people pay $20-30,000 per night. Yes, there are people who pay that much. Remember to send me a postcard!

A billion dollars will buy you a $20,000 room every night for 137 years.

Yachts

Le Grand Bleu – $90 million.

Some people spend as much as $200 million or more on yachts.

You can buy ten $100 million yachts with a billion dollars.

Private Jets

Of course, there are private jets. There are approx. 15,000 private jets registered in the US according to NBAA. (Note: See the IPS High-Flyers study.)

This is a Gulfstream G550. You can pick one up for around $40 million, depending. Maybe $60 million top-of-the-line.

Your billion will buy you 25 of these.

Private Islands

If the rabble are getting you down you can always escape to a private island.

This one is going for only $24.5 million – castle included. You can only buy 40 of these with your billion.

Mansions

This modest home (it actually is, for the neighborhood it is in) is offered right now at only about $8 million. I ride my bike past it on my regular exercise route, while I think about how the top tax rate used to be high enough to have good courts, schools & roads and counter the Soviet Union and we didn’t even have deficits.

I ride there but that neighborhood is not like my neighborhood at all. While there is one family in that house, I live closer to the nearby soup kitchen that serves hundreds of families. One family in a huge estate and hundreds at a soup kitchen roughly matches the ratio of wealth concentration described below.

Here are a few nearby homes up for sale.

You can buy 125 houses like this one with your billion.

Luxury Items

Here is an article about ten watches that are more expensive than a Ferrari.

The one in this picture costs more than $5 million. You can buy 200 of these with your billion.

Medieval Castles

Just for fun, this is Derneburg Castle. Do you remember the big oil-price runup a few years ago that sent the price of a gallon at the pump up towards $5? One speculator who helped make that happen got a huge bonus paid with government bailout money. He owns this castle. He has filled it with rare art. You can’t go in and see any of the rare art.

Click here to see the layout in an aerial view. That’s as close as you’re going to get, peasant.

Let’s Go Shopping

So you say to yourself, “I want me some of that. I’d like to place the following order, please.”

• One Maybach Landaulet for $1 million to drive around in. (Actually to be driven around in.)
• One $100 million yacht for when I want to get seasick.
• One Gulfstream G550 private jet for $40 million.
• One private island for $24.5 million (castle included) for when I want to escape the masses.
• One $8 million estate for when I have to go ashore and mingle with the masses (but not too close.)
• One $5 million watch so I can have one.
• Total: $178.5 million.

My change after paying with a billion-dollar bill is a meager $821.5 million left over. I might be hard up for cash after my spending spree, but I can still stay in a $20,000 room every night for 112 and 1/2 years.

So, as you see, $1 billion is more than enough to really live it up. People today are amassing multiples of billions, paying very little in taxes and using it in ways that harm the rest of us.

How Extreme Is The Concentration?

Now you have a way to visualize just how much money is concentrated at the very top. And the concentration is increasing. The top 1% took in 23.5% of all of the country’s income in 2007. In 1979 they only took in 8.9%.

It is concentrating at the expense of the rest of us. Between 1979 and 2008, the top 5% of American families saw their real incomes increase 73%, according to Census data. Over the same period, the lowest-income fifth (20% of us) saw a decrease in real income of 4.1%. The rest were just stagnant or saw very little increase. This is why people are borrowing more and more, falling further and further behind. (From the Working Group on Extreme Inequality)

Income VS Wealth

There are a few people who make hundreds of millions of income in a single year. Some people make more than $1 billion in a year But that is in a single year. If you make vast sums every year, after a while it starts to add up. (And then there is the story of inherited wealth, passed down and growing for generation after generation…)

Top 1% owns more than 90% of us combined. “In 2007, the latest year for which figures are available from the Federal Reserve Board, the richest 1% of U.S. households owned 33.8% of the nation’s private wealth. That’s more than the combined wealth of the bottom 90 percent.” (Also from the Working Group on Extreme Inequality)

400 people have as much wealth as half of our population. The combined net worth of the Forbes 400 wealthiest Americans in 2007: $1.5 trillion. The combined net worth of the poorest 50% of American households: $1.6 trillion.

Corporate wealth is also personal wealth. When you hear about corporations doing well, think about this chart:

The top 1% also own 50.9% of all stocks, bonds, and mutual fund assets. The top 10% own 90.3%.

