“The emancipation of the working class will only be achieved by the working class itself.” — Karl Marx
Mar 19, 2001
In the second week in March, all the major stock markets plunged –not just in the U.S. but all over the world. This plunge was led by the formerly high flying NASDAQ index, whose stocks have lost almost two-thirds of their value in one year. But most other stocks have also been falling, raising the specter of a much bigger financial crash.
This plunge is putting to rest the myth about the so-called "New Economy" –one which would fuel a never-ending expansion, raising all boats in the process, as the saying goes.
In fact, there never was a new economy. No new schools were built for our children, no new teachers were trained and hired to work in those schools. Ordinary people had less access to decent health care, not more. No new affordable housing was built.
In short, there was no improvement in the workers' standard of living, no increased benefit from our hard labor, only a further decline.
This was not in any way, shape or form a "New Economy." It was the same old capitalist economy, based on the real exploitation of the working class.
Over the last year, corporate profits have fallen and speculation has plunged, and over the last weeks this plunge has worsened considerably. In response, the capitalists have cut back their investments and new orders.
It is no secret that the capitalists expect the working class to foot the bill. The capitalists made this perfectly clear even before they began to lose their first pennies: They initiated a new round of layoffs, while pushing for much greater production from those workers left on the job. These layoffs are being followed by the familiar demands by the capitalists for the workers to make ever more sacrifices, pull in our belts even more.
By putting so many people out in the street, without enough money to spend to buy their products, the capitalists do the very thing which ensures a new downturn and makes it worse. And these new rounds of layoffs and new demands for sacrifices only hint at what will come.
During supposed good times or real bad times, the workers have nothing to expect from what the capitalists have to offer. We have let the capitalists impose their demands on us for too long. We need to start imposing our own interests on the capitalists.
Certainly, we have everything to gain and nothing to lose from doing that. A vast, unmet potential already exists for everyone to have a decent life. The working class, generation after generation, has done the work which built up more than enough productive capacity to meet everyone's needs. Instead of running society to squeeze out every last penny in profit, we could drastically reduce the amount of time that people have to work to make a living, while getting rid of all unemployment. Right now we have the means to build up our system of education and health care and allow everyone the chance to retire in comfort.
We could stamp our imprint on society, running it according to our interests, giving everyone the time and the wherewithal to do the things we want to do.
It is time to stop sacrificing for the capitalists, and start organizing for ourselves.
Mar 19, 2001
Earlier in March, President Bush issued an executive order barring a potential strike by mechanics at Northwest Airlines. He also said he would block walkouts at any major airline this year –supposedly to prevent millions of travelers from being inconvenienced by strikes and slowdowns.
How touching! Suddenly the government is concerned about consumers, the air travelers. When it came to worsening conditions and service such as overcrowded airports and planes, increasing flight delays and the erosion of safety that goes with it, the government claimed its hands were tied. The government pretended it couldn't force the airlines to provide decent service. But when airline workers demand the right to fight for better pay and benefits and, incidentally, a reduced workload which would improve safety, the government can spring into action immediately.
This has nothing to do with the interests of the consumer. The consumer is only the excuse the government uses for protecting the profits of the big airlines.
At Northwest, profits have been huge. It generated so much cash, it was able to buy a major stake in Continental Airlines, the fifth largest airline in the country.
Meanwhile, Northwest has really stuck it to the mechanics. In 1993, when Northwest claimed it would go bankrupt unless it got major concessions from all its unions, the unions agreed to cuts in pay, vacations and work rule changes that were valued at 897 million dollars over three years. At the end of the concession period, wages and holidays returned to the pre-1993 level, and mechanics received a pay increase of one to three%. In other words, they were still behind the rate of inflation. When the mechanics’ contract came up again in 1996, the company simply stalled the union; it has been doing that ever since. The mechanics have not had a contract –nor a wage increase –in over four years.
The unions have denounced Bush, claiming that his executive order demonstrates what the Republicans are.
