Michael Roberts: Economic Forecast 2020

by Michael Roberts

“It is difficult to make predictions, especially about the future” is an old Danish proverb, often attributed to Nils Bohr, the Danish atomic physicist and quantum theorist.  And amusing and insightful as it may be, there is no getting away from realising that applying the scientific method to any issue requires making predictions that can be tested to support or throw doubt on a theory.

In the natural sciences, as they are called, where human beings are not being studied, prediction plays an important role.  For example, according to Einstein’s theory of relativity, tit was predicted that large stellar objects will bend space itself through ‘gravitational waves’.  And exactly 100 years ago, that prediction was confirmed through astronomical observation of a solar eclipse.

Applying the scientific method and making predictions in social science is clearly much more difficult because the subject being studied are human beings.  Scientific method is full of pitfalls: human mistakes; inadequate data; unrealistic assumptions; inconsistent conclusions.  And these pitfalls are  probably greater in the social sciences, given less data and where the political and ideological pressures are greater. Nevertheless, I reckon that prediction must be part of the social scientific process.

But there is a difference between predictions and forecasts, in my view.  Take the climate.  We can predict that in the temperate regions of the planet, there will be four distinct seasons from spring, summer, autumn and winter.  And we can predict that the sun will come over the horizon in the morning and set in the evening.  Modern climate scientists are predicting that the earth is set to warm up at a rate not seen in thousands of years because of greenhouse gas emissions.  Physicists predict that in about one and a half billion years, the moon will eventually break out from its orbit around the earth, producing catastrophic damage to the earth’s atmosphere and wiping out all life.  We won’t be around to confirm that prediction.

Similarly, we Marxist economists can make predictions with some degree of certainty; namely that under the capitalist mode of production there will be regularly occurring crises of slumps in investment and production that cannot be avoided.  We can also predict, I would claim, that the profitability of capital will fall over time as capitalism expands the productive forces and matures.

But that is not the same as making a forecast.  Climate scientists cannot be sure when the earth will heat up to a tipping point that leads to uncontrollable warming that damages the fabric of the planet and engenders destructive floods, droughts etc.  We don’t know in which year, decade, century or millennium when the moon will break away from the earth.  We have limited ability to forecast when it is going to rain, shine or snow – although we have got much better in making such weather forecasts. And in social sciences, any forecast is even more uncertain.  We cannot forecast when or how much the rate of profit will fall in any one year or the exact change in output or investment likely to be achieved in a year or month; or exactly when a new slump in production might come.

All this preamble in this post is designed to make excuses for the failure of my forecasts of a new global recession to emerge over the last few years.  After the end of the Great Recession in 2009, I made a prediction that eventually there would be a new global slump.  And I made a forecast that this would happen from about 2016 onwards and most likely by 2018, after all post-war recessions had come along about every 7-10 years.  And yet, as we enter 2020, the world capital economy has avoided a new slump for the longest period since 1945.  So how did I get my forecast wrong?

My forecast was partly based on a theory of cycles in capitalism built around the long term cycle of 55-70 years first expounded by Russian Marxist economist, Kondratiev.  I reckon there have been four K-cycles since the start of the industrial revolution in Europe. The fourth cycle started in 1946, peaked in the early 1980s and should have troughed around 2018.



Marxist economist Anwar Shaikh has put forward a similar forecast to mine, also based on the dating of the K-cycle.  When measured by the gold/dollar price, he forecast that the downphase in the current K-cycle would trough around 2018.  More recently, Greek Marxist economists Tsoulfidis and Tsalikis (TT), in their new book, also identify long cycles.  Like me, they base the up and down waves in these cycles primarily on the movement in the rate and mass of profit.  However, TT reckon that the bottom of the current cycle will not be reached until 2023-28.

Cycle theory argues a new trough and slump in capitalist production is necessary to devalue the existing stock of capital before a new round of innovations based on rising profitability can begin.  But forecasting when that will happen is very difficult.  For the record, this is what I said at the beginning of each year since 2016, when the trough of the current cycle should have been reached.  In 2016, I said: “As for 2016, I expect much the same as 2015, but with a much higher risk of new global recession appearing….even if a new global slump is avoided this year, that could be the last year that it is.”  There was no slump in 2016 but the year did deliver a ‘mini-recession’ with global growth at its lowest since 2009.

Then in 2017, I said: “2017 will not deliver faster growth, contrary to the expectations of the optimists.  Indeed, by the second half of next year, we can probably expect a sharp downturn in the major economies …far from a new boom for capitalism, the risk of a new slump will increase in 2017.”  This forecast proved to be wrong as, instead, there was a mild recovery from the previous year in the major economies.

For 2018, I explained: “What seems to have happened is that there has been a short-term cyclical recovery from mid-2016, after a near global recession from the end of 2014-mid 2016.  If the trough of this Kitchin cycle was in mid-2016, the peak should be in 2018, with a swing down again after that.”  That forecast proved correct as growth slowed from mid-year 2018 and into 2019.

My forecast this time last year for 2019 was as follows: “slowing profits growth and a rising cost of (corporate) debt, alongside all the politico-economic factors of an international trade war between China and the US, suggest that in 2019 the likelihood of a global slump has never been higher since the end of the Great Recession in 2009.”

Well, there was no slump in the major economies in 2019, but they achieved the slowest rate of growth in any year since the end of the Great Recession.


