Tuesday, November 20, 2018

Don't Let The Criminals of Guantanamo Walk Free



Richard Mellor
Afscme Local 444, retired

I give no credibility to those who can can condemn the horrors of Nazi concentration camps and places like Auschwitz with the view that it couldn't happen here in the US. Here in the 21st century where we are supposed to be so civilized, "How would the German people have allowed that?" people will often say of the existence of Auschwitz and  Treblinka and Bergen Belsen.

Leaving aside the historical record that shows quite clearly that the modern nation state we call the United States was based on such activity; the genocidal wars against the native population that included biological warfare and ethnic cleansing for example, and more recently US capitalism killed some 3 million people in Vietnam air dropping chemicals on their food, the people themselves, and even their own troops.

But what is Guantanamo?  Most of the US population has no clue that after 911 and with the help of the feudal warlords it paid billions to in the war against the former Soviet Union, the US offered poverty stricken people living in a country trapped in a feudal bubble and with a centuries long history of struggle against colonial powers, cash if they would go out, find terrorists and hand them over to them---------so they did.

No US official responsible for this war crime has paid for the inhuman brutality inflicted on the people held in Guantanamo or Bagram or any other US government torture center.  The US houses some of the most efficient terrorists and killers on the planet. Rumsfeld, Wolfowitz, George W Bush Obama and, through their political inaction most ranking members of the Democratic and Republican parties.

How can George W Bush not be seen as anything but a mass murderer?

Obama signed the Executive Order to close Guantanamo, a US occupied part of Cuba and promised it would be closed within a year, yet despite the Democrats in control of the House and Senate, nothing happened. This is not a rare occurrence but standard procedure. It was not an accident. This is one of the many lessons that some of the young people so enamored with the many new faces that have emerged from the last election will have to learn about the Democratic Party. The Democratic Party is a capitalist party and cannot serve the interests of the working class in America and never will. 

Trump is such a degenerate and vile human being that George Bush is being re-invented as some sort of cuddly character. He's best friends with Michelle Obama now, even offered her a piece of candy at the funeral of the dead bourgeois they all made fun of, John McCain. Michelle Obama, like her husband, one of the more cultured and refined representatives of US imperialism, has even been seen in the mass media hugging this mass murderer and referring to him as her "partner in crime" Class solidarity is strong among them.

The problem is that the capitalist media has been very successful in manipulating the working class population, blaming foreigners, immigrants, the poor for all our ills. The havoc the US war machine has waged on poor former colonial countries is barbarism to say the least. Iraq, a country that had nothing to do with 911, is no longer a viable nation state. After 17 years and thousands upon thousands dead including some Americans, Afghanistan is still a "failed" state. The largest and most influential of the failed states of course is the US---the guy with the big stick.

We should be sickened by what we see in the video above. Imagine how working there turned young people in to monsters, destroyed their humanity much as the humanity of the operators of the attack helicopter in Collateral Murder was destroyed.  Not only that, it is what drives what the Pentagon calls "terrorist" activity.   Read Wikileaks' The Gitmo Files and watch this "Collateral Murder" video, that's why they went after Chelsea Manning and why they want Assange, they brought us the truth about what our government is doing domestically and abroad.

A former co-worker Facebook friend put something up about how we "owe illegals nothing" in reference to the caravan and general immigration through our southern borders. Naturally, he has no clue why people from the south risk life and limb (always rape for women) to come to the US. They are not migrants, they are economic refugees fleeing conditions brought about through decades of US foreign policy in the region. Canadians aren't scrambling to come here.

The same post called for respecting veterans and he's obviously a Trump fan. Well, veterans are not respected by the US government, or any government for that matter. There are hundreds of thousands of them in severe physical and mental crisis leading to the statistic that more commit suicide than die in combat. All the flag waving is for when they're sent to kill or be killed not for when they return damaged goods; that's money out and suddenly there's a shortage. And it's not to defend our so-called freedoms, that the US ruling class is dismantling, but to enrich the likes of the war criminal Dick Cheney and other investors plundering the world's resources. 

Needless to say I don't need FB friends like this former co-worker who most likely, like so many of us, couldn't locate Iraq or Afghanistan on a map as taxpayer money was raining down on its citizens in the form of bombs and missiles.   Personally I am repulsed by that trick slogan, "Support our Troops" as all it means is to defend their actions, US corporate wars. I would do everything in my power to prevent a child of mine from dying or killing others in such a worthless venture that is not in our interest. The rich don't send their kids, they have better options. The best way to support anyone, troops included is not place them in harms way without cause.  A civilized society would provide better options for our young people.

Don't let what happened to these people the US war machine stuck in Guantanamo die without calling out the perpetrators and calling for their prosecution just as a matter of principle. I heard a young guy on TV talking about how "we" took back the House meaning the Democrats.

Imagine identifying with a political party owned and operated by billionaires. It is not without good reason that this party is referred to as the "death of all social movements".

That's the political hole we find ourselves in.

Sunday, November 18, 2018

Ohio: Trade Union Leadership Supports Republican Against Working Class Democrat

Sean O’Torain

We have explained on this Blog how the top union leadership refuses to take on the anti union and anti working class policies of the capitalist Democratic Party. This piece from the New York Times below shows how the majority of the union leadership in this case even refused to support the more pro union Democratic Party candidate instead supporting the anti union Republican Party candidate. The new candidates who have been elected in the recent elections who claim to be "progressive”, especially the Democratic Socialists of America members who see themselves as socialists, have the responsibility to take on these false policies of the pro capitalist union leaders. This Blog does not believe it was the correct strategy for DSA members to stand as Democratic Party candidates but as they have done so and some been elected they must at least take up the struggle against the policies of the union leaders. 