Worse Than Egypt

In fact our country’s concentration of wealth is worse than Egypt. Richard Eskow writes,

Imagine: A government run by and for the rich and powerful. Leaders who lecture others about “sacrifice” and deficits while cutting taxes for corporations and the wealthy. A system so corrupt that rich executives can break the law without fear of being punished. Increasing poverty and hardship even as the stock market rises. And now, a nation caught between a broken political system and a populist movement that could be hijacked by religious extremists at any moment.

Here’s the reality: Income inequality is actually greater in the United States than it is in Egypt. Politicians here have close financial ties to big corporations, both personally and through their campaigns. Corporate lawbreakers often do go unpunished. Poverty and unemployment statistics for US minorities are surprisingly similar to Egypt’s.

The Harmful Effect on The Rest Of Us

This concentration is having a harmful effect on the rest of us, and even on the wealthy. When income becomes so concentrated people who would otherwise think they are well off look up the ladder, see vastly more wealth accumulating, and think they are not doing all that well after all. This leads to dissatisfaction and risk-taking, in an effort to get even more. And this risk-taking is what leads to financial collapse.

Aside from the resultant risk of financial collapse, the effect of so much in the hands of so few is also bad psychologically. People need to feel they earned that they have earned what they have, and develop theories about why they have so much when others do not. Bizzare and cruel explanations like Ayn Rand’s psychopathic theories about “producers” and “parasites” take hold. Regular people become little more than commodities, blamed for their misery (“personal responsibility”) as they become ever poorer.

Teddy Roosevelt, speaking to the educators about “False Standards Resulting From Swollen Fortunes,” warned that while teachers believe their ideals to be worth sacrifice and so do non-renumerative work for the good of others, seeing great wealth makes people think that obtaining wealth is itself a lofty ideal,

The chief harm done by men of swollen fortune to the community is not the harm that the demagogue is apt to depict as springing from their actions, but the effect that their success sets up a false standard, and serves as a bad example to the rest of us. If we do not ourselves attach an exaggerated importance to the rich man who is distinguished only by his riches, this rich man would have a most insignificant influence over us.

Societies that are more equal do better. In the book The Spirit Level: Why More Equal Societies Almost Always Do Better, Richard G. Wilkinson and Kate Pickett make the case that great inequality harms us physically as well as spiritually, and the these harmful effects show up across society. The book examines social relations, mental health, drug use, physical health, life expectancy, violence, social mobility and other effects and show how inequality worsens each.

Influence Buying

There is a problem of the effect on our democracy from the influence that extreme, concentrated wealth buys. In the book Winner-Take-All Politics: How Washington Made the Rich Richer–and Turned Its Back on the Middle Class, Jacob Hacker and Paul Pierson make the case that the anti-democracy changes we have seen in America since the late 1970s that led to intense concentration of wealth and income are the intentional result of an organized campaign by the wealthy and businesses to use their wealth to, well, buy even more wealth.

The secretive Koch Brothers are said to have a net worth of $21.5 billion each and are particularly influential. They financed the Tea Party movement and along with big corporations and other billionaires they financed the massive assault of TV ads in the midterm elections that helped change the makeup of the Congress. And now Congress is paying them back,

Nine of the 12 new Republicans on the panel signed a pledge distributed by a Koch-founded advocacy group – Americans for Prosperity – to oppose the Obama administration’s proposal to regulate greenhouse gases. Of the six GOP freshman lawmakers on the panel, five benefited from the group’s separate advertising and grassroots activity during the 2010 campaign.

… Republicans on the committee have launched an agenda of the sort long backed by the Koch brothers. A top early goal: restricting the reach of the Environmental Protection Agency, which oversees the Kochs’ core energy businesses.

We Must Address This

We owe it to ourselves to come to grips with this problem. We owe it to democracy to begin taxing high incomes and inheritance again. We owe it to future generations to use a temporary wealth tax to pay off the debt.