 
So, while the decade of 2010s was the longest period without a slump in the major economies since 1945, it was also the weakest recovery from any recession in the same period.



And in 2019, global growth recorded its weakest pace since the global financial crisis a decade ago.
What were the factors for the slowdown and what are the factors that have enabled the major capitalist economies to avoid major slump that cycle theory predicts should have happened by now?

On the negative side, slow real GDP growth (of 1-2% a year) has been driven by continued low investment rates.  In its recent global outlook, the IMF highlighted that: “firms turned cautious on long-range spending and global purchases of machinery and equipment decelerated.”.



The ongoing trade war between the US and China along with trade frictions with the EU was also an important factor in the slowdown in technology spending.  Global trade—which is intensive in durable final goods and the components used to produce them—slowed to a standstill.



Indeed, since the end of the Great Recession, globalisation and ‘free trade’ has increasingly given way to protectionist measures, as it did in the 1930s.  Since 2009, governments worldwide have introduced 2,723 new trade distortions, the cumulative effect of which was to distort 40% of world trade by November 2019.


The global trade and investment slowdown has particularly hit the so-called emerging economies, several of which have slipped into outright slumps. Emerging markets face a serious “secular stagnation” problem. Growth in almost all cases has been far lower in the last 6 years than in the 6 years leading up to the Great Recession. And in Argentina, Brazil, Russia, South Africa and Ukraine, there has been no growth at all.



Nevertheless, 2019 did not see a new global slump.  Why not?  First, the monetary authorities quickly reversed their previous policy stance that the global economy was fine and had ‘normalised’.  In 2018, many central banks had been on hold with their policy interest rates or in the case of the Federal Reserve had hiked the rate.  In 2019, the opposite was the case.



Interest rates on government bonds and other ‘safe assets’ fell back towards zero or even turned negative.  With borrowing so cheap, large corporations and banks sucked up cheap credit; but not to invest in productive assets, but instead to buy up shares and bonds.


Stock market prices rocketed, up 30% in the US.  Global stock markets are now worth $86trn, just shy of all-time high and equal to almost 100% of global GDP.



The main purchasers of corporate stocks are the corporations themselves.  These so-called buybacks pushed up stock prices, in turn making it easier to buy out other companies or gain even more credit.  Much of the buyback funds were borrowed.  This expansion of what Marx called ‘fictitious capital’ has replaced investment in productive capital and it has been financed by Minsky-style Ponzi finance (ie issuing more debt to fund the cost of servicing existing debt).



The major capitalist economies are now in a fantasy world where the stock and bond markets (‘fictitious capital’) are saying that world capitalism has never had it so good, while the ‘real economy’ is stagnating in output, trade, profits and investment.

The other counteracting factor that has enabled the capitalist economies to avoid a new slump in the 2010s has been the rise in employment and the fall in unemployment.  Instead of investing heavily in new technology and shedding labour, companies have sucked up available cheap labour from the reserve army of unemployed created in the Great Recession and from immigration.  According to the International Labor Organization, the global unemployment rate has dropped to just 5%, its lowest level in almost 40 years.



This did not happen in the 1930s Great Depression.  Then unemployment rates stayed high until the arms race and impending world war militarised the workforce.  In the 2010s, it seems that companies, rather than reducing their costs in the face of recession and low profitability by sacking the workforce and introducing labour-saving technology, opted to take on labour at low wage rates and with ‘precarious’ conditions (no pensions, zero hours, temporary contracts etc).  As a result, there has been a sharp increase in what are called ‘zombie companies’ that make only just enough money to pay a low-wage workforce and service their debts, but not enough to expand at all.

High employment and low real GDP growth means low productivity growth, which over time means stagnating economies – a vicious circle.  The great AI/robot revolution in industry has not (yet) materialised.  Globally, the annual growth in output per worker has been hovering around 2 per cent for the past few years, compared with an annual average rate of 2.9 per cent between 2000 and 2007.



These counteracting factors may have delayed the advent of a new slump, but in my view, they can only delay it.  The fundamental driver of a capitalist economy is profit – and rising profits at that.  The most important factor for analysing the health of the capitalist economy remains the profitability of the capitalist sector and the movement in profits globally.  That decides whether investment and production will continue.  This blog has presented overwhelming evidence that profits and investment are highly correlated and in that order – see our book, World in Crisis.

Neither average profitability of capital nor the mass of profits is rising in the major economies. According to the latest data on the net return on capital provided by the EU’s AMECO database, profitability in 2020 will be 4% lower than the peak of 2017 in Europe and the UK; 8% down in Japan; and flat in the US.  And profitability will be lower than in 2007, except in the US and Japan.

My estimate of global mass profits also shows, at best, stagnation.  Japanese corporate profits are currently down 5% yoy, the US down 3% and Germany down 9%.



As for the largest and still leading capitalist economy in the world, the US, its rate and mass of profit have been falling since 2014.  In 2018, on my measure, US overall profitability rose very slightly over 2017 (probably due to Trump’s corporate tax cuts).  But profitability in 2018 was still 5-7% below the 2014 peak.  If we assume real GDP, employee compensation and fixed asset growth for 2019 will have been similar to the mini-recession of 2015-16, we can expect a further significant downturn in US profitability, to levels well below 2006.  On another measure, of earnings as a % of fixed assets in US non-financial companies, the rate is lower than in 2008 and approaching the all-time lows of 2001 and 1982.