This is similar to Colorado where in the race for Boulder County Commissioner the state AFL-CIO supported not a Republican but a right wing pro-fracking Democrat against his opponent Cliff Willmeng. Willmeng is a trade union member and environmental activist. Trade Unionist Runs For Office. AFL-CIO Leadership Backs the Democrat.

Here is a comment on this report in the New York Times from Michael Munk:

 Alec MacGillis writes in the NYT about a Ohio state legislature election:

"But most confounding [about the lack of support for a working class Dem] were the unions. One by one, they started supporting  [Repub] Jay Edwards. And not just the building-trades unions, which sometimes side with Republicans, but also the Service Employees International Union and the public sector unions — Afscme, the Ohio Education Association and the Ohio Civil Service Employees Association. The only endorsements Mr. Sappington received were from the National Association of Social Workers and the Sheet Metal, Air, Rail and Transportation Workers.

Mr. Sappington was stunned. He was about as pro-union as one could be. In his video, he had mentioned his earlier activism against the law that Ohio Republicans had pushed through in 2011 eliminating collective bargaining for public employees, which was later overturned by referendum. His mother had been active in Afscme; his brother belonged to the Civil Service Employees Association. And Mr. Sappington himself was a low-wage service worker. Yet he was losing labor support to a Republican who had supported a state budget that effectively reduced funding for education."
Michael Munk’s site is here: Michael Munk.com

Why the Perfect Red-State Democrat Lost
Taylor Sappington is exactly the kind of candidate his party should want in Ohio. But he couldn’t get union support.
By Alec MacGillis

Mr. MacGillis is a political reporter.
Nov. 16, 2018

Unlike many young Ohioans, Taylor Sappington, 27, of Nelsonville, decided to stay in his hometown after he graduated from college. CreditTy Wright for The New York Times
Taylor Sappington
Unlike many young Ohioans, Taylor Sappington, 27, of Nelsonville, decided to stay in his hometown after he graduated from college. CreditCreditTy Wright for The New York Times

Taylor Sappington heard the call like so many other Democrats in the year after Nov. 8, 2016. He had seen Donald Trump coming, homing in on his little town, Nelsonville, Ohio, in the state’s impoverished Appalachian southeast. The town of 5,300 people had voted for Barack Obama twice by large margins.

Mr. Trump was Nelsonville’s pick in 2016, though it was more by default than acclamation. Mr. Trump won there with less than a majority, with 30 percent fewer votes than Mr. Obama had gotten four years earlier. Mr. Sappington, a 27-year-old Ohio native, took this as evidence that Nelsonville was not beyond redemption, that the town where he had grown up in hard circumstances — the son of a single mother who was for a time on food stamps, living deep in the woods in a manufactured home — wasn’t really Trump country.

Not so long ago, Ohio was considered the quintessential swing state — it had, after all, voted for the winning presidential candidate in every election starting with 1964. Something happened this decade, though. The 2010 national “shellacking” of Democrats left a particularly strong mark in Ohio. The Republicans who assumed control of Columbus pulled off an aggressive gerrymandering of federal and state legislative districts. In 2012, when Mr. Obama won the state for the second time, Republicans held 12 of the state’s 16 congressional seats despite winning only 52 percent of the total House vote.

The state’s makeup had been trending red, too. At a time when the share of white voters without college degrees — who are fast becoming the Republican base — decreased nationwide, it held strong in Ohio. The state was drawing relatively few immigrants, its education system was sliding in national rankings and, with its smaller cities and towns falling far behind thriving Columbus, it was losing many young college grads to jobs out of state.

Not Taylor Sappington, though. He wanted to stay. He had gotten hooked on national politics in high school, around the time he read a book on Robert F. Kennedy’s 1968 campaign. And he had gotten out of Nelsonville, winning nearly a full ride to George Washington University.
Read the rest of this article here.

Saturday, November 17, 2018

Working Class History: Sit Downs, Ready to Die in a Flint Factory


Flint orchestra in the occupied Fisher plant
Richard Mellor
Afscme Local 444, retired

Below is a short description of the factory occupations in Detroit and the strikes and occupations of GM plants in the 1930’s that changed the balance of class forces in the US. It is an account written by Kermit Johnson who was the head of the “Board of Strategy” that was set up to direct the strikes and occupations after the strike had begun. It was printed in the February 11th 1959 issue of The Searchlight, the official publication of UAW Local 659 in Flint and quoted in Art Preis’ Labor’s Giant Step.  I had written it some time ago for distribution in my workplace as working class history in this country is censored. We are supposed to think that Merryl Lynch built America as the advertising campaign went. The three general strikes and the factory, and other workplace occupations were possibly the greatest movements of the US working class in the 20th century along with the black revolt and civil rights movement that arose with a vengeance shorty after. The Congress of Industrial Organizations (CIO)  rose in this period and this offered thousands of black workers opportunities. But the CIO unlike the openly racist AFL (they merged to form the AFL-CIO in 1955) was more radical in dealing with this issue and combating racism as at times white workers struck to keep black workers out of production jobs.
Roscoe Van Zandt Explanation below

When we talk of the New Deal and the social legislation, (minimal as it was) that arose in that period we need to look at what was happening on the ground. Here is a brief account that gives some idea of what the US capitalist state was facing as well as the most powerful corporation in the world, GM. This is just a small glimpse of our history and I felt like sharing it.

