Wednesday, January 28, 2015

The unnavoidable battle for control of our unions.

By Richard Mellor
Afscme Local 444, retired

It is inevitable that any conversation with the average rank and file union member will eventually lead to the question of the leadership and the concessionary contracts they impose on the membership.  Why won’t they fight?  They’re corrupt. They’re taking bribes. Why did they put this no strike clause in the contract? Why would they agree to layoffs and furloughs? (temporary layoffs)

The frustration among the ranks of organized labor is considerable. And it would be foolish to deny there is corruption, dishonesty and other similar practices on the part of the union hierarchy, not to mention the obscene salaries and other perks they give themselves. But these are secondary factors behind the betrayals that have included joining with the bosses in firing militant activists.

I have made my view on this very clear over time.  The main reason for the crisis of leadership that exists within organized labor is their worldview.  The present leadership has the same view of society as the bosses. They accept that the capitalist mode of production is the only way society can be organized and they consider the right of the boss to own the factory as inviolable, They have the right to move production if they wish and to control how work is organized.  For the labor hierarchy and its allies in academia and the Democratic Party, profits are sacrosanct, without profits there is no work and no society.  Despite workers building unions to protect us from the market and competition, the union leadership at the highest levels sees the unions as employee association with themselves as the CEO’s and it is their job to supply labor power to the bosses at the most competitive price. As I have stated before, if the union hierarchy were CEO’s of major corporations they would likely have been let go log ago for failing to produce the goods.

The dues paying working union member feels the destructive effects of this worldview every day through declining wages, benefits and work conditions. We are also confronted with it head on if we begin to question the effects of these policies if and when we get to union meetings.  The union tops talk and talk about the need for members to become active in our unions but only if we do not question their failed policies; we must not rock the boat.

Workers naturally oppose the bosses’ offensive and the ongoing destruction of work rules, wages, benefits and other gains that were fought for and won over decades of heroic struggle.  Workers cringe when their union leadership ushers them over picket lines along with the boss as the leadership’s of competing unions engage in destructive personal feuds as the Teamsters did in the Waste Management strike taken by ILWU Local 6 in San Leandro California last year. (See below)  The leadership ensures that meetings are designed not to inspire or mobilize the tremendous potential power of organized labor that exists even as our membership declines.  They will try to suppress any opposition movement from below that threatens the relationship they have built with the bosses based on labor peace------a peace brought about at their own members’ expense.

The response we often hear from disgruntled members is that they need to decertify one union and join another or in other cases need to build a new union. Sometimes it might be a competing leadership whose goal is to replace the existing one but with the same polices or simply on the basis of needing a “democratic “ union.

But this crisis exists throughout the trade union movement, concessionary policies, business unionism and in general pro-management policies that are backed up by an army of staff whose role it is to implement them. There is no way out by simply decertifying or leaving one union to go to another.  Also, the idea of building an alternative is equally difficult.

I was once told that workers are like electricity, we take the line of least resistance.  This is true and there are many reasons for it. We want to keep our jobs in the face of an army of unemployed that capital uses as a threat, keeps on the sidelines to keep us on our toes, always afraid we’ll be replaced. They keep us in debt when we have mortgages to pay and kids in college.

But as I used to say to my co-workers, the bosses will not let up; they are forced by the laws of the system, the very laws the union officialdom accept as inviolable, to drive US workers conditions back 100 years.  We have no alternative but to fight.
AFL-CIO's Trumka with friends.
Any rank and file union worker or activist wanting to change the present decline in our living standards will inevitably come in to conflict with the present leadership, we cannot avoid this and trying to avoid it by moving from one union to another, appealing to lawyers and the courts or forming new unions from the ground up is no way out.

Instead, we have to openly confront the disastrous policies that have brought us this far.  Rank and File opposition caucuses must be built in the unions based on a program that challenges the bosses offensive, demands what we need not what the boss, the union hierarchy or their friends in the Democratic Party and Congress tell us is realistic. We have to be clear that if we are to challenge the present leadership, we have to explain what we will do that is different. We must challenge their record, a record of doing the same thing over and over again despite miserable failure. Of course, we should remember, the union officials that impose concessionary contracts on their members never have to work under them.

We must campaign in the union halls and out in the open if we are to tap in to the tremendous anger and displeasure that exists among the dues paying members who have given up. We must learn our labor history and discuss strategy, tactics, what has worked and what hasn’t. That’s what political warfare demands. The Union hierarchy and its army of staff are paid to strategize, not how to win but how to concede and prevent revolts form below. At best, their policies are ones of damage control; hardly a way to inspire workers to fight or even come to meetings. We have the burden of work and having to do it in our free time. But we have no choice if we are to halt this slide in to third world status.

Workers will fight if we see a leadership that is willing and more importantly has a thought out program and a plan.  As a democratic caucus grows, its program and policies become more alive, more filled out through the involvement of workers ourselves.  We have access to our co-workers and fellow union members. We can begin the process of transforming the unions in to real fighting organizations by building around some demands such as:

Opposing the Team Concept: Workers and bosses do not have the same interests
Across the board wage raises that meet our needs not the bosses.
Support a liveable minimum wage $20 an hour or pay that equals a basket of goods necessary live a decent life.
Organize to rid no strike clauses from our contracts that are designed to undermine solidarity.
Fight for same contract dates in workplaces with more than one union
Build an intra union regional and nationwide militant shop stewards movement
Increase vacations and time off. US workers work two months more per year than workers in most industrialized countries.
Fight for a shorter workweek with no loss in pay and to create jobs.
Organize the unorganized.
Fight sexism and racism and other divisive tactics on the job.
Fight for on site childcare to relieve families of the burden of work and family
Build links with the communities we serve or work in and take up social issues like police abuse, the environment etc.  We can win if we build a wider movement.

