Stockton CA: the largest US municipal bankruptcy as the 1% make us pay

N Las Vegas development bankruptcy bound.

As a previous post on health care points out, the desperate and arrogant US capitalist class is close to making serious mistakes as they intensify their offensive against workers and the middle class.  The US is engulfed in a political and economic crisis globally and at home and things are getting worse.

Globally, the relations between the powers have shifted. While US capitalism still holds military supremacy its economic supremacy is threatened on all sides especially by China. While I was in Australia it became clear that here also the sands are shifting as this country that is dominated culturally by its European colonial heritage and links to the US and Britain, is feeling the economic pull of Asia and is struggling with its identity.  US capitalism as it is throughout the world, is seeking to increase it's military presence in Australia in an effort to curb Chinese expansion as it has done in Central Asia, something that more Australians fear as it will draw this nation, increasingly dependent on trade relations with its Asian neighbors in to US capitalism's disastrous "War on Terror".

In order to defend the interests of Wall Street US capitalism is being forced to increase its offensive against workers and the poor at home to pay for this crisis.  While some sections of US capitalism recognize the dangers of this offensive, that the US working class has limits, confidence is relatively high as years of class collaboration on the part of the heads of organized Labor has kept the rank and file in check and weakened US Labor's militant traditions.

The situation is extremely volatile and, without appearing alarmist, it would be a mistake to think that the great social movements that arose in this country in the past will not be seen again in the not so distant future.  The Occupy movement appears to have subsided somewhat after severe repression from the state and internal weaknesses and mistakes.

US capitalism however continues with its domestic offensive. Here in California, Stockton, a city some hour and a half east of San Francisco filed for bankruptcy protection, the largest US city ever to do so.  Like private companies that seek bankruptcy protection in order to renege on Labor/management contracts and what the capitalist media calls "overly generous" employee pensions, municipalities, starved of cash and overburdened with debt eliminate these obligations through the courts.

North Las Vegas Nevada, has declared a "state of emergency" and suspended portions of its contractual agreements with Unions.  The city used a state law "designed to cope with riots, natural disasters, military action or civil disorder to suspend raises and holiday pay for its police and fire unions", the Wall Street Journal reports. Critics have stated that this is simply a move to avoid dealing with trade unions.  As this drive to put the US working class on rations, very successful so far in the private sector, the capitalist class lingers amid the rubble to pick up the buildings, public works projects (parks, water etc) as their representatives on public bodies sell of public assets in the rush to privatization.  The US is being Gorbacheved.

Vallejo, another city in the San Francisco Bay Area that filed for bankruptcy in 2008 is not out of insolvency after slashing wages, pensions etc.  Vallejo owed $50 million when it filed, North Las Vegas has  a $31 million deficit and $450 million of outstanding debt. Stockton by comparison is $700 million in debt.  The capitalist crisis has savaged revenue for these municipalities, particularly with the collapse of the housing market where most Americans are encouraged to put our spare cash.  A home was a bank for most of us. N Las Vegas has seen property tax decline 37% in the last three years as one in every 195 housing units is in foreclosure.  This is more than three times the national average according to the data from RealtyTrac.  Before the crash, real estate developers and sellers were gorging themselves in the Las Vegas area; it was indeed a "sumptuous feast"  to borrow a phrase from Larry Summers.  Another financial journal reported that some real estate agents were earning $500,000 a year "filling out forms".

In all these situations layoffs and massive cuts (for reduced layoffs) occur.  Unemployment in places like Stockton and North Las Vegas is way above national average,of 8.2%; 14.3% for N Las Vegas.

The savage effects of the capitalist crisis on the US population should not be underestimated and we can be assured that it will at some point be met with huge social explosions---it cannot go on without such a reaction and the capitalist class cannot avoid waging this war.  "This is not going to be the last time you hear of a situation where politicians ...are trying to address the issue of entitlements, and they are using every avenue they can to make cuts happen" says one investor.

Lawsuits have been filed as a response to the action taken by the 1%'s politicians in N Las Vegas. This is also the standard response from the heads of organized Labor to attacks on trade Union rights.  File a law suit and get a Democrat elected is the method, a method that has failed us miserably for decades.  The alternative for organized Labor's officialdom, building an independent  political alternative rooted in the working class, our communities and organizations, is not something that will occur through actions form above but from actions below. 

The figures quoted above with regard to debt are paltry when we consider that some individuals in the US earn more than $10 billion a year.  Trillions more is wasted on predatory wars fought in the interests of Wall Street and the US corporations. This doesn't go unnoticed.  It's not that US workers "don't care" as so many of the enlightened like to argue---they just don't know what to do about it.  Hollywood and the powerful US spin machines still shows the world a different America.  But exhausted by decades of war, corrupt politicians and an economic, political and "growing" crisis in the ranks of the military, we can be sure of increased social unrest.

Reality is after all objective.