The workers had presented demands to GM prior. They were:
Union recognition and a signed contract
Abolition of piecework
The 30-hour week and six-hour daytime and a half for overtime
Minimum pay rates
Reinstatement of discharged unionists
A seniority system
Sole collective bargaining rights for the UAW
Union participation in the rate of the belt speed

When we talk about “American Values” that we need to be proud of and emulate, I think these are a one of the many great examples. It is the methods that built the union in the 1930's that we have to return to: occupations, mass picketing, violating injunctions and anti-worker/union laws like Taft Hartley adding to that, talking up social issues as well, racism, sexism, housing health carte and education. You know what I mean. The struggle must become general and the power of workers at the point of production and distribution is the big stick, the one the labor hierarchy is afraid to use.

From Labor’s Giant Step by Art Price.
Try get a used one.

"GM had already recovered from the first shock of being forced to surrender four of their largest body plants to sit-down strikers.  They already had the legal machinery in motion that would, within a short time, expel by force if necessary, the strikers from the plants.  If that happened, we knew the strike would be broken, and the fight for a union in General Motors would be lost." 

"The next few minutes seemed like hours, as I ambled toward the door, my previous confidence was rapidly giving way to fear--fear that we'd lost our one big gamble.  My thoughts were moving a mile a minute, and I was rehashing the same plan over and over , but this time, all its weaknesses stood out like red lights."  ".......then the door burst inward and there was Ed!  Great big Ed, his hairy chest bare to his belly, carrying a little American flag and leading the most ferocious band of twenty men I had ever seen.  He looked so funny with that tiny flag in comparison with his men who were armed to the teeth with lead hammers, pipes, and chunks of sheet metal three feet long.  I felt like laughing and crying at the same time."

"When I asked where the hell the three hundred men were that he had guaranteed to bring with him, he seemed dumbfounded.  I don't think he'd ever looked back from the time he'd dropped his tools, picked up the flag, and started his line plunge to plant 4.  It didn't take a master mind to know that trying to strike a roaring plant of more than three thousand men and almost as many machines with just twenty men was almost impossible.  We huddled together and made a quick decision to go back to plant 6 for reinforcements, and if that failed to get out of Chevrolet in a hurry.  Luckily we encountered little opposition in Ed's plant and in a short time we were back in Plant 4 with hundreds of determined men."

"Although we didn't know it then, a real war was going on in and around plant 9, the decoy.  Every city cop and plant police were clubbing the strikers and using tear gas to evacuate the plant.  In retaliation the men and women from the hall were smashing windows and yelling encouragement from the outside."

"Back in plant #4, a relatively peaceful operation was proceeding according to plan; a little late, but definitely moving now.  Up and down the long aisles we marched, asking, pleading, and finally threatening the men who wouldn't get in line.  For the first hour the men in plant #4 were being bullied not only by us but by management as well.  Almost as fast as we could turn the machines off, the bosses, following our wake, would turn them on, and threaten the men with being fired.  As the lines of marchers grew longer, the plant grew quieter, and finally after two hours every machine was silent."

"The men were standing around in small groups, sullenly eyeing members of supervision.  No one knew who belonged to the Union because no one had any visible identification.  We had successfully taken the plant, but we knew that our gains had to be immediately consolidated or we'd face counteraction.  We had a few men go through the plant and give a general order that all who didn't belong to the Union should go upstairs to the dining room and sign up.  While the vast majority were thus taken care of, a few hundred of us were left unhampered to round up the supervisors.  It didn't take long to persuade them that leaving the plant under their own power was more dignified than being thrown out.  Herding the foremen out of the plant, we sent them on their way with the same advice that most of us had been given year after year during layoffs.  "We'll let you know when to come back." "

"The next day, when Judge Gadola issued his injunction setting a deadline for the following day, the strikers held meetings and decided to hold the plants at all costs. The Fisher #1 workers wired Governor Murphy "Unarmed as we are, the introduction of the militia, sheriffs, or police with murderous weapons will mean a blood bath of unarmed workers...We have decided to stay in the plant.  We have no illusions about the sacrifices which this decision will entail.  We fully expect that if a violent effort is made to oust us, many of us will be killed, and we take this means of making it known to our wives, to our children, to the people of the state of Michigan and the country that if this result follows from an attempt to reject us, you (Governor Murphy) are the one who must be held responsible for our deaths."

The narrative continued and the author Art Preis wrote further, Early the next day , all the roads to Flint were jammed with cars loaded with unionists from Detroit, Lansing, Pontiac and Toledo. More than a thousand veterans of the Toledo Auto-Lite and Chevrolet strikes were on hand.  Walter Reuther, then head of the Detroit West Side UAW local, brought in a contingent of 500. Rubber workers from Akron and coal miner from the Pittsburgh area joined the forces rallying to back the Flint strikers. No police were in sight. The workers directed traffic. Barred from Fisher #2 and Chevrolet #4 by troops with machine guns and 37-millimeter howitzers, the workers from other areas formed a huge cordon around Fisher #1.

The 44-day Flint occupation should be labor’s  4th of July.  It was a heroic moment in the history of the US working class. American values at their best.  

* Roscoe Van Zandt, the only African American known to have been inside during the Flint Sit-Down Strike. Photo from the Walter P. Reuther Library.

Friday, November 16, 2018

Pelosi: "The Democratic Party is Capitalist". What is DSA, Cortez and Tlab's Response?




by Richard Mellor
Afscme Local 444, retired

In the video above, Nancy Pelosi, the California Congresswoman and multi-millionaire who held the powerful position as the Speaker of the US House of Representatives from 2007-2011, answers a question from a student. The student asks if the Democrats could move to the left. In response, she makes it abundantly clear,  “I have to say, we’re capitalists, that’s just the way it is,” She was speaking less to this student than to the party backers, the bankers, industrialists and the US capitalist class as a whole, ensuring them that the party is still theirs and always will be.