And:
All paid union officials should be elected and paid no more than the average wage of the workers they represent and subject to recall. When members are on called out on strike, all officials should receive the same strike pay.

We must also raise the issue of political action and the disastrous and expensive support the union officialdom gives to the Democratic Party. Working people must have a party/candidates of our own, independent of big business.

The purpose of this commentary was not to lay out a detailed program for union caucuses but to share this writers general views on what we are faced with. In particular my aim is to counter the view that there is an easy way out through decertification or building new unions. The leadership is not invincible, but they are entrenched. They hang though like rotten apples from a tree; with the slightest wind they will fall. The Rank and file have the numbers, have the power, they are that wind.

Note: More on the Waste Management strike

Tuesday, January 27, 2015

France and Pakistan in the aftermath of religious extremism

Farooq Tariq on the campaign trail in 2013 Source

We reprint this piece from Farooq Tariq*. It was originally published in the The News International

Challenge and response
by Farooq Tariq

Wednesday, January 28, 2015
After the barbaric act by extremist militants against schoolchildren at the Army Public School in Peshawar and the attack on the Charlie Hebdo magazine in Paris, the reaction and response by the respective governments and people of Pakistan and France were in the form of monotonic approaches. Cross-party national unity and adoption of a few stern laws was how both governments – Pakistani and French – responded to the attacks.

In Pakistan, opposing political parties had to sit together to rethink strategies for an effective response to the growing challenge posed by extremists. The net result was establishing military courts under a civilian government. In France, President Francois Hollande had no hesitation in sitting alongside Nicolas Sarkozy, head of right-wing UMP and the leader of far-right Front National Marine Le Pen on the pretext of cross-party unity at a time of extreme crisis. He even led a mass rally along with heads of state and known oppressors of freedom that he had opposed many times publically . The main response of the French president’s roundtable meeting was to formulate new laws that were mainly to curb human rights – for fighting terror.

On the people’s side, the reaction to these horrifying incidents was also unprecedented. France experienced something historic in the sheer strength and size of the demonstrations that took place on the weekend of January 10 and 11. In Pakistan, a spontaneous general strike by the people across the country was an immediate response. This was what the Pakistan Tehreek-e-Insaf had been attempting for some months without success.

In France, whatever the confusion in the minds of the participants of the rallies, their reaction and behavior showed that the demonstrations were a tremendous expression of fraternal feeling. Participants chatted amongst themselves and helped one another move along amidst the crush of the masses of people that had gathered. Some scenes on January 10 and 11 brought back memories of the demonstrations of 1995 or even 1968, with solidarity as the dominant theme.

Within this fraternal outpouring, we should also note the presence of placards and symbols against all forms of racism – be it anti-Semitic or anti-Muslim racism. The millions of people in attendance were not expressing their support for the magazine’s editorial line. They only sought to inject social and democratic content into the anger and sadness.

This is the groundswell from French society that has been expressed since January 7. These were not reactionary demonstrations. The dominant themes were not support for cross-party national unity or anti-democratic measures announced by the government. Society went into action spontaneously and with a great deal of confusion, but in a progressive direction all the same.

The French people took to the streets but not to support ‘political operations’ and manoeuvres. What they took away from the marches will not be the presence of a cordoned-off handful of blood-stained world leaders, but rather the involvement of millions of ordinary women and men. From the French revolution of 1789-1799 until today, many ups and down have been witnessed in French society. However, the French people have a collective consciousness of fraternity and solidarity, enriched by centuries of experience.

The same is true of Pakistani society as a whole, on a different level and degree. Religious extremists generally had support of the state on a miscalculated approach of security paradigms. A distinction was made between good and bad Taliban by right-wing political parties and institutions of the state. December 16 changed it all.

Both incidents took place at a time when the French and Pakistani governments were highly unpopular and faced with unprecedented right-wing challenges, from the rise of the Front National of Marine Le Pen in France and Imran Khan’s PTI in Pakistan. Mian Nawaz Sharif has cleverly used the occasion to emerge as the Pakistani leader ready to fight fundamentalism, and adjusted his previous ‘military out of politics’ position to bring them in as senior partners.

In France, will President Hollande manage to use this crisis to raise himself more or less above the fray of party politics and his own Socialist Party to come out on top in the 2017 presidential elections? In keeping with his cross-party national-unity operation, will he manage to pursue his austerity agenda, thereby worsening the socio-economic condition of millions of working people? Will he manage to contain the Right and Far Right, which have been marginalised by the events of recent days? All this is yet to be seen.

In France revolutionaries and progressive forces are leading the fight against Islamophobia and have the view that all racist acts must be denounced, the right of Muslims to practise their religion must be protected and mosques must be defended when they are attacked. In Pakistan, the 16/12 movement with a slogan of ‘Never Forget Pakistan’ was able to mobilise thousands in solidarity with the Peshawar martyrs a month after the incident. They intend to repeat it on the 16th of every month.