Resources

The Working Group on Extreme Inequality explains why inequality matters in many more ways, and is well worth clicking through to study. They also have a page of resources for study with links to other organizations. Also, spend some time at Too Much, A commentary on excess and inequality because it is “Dedicated to the notion that our world would be considerably more caring, prosperous, and democratic if we narrowed the vast gap that divides our wealthy from everyone else.” The Center on Budget and Policy Priorities has a Poverty and Income area of research with good resources. The Center for Economic and Policy Research has a research section on Inequality and Poverty.

Silver and Opium

Antal E. Fekete

(Editor’s Note: The following exploration by Dr. Fekete serves to illustrate how history sometimes repeats itself. It is, I believe, important to recognize that the same “City of London” based power-mongers that orchestrated the opium wars are the same “City of London” based power-mongers that own the Federal Reserve and are conducting another assault on China, for the same reason. As Dr. Fekete points out, the only difference is that the addiction to opium that was so heinously exploited in the first go around has been replaced by the addiction to fiat dollars. – JSB)

The opium wars do not belong to the glorious episodes of Western history. Rather, they were instances of shameful behavior the West still has not lived down. Mercantilist governments resented the perpetual drain of silver from West to East in payment for Oriental goods (tea, silk, porcelain) that were in high demand in the Occident, facing low demand in the Orient for Occidental goods. From the mid-17th century more than 9 billion Troy ounces or 290 thousand metric tons of silver was absorbed by China from European countries in exchange for Chinese goods.

The British introduced opium along with tobacco as an export item to China in order to reduce their trade deficit. Under the disguise of free trade, the British, the Spanish and the French with the tacit approval of the Americans continued sending their contraband to China through legitimate as well as illegitimate trade channels even after the Chinese dynasty put an embargo on opium imports. Because of its strong appeal to the Chinese masses, and because of its highly addictive nature, opium appeared to be the ideal solution to the West’s trade problem. And, indeed, the flow of silver was first stopped, and then reversed. China was forced to pay silver for her addiction to opium smoking that was artificially induced by the pusher: the British.

Thus silver was replaced by opium as the mainstay of Western exports. In 1729 China, recognizing the growing problem of addiction and the debilitating and mind-corrupting nature of the drug, prohibited the sale and smoking of opium; allowing only a small quota of imports for medicinal purposes. The British defied the embargo and ban on opium trade, and encouraged smuggling. As a result, British exports of opium to China grew from an estimated 15 tons to 75 by 1773. This increased further to 900 tons by 1820; and to 1400 tons annually by 1838 – an almost 100-fold increase in 100 years.

Something had to be done. The Chinese government introduced death penalty for drug trafficking, and put British processing and distributing facilities on Chinese soil under siege. Chinese troops boarded British ships in international waters carrying opium to Chinese ports and destroyed their cargo, in addition to the destruction of opium found on Chinese territory. The British accused the Chinese of destroying British property, and sent a large British-Indian army to China in order to exact punishment.

British military superiority was clearly evident in the armed conflict. British warships wreaked havoc on coastal towns. After taking Canton the British sailed up the Yangtze River. They grabbed the tax barges, inflicting a devastating blow on the Chinese as imperial revenues were impossible to collect. In 1842 China sued for peace that was concluded in Nanking and ratified the following year. In the treaty China was forced to pay an indemnity to Britain, open four port cities where British subjects were given extraterritorial privileges, and cede Hong Kong to Britain. In 1844 the United States and France signed similar treaties with China.

These humiliating treaties were criticized in the House of Commons by William E. Gladstone, who later served as Prime Minister. He was wondering “whether there had ever been a war more unjust in its origin, a war more calculated to cover Britain with permanent disgrace.” The Foreign Secretary, Lord Palmerston replied that nobody believed that the Chinese government’s motive was “the promotion of good moral habits”, or that the war was fought to stem China’s balance of trade deficit. The American president John Quincy Adams chimed in during the debate by suggesting that opium was a “mere incident”. According to him “the cause of the war was the arrogant and insupportable pretensions of China that she would hold commercial intercourse with the rest of mankind not upon terms of equal reciprocity, but upon the insulting and degrading forms of the relations between lord and vassal.” These words are echoed, 160 years later, by president Obama’s recent disdainful pronouncements to the effect that China’s exchange-rate policy is unacceptable to the rest of mankind as it pretends that China’s currency is that of the lord, and everybody else’s is that of the vassal.