This growing profitability crisis threatens to turn the increased credit for corporations from a bonus into a burden.  The Institute of International Finance estimates that global debt has now hit $250 trillion and is expected to rise to a record $255 trillion at the end of 2019, up $12 trillion from $243 trillion at the end of 2018, and nearly $32,500 for each of the 7.7 billion people on the planet.



Separately, Bank of America recently calculated that since the collapse of Lehman, government debt has increased by $30tn, corporate debt by $25tn, household by $9tn and financial debt by $2tn.  The BofA warns that “the biggest recession risk is a disorderly rise in credit spreads & corporate deleveraging.”



The World Bank joined the BIS (the ‘central banks’ central bank) in warning that the largest and fastest rise in global debt in half a century could lead to another financial crisis as the world economy slows.  In a report titled, Global Waves of Debt, the World Bank looked at the four major episodes of debt increases that have occurred in more than 100 countries since 1970 — the Latin American debt crisis of the 1980s, the Asian financial crisis of the late 1990s and the global financial crisis from 2007 to 2009.  During the fourth wave, from 2010 to 2018, the debt to GDP ratio of developing countries has risen by more than half to 168%: a faster increase on an annual basis than during the Latin American debt crisis.

World Bank chief David Malpass warned that “a sudden rise in risk premiums could precipitate a financial crisis, as has happened many times in the past.”  And that risk was confirmed this time last year, when interest rates rose too high – due to the attempt to ‘normalize’ policy – and stock and bond prices tumbled.

As we enter a new decade and go into the 11^th year since the end of the last global slump, these are the fundamental factors that suggest a new slump is not far away.  They are: stagnant or falling profits and profitability; weak or falling investment; rising corporate debt and falling trade (amid a global trade war).

But there are also counteracting factors that have so far enabled the major economies to escape a slump in production and investment (if at the price of low GDP growth, productivity and wages).  Global costs of borrowing are at all-time lows, partly due to central bank policy of zero interest rates and ‘quantitative easing’; but also because there is no demand from the capitalist sector for credit to invest in productive assets or from the governments to spend.  So the stock and bond markets of the world are hitting record highs.  And there is the new phenomenon, not seen in previous long depressions, namely low unemployment rates that provide at least a modicum of income for households.

Mainstream economic forecasts for 2020 are generally mildly optimistic.  The Fulcrum macro-model published in the FT reckons that “the outlook from the models shows global growth rates rising next year, returning roughly to trend rates. Recession risks are deemed to be low, currently standing about 5 per cent for the US and 15 per cent for the eurozone.”  Alternative models, such as those from Goldman Sachs suggests a recession risk of 24 per cent in the US next year.



Maybe these forecasts will prove to be right.  But eventually, the fundamental factors of profits and investment must override the counteracting factors of low interest and unemployment.  Profits rule investment and investment rules employment and income, and that rules spending.  The fantasy world cannot continue much longer.  2020 may be the year that it collapses.

Noam Chomsky on Israel, Settler Mentality and Colonialism

Richard Mellor
Afscme Local 444, retired

More often than not when I discussed Israel with co-workers or with workers in general, those that are not deeply involved in world politics, would say that Jews and Muslims have been fighting this present fight for centuries and people more often than not claim that religious differences are the root cause. This is not the case in Israel/Palestine, nor is it in Northern Ireland.

As I have pointed out many times in writing on the subject I refer to the first British governor of Jerusalem who said of the creation of a Jewish state in the region, that it could be "Our loyal little Ulster in the Middle East". In other words, a small settler minority occupying the land and the homes of the indigenous inhabitants they have driven out, with the result being a siege mentality on the part of the settlers and a dependence on the colonial or outside power for protection. Israel is a European settler state in the Middle East.

The US is also a settler state as is Australia as Chomsky says. When Americans talk to me about the Union Jack, the flag of the United Kingdom, I remind them, or in most cases they hear for the first time, that the Irish Republicans referred to it as the "Butcher's Apron." Ireland was England's first colony and to this day, the history and brutality of this colonization has molded Irish mass consciousness.  Irish people are not Irish American people and many are often embarrassed by the ignorance of Ireland's revolutionary history and it being supplanted by green beer, rivers and Leprechauns by their US cousins. When I was in a pub in Dublin in October watching the Rugby World Cup final between South Africa and England, there was not one Irish person rooting for England in there. As it was an international game the anthems were sung and I don't sing anthems (except the Internationale, the workers' anthem) especially a backward feudal hymn, and I certainly wouldn't sing God Save the Queen in an Irish pub.

In this video Chomsky gives a short, succinct explanation of why US imperialism supports the Zionist regime with all its brutality and racism. He explains the religious aspect of it going back to before the Balfour Declaration and Christian Zionism in England as well as here in the US. Most people do not consider when it comes to a religious reason for supporting Zionism that Christian Zionists far outnumber and have more influence than their Jewish counterparts. For these people, the conflict in Israel/Palestine is a confirmation of Biblical prophecy.  Along with this there is the geo-political as Israel is US imperialism's only reliable ally in the Middle East. The revolutionary potential of the Arab masses rules the weak Arab regimes out as far as that is concerned. Zionist brutality against the indigenous population of the region is made possible by US support.