The mid-terms have lit a small fire under Pelosi and the Democratic Party old guard, a development due partially to the rise of Trump, a positive side of the Predator in Chief’s activity, forcing people to get active in some way. As of this writing 101 women have won House seats and there may be more yet.  Many of these new faces are women of color as well as from diverse backgrounds. New Mexico’s Deb Haaland and Kansas’ Sharice Davids  are the first Native American women. Ayana Pressley and Jahana Hayes are both black.

Perhaps the most well known at the moment is the Latina Alexandria Ocasio-Cortez, both Cortez and Rashida Tlaib are members of Democratic Socialist of America (DSA).

Without a doubt this is a very positive development as it was when Obama was elected in the sense that it opens cracks in an historic racist and sexist tradition.  I remember watching Jesse Jackson crying when Obama got the Democratic Party nomination at a huge rally in Chicago and I saw in his face the reality of this setting in, something he probably thought would never occur in his lifetime. Those tears were genuine in my opinion.

But while the election of people of a different color, gender and religious backgrounds, in a society built on racism, sexism and exploitation is a positive development. The main question for all of us though is not their particular identity as a female or gay person or what they are saying, but what are they going to do? For some of us that are older, we have heard all the rhetoric before from left Democrats. It might not be an exaggeration to say that in Jackson's first run for the nomination he was to the left of someone like Ocasio-Cortez but was eventually brought back to reality by the Democratic Party machine.

If you have listened to Pelosi in the video above, her response to the young student is classic. She affirms the primacy of capitalism and her party as a political arm of it. But she understands the point the student makes about the mood among young people and she also sees how the capitalist crisis is destroying living standards, the environment and undermining society’s faith in bourgeois democracy.

But it’s not capitalism that’s the problem she argues and tells of he old days when the Chairman of Standard Oil of New Jersey said that when the CEO’s and corporate heads made decisions they applied “stakeholder” capitalism principles. They took in to consideration the shareholders, the management, the consumers and the workers. In other words, “the community at large”.  Pelosi, perhaps because she has a degree in advanced economics along with her extensive reading of Marx and Engles’ works, and maybe a Michael Roberts article or two, then makes the claim that about 15 years ago “stakeholder” capitalism was pushed aside and replaced by “Shareholder capitalism”. Brilliant economic analysis Nancy.

The capitalist mass media covers the collapse of the Venezuelan economy (and the collapse of Stalinism) as a failure of socialism or communism although both were neither. The crises in the capitalist world we are led to believe are due to “crony capitalism” or simply corruption or bad management, in other words, character flaws. The Russian capitalists are almost always described as “Oligarchs”. The US capitalist class along with the Vatican spent a lot of money and time influencing Russian politics after the collapse of Stalinism to ensure that what replaced it was not a healthy workers state, a democratic socialist regime, but capitalism. They got what they asked for and regret it.

The intention in using these terms is to stress that capitalism can be made nice. The Chairman of Standard Oil Pelosi quotes, along with the likes of Bill Gates and Jeff Bezos today, would argue we are all just  “one community” and a regulated capitalism, a socially conscious capitalism, can provide a secure and healthy existence for all as well as protect the natural world in which we live. But regulation doesn’t, never has and never will, control capitalism and its brutal, violent and inhumane affect on humanity and the planet. What this argument does is ignore the inherent class antagonisms within capitalism that are the source of all wars, and conflict and are at the root of environmental destruction, racism and exploitation. It also ignores history.  Theodore Roosevelt took on the Trusts and Robber Barons. Franklin Roosevelt took on the big bourgeois in the 1930’s. Neither attempt brought the capitalism Pelosi is talking about. It was a world war that saved capitalism from itself at the cost of 57 million lives and it was the aftermath of it that that allowed the intact productive forces of US imperialism to enter a period that provided the material basis for the so-called American Dream which was a very limited dream indeed. US capitalism was still a nightmare existence for millions of its citizens particularly in the Apartheid South.

So one would think that such a comment from a major US bourgeois politician like Nancy Pelosi would be jumped on by the Democratic Socialists of America and new politicians like Alexandria Ocasio-Cortez and Rashida Tlaib who are both DSA members, they too must be aware of the disgust with the two capitalist parties and the desire not only for a new party but socialism.

But there seems to be a significant silence on this issue. DSA appears not to have taken up this challenge and Pelosi is let off the hook. Recently Ocasio-Cortez described the present situation as a sort of  “no holds barred, wild west, hyper capitalism”. Like Pelosi, she is saying that capitalism is not the problem in and of itself. As a socialist she seems to avoid class and class antagonism’s altogether. The billionaire George Soros has the same view but uses the term Market Fundamentalism and suggests names like “robber capitalism”, or the "gangster state,". Either way, all of these descriptions that lead to the idea that capitalism has a future.
 
The Young Turks?
While welcoming new faces in politics as in all aspects of life, women, religious minorities, people of color etc., this does not guarantee much. There are far more black politicians, mayors of cities and legislators than in the past, but the crisis that capitalism brings to the black community and far more disproportionally continues; homelessness, unemployment, incarceration rate, racism in the justice system and police brutality, housing education, health care you name it.