The peace of Nanking did not last. The Chinese searched a suspicious ship, and the British answered by putting the port city of Canton under siege in 1856, occupying it in 1857. The French also entered the fray. British troops were approaching Beijing and set on to destroy the Summer Palace. China again was forced to sue for peace. In the peace treaty of Tianjin China yielded to the demand to create ten new port cities, and granted foreigners free passage throughout the country. It also agreed to pay an indemnity of five million ounces of silver: three million to Britain and two million to France.

This deliberate humiliation of China by the Western powers contributed greatly to the loosening and ultimate snapping of the internal coherence of the Qing Dynasty, leading to the Taiping Rebellion (1850-1864), the Boxer Uprising (1899-1901) and, ultimately, to the downfall of the Qing Dynasty in 1912.

The present trade dispute between the U.S. and China is reminiscent of the background to the two Opium Wars. Once more, the issue is the humiliation and plunder of China as a “thank you” for China’s favor of having provided consumer goods for which the West was unable to pay in terms of Western goods suitable for Chinese consumption. The only difference is the absence of opium in the dispute.

Oops, I take it back. The role of opium in the current dispute is played by paper. Paper dollars, to be precise. In 1971 an atrocity was made that I call the Nixon-Friedman conspiracy. To cover up the shame and disgrace of the default of the U.S. on its international gold obligations, Milton Friedman (following an earlier failed attempt of John M. Keynes) concocted a spurious and idiotic theory of floating exchange rates. It suggests that falling foreign exchange value of the domestic currency makes it stronger when in actual fact the opposite is true: it is made weaker as the terms of trade of the devaluing country deteriorates and that of its trading partners improves. Nixon was quick to embrace the false theory of Friedman. No public debate of the plan was permitted then, or ever after. Under the new dispensation the irredeemable dollar was to play the role of the ultimate extinguisher of debt, a preposterous idea. The scheme was imposed on the world under duress as part of the “new millennium”, shaking off the “tyranny of gold”, that “barbarous relic”, the last remnant of superstition, the only remaining “anachronism of the Modern Age”. The ploy was played up and celebrated as a great scientific breakthrough, making it possible for man to shape his own destiny rationally, free of superstition, for the first time ever. Yet all it was a cheap trick to elevate the dishonored paper of an insolvent banker (the U.S.) from scum to the holy of holies: international currency. The fact that fiat paper money has a history of 100 percent mortality was neatly side-stepped. Any questioning of the wisdom of experimenting with is in spite of logic and historical evidence was declared foggy-bottom reactionary thinking.

The amazing thing about this episode of the history of human folly was the ease with which it could be pushed down the throat of the rest of the world, including those nations that were directly hurt by it, such as the ones running a trade surplus with the U.S. Their savings went up in smoke. The explanation for this self-destructing behavior is the addictive, debilitating and mind-corrosive nature of paper money, in direct analogy with that of opium. The high caused by administering the opium pipe to the patient (read: administering QE) had to be repeated when the effect faded by a fresh administration of more opium (read: more QE2).

If the patient resists, like China did in 1840, then a holy opium war must be declared on it in the name of the right of others to free trade. 170 years later a New China once more demurred against the paper-torture treatment it was subjected to by the American debt-mongers and opium pushers.

But beware: if the West starts another Opium War, this time it is not China that will be on the losing side.

Reference: Opium Wars, Wikipedia, June 29, 2010.

The Two Roads Out of Recession

Shamus Cooke

Recent events in Washington, D.C. should provoke fear and outrage in the average American worker. As the jobs recession staggers on, politicians and labor leaders alike seem bizarrely distanced from reality, unable to advance any ideas that remotely correspond to the basic demands of those tens of millions of unemployed, under-employed, or poorly paid workers.

Instead, what we get is President Obama’s recent groveling to the corporate-dominated Chamber of Commerce, pleading with them to hire workers. The President’s recent speech to the Chamber implied many dangers, which neither labor federation – AFL-CIO and Change to Win – bothered to point out. In fact, the AFL-CIO applauded sections of the speech, rather than condemning its sinister motives. If labor unions align themselves with the President’s and the Chamber’s pro-corporate path out of the recession, a workers’ road to recovery will be bypassed.