In the case of British colonialism, it too is a history of extreme brutality and repression. It governed India for a century or more and plundered that sub-continent. I should add, that why identity politics is so prevalent here in the US is that it obscures or completely negates the class question.  We "are all American" fits in to the propaganda of the ruling class very nicely and it is shouted most loudly when they need cannon fodder for their imperial ventures.  But British colonial policy was not developed by the working class or the rural peasantry no more than US imperialism's invasion of Korea or Vietnam or Grenada or Cuba or countless other nations is not developed in any way through the truly democratic intervention of the working class. This is why I for one have been so vehement when criticizing those who rail against racism, white nationalism, imperialism and so on and never mention class at all.

US workers from all backgrounds and cultures have been sent to Afghanistan, Iraq, Vietnam and so on, plus, we have the notorious concentration camp in Guantanamo Bay and recently thousands upon thousands of small children locked away in camps, prisons and makeshift holding tanks. Where is the public outcry about this?  These people are economic refugees from US imperialism's century old domination of the political and economic life of their homelands. But we do not look at or treat the workers the US sent to invade Vietnam or Iraq, countries that never threatened us in any way, the same way we would treat those who send them. We don't attack the average person in the street for their apathy. We can accuse them of avoiding reality or keeping their heads in the sand but we do not distribute responsibility equally.

I encourage workers to listen to how Chomsky answers that question.

The IHS and the Ongoing War Against Native Americans

In the face of extreme violence Native people are still here and still fighting (for all of us)  Source

Richard Mellor

Afscme Local 444, retired

"Could it not be contrived to send the small pox among the disaffected tribes of Indians? We must on this occasion use every stratagem in our power to reduce them."

The words above, were written by a fine, cultured English gentleman, a prominent member of the English upper class named Jeffrey Amherst. Amherst was a veteran of the colonial wars fought for Britain on the North American continent and there are place names and streets named after him, including Amherst College in Massachusetts. Native Americans are forced to live in a society that reminds them of centuries of colonial history and the genocidal war against them that began with the European invasions.

Picture if you can, a scene at the doctor’s office and her diploma was earned at the Adolph Hitler School of Medicine, or was bestowed on him by the Joseph Mengele Institute?  Unimaginable isn’t it. Not for Native American’s it isn’t. What is it like for them having to pass by, or see pictures of that mountain in South Dakota that has the faces of heroes of the continent’s colonization, carved in to it as large as life? It’s staggering when we think about it. And saying that this view of US history is just “someone else’s point of view” isn’t sufficient. A point of view is not valid simply because it’s a point of view. What makes it valid is whether it corresponds to objective reality or in this instance historical accuracy.

I have wanted to write something along these lines for the last month and just couldn’t get it done. I was motivated initially by numerous articles in the Wall Street Journal describing the disgraceful state of affairs at the Indian Health Service (IHS), the federal agency that provides health care to 2.6 million Native Americans. Then I tried again after reading the back and forth accusations of genocide between the U.S. and Turkey. I will share this regardless, as I read what I think is the final piece on this subject.

Native people have repeatedly complained about the conditions in the hospitals that are supposed to serve them, and also the treatment or lack of it, including the shortage of doctors. The reality for me is that the genocidal war that was waged against the Native population at the onset and throughout colonization, including germ warfare as the quote by Amherst confirms, is continuing against the survivors of that genocide and the state of the Indian Health Service is confirms this.

One article highlighted the use of doctors whose record was less than stellar and these were not isolated cases. The Wall Street Journal points out that, “Since 2006, the U.S. government has paid out about $55 million in settlements in 163 malpractice cases at Indian Health Service hospitals.”  The Journal claims that doctors with numerous malpractice cases under their belt are given a “second chance” at the Indian Health Service. One of them, a Dr. Henry Stachura who retired in August 2019, had numerous allegations directed at him due to his care at the IHS that cost the US government (the taxpayer), $1.8 million in malpractice payments. Three of those patients died according to the Wall Street Journal. “Our tribal members are at the mercy of these federal health facilities….”, Tori Kitcheyan, a Winnebago Tribe of Nebraska council member, tells the WSJ, “There is no other choice.”.

One doctor at a hospital in Claremore Oklahoma cost the taxpayer over a million dollars in malpractice settlements for spilling fecal matter under a patient’s skin and botching a hernia repair according to the Journal

Doctors at the IHS are in a unique situation in that the US government covers the malpractice claims and they pay nothing. The Wall Street Journal cites a survey by a doctor recruitment firm that claimed this was considered a “top perk of the job”.  It would certainly be a top perk for a doctor who had a long list of malpractice claims with dead or injured patients on it.

In the US, where medical care is big business and quality of care is dependent on what you can pay for, the poor get what they deserve, (It’s called freedom here).  In the case of the Native People, those that have survived the genocidal war against them will be at the bottom of the heap.

In the latest Wall Street Journal, titled, A Tragic Journey Through The Indian Health Service,  we read about the case of Kate Miner, a Lakota woman and single mother who raised four children on her own. She went through more than a year of excruciating pain and unnecessary stress being misdiagnosed and generally ill treated by the system. Dr. Robert Martin Jr. one of the numerous physicians who saw Ms. Miner one night worked at an HIS facility. He is one is of many examples, the WSJ gives of doctors with poor records ending up working at the HIS. The Journal reports:

“In 2015, Dr. Martin’s medical license in Arkansas was suspended, then restricted, after he allegedly prescribed painkillers to two patients with whom he was sexually involved, according to that state’s medical board. The women were prostitutes at a Nevada brothel, board records show, and appeared on the HBO show “Cat House: The Series.” Dr. Martin also allegedly prescribed steroids to himself, the records show.