So new faces, people shut out of the game based on their race religion or gender, can be a huge step forward. But it doesn’t have to be. Their politics and how they see the world is paramount.  The first contentious issue for me is that they are in a party that (as Pelosi says) is a capitalist party that will not serve the interests of working people, never mind go after the bloated US offense budget, stop Washington’s murderous wars and transform foreign policy. The Democratic “Better Deal” will be more of the same unfortunately although without the cretin Trump’s madness. For socialists it is clear that a democratic socialist US cannot be brought about through the Democratic Party. But for the average worker even serious reforms are unreachable and any reform of substance will be temporary or paid for overwhelmingly by workers and the middle class. They’ll rob Peter to Pay Paul.

The elation at these new faces is justified but there is also the petit bourgeois from all backgrounds whose obsession with identity politics is in actuality a class position, it is to obscure the class differences among marginalized groups, people of color, gays etc.  It is when the politics of identity is used in this way to obscure and outright censor the discussion of class and class society it should be confronted. Some of the loudest proponents of identity politics are actually using it as a means of defending a class position------theirs.

I do not know much about Alexandria Ocasio-Cortez. I know she is courageous as are her colleagues challenging the power in the US as members of disenfranchised communities. She did say in the same interview where she talked of “Wild West Capitalism” that “Capitalism has not always existed and will not always exist.”  This comment caused some controversy showing how afraid the US ruling class is of the working class although Ms Cortez never mentioned the working class and as far as I can tell is not a frequent user of the term. Any mention of capitalism having a shelf date is bad enough. But she is young and who knows where she might end up but she is in a minefield. In this situation there are, like the workplace, only two sources of power, the capitalists or the working class.

The DSA should be guiding Ms Cortez in these dangerous waters including joining with her in taking up Pelosi's admission that the party she is in is a capitalist party and orienting to the working class including the 14 million members in unions. The DSA leadership is guiding her but not in the right direction evidently.

Myself and some others around Facts For Working People were very positive about Cortez' victory in the primary not because we see the Democratic Party as a vehicle for change but because her election, and since the mid-term results, will bring what seems a likely split in the Democratic Party even closer.

Let’s hope so.

Corporate debt – the IMF gets worried

by Michael Roberts

The IMF does not pull any punches in its latest post on the IMF blog.  It is really worried that so-called ‘leveraged loans’ are reaching dangerous levels globally.  These loans, usually arranged by a syndicate of banks, are made to companies that are heavily indebted or have weak credit ratings. They are called “leveraged” because the ratio of the borrower’s debt to assets or earnings significantly exceeds industry norms.  The level of these loans globally now stands at $1.3trn and annual issuance is now matching the pre-crash year of 2007.


With interest rates extremely low for years and with ample money flowing though the financial system, yield-hungry investors are tolerating ever-higher levels of risk and betting on financial instruments that, in less speculative times, they might sensibly shun.” says the IMF.  About 70% of these loans are in the US; so that is where the risk of a credit crunch is greatest.  And more than half of this year’s total involves money borrowed to fund mergers and acquisitions and leveraged buyouts (LBOs), pay dividends, and buy back shares from investor—in other words, for financial risk-taking rather than productive investment.

And even though corporate earnings in the US have risen sharply in 2018, the share of companies that have raised their debt to earnings above five times has reached a higher level than in 2007.


New deals also include fewer investor protections, known as covenants, and lower loss-absorption capacity. This year, so-called covenant-lite loans account for up 80% of new loans arranged for non-bank lenders (so-called “institutional investors”), up from about 30% in 2007.


With rising leverage, weakening investor protections and eroding debt cushions, average recovery rates for defaulted loans have fallen to 69% from the pre-crisis average of 82%. So any sizeable defaults would hit the ‘real’ economy hard.

Back in 2007, the debt crunch was exacerbated by the phenomenal growth in credit derivatives issued by non-banks, the so-called ‘shadow banks’, not subject to central bank controls.  Now again, it is in the shadow bank area that a debt crisis is looming.  These institutions now hold about $1.1 trillion of leveraged loans in the US, almost double the pre-crisis level.  On top of that are $1.2 trillion in high yield, or junk bonds, outstanding. The non-bank institutions include loan mutual funds, insurance companies, pension funds, and collateralized loan obligations (CLOs), which package loans and then resell them to still other investors. CLOs buy more than half of overall leveraged loan issuance. Mutual funds (which are usually bought by average savers through their banks) that invest in leveraged loans have grown from roughly $20 billion in assets in 2006 to about $200 billion this year, accounting for over 20% of loans outstanding.


All this debt can be serviced as long as earnings pour into companies and the interest rate on the debt does not rise too much.  Corporate earnings appear to be strong at least in the US.  In the latest quarter of reported company earnings, with 85-90% of companies having reported, US corporate earnings are up nearly 27% from the same period last year (although sales revenues are up only 8%).  US sales revenue growth is about 20% higher than in Europe and Japan but earnings growth is two to three times larger.  That tells you US earnings are being inflated by the one-off Trump corporate tax cuts etc.

Moreover it is earnings in the energy/oil sector that have led the way, as oil prices rose through the last year.  Recently, the oil price has taken a serious plunge as supply (production in the US) has rocketed. That’s going to reduce the contribution of the large energy sector to earnings growth.

Anyway, the reported earnings by companies in their accounts are really smoke and mirrors.  The real level of profits is better revealed by the wider data provided in the official national accounts.  And the discrepancy between the rise in profits as recorded there and the company earnings reports has not been as high since the dot.com bust of 2000, which eventually presaged the mild economic slump of 2001.  Reported US corporate earnings per share are rising fast, but ‘whole economy’ profits are basically flat.

The other moving part is the cost of borrowing.  The decade of low interest rates is over as the US Fed continues with its policy of hiking its policy rate.

The Fed policy sets the floor for all borrowing rates, not only in the US economy, but also abroad whenever borrowing dollars.