That's true –just as the Democrats demonstrated what they are in 1997 when Clinton broke the American Airlines pilots strike after they were out for exactly seven minutes. Bush may have jumped the gun –but both Clinton and Bush made it clear they wouldn't accept a strike. President Clinton, the supposed friend of the unions and workers, appointed a three-member mediation board with two of its three members coming from management. Its chairman, Francis Duggan, was a vice president of the Association of American Railroads, while Magdelena Jacobsen was a labor relations manager for Continental Airlines. Not surprisingly, this board has taken Northwest's side against the mechanics at every step.
The Democrats and Republicans both stand ready to use the government against the workers.
This doesn't mean the mechanics at Northwest have to accept whatever injustice the company and the government impose. Workers in the entire airline industry are facing the same kinds of injustices as the Northwest mechanics, with the government helping all the companies to keep the lid on tight.
The problem is for the workers to find a way to blow that lid off. And that means starting to make a big fight. Maybe the mechanics at Northwest could begin the fight. Then it will be up to other workers to break down the barriers that separate them, and begin to fight together, using the power they have as workers, as the people who make everything run, and can make everything stop. It is up to the workers to claim the right to strike as their own.
Mar 19, 2001
In March, both the Senate and House defeated ergonomic standards for repetitive motion injuries. Clinton had issued them at the end of his Administration. John Sweeney, head of the AFL-CIO, said in response to the House and Senate's repeal, that this was another proof of the Bush-Republican Administration's not being on the side of labor and its disregard for the health and safety of America's working families. Sweeney is indeed right about the Republicans. But this is only half the truth.
The other half relates to what the Democrats did –or didn't do about that same question. During Bill Clinton's first term in office, with the Democrats a clear majority in the House and Senate, the Democrats never raised the issue of ergonomics standards. Their excuse was that more time was needed to study the problem –while under their very eyes each year over half-a million workers who work at computers and in meat and poultry industries have suffered from work-related repetitive motion injuries. The possibilities existed then and there to enact and begin the implementation of ergonomics standards.
The delay went on for 8 years. (Interestingly, as far back as 10 years ago, Republican Elizabeth Dole, as Secretary of Labor, had recommended ergonomics standards.) Clinton waited until
mid-November to issue standards –and very minimal standards at that. He could have implemented them immediately, thus giving himself the time to veto any attempt by Congress –which had only 60 days to overturn them, if he were serious about wanting them to go into effect. Instead he delayed the date for the standards to be effective until January 16, putting the responsibility of an overturn upon the Bush Administration. This was a calculated move on Democrat Clinton's part to ensure the standards would not go into effect, while making it appear that only the Republicans were "anti-labor."
The charade by the Democrats carried over into the Bush administration. In the Senate, with an equal number of Democrats and Republicans, the Republicans held solid in opposing the standards; while six Democrats joined the repeal vote. The Democrats made no effort to instill unity within their Party. And they agreed to limit debate and filibusters, making it impossible for them to block repeal. After the vote was concluded, Senator Ted Kennedy had the gall to act outraged! "This is special interest legislation," he proclaimed –only to call for a 2 to 3 month period of "re-examining" the problem.
Clearly neither party is about to set and implement policies that might force the bosses to spend money and make necessary changes that could begin to deal with ergonomic problems.
To point a finger at the Republicans while ignoring the Democrats, as Sweeney and other union officials do, is to reinforce the bosses by blinding the working class from seeing all its political enemies.
Mar 19, 2001
On March 15, the U.S. Senate overwhelmingly passed a so-called bankruptcy reform bill by 83 to 15 –with the majority of both parties voting for the bill. A similar measure was passed earlier this month by the House of Representatives. President Bush has already declared that he intends to sign the final bill into law immediately.
Bankruptcy filings have been soaring to record breaking levels in recent years. In 2000, 1.2 million people declared bankruptcy. While this was down slightly from 1998 –the peak year, so far –the trend over the last 20 years has been sharply upward. The number of people going bankrupt roughly doubled between 1980 and 1990. It roughly doubled again between 1990 and 2000. And with the economy now in turmoil, the stock market diving, and more and more layoffs being announced every day, it is expected that even more people will soon go into bankruptcy court.
Of course, the credit card companies and banks helped to create this situation. For years they have been pushing everyone to go into debt. Nearly everyone now gets one offer after another for easy credit cards or loans. When you get your statement you're told you don't have to pay off the loan –only a tiny part of it. As credit card debt mounted, the banks began pushing homeowners to take out second mortgages in order to pay off their credit card debt. Millions of homeowners –most of them working class people –have done this, only to start using their credit cards again. And the banks and credit card companies have gotten obscenely rich from all these loans –from the fees in rolling over mortgages, from the usurious rates on credit cards.