Avoiding a ‘clash of barbarisms’ between imperialist barbarism and that of organisations like the Islamic State (Isis) and Al-Qaeda is a must. Imperialist barbarism and its dictatorial supporters in situ oppress millions of people daily around the world. This is the fertile ground in which fundamentalist and terrorist organisations prosper. They feed off international interventions such as the ones led by the US and other western powers in Afghanistan, the Middle East and Iraq, and those regional powers. Often the growth of these fundamentalist organisations was initially funded and encouraged by Washington or by states such as ours. Now, however, they are pursuing their own policy and their own strategy of confrontation.

We must never forget one basic truth: the terrorist violence is directed first and foremost against people in Muslim countries. They attack all freedoms and all fundamental rights. They play a major counter-revolutionary role – against the progressive aspirations of the ‘Arab spring’, for example. They mete out levels of terror reminiscent of fascist movements in the 1930s.

These forces must be fought, at a time when they are carrying out an increasing number of barbaric acts. We must fight them not only in our countries, but also through international solidarity – by fighting against imperialist wars; supporting progressive movements, resisting fundamentalism and defending victims of intolerance wherever they may be.

Fundamentalism (of all religions) and the new Far Right (xenophobic and racist) are laying claim to the ideological ground of radicalism. We need a broad international anti-fascist and anti-fundamentalist resistance front, and also an activist Left capable of providing a radical alternative.

Email: farooqtariq@hotmail.com  Twitter: @Farooqtariq3

*Farooq Tariq is General Secretary of the Awami Workers Party of Pakistan

Sunday, January 25, 2015

Greece: Syriza's huge victory must be built on throughout Europe.


by Richard Mellor
Afscme Local 444, retired

This is a short report by Irish Socialist Party member and member of the Irish parliament (Dail) Paul Murphy. It is very good.

The  huge victory for Syriza in the Greek elections shows that the Greek working class has definitively decided that the savage cuts imposed on them by the European, and indeed global capitalist class, must cease.

The election result that gives Syriza somewhere around 40% of the vote is also a tremendous victory for the European working class and workers throughout the world. At this point it is not clear if Syriza will have an outright majority in parliament and as of this writing is one vote short. The response from the Troika, the EU, the ECB and the IMF backed by global capitalism, will be an all out war against the Greek people.  They must be punished for their democratic expression.

From my limited understanding, the KKE, the Greek Communist Party also has five or six percent of the vote and has a refused, as it has all along, to work with Syriza.  Facts For Working People says emphatically that this is not the time for the disease of sectarianism.  The European trade union movement and all left forces, especially those in Greece must join with the Greek workers and Syriza in their struggle against global capital and its austerity agenda.

An all European movement against capital is what will help Syriza move forward after receiving the go ahead today.  There will be more on this situation as it develops but now is not the time for hesitation or retreat, the movement must move forward or die under massive pressure from the European bourgeois which will include funding and promoting fascist elements.

With this short commentary we would also argue that an important first task for Syriza and its allies would be to take in to public ownership the banks, financial institutions and the dominant sections of the Greek economy. 

Crucial vote today as Greek workers are set to reject Austerity

2013: Greek public sector workers strike against cuts

Here is Irish poet Kevin Higgins on Greece as the Greek workers vote today.  The Greek translation is below.

Austerity Mantra
Everything must be on the table.
Your ninety seven year old granny
is no longer cost effective, would
benefit greatly from being brought face to face
with a compassionate baseball bat.
The figures speak for themselves and will
be worse by morning. The paraplegic
in his insanely expensive wheelchair
will have to crawl as God intended.
Here are the figures that won’t stop
speaking for themselves, this is the table
everything must be on. Yesterday my name was
Temporary Fiscal Adjustment.

Tonight, the insect in the radio calls me
The Inevitable. When the economist
puts his hand up, take care not to cough.
Everything’s on the table and
the table’s tiny. I’d send you a pillow
to hold hard over the child’s face
‘til the kicking stops, but at current rates
there’ll be no pillow. I am the unthinkable
but you will think me. Pack her mouth
with tea towels, hold down firmly
your old mildewed raincoat,
‘til there’s no more breath.

Tomorrow I’ll be known as
Four Year Consolidation Package.
Lock the cat in the oven and bake
at two hundred degrees centigrade.
Tie your last plastic bag over
your own head. The figures speak for themselves
and there is no table.