As I have explained in a number of posts, the Fed’s hiking policy will add to the burden of servicing corporate debt, particularly for those companies that have resorted to leveraged loans and junk bonds.  Herein lies the kernel of a future slump.

Wednesday, November 14, 2018

California Fires, Climate Change is Real



Richard Mellor
Afscme Local 444, retired

It is almost a surreal scene, an overcast sky, the constant smell of smoke in the air and people walking down the street even driving in their cars wearing masks to alleviate some of the unpleasant affects of breathing in smoke filled air.

That’s life in in the San Francisco Bay Area.

I went down to Monterey CA yesterday just to get out for an overnight trip with a friend and the air down there was much nicer, less toxic. I returned today and the difference in air quality was significant.

The cause of this crisis is the worst fire in California history, what we call the Camp Fire in Butte County about 200 miles NE of where I live. At this writing, the fire has burned about 135,000 acres destroyed 9000 structures and destroyed the town of Paradise California, a population of about 30,000. So far it is responsible for 56 deaths with 130 or so people still missing. Fires are also raging in the south of the state and the celebrity community of Malibu has also been evacuated. I saw video of the Santa Monica mountains today that resembled Hiroshima.  There are no birds, no insects, no sounds, nothing, one person said.

The Butte County Camp Fire area is about 25% contained according to media reports and the area of the fires’ origin is closed off and is being investigated as a crime scene.The fire was traveling so fast fire fighters were unable to fight it and ended up primarily as a rescue operation according to reports. The cause of the fire is still under investigation. It is still undecided as to whether it was caused by human activity like a campfire or some other means. A lawsuit has been filed by some of the victims against Pacific Gas and Electric, (PG&E) the state’s power utility. PG&E is an old established private, investor owned energy supplier for much of central and northern California on up to the Oregon border and is regulated by the California Public Utilities Commission. Since the fires its stock price has tumbled.

PG&E has been sued and found responsible for fires in the past and although no determination has been reached, there is a lot of information coming to light that points in the direction of PG&E.  The attorney for the plaintiffs in the recent suit said that there were complaints of problems with power lines before the fire started and there are witnesses to substantiate this according to the media.

Initially, the Predator in Chief Trump blamed the fire and the spate of fires the state has endured, on the Forestry Service and bad management, “There is no reason for these massive, deadly and costly forest fires in California except that forest management is so poor,” he announced as the fire raged. Trump then threatened to withhold federal funds if there is no immediate “remedy” to this poor management.

The Wall Street Journal, perhaps the most important mouthpiece of US finance capital, while critical of Trump’s “rhetorical style”  in  an editorial earlier this week (“Mr. Trump has no empathy gene”) agrees with him. Extremely high winds and low moisture makes fired harder to contain the Journal says but “fueling” the fires is an “overgrown government bureaucracy” .

Of course the WSJ blames government bureaucracy because then Trump’s remedy with which they agree, can provide the alternative they both desire, the management of California’s vast lands should be in private hands, it should be, like all things in the capitalist mode of production, an opportunity for profit making. And it is not just the management of these lands that should be a profit making venture. Some 57% of California forestland is owned by the federal government, in other words, it is a public venture like the USPS, (post office) another highly efficient public service. Education, the US mail, land management and land itself are all opportunities missed as far as the investor, the owner of capital, is concerned. Pubic expenditure crowds out private capital and reduces opportunities for profits and capital accumulation. Successful public projects also tend to undermine the argument that only the private sector can provide jobs, can manage society, can provide the needs of society; it is a bad precedent. This type of expenditure is only good when it facilitates market activity like the building of the freeway system or rail that transport manufactured goods. Capitalism has to have an infrastructure that supports its economic activity and is reluctant to rely on the market.

So the Wall Street Journal points to the real culprit in all of this, regulation and other curbs on market activity and profit making. That’s why they hate unions, they are an obstacle of sorts to the free flow of capital, the capitalist’s right to do what they want with their capital and when.  This is what Trump wants but is incapable of articulating.

The Journal blames the “numerous” laws passed over the last 50 years that curb the capitalist’s freedom. Laws like the Endangered Species Act and National Environmental Policy Act.  For the Wall Street Journal and the US capitalist class it is these policies and the regulations and permits and other, what they call “bureaucratic” measures that are the root cause of these catastrophic fires that have ravaged and continue to ravage our state.

The glaring omission in the Wall Street Journal editorial is climate change. There is not one word about that.  These laws and what are actually fairly toothless regulations (OSHA is close to worthless in protecting workers on the job but the US Chamber of Commerce still opposed it), are to blame. The journal refers to them as “political blinders” but they are restrictions, small ones, on the rights of capital.

Paradise has had  just 0.88 inches of rain since May 1, compared with a historical average of over 7
inches during the same period tweeted James Sinko a meteorologist at the Weather Channel. “If Northern California had received anywhere near the typical amount of autumn precipitation this year ... explosive fire behavior & stunning tragedy in #Paradise would almost certainly not have occurred,” Daniel Swain, a climate scientist and researcher at UCLA wrote.


So no matter what way one looks at it, the root cause of these catastrophic events is capitalism, how society is organized. How we produce the necessities of life.  On the one hand there is climate change and all the by products of this that we should be familiar with by now.  Where humans live. How cities and our communities are built and where they are built is is all determined by planners and experts acting on behalf of owners of capital, investors and their political parties and representatives. The more people want to escape urban life and go live in the forest the more likelihood of fire and one of the riskiest additions to this living is the need for a power supply. Gas and electricity has to be brought to these communities.