Debt has soared during the last 20 years – for everyone but the richest people. After taking inflation into account, the debt of the bottom 40% of the U.S. population has roughly doubled; the debt of the middle 20% has gone up by about three-quarters. But the debt of the top 1% of the population has gone down by over 30% during these same years.
The banks' and credit card companies' offers of loans have been the only way many working people have stayed even over the last 10 years when the supposedly "booming" economy left them far behind.
Working people and the poor have gone deeper and deeper into debt simply trying to maintain their living standards.
Obviously, this was a sucker's bet. Sooner or later the banks were going to call in their loans.
Now, with this new bankruptcy law, they are doing it. There is to be no escape from credit card debt, even if it means you don't pay your house note or child support. The banks, having fastened the chains of debt slavery on the working population, are now pulling the chain tight.
Mar 19, 2001
In November, companies announced 45,000 job cuts; in December 134,000; in January, over 200,000. During the last recession, in 1990-91, layoffs didn't jump like this until more than a year after the recession had started.
George W. Bush, three days after taking office, was already talking about the "recession we are already in." Bush's advisers, even though they understood that he did not want to take the blame for a recession if it comes, cautioned him against using that horrible "R" word. By talking about a recession, he was told, he might actually bring it on.
Clearly the economy is sitting on the edge of a precipice, and those who really make economic policy know it. Otherwise, a politician's words would evaporate just like hot air usually does.
Alan Greenspan, Chairman of the U.S. Federal Reserve and the U.S. government's most important financial officer, recognized the gravity of the situation when a Congressional committee recently asked him about the possibilities of a new recession. He avoided giving a direct answer, saying "A recession is almost impossible to predict," depending so much on what he called "consumer and investor confidence." But, significantly, he compared changes in "confidence" to "water backing up against a dam which finally breaks, with the torrent carrying away whatever remnants of certainty and euphoria built up in the previous period."
So, is the dam about to break? Are we headed into a new recession or –given the recent slide of the stock markets –into the "torrent" which will carry everything away?
We have just lived through nine years of so-called economic prosperity. But not only have the fruits of this "prosperity" not been shared out equally. The standard of living of the working class has actually gone down. Almost one-third of all workers last year held full-time jobs which would not support a family of four above the official poverty line.
It's true that the majority of working class families came close to maintaining their total family income –but only because everyone in the family worked many more hours. The main breadwinner, including women with young children, worked more overtime or took a second job. In two-couple families, both people worked, with women going back to work much sooner after the birth of their children.
The lower wages we see today are, in part, one consequence of Clinton's welfare "reform." By forcing women with young children to work, Clinton provided fresh entrants into the working class so desperate they had to take any low wage offered –thus bringing more downward pressure on everyone's wages.
During the last nine years of "good times," many working people tried to maintain their standard of living by going further and further into debt. Today, consumer and mortgage debt stands at an all time high –it totals more than the total amount of disposable income held by consumers. While this enormous increase in debt allowed workers to go on buying what they had been buying before, this only put off the day of reckoning. The new bankruptcy laws will bring that day of reckoning closer.
Having endured lower real wages and longer hours of work, and now facing a new round of unemployment, working people have a lot of reason to express "no confidence" in this economy.
While the working class continued to fall behind, despite the prosperity, the wealthiest layers of society increased their income and their holdings many times over. Since 1977, the wealthiest one% of the population doubled their share of the national income. By 1999, inequality had progressed so far that the wealthiest five% of the population owned 60% of the national wealth, while the remaining 95% owned only 40%.
The capitalists have been accumulating more and more wealth at the expense of working people. This, of course, has always been the case in a capitalist economy. The wealth in the hands of the capitalist class comes from the exploitation of the laboring population. And over time, the general trend is for the capitalist class to take an ever bigger share of the total wealth produced.