Kevin Higgins
Greek translation by Lina Sipitanou  



ΜΕΤΑΦΡΑΣΗ: ΛΙΝΑ ΣΙΠΙΤΑΝΟΥ


Όλα πρέπει να μπουν στο τραπέζι
η ενενηνταεπτάχρονη γιαγιά σου
δεν είναι πλέον οικονομικά αποδοτική,
θα είχε όφελος αν την έφερναν καταπρόσωπο
με κανένα πονόψυχο μπαστούνι του μπέιζμπολ.
Τα νούμερα μιλάνε μόνα τους και θα ‘χουν
χειροτερεύσει ως το πρωί. Ο παραπληγικός
στην  εξωφρενικά ακριβή αναπηρική του καρέκλα
αναγκαστικά θα έρπει, όπως το θέλησε ο Θεός.
Ορίστε τα νούμερα που δεν σταματούν
να μιλάνε μόνα τους, αυτό είναι το τραπέζι
που πάνω θα τα βάλουμε όλα. Χθες το όνομά μου ήταν
Προσωρινή Φορολογική Προσαρμογή.
Σήμερα, το έντομο στο ραδιόφωνο με αποκαλεί
το Αναπόφευκτο. Όταν ο οικονομολόγος
σηκώνει το χέρι, πρόσεξε μην βήξεις.
Όλα είναι πάνω στο τραπέζι και
το τραπέζι είναι κούτσικο. Θα σου ’στελνα μαξιλάρι
να το κρατήσεις γερά πάνω στο πρόσωπο του παιδιού
μέχρι να σταματήσουν οι κλωτσιές, με τις σημερινές τιμές όμως
μαξιλάρι δεν έχει. Είμαι το αδιανόητο
όμως εσύ θα με διανοηθείς. Στούμπωσε το στόμα της
με ποτηρόπανα, πάτησε κάτω γερά
το παλιό σου μουχλιασμένο αδιάβροχο
ώσπου να μην έχει άλλη ανάσα.
Αύριο θα με ξέρετε ως
Τετραετές Πακέτο Σταθεροποίησης.
Κλείσε τη γάτα στο φούρνο και ψήσε την
στους διακόσους βαθμούς κελσίου.
Δέσε την τελευταία σου πλαστική σακούλα
γύρω από το κεφάλι σου. Τα νούμερα μιλάνε μόνα τους
και τραπέζι δεν υπάρχει.

Kevin Higgins
Μετάφραση: Λίνα Σιπιτάνου

Saturday, January 24, 2015

The King is Dead

The King Is Dead 
A poem on the occasion of the death of King Abdullah of Saudi Arabia.

Royal flag at half-mast flies
Forgotten victim sadly sighs
Only another despot cries
When a bloody tyrant dies

The great and good will eulogise
Sing loud his praise to blood-red skies
Soft-wrap his crimes in sweet disguise
When a bloody tyrant dies

Jail and flogging was the prize
For those whose voice and word defies
So must we now not criticise
When a bloody tyrant dies?

Keep alive financial ties
Watch the price per barrel rise
A show of grief keeps oil supplies
Flowing when the tyrant dies

Beheaded victims can not rise
To say good riddance not goodbyes
Speak truth through cant and fawning lies
So next it's tyranny that dies.

Friday, January 23, 2015

The ECB, QE and escaping stagnation

by Michael Roberts

The announcement by Mario Draghi at the council meeting of European Central Bank (ECB) yesterday that the ECB and the national central banks of the Eurozone would inject €1.1trn of new credit over the next 18 months into the area’s banks has certainly had a quick result. The euro dropped to an eleven-year low against the US dollar.

euro

The ECB has finally joined the Federal Reserve, the Bank of England and the Bank of Japan is what is called outright quantitative easing (QE). This is the outright purchase by the central banks of government, corporate and real estate bonds paid for by ‘printing money’, or more precisely electronically creating reserves of money in banks.

Up to now, the ECB has shied away from doing this QE and instead merely lent money or credit to the banks for increasingly longer periods of time (now up to three years) at virtually zero rates of interest. The German and northern European governments were opposed to the outright purchase of the bonds of Ireland, Spain, Portugal, Italy and Greece, the profligate governments. They feared that such purchases would allow these governments to spend as they pleased and put at risk the German taxpayer from any defaults on this debt.

But such has been the stagnation of most Eurozone economies and the growing prospect of outright deflation that the Germans, Dutch and Finns have been ‘persuaded’, kicking and screaming, that the ECB must go for broke and buy Italian and Spanish bonds held by banks, insurance companies, pension and hedge funds and hope that it helps kick-start the Eurozone economy and avoid deflation.
As I explained in a previous post
(https://thenextrecession.wordpress.com/2015/01/11/the-spectre-of-deflation/)
and also now in an article for the Weekly Worker this week
(http://weeklyworker.co.uk/worker/1042/the-spectre-of-deflation/),
there is the spectre of deflation hanging over Europe, which could drag the whole region into a deep depression and a renewed euro crisis. So action was needed.

The Draghi package is much bigger than expected, injecting funds equivalent to 0.6% of Eurozone GDP every month. This is bigger in relative terms than any other QE programme from the Fed, the BoE or the BoJ.
ECB balance sheet

There was a figleaf to the German doubting Thomases in that 80% of the supposed risk from new purchases of government debt would be down to national central banks and not shared across the Eurosystem. But that’s an illusion: if any national central bank got into trouble with losses from the purchase of its own government’s bonds, the ECB would have to bail them out anyway.
So the real question is: whether this huge QE will lift the Eurozone economy from its near deflationary depression. Well, it certainly is driving the euro down. That will help Eurozone exporters to compete in world markets against the likes of the Swiss, US and some Asian producers. But as most exports of each EMU member state are to each other, a weaker euro will not be enough to get things going.

Unless real wages (which have been falling in most Eurozone economies) and business investment (which remains stagnant in most Eurozone economies) start to pick up, there will be no escape from stagnation and depression. And QE will not do that, as I explained in more detail in a previous post (https://thenextrecession.wordpress.com/2014/11/02/the-story-of-qe-and-the-recovery/). Since the use of QE from 2010 by various central banks, global growth has remained weak and below trend and the recovery in employment and investment has been poor despite a huge electronic printing of money.  Real economic growth has not responded.