As part of the sanctions, he offered to practice only on Indian reservations or at Department of Veterans Affairs hospitals, Arkansas medical-board records show. Eight months after his suspension, the disciplinary order was dismissed, and the restrictions were lifted.” WSJ 12-24-19

Native people, the original inhabitants of this land but driven from it, along with veterans who we are told protect the rest of us and our freedoms, get the bottom of the barrel when it comes to medical care. If that doesn’t convince you that this parade of military veterans at sports events and talk of them as heroes is sheer hypocrisy and lies nothing will.

 “The IHS’s network of hospitals and clinics treats some of America’s poorest communities, beset by high rates of diabetes, alcohol-related deaths and other chronic diseases.”, the Journal adds. 

Billings MO March for Murdered and Missing Native Women

Other issues that have caught my attention recently through social media and American Indian websites and outlets, is the murder, rape and trafficking of Native women and girls. In Montana, Native Americans are just 6.7 percent of the total population, but make up 26 percent of missing persons cases.  I posted a piece on this blog from a Native American brother recently, something he posted to his Facebook page.  This is an issue in the US and Canada.

That said, we had a civil war here over the construction of the Dakota Access Pipeline that was met with extreme violence by the state but it showed that the resistance on the part of the Native population is far from over. Naturally, the present leaders of the building trades unions of the AFL-CIO supported the state. The leadership of the unions with their myopic view of the world want to ensure their members have jobs at all costs to keep the dues money coming in. Some of them will support capitalism’s destruction of the environment until every tree is cut down and every stream and ocean polluted. 

I am no expert on what is or is not genocide but though the source is nothing to boast about, Turkey’s Erdogan recognizing the U.S. treatment of Native Americans as genocide is spot on.  That Erdogan made this decision in response to the US government recognizing Turkey’s massacre of Armenians in 1915 as genocide doesn’t alter that. US capitalism has a lot of blood on its hands and has little credibility when it accuses Turkey, China, Myanmar or any other country of human rights abuses.

 

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If we look at the historical record. the US government’s policy toward the Native population, has clearly been to annihilate another ethnic group. Not simply removing them from their lands, but consciously attempting to eradicate their language which is what any colonial power will do, (the British in Ireland for example) and the eradication of their culture, their art, their presence in general.

They were then shoved in to Bantustans basically. The US government policy against Native Americans included starving the population and the way to do that was to kill all the Buffalo. The US government also poisoned the food supply of the Vietnamese people spraying dioxin (contained in the herbicide Agent Orange) on the land, the people, and even their own troops. There is no way that these policies of the US ruling class are not genocidal and surely a policy directed against an ethnic group can be genocide even though it fails to wipe them out entirely.

In the United States, it’s quite obvious simply from the comments made by Amherst above, that the goal was to take the land, remove the indigenous inhabitants from it by one way or another and dispense with them.  As part of the exchange with one of his officers quoted above, Amherst continued, "P.S. You will Do well to try to Innoculate [sic] the Indians by means of Blankets, as well as to try Every other method that can serve to Extirpate this Execrable Race.”,  Wikipedia, Jeffrey Amherst. 

To save some readers time, extirpate means to exterminate, and my dictionary has execrable as utterly “detestable; abominable; abhorrent.”.

Here is a previous WSJ article on the subject of the Indian Health Service  In the print edition of the Journal it was titled “Wanted: Leader To Fix Sickly US Health Agency”.  But what we have to grasp is that it is not possible to fix the IHS. We only need consider that the life expectancy of whites, a so-called privileged group in US society, is declining and there is massive poverty among the white population with millions of them also lacking health care, so there’s no likelihood of the US government rectifying the problems facing the health of 2 million Indians. It makes perfect sense that the ruling class of a social system whose goal it was from the beginning was the eradication of what they considered an “execrable” or abhorrent race of people, that conditions among this section of US society are what they are; these people were supposed to go away. 

Interestingly enough there was a recent article in the U.S guardian on the crisis facing indigenous women and girls and the disgraceful response to it by the state. In the article the author writes:

“Sex trafficking of contemporary indigenous women is “almost indistinguishable from the colonial tactics of enslavement, exploitation, exportation and relocation”.

In sharing these reports I am not condemning the entire workforce of the IHS. As in all cases like these, there are likely many, many doctors, nurses and health care workers who are dedicated to serving a community desperately need of some help. But as with all public services, the private sector and its state will ensure that they do not resolve the social crisis they are supposed to address, this would undermine the so-called supremacy of the market.

Part of transforming society and taking the road to genuine freedom has to be telling the truth about history. The ruling class will never do this in a serious way. Every ruling class falsifies the history of the oppressed if it recognizes it at all. As far as addressing the conditions that persist among the Native population is concerned, a starting point must be the recognition that their history is a heroic struggle against genocide and the current state of a crucial social service that is designed to fail is a continuation of that process.

Sure, Trump is a Degenerate.But Let's Keep Our Eyes on the Prize.