But –and this is important –only one other time in the last hundred years did the standard of living of the American working class actually go down even while an expansion was going on. In all other previous expansions, while the capitalists were taking a bigger share of the wealth created by the labor of the working class, the working class nonetheless enjoyed an increase in its standard of living. That is, the real, productive economy was expanding fast enough to allow both things to happen at the same time.
It's difficult to make exact comparisons because the statistics are kept so much differently today, but the one other time when the working class fell backwards in similar fashion was in the years leading up to the 1929 market collapse. Of course, this parallel isn't a proof that we are about to go through a new crash this week, but it is nonetheless significant.
Instead of investing in production, building up the infrastructure that any society needs to function efficiently, the capitalists saw greater opportunities for profit by placing their wealth in all kinds of speculative ventures. As more money flooded into these ventures, prices rose to record levels. And this attracted more money ... leading to even higher prices. This speculation encouraged a skyrocketing of debt. More and more stock was bought by people and institutions going into debt to do so, hoping to buy, only to resell, make a profit, pay off the loan, and go out and do the same thing all over again. The capitalists seemed to be making money out of thin air, with millionaires becoming billionaires and billionaires becoming multi-billionaires.
The prices on stock became totally fictitious.
The U.S. economy today is living in what the commentators call a "bubble." That is, the financial structure has ballooned out of all proportion to the underlying economy which, in theory, it is supposed to serve.
Financial instruments –a fancy term for money –are required to facilitate the exchange of goods and services, as well as the investment in new production. These financial instruments take many forms, but what is important today is that the amount of these instruments in circulation is enormously bigger than what the productive economy requires to function. It's difficult to say exactly how much "extra" money is floating around in the financial circuits of the world. But one comparison will give a rough estimation of the situation today. The U.S. GDP (Gross Domestic Product, that is, all the goods and services created in a year) today stands at close to ten trillion dollars. The total valuation of all the stocks listed on all the U.S. stock markets is today something on the order of 15 trillion dollars –give or take a few trillion.
The last time the value of the stockmarket even matched the total GDP, don't even talk about surpassing it, was in ... yes, once again, 1929. And we know what happened to that financial "bubble."
The United States is not the first country in the world to find its economy caught inside a financial bubble. Japan did two decades ago, only to go into a nearly catastrophic nosedive when the bubble burst, a nosedive which continues to worsen. The economies of the Far East –the so-called "Asian tigers" like Indonesia –all were enclosed in financial bubbles which burst.
These are not nice light bubbles disappearing into air with a little pop, pretty to look at on a dreamy summer day. These are financial bubbles, which bring about a severe attack on the standard of living of the working class when they burst: a big jump-up in unemployment, a sharp decrease in actual wages.
For almost two decades, the stock markets in the U.S. have risen almost inexorably, interrupted by an occasional downturn, the most spectacular being the crash of 1987, only to rise to new and more dizzying heights. This surge was led by the NASDAQ, the market where the so-called "new economy" companies list their stock. Starting in 1982, the NASDAQ composite index climbed by 3,072% to its high last year. At the same time, the Dow Jones Industrial Average, which measures the stock of some of the biggest U.S. companies, climbed 1,409%.
If this were a year ago and we were talking about the "new economy," we would have been pointing out the enormous disproportion between the valuation of these stocks and the profits which these companies could reasonably be expected to produce, not to mention what these companies could be expected to contribute to the total GDP.
Palm Pilot, for example, on the day its stock was issued a little more than a year ago, was valued, if we believe what stock prices told us, at 53 billion dollars, six billion more than GM, a company many times its size, in the industry which still accounts for almost one sixth the total U.S. GDP.
The vast majority of the stocks listed on the NASDAQ have never turned a profit, never paid a dividend. In other words, "investors" bought them only for speculative purposes, expecting to sell them for more than they paid for them.
The money valuation put on the stock of these companies was purely fictitious, reflecting only the belief of investors that the stock prices would keep going up.
For the last year, however, they have been going down. And the plunge down, just as the ride up, was led by the NASDAQ index, whose stocks have lost almost two-thirds of their money valuation in one year's time. But most other stocks have been falling too, raising the specter of a much bigger financial crash. Investors didn't move their money into other stocks –their money just disappeared into thin air.