It’s demand for credit or money that drives the supply of money, not supply creating demand. And the demand for money has been weak because economic activity is weak. To use another cliché: you can bring a horse to water, but you cannot make it drink.  The ‘money multiplier’, the ratio of the amount of money printed by the Fed relative to the amount of money flowing into the wider economy has dropped like a stone.
money multiplier
QE has not worked in raising rates of economic growth back to pre-crisis levels. So where has all the money gone? It has gone into the banking system to shore up their balance sheets and restore their profits. And it has engendered a massive bubble in financial assets; and the prices of government and corporate bonds and most of all, stock prices, have rallied to record highs.
QE and stocks
The only beneficiaries have been the top 1% of wealth holders everywhere as they own the bulk of financial assets.

When QE was begun back in 2010, mainstream economists, both monetarists like former Fed chair Ben Bernanke and Keynesians like Paul Krugman, saw QE as the main economic weapon to get economies moving. Krugman even argued that the Bank of Japan’s QE programme would get Japan out of its stagnation.

How wrong can you be? The BoJ’s target of a 2% inflation rate remains a chimera some four years later, while Japan’s real economy hovers near recession, despite a QE programme that has meant a rise in the BoJ’s holdings of government bonds equivalent to 50% of GDP and rising (https://thenextrecession.wordpress.com/2014/10/13/japan-the-failure-of-abenomics/). It will be the same result for the ECB’s QE programme: the euro may fall, as did the yen after the BoJ started its programme. But there will be no significant recovery in economic growth.

The Keynesians go insisting for even more QE. But they also look to more fiscal action, namely running higher budget deficits for longer so that governments start to spend more on infrastructure, government services and benefits and even defence. This might provide some limited support for growth. But extra government borrowing is anathema to the strategists of capital because it would eventually mean higher interest rates and possibly higher taxation down the road, and thus lower profitability at a time when profitability in most economies is still below the level before the Great Recession (see my post, https://thenextrecession.wordpress.com/2012/06/13/keynes-the-profits-equation-and-the-marxist-multiplier/ and the joint paper by G Carchedi and me on the effectiveness of Keynesian-type fiscal spending, The long roots of the present crisis).

Indeed, far from looking to increase QE or government spending, the US Fed is getting ready to hike its ‘policy rate’ later this year. And the risk is that if the Fed does implement a hike in interest rates in 2015, then the financial boom will also collapse and profits will begin to fall, increasing the risk of a new slump (see my post, https://thenextrecession.wordpress.com/2014/08/01/the-risk-of-another-1937/).

Mainstream economists have started to recognise that the major capitalist economies are not ‘returning to normal, but are locked into something they now like to call ‘secular stagnation’, the main theme of the recent annual meeting of the American Economics Association (see my post). How can economies escape?

A new report from the OECD attempts to provide some answers (escaping-the-stagnation-trap-policy-options-for-the-euro-area-and-japan-1). The OECD is starkly clear: “The global economy continues to run at low speed and many countries, particularly in Europe, seem unable to overcome the legacies of the crisis. With high unemployment, high inequality and low trust still weighing heavily, it is imperative to swiftly implement reforms that boost demand and employment and raise potential growth. The time to act is now. There is a growing risk of persistent stagnation, in which weak demand and weak potential output growth reinforce each other in a vicious circle.”
Even more darkly, it goes onto to say: “The cylinders of the world economy continue to fire at only half speed. Growth is low and uneven and some parts of the world, such as the euro area, are at risk of falling into a trap of persistent stagnation, an extended period of low overall economic activity and low employment despite extraordinary monetary stimulus. A vicious circle is developing, with weak demand undermining potential growth (e.g. via a deterioration of the capital stock, structural unemployment and higher inequality) and weak potential growth further reducing demand (e.g. by discouraging capacity-expanding investment).”

It really could not be worse, short of another global slump. So what is to be done?
The OECD backs the current policy of QE and talk of investment spending. “With Japan’s launch of the “three arrows” in 2013, the EU’s recent launch of an investment plan and the euro area’s expected move towards quantitative easing, the likelihood of escaping the stagnation trap is increasing.” But it won’t be enough: “further action is needed to sustain this positive reform momentum.”

And what could this be? “structural reforms are urgently needed to remove regulatory bottlenecks to investment, reduce the administrative burden for business, and facilitate company restructuring.” In effect, the OECD wants even more deregulation in business practices, complete ‘flexibility’ in labour markets and more free trade, particularly in services: “reducing regulatory barriers …Further dismantling border and behind-the-border barriers to the international movement of goods and services will serve both to expand demand and make markets more competitive and dynamic”. In other words, the OECD wants more ‘neoliberal’ policies to allow ‘market forces’ to work. In effect, it wants ‘free markets’ in labour to keep wage costs down and free movement of capital internationally to raise profitability. Apparently, the problem is that capitalism is not being allowed to work, not that it does not work.

QE has failed in the last four years to get the major capitalist economies going; fiscal deficit spending has not worked in Japan either; so the strategists of capital look to the ‘third arrow’ of weakening labour and extending the ‘free’ movement of capital as the answer. But another slump that destroys capital values and raises average profitability is more likely to be the way out for capital.

Thursday, January 22, 2015

Saudi King Abdullah is dead.