Pacific gas and Electric is a for profit corporation and in all such activity, profit is paramount. Some utilities shut off power in extreme weather conditions in order to lessen the chance of fires but PG&E never did this until recently. The attorney for Camp Fire victims, “….claims PG&E sent out emails indicating it would shut off power before the Camp Fire but didn't do it. "Their meteorologists were watching the conditions, and then they decided not to," he said. "They decided to leave the power on."  CNBC.com

The attorney told CNBC that , "PG&E does not want to shut off power for the reason that management bonuses are tied not to safety, but rather the lack of customer complaints," When people are told their power is about to be shut off they complain which makes management hesitant to do so. Profit comes first.

There is no doubt that bureaucracy in the public sector comes with problems, mostly due to it functioning within the capitalist system as opposed to under the democratic ownership and control of workers as workers and as consumers.. But a society’s energy needs should not be in private hands. Like health care, education, transportation and other important social needs, the profit motive is a huge barrier to providing them.

Like the catastrophic hurricanes we are experiencing, these fires are not “acts of god” or a problem of regulation or environmental legislation aimed at protecting plant or animal life including our own, they are products of an inefficient, wasteful and bankrupt system of social organization.  I am not a climate scientist but I am aware that through time, the planet has gone through climate patterns, some extreme, some gradual. Bur what we are witnessing is different. The changes that are threatening to end life as we know it on this planet are occurring as a direct result of human intervention. They are a by product of human activity, not in general, but specifically as part of a system of production that is incompatible with human life and all life that has arisen and existed up till now.

This is one lesson we must draw from these crises and the other is that we cannot sit idly by if we love our children and our grandchildren. We owe it to them, we are obligated to them, to act to change the system and to  build a new world in which we can live in harmony with each other and the natural world that gave us life.  

Sunday, November 11, 2018

The Best Way To Honor War Veterans Is To Stop Creating Them

The commentary below was originally published at Medium.com and can be read there. It's author is  Caitlin Johnstone.

The US will be celebrating Veterans Day tomorrow, and many a striped flag shall be waved. The social currency of esteem will be used to elevate those who have served in the US military, thereby ensuring future generations of recruits to be thrown into the gears of the globe-spanning war machine.

Veterans Day is not a holiday to honor the men and women who have dutifully protected their country. The youngest Americans who arguably defended their nation from a real threat to its shores are in their nineties, and soon there won’t be any of them left. Every single person who has served in the US military since the end of the second World War has protected nothing other than the agendas of global hegemony, resource control and war profiteering. They have not been fighting and dying for freedom and democracy, they have been fighting and dying for imperialism, Raytheon profit margins, and crude oil.

I just said something you’re not supposed to say. People have dedicated many years of their lives to the service of the US military; they’ve given their limbs to it, they’ve suffered horrific brain damage for it, they’ve given their very lives to it. Families have been ripped apart by the violence that has been inflicted upon members of the US Armed Forces; you’re not supposed to let them hear you say that their loved one was destroyed because some sociopathic nerds somewhere in Washington decided that it would give America an advantage over potential economic rivals to control a particular stretch of Middle Eastern dirt. But it is true, and if we don’t start acknowledging that truth lives are going to keep getting thrown into the gears of the machine for the power and profit of a few depraved oligarchs. So I’m going to keep saying it. 



Last week I saw the hashtag #SaluteToService trending on Twitter. Apparently the NFL had a deal going where every time someone tweeted that hashtag they’d throw a few bucks at some veteran’s charity. Which sounds sweet, until you consider three things:

1. The NFL’s ten wealthiest team owners are worth a combined $61 billion.

2. The NFL has taken millions of dollars from the Pentagon for displays of patriotism on the field, including for the policy of bringing all players out for the national anthem every game starting in 2009 (which led to Colin Kaepernick’s demonstrations and the obscene backlash against him).

3. VETERANS SHOULD NOT HAVE TO RELY ON FUCKING CHARITY.
Seriously, how is “charity for veterans” a thing, and how are people not extremely weirded out by it? How is it that you can go out and get your limbs blown off for slave wages after watching your friends die and innocent civilians perish, come home, and have to rely on charity to get by? How is it that you can risk life and limb killing and suffering irreparable psychological trauma for some plutocrat’s agendas, plunge into poverty when you come home, and then see the same plutocrat labeled a “philanthropist” because he threw a few tax-deductible dollars at a charity that gave you a decent prosthetic leg?

Taking care of veterans should be factored into the budget of every act of military aggression. If a government can’t make sure its veterans are housed, healthy and happy in a dignified way for the rest of their lives, it has no business marching human beings into harm’s way. The fact that you see veterans on the street of any large US city and people who fought in wars having to beg “charities” for a quality mechanical wheelchair shows you just how much of a pathetic joke this Veterans Day song and dance has always been.

They’ll send you to mainline violence and trauma into your mind and body for the power and profit of the oligarchic rulers of the US-centralized empire, but it’s okay because everyone gets a long weekend where they’re told to thank you for your service. Bullshit.
Veterans Day, like so very, very much in American culture, is a propaganda construct designed to lubricate the funneling of human lives into the chamber of a gigantic gun. It glorifies evil, stupid, meaningless acts of mass murder to ensure that there will always be recruits who are willing to continue perpetrating it, and to ensure that the US public doesn’t wake up to the fact that its government’s insanely bloated military budget is being used to unleash unspeakable horrors upon the earth.