What is the corporate route out of recession?  Economist Robert Reich explains:

“[The Chamber of Commerce] has a deep, abiding belief in cutting taxes on the wealthy, eroding regulations that constrain Wall Street, cutting back on rules that promote worker health and safety, getting rid of the minimum wage… fighting unions, cutting back Medicare and Social Security, reducing or eliminating corporate taxes, and, in general, taking the nation back to the days before the New Deal.” (February 8, 2011).

This is the group that Obama insists that it’s possible to “work together” with to create jobs. Under Obama’s vision, these pro-corporate policies will make Corporate America the best competitor on the global market, a goal he seems nearly fanatical about.

The President wrongly believes that, by giving in to the above corporate policies, big business will hire workers – at low wages – out of the kindness of their own hearts, as if morality has ever played any role in the art of profit-chasing.

Here’s what Paul Krugman of The New York Times has to say about focusing U.S. economic policy around making U.S. corporations more competitive:

“…isn’t it at least somewhat useful to think of our nation as if it were America Inc., competing in the global marketplace? No.  Consider: A corporate leader who increases profits by slashing his work force is thought to be successful. Well, that’s more or less what has happened in America recently: employment is way down, but profits are hitting new records. Who, exactly, considers this economic success?” (January 23, 2011).

Unfortunately, U.S. labor leaders have not yet drawn the same, correct conclusions as a moderate liberal like Krugman. Worse yet, The AFL-CIO has worked, unforgivably, to bolster the Chamber of Commerce’s credibility, forming a “partnership” with these corporate snakes to “rebuild America’s infrastructure.” The Chamber’s President, Tom Donahue, was quick to take advantage of this positive press, which inevitably aims to fool workers into thinking their enemies are their friends:

“With the U.S. Chamber of Commerce and the AFL-CIO standing together to support job creation, we hope that Democrats and Republicans in Congress will also join together to build America’s infrastructure.”

Unfortunately, both the Democrats and Republicans have made it clear that any increase in public spending will pale in comparison to cuts in social programs that benefit workers.  The New York Times reports:

“[Obama’s] budget for the 2012 fiscal year, which starts Oct. 1, will call for greater deficit reduction [cuts] over the coming decade… the budget will reflect his midterm shift from a focus on stimulus spending and tax cuts in his first two years to budget-cutting as the economy [corporate profits] picks up steam.” (February 12, 2011).

Cuts to social programs are inevitable because the Democrats have already extended the Bush tax cuts for the rich, while also promising to lower the corporate tax rate. This is the essence of the problem.

A workers’ path to economic recovery would be the exact opposite of the above polices that the Chamber of Commerce is successfully implementing. Drastically increasing taxes on the wealthy and corporations is but the first, necessary step to increase public funding for a real jobs program.

This crucial solution is not being proposed by the big labor federations because the union leaderships have a suicidal attachment to the Democratic Party, whose favored constituency is, as always, the rich, who would rather not have their taxes raised.

Sadly, the leaders of both labor federations have done nothing of substance to show their members a worker-centered path out of the recession. They have passively attached themselves to the blatantly pro-corporate agenda pursued in Congress and the White House, while also doing nothing to fight back against the ongoing attack against public sector unions, the backbone of the American labor movement.

What we are witnessing is an attempt by the corporate class to fundamentally shift the power dynamics in American society, completely away from workers towards corporations. The project that began in earnest under Reagan has picked up steam with Obama. Bob Herbert’s editorial in The New York Times describes this dynamic well:

“While millions of ordinary Americans are struggling with unemployment and declining standards of living, the levers of real power have been all but completely commandeered by the financial and corporate elite. It doesn’t really matter what ordinary people want. The wealthy call the tune, and the politicians dance.” (February 11, 2011).

There are only two ways out of this recession, the path sought by corporations and the one that will benefit working people.  The two roads cannot be traveled on simultaneously. Nor can working people expect leaders of national labor unions or national liberal organizations to pick the correct path, let alone make one concrete step in any progressive direction.

The movement must start at the local level, from the bottom up. Local unions and labor councils should pass resolutions demanding that the rich and corporations be taxed for local and national jobs programs. Regional coalitions of community and labor groups can be formed to put on public forums, create educational material, and organize massive demonstrations. The first real step forward will happen after we learn to detach ourselves from the above corporate mindset, relying on ourselves and acting collectively.