Now, "investors" are not your next-door neighbors, rushing into the internet to buy and sell stocks. Your neighbors may even do that, but they were not the ones who suddenly brought these indexes to come tumbling down. What brought the indexes tumbling down were the speculators –who are nothing more nor less than the whole financial structure of this country: the biggest banks, brokerages, insurance companies, financial arms of industrial companies. They are the ones rushing today to get out, to protect their "investments." In so doing, they can bring about the very thing they fear, a collapse of these stock markets –and with it, the destruction of so much fictitious money valuation that the underlying economy could easily grind to a halt.
What makes this present slide of stock prices potentially so dangerous is that it has been building for a long time, gaining speed and momentum along the way, replacing investor confidence with fear and panic.
Of course, no one knows what the future holds for the stock market this time around. The government, the Federal Reserve and the capitalists may be able, once again, to forestall the crisis, using the familiar means at their disposal, issuing more debt, printing up more money. In so doing, not only would they not deal with the imbalances that have built up during the rise in the stock markets, by papering them over, they would make them still worse. That is why several respected economists have lately suggested it would be better to bite the bullet –that is, to allow markets to "correct" themselves, that is, continue to plunge, rather than to put the plunge off, only to have an even bigger one in the future.
This has led to an increase of competition inside the capitalist class itself, as the biggest corporations and industries have sometimes tried to benefit at the expense of not only society as a whole, but other corporations as well. This has been illustrated by the rampant speculation in the utility industry. In California, in the open market, one megawatt of electricity cost $30 in December of 1999, $150 in June of 2000 and $1500 in February of 2001. Obviously, Wall Street was not the only place to attract speculators.
Of course, these price spikes were not caused by a shortage of electrical power, but were caused by a shortage of electricity organized by the very companies producing and distributing it.
While a contrived shortage like this may be good for the profit sheets of companies selling electricity (or natural gas, etc.) for the rest of the economy, price spikes and shortages can spell disaster. Consumers and other businesses have less money to spend, not to mention the fact that they can't even count on having electricity when they need it.
What is happening today is like a replay of the situation in the 1920s, when utilities of all kinds, in "competition" with each other, merged, bought up each other, went out of business or became so dominant they were able to impose whatever price they wanted and to provide service only where they wanted. Large urban areas went without power for weeks at a time, many rural areas had no electricity at all. In 1929, not only was the financial system encased in its bubble, service by the utilities was on the verge of collapse.
Today, this is not just the case of electrical power in California, but about all the utilities, where the same dynamic is working to push up prices and cut off service: oil and natural gas, telephones, railroads, airlines, mail service.
But no matter how much the capitalists compete against each other for the lion's share of profits, their main attack is always aimed at the working class.
When Chrysler announced, in November, that it was cutting back its workforce by over one quarter –it heralded a new round of concession demands by the big corporations. Cutting back production somewhat, Chrysler nonetheless cut back its work force much more, indicating that it intends to make use of the situation to increase the speed of work.
Looking at the difficulties ahead, the big corporations have all been lining up, preparing to discipline their own workforce, to extort still more production of still fewer workers, to increase exploitation.
Each of them, anticipating a new recession, attempting to protect their own profits, does the very thing which can bring about recession: that is, they cut back on investment, cut back on production, increase unemployment, lower wages: a perfect formula for recession.
If we are standing today on the verge of a new recession, it's because the capitalists are bringing it about. And if it develops into something worse –a financial collapse with the economy grinding to a halt – that will be because the capitalists have also laid the groundwork for it with their wild speculation, both in the financial markets and the utilities field.
The last time the capitalist economy got to this point, it took a world wide depression to get out: vast destruction of capital, not only the fictitious capital on the stock market, but the real capital of factories and machinery; and a world war which destroyed 50 or so million people.
Capitalism has no more prospects to offer the vast majority of humanity. It is a worn-out system, which long ago outlived its usefulness.
Mar 19, 2001
In the past two weeks, fighting erupted again in the Balkans, mainly in two areas bordering Kosovo. Albanian guerrilla forces are involved in both cases, fighting against the Macedonian army and police south of Kosovo and against Serb forces to the east.
U.S. and NATO officials have publicly complained about this new round of violence and blamed it on the Albanian guerrillas. In reality, the U.S. and NATO are fully implicated in what happened: they have been controlling the areas in question for nearly two years.