This is what happens to a social system that has produced more wealth, more innovation, more products and more devastation and misery, than any in the history of human society.  Trump is the political excrement of a social system of production on it's last legs, at the end of an historical era. It is evidence to the rest of us, the working class, the specially oppressed minorities, the friends of the earth, the demoralized middle class that might choose the road to fascism and reaction, that if the working class does not take on the task that history has set for us, we can lose it all.

But let's not allow the degenerate nature of this imbecile to cloud our thinking. There were serious problems here in the US and throughout the world that were not Trump's doing. The trade union leadership that refuses to offer an alternative despite having the resources to do so, and the inability of both parties of capitalism, Democrats and Republicans, to continue to govern US society in a way that offers US workers any hope of a future have contributed to the rise of Trump.

Obama is an educated, slick bourgeois politician. He's cultured, as were the English bourgeois that lorded it over 25% or so of the world's population. Obama is polite and has manners like the Belgian King Leopold who oversaw the murder of 10 million inhabitants of the Congo, a country in Africa that Leopold believed was his "back yard".

Michelle Obama has no problem with the media publishing pictures of her with her arm around the war criminal and mass murder George W Bush.  That the media quotes her saying he is her "partner in crime" doesn't concern her. This is class solidarity folks, these people stick together and the glue that bonds them is money, the pursuit of it and the accumulation of it. In other words, capitalism.

Nasty, yes, but our struggle is not personal

Trump admits he can grab women's crotches whenever he feels like it. The Nazi's and the KKK love him up to a point; he's a bit too liberal and sort of schizophrenic even for them. The US ruling class is done with him, he is not good for business. Capital accumulation, the acquiring of wealth without working which is the only way it can be accumulated, needs a certain amount of equilibrium, it cannot abide chaos. Trump is chaos.

Yes, Trump is mad. But that's not the main issue for the US ruling class. He can be mad, he can be a racist and a rapist and he appears to be both. But for God's sake man, don't interfere with profit making. You might ignite a social upheaval.

Horrific footage of Animal Torture. Research for Profits.

Warning: There is some brutal footage in this video. It is not suitable for children but all of us that have not lost our humanity should watch it and share it.



Richard Mellor
Afscme Local 444, retired

Animals or humans. There is no limit to the horrors that the market will impose on humans, animals or the natural world on behalf of the owners of capital and their rapacious, violent struggle for profits. Some will say that they are just as ruthless in their treatment of humans, of the poor and so on. And this is true. But that doesn't change the obligation to change what we see here. We are all animals on this orb.

What you are witnessing here is not some sort of aberration, not an unusual event. As I just wrote, they treat humans the same way. Everything, the land, the plants and the forests, the animals and the human body are all commodities, something that has the potential to return more capital to the capitalist above their outlay.

What genuine socialism will do for us is allow us to have a better relationship with not only other animals, but the land and the natural world that nourishes us. We have no choice but to change the world, the way we produce the necessities of life or we die. There are some sections of society that want to prevent that even if it means the end of life as we know it.

We have the means, we have the know how. Even if we use animals to help us understand how to create a safer world, it will be done in a planned collective sane way; humanity can respect them lime the indigenous hunter of the whale or the Mongol owner of the camel. The most important aspect of that system will be the profit motive, the struggle to accumulate wealth and money at the expense of ohers will no longer exist.

California: Massive homelessness in a state with 90 billionaires.

Down near my former workplace.

Richard Mellor
Afscme Local 444, retired

I worked in the streets of Oakland and surrounding towns for 30 years. I worked for the water utility that supplies some 3 million residents on the east side of the San Francisco Bay, the East Bay Municipal Utility District (EBMUD). I remember driving my backhoe (JCB to Brits) up Peralta Street heading toward Emeryville and North Oakland and I would see the homeless pushing their shopping carts liberated from some Safeway parking lot and laden with cans, metals and other recyclables to a scrap dealer there. 

I became familiar with some of them as I drove by, giving a nod here, a wave there. They were homeless but were dignified, they were working collecting recyclables that could keep them going another day. There were occasional complaints from the "official" refuse collection company that the homeless would do the rounds of the recycle bins parked at the sidewalks edge which is where residents left them for the company trucks that emptied them and took them to the dump. Back then, three workers, Teamster members used to accompany the trucks, one driving the other two grabbing the bins and emptying them. Where I live now, it's just one person as the garbage truck is automated, picks up the bins, empties them and each stop takes just a few minutes.  As with all technical advances that improve the productivity of labor, they are owned by the capitalist not the worker. The excess labor power now no longer needed is cast aside. Technology in the hands of the private sector increases the exploitation of the worker; I don't think the invention of the dishwasher or vacuum cleaner liberated the housewife.

Now when I drive through Oakland there are literally tent cities everywhere, and I mean real cities.   Many of the homeless have traditionally been the mentally ill that were thrown on to the streets when Reagan and co shut down the institutions that were supposed to serve them. For the longest time, one third of the homeless were Vietnam veterans. What a world, a worthless POS like Reagan treating people suffering from the trauma of conflict like that. Isn't the free market great!

The city clears these camps on occasion throwing away their tents and belongings but where can they go? What a barbaric practice. If one is not suffering from some sort of mental illness prior to being homeless and living on the streets, they certainly are likely to after it. Writing in the San Francisco Chronicle today, Otis R Taylor Jr points out:
"Homelessness in Oakland increased by 47% in the past two years, with a 68% increase in the number of unsheltered people — from 1,902 to 3,210 people. What’s more, 70% of homeless people are black when black people are less than a quarter of Oakland’s population."