The only way to honor veterans, really, truly honor them, is to help end war and make sure no more lives are put into a position where they are on the giving or receiving end of evil, stupid, meaningless violence. The way to do that is to publicly, loudly and repeatedly make it clear that you do not consent to the global terrorism being perpetrated in your name. These bastards work so hard conducting propaganda to manufacture your consent for endless warmongering because they need that consent. So don’t give it to them.

Your rulers have never feared the Koreans, the Vietnamese, the Iraqis, the terrorists, the Iranians, the Chinese or the Russians. They fear you. They fear the American public suddenly waking up to the evil things that are being done in your name and using your vast numbers to shrug off the existing power structures without firing a shot, as easily as removing a heavy coat on a warm day. If enough of you loudly withdraw your consent for their insatiable warmongering, that fear will be enough to keep them in check.
T
his Veterans Day, don’t honor those who have served by giving reverence and legitimacy to a war machine which is exclusively used for inflicting great evil. Honor them by disassembling that machine.
_____________________

Saturday, November 10, 2018

Nov 11th 1918. The End of the Ist Great Imperialist War


Dulce et Decorum Est
Wilfred Owen, 1893 - 1918

Bent double, like old beggars under sacks, 
Knock-kneed, coughing like hags, we cursed through sludge, 
Till on the haunting flares we turned our backs 
And towards our distant rest began to trudge.
Men marched asleep. Many had lost their boots
But limped on, blood-shod. All went lame; all blind; 
Drunk with fatigue; deaf even to the hoots 
Of tired, outstripped Five-Nines that dropped behind. 

Gas! Gas! Quick, boys!—An ecstasy of fumbling, 
Fitting the clumsy helmets just in time; 
But someone still was yelling out and stumbling
And flound’ring like a man in fire or lime... 
Dim, through the misty panes and thick green light,
As under a green sea, I saw him drowning.  

In all my dreams, before my helpless sight,
 He plunges at me, guttering, choking, drowning. 
  
If in some smothering dreams you too could pace
Behind the wagon that we flung him in,
And watch the white eyes writhing in his face,
His hanging face, like a devil’s sick of sin;
If you could hear, at every jolt, the blood
Come gargling from the froth-corrupted lungs,
Obscene as cancer, bitter as the cud
Of vile, incurable sores on innocent tongues,
My friend, you would not tell with such high zest
To children ardent for some desperate glory,
The old Lie: Dulce et decorum est Pro patria mori.


Richard Mellor
Afscme Local 444, retired
Tomorrow, November 11th will be the hundredth anniversary of the end of the first World War, or what I always knew as a young man as the Great War. My father spent the entire length of the Second World war in Japanese hands, first in Hong Kong, then working on the docks in Tokyo, I believe for Mitsubishi. He may have been lucky in this regard as had he been in the jungles of Burma or Thailand he may have not survived at all. 

I always remember when him and is old army buddies would drink together at events in Mill Hill or a local pub. My uncle George also had half his foot blown off by a land mine in Italy and often he was there. They were in the Middlesex Regiment. The Middlesex Regiment's nickname was the Die Hards as in a famous battle, the Battle of Albuhera, their commander's words to them were "Die Hard my men Die Hard" and  The term had earlier origins.

There was one of them who was a veteran from the Great War, I forget his name now. He had a wooden leg losing the other in battle and he held his liquor so well the others claimed to the young me that his leg was hollow and the beer went there. When they'd had a few there would be a little bit of friendly competition with the Great War veteran using that term "up to my neck in mud and bullets" as the first war was fought to a great degree in trenches with a no-man's land separating the combatants. There were many attempts at fraternization and a decent film about this is Joyeux Noel 

The 1914-18 war, 1917-18 in the US, cost some 18 million lives. I was to understand later in life it was an imperialist war, a war between the capitalist powers for domination of world markets and natural resources. It was the end of the domination of British colonialism on the world stage and the second imperialist war sealed that fate as the US took the baton although British colonialism's decline began much earlier. Two world wars sealed its fate. All empires end. After the Armistice, US and other western powers sent troops in to Russia to crush the world's first workers' state.

There were many poems written about the first Imperialist war, but the one above is one of the most famous and powerful. Soldiers wrote their experiences down and many of these have been found.    This is a beautiful poem by Wilfred Owen who died in that war. The term Dulce et decorum est Pro patria mori, that Owen refers to as a lie, translates to: "It is sweet and fitting to die for one's country" It is indeed a lie. Workers die for "their" ruling classes, the heads of competing nation states, battles we have no real material interests in. Workers have no country in that sense. The working class governs no nation state in the world today and only did for a brief period after taking power in Russia in 1917 until the rise of Stalinism. Workers do not declare wars, capitalists do, or did. Now they don't even bother to do that.

We should keep this in mind: workers as cannon fodder are also trained to kill. They are taught that the enemy is less than human or less human than them. Racism, religious hatred, these are some of the methods used to turn workers in one country against workers in another. We just saw this fearmongering on a major scale with Trump and the economic refugees from Central America. When we think of the marine who killed 12 people in the bar and the black marines who also shot a number of cops some years ago and other vets that have returned and killed their families and themselves, they are then demonized, criminals, mentally ill, they are supposed to kill the people they are told to. They must never make decisions for themselves. To kill for most human beings is a traumatic sickening thing but we are supposed to ignore what the state has done to them and accept that their behavior is just a mental health issue not connected to military training or the product of combat.

The Great War was supposed to be the "war to end all wars". But capitalism is a system of war, it is never ending war. No matter what its adherents say, they are driven to war by the laws of this system  and they will be driven to the next one. The US has been at war with other nations and peoples its entire history starting with Native Americans. It is only the unity of the working class internationally that can build an everlasting peace. With the existence of nuclear weapons, time is not on our side.