Saturday, March 31, 2012

San Leandro City Council Bows To pressure, more austerity ahead

This a piece I have distributed locally after attending a City Council meeting in the town where I live.


March22, 2012
I was at the last San Leandro council meeting and watched the process of shifting the burden of the present capitalist crisis on to the backs of working people unfold. (see my blog on our school situation).

The mayor gave his “State of the City” report.  I don’t know the mayor and therefore make no attempt to judge his personal motives.   I assume he believes he is doing the right thing but the “right thing” in this case is to appease to business, to please capital at the expense of workers and public services. As I pointed out in a blog about Indiana recently, capital has some demands of its own for its generosity, not least lower taxes and low wages or an environment that allows them to be competitive is how they phrase it. Our council, like all of them, is doing its best to show the 1% that it will dutifully act as their agents.

Citing “difficult times” our mayor made reducing pension costs a priority; we must “Make the pension system sustainable.”  he said and vowed that “We will either find savings or make necessary spending cuts”.

The cost of firefighters will rise too and that’s all due to their pensions going up and they work under contract from the county. Pension reform is vital say these politicians. Workers receiving a retirement package that actually allows us to live a relatively decent existence when we quit working is destroying the mighty US capitalist machine.  A decent pension and wages should be lauded as a goal for all workers and fought for aggressively. That public services and workers wages are destroying the economy is nonsense and we have to reject it.

It is profits that are undermined by public expenditures. That’s what all this is about. The San Francisco Chronicle continued the assault in a recent editorial. The California Public Employees Retirement Fund (CalPERS) barely broke even last year from its high of 11% a year.  
“The party’s over” says the Chronicle.  With CalPERS earning less, state and local agencies will have to fork over more to maintain pensions. This would obviously affect services as the politicians elected to local councils accept that their duty is to carry out the policies of the 1% and shuffle funds around, cutting here, shaving a few bucks there, raising taxes on workers and the middle class to maintain basic services.

In San Leandro, like the rest of the country, public sector workers and the services they provide communities have already contributed significantly to pay for this crisis orchestrated by Wall Street and the bankers. A program of temporary or part time layoffs, euphemistically called “furloughs” is due to expire and city leaders may well try to extend it. For state workers, these part time layoffs amounted to a 20% pay cut.  Recently, some San Leandro, high school seniors went on a hunger strike to protest cuts in education. The bankers are serious; they have no future but a third world existence for our youth. 

Included in our mayor’s address was a projection of seven years with no salary increases including COLA raises for city workers. So as inflation increases, this will cut further in to wages and living standards, not to mention consumption which will be bad for local businesses. There is also no “planned restoration of programs” already cut the mayor said.  This is what the mayor considers the “right track for economic recovery”, and indeed it is from a businessperson’s point of view. One of the bright spots in the report was a high-speed Internet loop.  There is nothing wrong with this, but it is all designed to appease capital, just like the cuts. This is the scenario that emerges if we accept that there is no money in society and base our actions on what works best for the 1%.

We are being forced to pay for a crisis not of our own making.  There is plenty of money in society.  The problem is it is lining the pockets of the 1%. US corporations are on a strike of capital; they are sitting on mountains of cash, more than $2 trillion of it. It’s like the fancy new sports stadiums. The speculators and investors will throw in some cash as long as the public guarantees they will cover their investment. Privatize gains socialize losses. They nationalized the debt of the Savings and Loan companies when that crisis hit---no whining about communism then. If we are going to guarantee anything, it needs to be shelter, health care, education, public services, retirements and jobs as well as a safe and clean environment. In short, what we need as human beings to live a decent and productive life. 

Then there is private money or what they refer to as private money.  Some individuals have earned more than $5 billion dollars a year on more than one occasion.  They lavish these funds on $400 million yachts and $40 million dollar homes, more than one of them in different countries. They never earned this money and actually paid only a 13% tax rate on it.

In 2006, the 25 top hedge fund managers earned $15 billion between them.  The problem with public expenditure is it crowds out private capital and therefore another opportunity to make some profit, to earn money without doing any productive labor. That’s another reason they want to privatize everything.  They say the post office is losing money.  Who cares? it’s a public service. It’s simply a matter of capital allocation. But to solve this they want to eliminate 4,000 post offices, mostly in rural communities.  But the post office in these communities is a social institution and a link to the outside world for many.

The annual income of two human beings would save 4,000 post offices.  I know which I would choose. The financial crisis that broke in to the open in 2007 with the collapse of the subprime housing market has given the 1% reason to speed up the privatization process and put the US working class on rations. Prior to the Occupy Movement, the offensive against the public sector pretty much went unanswered. When 100,000 protested in Madison, Wisconsin, Labor officials and their Democratic allies managed to contain this movement to demands that would preserve Labor officials’ jobs and Labor’s role as cash cow and foot soldiers for the Democratic Party at election time.

A revolt at the local council, school or transportation board level would definitely cause some waves. But we cannot vote the crisis away.  Local politicians can, through their positions, help to build a movement from below that can transform the balance of class forces and resist this assault of the bankers and the two Wall Street Parties -- but only by relying on the strength of the movement and its ability to stop economic activity and profit taking.  Out of such a movement, rooted in it, independent candidates can run for office leading to the building of a political party, a workers’ party as an alternative to the two Wall Street Parties. 

No one says it is easy, but the mood is the most favorable it has been in a long time.  The bankers are hated. People are using credit cards to buy food, pay for medical care and are being thrown out of their homes amid an abundance of them. The only alternative is to continue this race to the bottom and lose all that has been fought for over decades.  It is an international problem and we need an international outlook. But we can begin by rejecting the 1%’s view of the world where we are.

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