There is talk in some communities of building "affordable" housing and "sheds" that homeless people can occupy. But this is no solution. The US ruling class will throw a few million at some social issues that are a by product of capitalism but the system is incapable of eliminating the savagery of the market, homelessness, like racism and constant war are all an integral part of capitalism and the fox will not protect the chickens in the hen house.  Crucial state institutions supposedly responsible for the health of millions of people are not designed to rectify society's problems; they are designed to give the impression they are.  I have been reading about the state of the Indian Health Services, an arm of the federal government that services over two million Native Americans, it is failing them and it is designed to. And anyway, without a job or skills and after years on the streets, these vicrims of the market need more than just a roof.

In the US, public transportation is so mediocre, particularly so here in California that during the Great Recession and on through these equally hard times, people walked away from their home and the blood sucker's mortgage but continued to pay off the car loan. This was a smart decision as they could sleep in the car and at least get to work.  There has been an increase in the number of vehicles, cars, trucks, and motor homes that park in certain areas, homeless with a roof at least. The "working poor" is a huge section of those in desperation and poverty in the US. To correct this situation will require a lot more than a few sheds and a million thrown out here and there. The trillions spent on the US military are off the table when it comes to finding funds. Same with the wealth of the small percentage of multi billionaires in the US who combined net worth could end world hunger.

It is the insecurity, fear, sense of powerlessness that drives the violent responses, drug and alcohol addiction and wiping out of one's entire family that are so prevalent here in the US; sensible gun control and background checks that any normal person would support will not solve the problem. There is a sort of collective madness. Almost every day there are mass killings of some sort. This is given fuel by the fact that in the media and society in general there is this constant propaganda that directs the blame at the victims. The "pull yourselves up by your bootstraps"  bull has not gone away although more and more people have no bootstraps to pull up. Even if they are working, they have two maybe three jobs with one of them having some sort of meager health insurance. The extreme wealth of a few at the top is ever present in the movies and television. I long for a show where one of the actors says to the roommate, "I'd better hurry I get in real trouble if I'm late for work." This is a bit exaggerated, but the reality is that on TV, work doesn't really exist, everyone just has fun, sex and cracks jokes to one another. There will be a black face, a gay person an immigrant, and so on just to show how wonderful life is here. Remember Breakfast Club, "isn't life swell".

There are increasing challenges to this madness and that includes homelessness but, as we have stated on this blog in the past, there will be some explosions ahead in the US. The movement against the savagery of the market will not be pretty, there will be confusion, steps back and steps forward and there will be violence as reaction rises in response to the class struggle becoming more acute. The US capitalist class has a long rich tradition of hiring gangsters and thugs to combat social movements and the organized working class. US labor history is full of such examples, like the Pinkertons and the Civil Rights had the citizens councils and the KKK. Here is the link to Otis Taylor Jr's article on the situation in Oakland in today's San Francisco Chronicle

Macron Attempts Major Backward Step in Pensions

Unions warn no 'Christmas truce' in sight. Source

Originally published on the UK website,  Left Horizons

By Greg Oxley, member of PCF Paris and editor of La Riposte

December 20, 2019

Macron's pension reform represents a major social regression, only the most recent of a raft of reactionary policies implemented by successive governments, including the supposedly "socialist" government of Francois Holland.

Pensions have been the subject of several  counter-reforms, but the current one is the worst of all. It will wipe out a pension scheme where the pension of retired employees are based upon the wages of those still working, rather than on the result of the buying back of a saving scheme.

This reform will also increase the retirement age and significantly reduce the amount of the pension. As a ‘good communicator’, Macron took care to hide the substance of his reforms behind a barrage of lies that the communist newspaper L’Humanité very usefully deciphered in detail. Macron claims that the points system will be fairer and more "equitable". On the contrary, it will exacerbate to the extreme pensions inequalities already glaring before the reform.

Reform aims to benefit banks and insurance companies

In Sweden, after the introduction of a point system in the 1990s, 92% of current retirees have a lower pension than they would have had with the previous model, and the number of retirees officially classified as "poor" is almost twice as much higher there than in France (7.5% in France, 14.7% in Sweden).

Under the points system, pensions will take into account periods of low wages and unemployment. The more we are unemployed, part-time or on sick leave, the more our pensions will be impacted. The most affected will be women, the disabled, the sick, the victims of unemployment and precarious work. The central aim of this reform is to open a market worth hundreds of billions of euros to the banks and insurance companies, by pushing millions of citizens into ‘provident contracts’ in the hope of compensating for their losses.

A huge movement of strikes and popular resistance is under way to block this new capitalist offensive. During 2018 and 2019, with the railway workers' strike and then the “yellow vests” movement, we saw the end of the relative social calm that had settled since the great struggles of 2010 in France. The movement currently underway is powerful and encouraging. But we should not underestimate the opponent. For Macron to give up his reform would be disastrous for him, because it would put him at odds with his commitments to the sharks of finance. 