Another despot bites the dust.
by Richard Mellor
Afscme Local 444, retired

King Abdullah, the 90 year old member of the family that runs the country of Saudi Arabia, (with US weaponry backing them up) is dead. Might it have been he was so upset at having to postpone the weekly flogging of a journalist due to international pressure? Was it possible that there was a threat of a mass mobilization by all the leaders of the "free" world to stand with the journalist and free speech?

US president Barack Obama, not known for pulling punches when it comes to old Putin, expressed his "personal sympathies and those of the American people".

Obama went on, "As a leader, he was always candid and had the courage of his convictions. One of those convictions was his steadfast and passionate belief in the importance of the US-Saudi relationship as a force for stability and security in the Middle East and beyond,"

Abdullah had the courage of his convictions alright. He believed in absolute power, religious intolerance, funding Islamic fanatical groups and religious schools. He opposed unions, free speech and women's rights. He did not consider women his equal by any measure and by some accounts has been married some 30 times fathering 25 children.

Could it have been that there were not enough beheading's last month or possibly that those damn women are still complaining about not being able to drive a car or leave home without a male family member. (even a teenage boy)

Saudi Arabia is stable alright but then so was Nazi Germany and the Soviet Union under the iron heel of Stalinism. Despots are OK if they share the loot with the US ruling class. One has to marvel at the absurdity of bourgeois politics.  The tiny Island of Cuba is blockaded for 60 years by the world's most powerful military power, the largest gathering of world leaders perhaps ever, went to Paris to stand up for free speech as the Saudi journalist received his first 50 lashes for daring to publish a website supporting freedom of speech for Saudi Arabia and the president of the US gives praise to a despot.  A Saudi woman was sentenced to 60 lashes in 2009 for simply participating in a TV show in which a Saudi man publicly talked about sex. No doubt all the freedom loving folks in the US Congress have nothing but kind words for this nasty individual. Why shouldn't they though, they are all in this together.

The thousands of workers who are brought to Saudi Arabia from places like Nepal and Bangladesh have no rights. Many of the women who work as maids have been treated with the utmost brutality, raped and in some cases killed by rich Saudi's that hire them. 

The folks at the Pentagon and in Congress don't speak for me, neither does the president.  Their diplomacy and reverence for each other and the so-called "rule of law" is phony

I hear the Bush family are in a state of grief having lost such a fine family friend.

Wednesday, January 21, 2015

The Islamisation of Birmingham


We have published numerous poems from our friend in Galway, Irish poet, Kevin Higgins. This is his response to the report by Fox News that England's second largest city is "Totally Muslim". Enjoy. FFWP Admin.

The Islamisation of Birmingham
there are actual cities like Birmingham that are totally Muslim
where non-Moslems just simply don’t go
Steve Emerson, Terrorism Expert, on Fox News

Most reckon it was the day Ozzy Osbourne
walked out the gates of Winson Green Prison,
ready to commit acts of musical terrorism
in a desperate effort to undermine Christ,
that the City began turning instead
to Mecca. All agree

the situation grew
more serious each time Roy Wood sang:
I Wish It Could Be Christmas Everyday
in the hope we wouldn’t notice
the big mad beard he got
at a training camp in Pakistan.

Spaghetti Junction was already
jammed with Moslem only vehicles,
the night the Mulberry Bush
and Tavern in the Town
were blown up by Moslems
disguised as IRA men.
Since then every nil all draw
between Aston Villa and Birmingham City
has been celebrated by stadiums half full
of nothing but Moslems.

Truth is, it started way back,
the night Chamberlain signed
his secret treaty with Adolf, agreeing
in the event of war with Russia, to hand
the birthplace of Enoch Powell
over to the Islams.

These days the local economy is mostly
Jaguar Cars and Cadbury’s chocolate
being secretly manufactured by Moslems
for export to terrorist countries busy
thinking up new ways to kill us.

KEVIN HIGGINS
Note: All people, pubs, companies, and football teams mentioned in this poem are native to Birmingham, with the exception of the late Adolf Hitler, who was born in the small Austrian town of Braunau am Inn, though his people did visit Birmingham in 1940, 41, 42, & 43.
.

Satire and free speech.

From Birgitte in Denmark

Satire means to ridicule the human weaknesses, vices and pieces of folly.

At least in Denmark satire has traditionally been used against the ruling elite. The only exception - until the recent satire began to be used against the Muslim Religion - was as far as I am aware, the satire used by the fascists against the Jews up to and during the 2nd World War.

It is not difficult to see which political wing at present is embracing the right to use satire against the Muslim religion - calling it "the freedom of speech right".

But our freedom of speech right is not threatened by attacks from a few terrorists. The threat comes from a completely different direction - the same direction where terrorism has come from - the economic mess the capitalist system finds itself in.

The terrorists in Paris were not motivated by a wish to hit our right to print or draw what suits us, but by a need to avenge the insult to their religion and not least their prophet. What some call satire was in their eyes defamatory.

Look at the situation of the Muslim population to day. What do we see? Poverty and degradation.
One of our traditions is - or should be - things are changing - that we do not walk over the weakest people. You do not step on someone who is lying down.

Syriza, the economists and the impossible triangle

by Michael Roberts

All the polls show that the leftist Syriza alliance is set to win the general election in Greece next Sunday.  It may not get an outright majority and may have to form a coalition with one of the small centre parties.  But it looks most likely that the incumbent coalition of Samaras’ conservative New Democracy and the degenerated social-democrat PASOK will lose power.

