Further Attacks on the Horizon As Bankers Strengthen Their Grip on Society. We have no alternative but to fight back

Working people know that in one way or another we are being forced to pay for the economic crisis caused by bankers, hedge fund managers and other speculators.  Everyone that is unemployed feels it; everyone that has lost or is about to lose their home feels it.  We feel it through cuts in public services and public sector workers feel it through the assault on them in the workplace.

There is more to come as what the capitalist press refers to as the Great Recession continues. Business Week reports this week that the situation is so bad the parasites that invest money in credit default swaps (basically teams of wasters that bet on whether or not borrowers will become so strung out they’ll be unable to pay the moneylender) claim that ratings agencies have States like California and Illinois as greater credit risks than Portugal.

In order to raise money, states have, as readers know, savaged public services and jobs.  Arizona, for example, has reduced assistance for 17,000 “seriously mentally ill people”. The big business politicians in Arizona are not only waging war against desperate economic migrants it appears.  And the right wing, Neo fascist groups patrolling the boarder don’t seem to care about mentally ill American citizens either.  Arizona has also sold some $1 billion worth of public property to raise money while New Jersey has “skipped” paying a $3 billion pension contribution despite state pension plans being underfunded by $46 billion last year.  (1)

As this writer has emphasized before, it is the pension plans of public sector workers that they really want to put a stop to next. “States don’t really have a chance of getting their houses in order unless they tackle unaffordably generous pension and health-care benefits for public employees.” Says Business Week, rallying its class to the cause. The problem with public sector pension plans is many of them pay enough for people to live on in retirement without having to take another job; disgusting.   This is a problem as it could be held up as a beacon for all workers at some point. If taken up in the right way it could spark of a mass movement of sorts that could get out of control.

We have heard this many times before; there is no choice, higher taxes or cuts in services. (this time we’re getting both)  We hear the same from the big business politicians and the heads of organized Labor when it comes to he workplace; cuts in pay and benefits or layoffs, these are the only options; after all, we’re in hard times.

Myself and countless others have pointed out that we are not in hard times, that there is money everywhere; it's a matter of priorities.  The IMF often remarked that the world is “Awash with liquidity”.  More often than not the serious journals of capitalism (the ones workers don’t read) talked of the world being “Awash with cash”. The problem right now is the Capitalists are on strike. We must reject the idea that there is a no money and recognize that we have to take it off of those that have it; it is our collective product.

One capitalist commentator recently remarked that a good crisis is a terrible thing to waste, and some of them have taken that advice to heart consolidating their positions and strengthened their grip on society.  Power and wealth is, as Marxist economists have predicted, concentrated in fewer and fewer hands.

The Wall Street Journal reports today that with the collapse of many finance houses during the crisis, three banks, J.P. Morgan, Wells Fargo and Bank of America now hold 33% of all U.S. deposits.  This is up from 21% three years ago. (2) These three banks made 57% of all home mortgages in the first quarter of 2010 up from 28% in 2008 the Journal reports. When Citibank is included, these firms hold $7.7 trillion in loans and other assets.  The Great Recession has been good to them as their total assets are twice as much as the next 46 biggest banks combined. The Journal points out that, “The three bulked-up giants now hold more than a third of all deposits in 25 metropolitan areas that are home to 70 million people, or nearly one fourth of the US population.” This is an amazing concentration of our wealth in their hands.

There are all sorts of obvious negatives about this and I won’t go in to all of them here but lack of competition among moneylenders is one as well as the effects on society when such large institutions fail.  That shouldn’t worry the money-lenders too much mind you as the taxpayer steps to the plate in those instances as we have just witnessed.

There are massive amounts of cash here and as we have pointed out on this blog previously, what is necessary is the taking in to public ownership of the banks, finance houses and other institutions (not the actual deposits of workers and other individuals) in order to allocate capital collectively on a democratic socialist basis.

One of the ways this consolidation effects older workers like myself is that the big banks pay less in interest on savings and CDs than most small banks that have to pay higher interest to attract customers. Even this has its limits for the small banks as their larger competitors use their financial muscle in all sorts of ways to keep customers.  The big banks often pay less interest on savings too. After it bought Wachovia, Wells Fargo cut interest rates on certificates of deposit.  In Orlando Florida, for example, a one-year CD that paid 1.26% at Wachovia paid 0.4% at Wells Fargo.  For older workers who have savings, this is a serious blow.  While the bank charges less interest to younger workers seeking loans drawing them in to their grasp to bleed them dry for as long as they can.

Most working people feel the effects of this as I have said.  And we wonder why there has not yet been a massive outcry in this country.  The Wall Street Journal asked in an editorial some time ago, “Why No Outrage?” ***  Part of the problem is that people just have nowhere to go. We have no political party of our own and millions of workers have drawn the correct conclusion that the Democrats and Republicans are in actuality two wings of the same party. The militant traditions of the US working class have also been driven to the depths of consciousness if they're present at all and we haven't had a mass movement here since the 1960's.

In the Unions the situation is dire as the heads of organized Labor support the Team Concept on the job and in the political sphere through their support of the Democrats. Here in California the AFL-CIO is supporting Jerry Brown for governor.  These policies mean the heads of the national Labor organizations have no credibility whatsoever with most workers.

We Can Stop This
The working class has the power to drive this offensive of capital back and ultimately change society.  We have to first recognize this fact.  We have to overcome what the English historian, Christopher Hill called the “Stop in the Mind” , the acceptance in our own minds of the ideology of the ruling class; that only capitalists can govern while working people work; that they are smart and we are stupid.  We can govern society.  We make it work and we know what is best for us.  The present economic crisis, endless wars and the environmental catastrophe in the Gulf of Mexico is confirmation of their bankruptcy and all of Obama’s and other politician’s rhetoric about taking BP to task after the fact is phony.  It took miners to die at Massey before they said anything about the lack of safety there.

They are using this crisis to take from us, wages, benefits and rights that took years of struggle to win.  We have been driven back this far due to the failure of the Labor leaders to mount an offensive against the employers. In the Unions we have to recognize that if we are to halt the decline we have to have a major struggle against the policies of the Labor leaders who are cooperating with the employers at every level. We have to transform our Unions and build caucuses that reject all that has failed so far and be prepared to confront the employers with the intention of winning. We must reject the laws of the market and the idea that capitalism is the only economic system possible.

We have to build community organizations that link up with those that work in our communities.  We cannot separate the struggle to control our communities from the struggle to control the workplace; this means fighting racism, sexism and other divisions that weaken the working class.  In this endeavor, public sector workers are still in a strong position, we are highly Unionized compared to the public sector and can bring the US economy to a halt.  What is more important is that a show of force by any sector of the working class would inspire millions of others to take action; a victory is a great motivator as power attracts.  The tremendous anger that exists in US society would find an outlet.  This is what the Union leaders are afraid of.

The present period and economic crisis represents a historic shift in relations between the classes at home and relations between the powers globally.  China has just been declared the world’s largest consumer of energy.  This will increase tension between the major powers as China’s clout on the world stage continues to grow in relation to the declining influence of the U.S.  Wages will be driven down further here in order to help US capitalism compete with its rivals. The Union hierarchy and employers will tell us it’s the “patriotic” thing to do.

Working people cannot get by hoping someone will make things right for us.  We cannot continue to be inactive. We cannot avoid the fight any longer; the consequences are too dire.  We owe it to our children and grandchildren to step forward and face the task that history has placed before us.

(1)  States of Crisis: BW 7-19-10
(2)  Wall Street Journal: A City Feels the Squeeze in the Age of Mega Banks 7-20-10
(3)  WSJ 7-19-2008