If he fails, his government will be paralysed, as was the government of right wing Prime Minister Juppé under the presidency of Jacques Chirac, after the events of 1995. Consequently, for the current strikes and demonstrations to have the least chance of success, they must widen, become even more massive, mobilizing the private sector. They need to further revive the "yellow vests" and seek reinforcements among high school students and students on a massive scale.

Macron will seek to divide the movement by temporary and sectorial concessions and by betting on deceitful and treacherous “union” leaderships, like that of the CFDT, which is a social-democrat union federation which has backed major social reforms in the past. The best antidote to such manoeuvres would be to mobilize more widely and open up the prospect of a possible victorious outcome.

Whatever the immediate outcome of the current struggle, the events we are currently experiencing bear witness to the social instability that is taking hold in France and which will only worsen, given the social and economic prospects for the future.

Deep distrust towards politicians all elites

This social and political instability is increasing not only across Europe, but around the world, creating a situation in which "populism" and nationalism are advancing at an enormous rate. We often read that the term "populism" means nothing. But it does mean something. It signifies the emergence of political currents which can capture and reflect a major change in the social consciousness of populations, or a significant part of them. In the last period this has been characterized by deep distrust of and hostility towards all "elites", particularly politicians, so-called democratic institutions, the media and various "experts".

Some opportunist politicians who ride this wave are only exploiting the social consequences of capitalism to advance their own interests. They poison popular consciousness with nationalism and xenophobia the better to serve, ultimately, the interests of the ruling class that they pretend to challenge.

We are raising the problem of populist and nationalist dangers here because the stakes of the struggles go far beyond their immediate causes. In defending the interests of the working class through struggle, we also need to raise these issues among all trade unionists and activists. Concretely, in the context of the progressive demolition of all past social conquests, of impoverishment, of increased precariousness, of fear and anxiety about what the future holds for us, the search for solutions can only ultimately take one of the two possible directions.

It must either lead to a resolute and serious class struggle that challenges and destroys the power of the ruling class and opens the prospect of a social order free from exploitation and oppression. Or, it will be channeled into a path that is based on "national" and "racial" myths, scape-goating other nations and races. Between these two fundamental forms of political consciousness, there is competition and a struggle, the outcome of which will decide the fate of humanity and, given the ravages of capitalism in the field of the environment and the ecological balance of planet, of its very existence.

Massive debts have accumulated

This vision also has to be put in the context of the global economic outlook as it appears for 2020 or 2021. Since the world recession of 2007-2009, a major offensive has been carried on against living conditions and the rights of workers. The apologists for capitalism explain the crisis of 2007-2009 by the exponential growth of credit - that is to say, debt - in the previous period. In fact, it was a market saturation crisis (or "overproduction") whose economic and social repercussions were amplified by the colossal mass of debts contracted in the previous period and whose economic function was to postpone as long as possible to saturate the markets by creating artificial demand.

The same apologists assured us, in the midst of the debacle, that the lessons learned from this experience would prevent us from reliving it in the future. In reality, debt worldwide has increased by 50% since 2009, with a sharp acceleration in the past 24 months. In 2017, global debt was $ 184 trillion. Two years later, it is $247 trillion, or 240% of world GDP. All international institutions like the World Bank, the WTO, the IMF, the ECB, the Federal Reserve, etc. envision another global recession in the next two or three years, compounded by the rise of protectionism and trade wars and also by the fact that many economically important countries are already in recession before the expected crash.

Social counter-reforms will be endless

And if many bankers think that the repercussions of this new crisis will be less serious in the write-off of assets and loss of profits, they are all of the opinion that, to get out of it, it will be necessary to proceed quickly to the destruction of what remains of "bottlenecks" in the area of ​​social legislation, public services and social spending.

Thus, we see that the capitalists are of the same opinion as us with regard to the future under capitalism. Social counter-reforms will be endless as long as capitalism exists. When we talk about a class war, politicians and other "experts" display a mocking smile ... What is this antiquated language of another age? Still, this is what awaits us – and at a level never seen in almost a century. The ruling class is preparing for it. It is as well that we prepare for it too.

In “democratic” Europe, the erosion or complete destruction of the social conquests of the past tends to undermine the social bases of parliamentary regimes which had rested on a “social compromise” and on the possibility of a peaceful coexistence of classes with competing interests. This possibility is getting weaker from year to year. Intense, bitter and hard struggles await us, struggles in which all the ideas, programs and methods of our organizations will be shaken and put to the test.

It is a warning and a call to class struggle

The currently dominant and majority tendencies in the workers' movement and in society, which are essentially defensive and limited to various expedients to mitigate the social consequences of capitalism – staying within the framework of the system, without any serious prospect of leaving it – will show themselves inadequate in the face of the reality of a system that is demanding counter-reforms. Our daily defensive struggles are necessary and indispensable but they need a political objective and an alternative to capitalism.

Removing the economic and the political state power from the capitalist class is the sine qua non of a transformation of society that would allow real social advance and fulfilment of workers’ aspirations and those of all those who suffer the consequences of capitalism. On the other hand, if this program of socialist change – worked, explained and properly argued – does not emerge in and around the workers’ movement in the coming period, then, inevitably, the despair which has already strongly stimulated "populism" will sink even more abundantly into the channels of nationalism, racism and ultimately, fascism and war.

We do not sketch these perspectives and alternatives for academic or journalistic purposes. It is above all a warning and a call to struggle, not only for a program that is defensive, but for one that advances the revolutionary transformation of society.