Financial markets are getting worried and Greek government bonds have dropped sharply in price as investors fear a default.  Greek banks are losing deposits as Greek corporations and the rich (or at least those that have not already done so) shift their euros overseas.  Three banks are now asking for what is called Emergency Liquidity Assistance (ELA) from the Greek central bank (in effect, liquid funds from the Eurosystem controlled by the European Central Bank).

So what will happen if Syriza becomes the government next week?  A guide to this was provided by a question and answer session with Syriza’s ‘shadow’ finance minister, Euclid Tsakalotos (soon to be finance minister?) at the London School of Economics that I attended this week.  Tsakalotos is an Oxford university graduate, now at the University of Athens (http://uoa.academia.edu/EuclidTsakalotos).

The meeting was arranged by Professor Mary Kaldor at the LSE and Paul Mason, the Channel Four broadcaster (you can read his comments on the meeting on his blog, blogs.channel4.com/paul-mason-blog/Greece-syriza-election/2941).

Other attendees included some leftist think-tanks like the Jubilee debt campaign and Red Pepper.  But also present were none other than Professor Chris Pissarides, the Cypriot-born economist at the LSE and a Nobel prize winner for economics for his work (see http://personal.lse.ac.uk/pissarid/).  Pissarides announced that he was currently an economic adviser to Samaras!

Along with Pissarides was the former head of the Cyprus central bank and ECB council member, Panicos Demetriades.  Demetriades was sacked by the Cypriot president after the bailout debacle there last year.  He had been appointed by the previous Communist president and then was blamed by the Conservatives for the bank meltdown.  But if he was a ‘liberal’, he did not show it at the meeting!  His main line was that the ECB and the Euro leaders would not compromise on debt reduction and Syriza was living in cloud cuckoo land.

What was Tsakatolos’ position?  He said that Greece had to get ‘fiscal space’.  By this he meant that the government needed funds to spend on ending the humanitarian crisis, save health and public services and end desperate poverty.  This could be done if the EU agreed to a debt reduction sufficient to reduce debt servicing to the minimum; and for the government to run a primary budget balance rather than a 4% surplus as the Troika (ECB, EU, IMF) demands.

Tskatolos was clearly right in his priorities.  The Greek economy remains in a parlous state. Unemployment was more than 25% at the last count.  GDP has collapsed by more than 30% since its peak before the crisis: a decline comparable only to that seen in the US during the Great Depression.  Public services have been decimated and poverty is rife, despite the resilience of the Greek people.  The austerity measures demanded by the Troika  for its loans and implemented by the coalition government with hardly a whimper has been draconian.  A widely recognised measure of fiscal stance is the underlying (cyclically corrected) primary balance (the deficit less debt interest). It shows that Greek austerity has been huge.
Greek austerity
If Greece got its ‘fiscal space’ then the Syriza government would have €6-7bn a year to spend.
The debt issue is clearly essential to deal with.  Greece’s public sector debt to GDP ratio is at an astronomical 175% of GDP.  Whereas the majority of that debt was held by French and German banks up to 2012, after the ‘orderly restructuring’ of the debt, now 78% of the Greece’s €317bn of public sector debt is held by the Troika.
greek debt
As I have pointed out in previous posts, around 90% of the €217bn of loans provided by the Troika went to pay off Europe’s banks and the hedge funds that held the debt.  The banks got most of their money back, leaving the Greek people with the bill.  This is now owed to the Troika. Back in 2012, the EU leaders finally recognised that the huge public sector debt that the Greeks had incurred in bailing out their banks and in funding the repayment of debt and interest to foreign lenders (mainly German and French banks) was just too great. They agreed with the conservative government in Athens that more funds would be made available, but that private creditors would take a ‘haircut’ in what was owed them.  So French and German creditors swapped their Greek government bonds for new ones worth a little less, but guaranteed by the euro stability funds (see my post, https://thenextrecession.wordpress.com/2012/03/09/greece-the-biggest-debt-default-in-history/).

This ‘haircut’ (along with savage austerity measures) was designed to reduce Greek government debt from 165% then to 120% of GDP by the end of this decade.  But the problem is that, if the Greek economy does not grow and drops into a deflationary spiral, then, even if the euro value of Greek debt is reduced, the euro value of Greek GDP will fall even more, so that the debt burden rises, not falls. And that is what has happened. Three years later, the Greek debt ratio is even higher at just under 175%.

The IMF continues to have the ludicrous position that this debt ratio can fall by 40 percentage points by 2019 – if austerity continues, as agreed by the conservative government with a primary budget surplus of 4% of GDP, if real GDP grows by over 3% a year and if inflation returns at a rate of over 1% a year.  Instead the Greek economy is deflating. The debt ratio is likely to rise even more.

Tsakalotos reckoned that the EU leaders would agree to debt relief and an adjustment of the fiscal programme because it was sensible and had support in other parts of the Eurozone too. But the question of how to grow the Greek economy even if Syriza gets a debt deal with the EU, which remains in doubt, was not properly dealt with in his answers.   Nobel prize winner Pissarides argued that the real task was to raise productivity through ‘labour market reforms’ along the lines of the Germans and now Italy’s social democrat PM Renzi.  Pissarides meant by that ending restrictive practices in the trade unions; money for training instead of welfare benefits, privatisation etc. This openly neoliberal position was, of course, opposed by Tsakalotos.

Instead, Tsakalotos advocated a ‘social market’ model (apparently he is an advocate of the old ‘Alternative Economic Strategy’ in the UK promoted by the likes of Stuart Holland and other left reformists) where government intervenes to correct or help the capitalist sector. And he called for an investment programme using EU money from the EIB etc. But there was no mention of control of the Greek banks and strategic industries and we know that defence spending will be maintained and Syriza will not leave NATO (as Paul Mason pointed out).

Overall, my impression of Tsakalotos was his strategy was to put forward a ‘reasonable’ set of proposals to the Troika and hope/expect them to compromise on a debt deal.  This was partly a hope and also tactical for the media.

What will happen?  Can Syriza maintain what some have called the impossible triangle: namely 1) stay in power, 2) reverse austerity and 3) stay in the euro?  Or will one or more have to go? Well, if Syriza does not get an outright majority, then debt negotiations will be weakened by a coalition government and there would be the possibility of a new election by the summer.

Probably the best that Syriza can expect is possibly some form of ‘London agreement’ (debt reduction along the lines that Germany got after the war) or more likely an extension of the terms of the debt with lower debt servicing costs or even perpetual rollover bonds.  But this would have to be made available to the likes of Portugal and Ireland who otherwise may object that Greece is getting special treatment.  But then the Germans could say, as they have already done, that Greece is an exception that proves the rule that the Eurozone works.

I still think the Germans do not want to push Greece out of the euro, despite the pressure of the eurosceptics in the AfD, as they see the risk of an involuntary exit with debt default as risky for the Euro project.  So they may eventually offer some concessions (but probably way short of what Syriza needs).

The Breugel research think-tank has done some estimates of the likely losses that Germany would incur if there is a ‘Grexit’, i.e. Greece is forced out of the Eurozone.  The Eurosceptic IFO Institute reckons that Grexit would cost Germany €76bn while a Greek default within the Eurozone would cost €78bn.  Not much difference.  But Breugel reckons that IFO has ignored the impact of losses for German corporations if there is Grexit and many Greek companies default on their trade debts.  German banks and industry could take a big hit if Grexit happens (http://www.bruegel.org/nc/blog/detail/article/1542-why-a-grexit-is-more-costly-for-germany-than-a-default-inside-the-euro-area/).
The negotiations on the debt are likely to be tortuous and so I expect the EU leaders/ECB to keep the Greek banks and government afloat over the next few months.  I doubt there will be a run on the banks or a collapse of Greek banks.  It is too dangerous for the Eurozone as a whole for the ECB to allow it.

Then the question is posed to Syriza: do they accept less than acceptable debt terms and hope to use the time to grow the economy on a capitalist basis; or do they reject them and opt Argentina-style for a unilateral debt reduction and budget spending?  The latter option would mean possible EU loan suspension and ECB lending (although that would be illegal under EU rules).  Then Syriza would have to take over the banks and leading industries, involve workers in production control; slash defence spending and monies for the army and police; and appeal for EU support for an EU-wide growth plan based on public investment.

I think a compromise deal is most likely; giving Syriza some time to hope for recovery on a capitalist basis.  What are the chances of that working?   Well, Greek labour costs have been slashed so Greek capitalism is more ‘competitive’ …
Greek labour costs
but the private sector is not investing and profitability is very low.
Grek profitability
The EU will likely inject some EU funds into Greece but not €6-7bn a year as Syriza hopes – and even that is nothing after the 40% cut since 2009.   So over time, the pressure will build from below for more serious action to end poverty, create jobs and restore public services, particularly education, housing and health.

If Syriza cannot or won’t respond to that pressure, then it will split or its supporters will become disillusioned and Syriza will fall back.  Syriza is divided between those like Tsakalotos who look for a ‘social market’ solution within the Eurozone and those like Costas Lapavitsas who reckons the only answer is for Greece to leave the Eurozone.  Lapavitsas is a professor at London University most noted for his work on financialisation in modern capitalist economies (see my post, https://thenextrecession.wordpress.com/2013/11/12/the-informal-empire-finance-and-the-mono-cause-of-the-anglo-saxons/).  Now he is standing as an MP for Syriza.

And he is not the only leftist/Marxist economist doing so.  It seems that Syriza has more UK or US-trained economics professors on their MP list than any party in Europe!

Another on the Syriza list is Yanis Varoufakis, professor of economic theory at the University of Athens, who has been calling for a Europe-wide, EIB backed investment programme to revive the Eurozone economy (http://yanisvaroufakis.eu/).  He has had misgivings about being a candidate for parliament as he is not sure ‘the triangle’ is possible (http://www.bostonreview.net/world/varoufakis-greece-austerity-syriza-left).  During the Cypriot banking crisis and bailout last April, he advocated selling back the recapitalised banks to the private sector
(https://thenextrecession.wordpress.com/2013/04/20/why-sell-back-the-viable-banks/).

Public ownership of the banks and strategic industries should be a central part of Syriza’s programme for economic revival, but it is not.

The ‘impossible’ triangle for Syriza of staying in power, reversing austerity and keeping the euro remains a question mark.  But no crisis of policy and action is likely in months as some at the LSE seminar seemed to think.  I think we could be discussing the same dilemmas on debt, growth and the EU this time next year.