In the spring of 1999, a U.S.-led coalition carried out a bombing campaign against Yugoslavia, with the pretext of ending Serbian Army repression against the Albanians of Kosovo. After 11 weeks of bombing directed mostly against cities and towns in Serbia as well as Kosovo, Serbian forces left Kosovo and NATO troops occupied the region.
The U.S. and NATO bombing recklessly victimized civilians, Serb as well as Albanian. It not only accelerated the exodus of Albanian refugees out of Kosovo, it also caused extensive damage in Kosovo where Albanians returned to live after the bombing was over. At the same time, the U.S. and NATO troops stood by as Albanian gangs started to chase away civilians of Serb origin and terrorize Albanians who opposed their policies. NATO also allowed Albanian guerrillas to cross the border into Serbia and Macedonia, which has a large Albanian minority. So it is only logical that the conflict gradually escalated into open military confrontation in Serbia as well as Macedonia.
Now that this stage has been reached, the U.S. has brought in its former enemy, Yugoslavia, to help stop the Albanian guerrillas. Yugoslavia's former dictator, Milosevic, who bore direct responsibility for the repression against the Albanians of Kosovo, may have been ousted. But the new Yugoslav president, Kostunica, shares the same hardline approach against Kosovo's Albanians that Milosevic had. And the Serb troops that are being sent to the border of Kosovo belong to the same military units used by Milosevic against Albanian civilians. All the while, the U.S. and its allies stood formally opposed to separating Kosovo from Yugoslavia even while it promoted ethnic civil war.
Right now, the fighting around Kosovo may be relatively small-scale. But it can certainly lead to a new round of war in the region, resulting in more ethnic cleansing, tens of thousands of new refugees, etc., because the circumstances are so explosive. Just consider, for example, that one-fourth of the population in Macedonia is Albanian, among whom the unemployment rate is 60%, twice the national unemployment rate (which is very high itself). In the rest of the war-torn areas, such as Bosnia and Kosovo, the situation has not improved in the least for the population either. All these areas, and Serbia itself, have not recovered from the destruction of war and are still plagued by large numbers of refugees, high unemployment and poverty.
If the vicious cycle of war seems never to end in the Balkans, it's above all because the big powers, the U.S. and its European allies, constantly pour gasoline on the fire. The "stability" that the big powers want to see in the Balkans is not one based on peace and prosperity for the entire population of the region. To the contrary, these powers want the region to be open to exploitation by corporations based in the U.S. and Europe –which in turn requires that the population is kept under control. So the U.S. and its allies not only tolerate but actually support local chiefs who carry out the worst kind of atrocities against civilians. That's why, for example, someone like Milosevic who was responsible for much of the ethnic cleansing was declared the "guarantor of peace" by the U.S. during the signing of the Dayton Accord which partitioned Bosnia in 1995. It's why they let loose these Albanian gangs as the new "guarantors of peace," and why they now today turn to Kostunica, Milosevic's stand-in, as the most recent "guarantor of peace."
It's obvious that under the supervision of the U.S. and its allies, the people of the Balkans can not expect peace –only more poverty, war and destruction. This vicious cycle will be broken when working people of all ethnic groups, based on their common class interests, unite their struggles against the big powers and their local cronies.
Mar 19, 2001
What would you do?
If I raped your wife
Killed your children
Brought havoc into your life?
Would you kill me, forgive me, give me a
Truthfully, Mr. Politician, what would you
What would you do?
If I starved your family
Stole your wealth
Injected you with diseases that destroy
Covered up the truth and constantly lied,
Wiped you out through genocide.
If I brought this kind of hardship to you,
Honestly, Mr. Politician, what would you
What would you do?
If I constantly destroyed your family,
putting them in institutions,
If I denied you reparations and refused to
If I discriminated against you because of
Told you you had no rights that you could
If I refused to accept you as a man
Knocked you down whenever you attempt
If I made your life miserable and blue
Give it to me straight, Mr. Politician,
what would you do?
What would you do?
If I made laws that would only benefit me
Constantly destroyed your community
Flooded your neighborhood with drugs
Turned your children into hoodlums and
Created a constitution that completely
Seriously, Mr. Politician, what would you
What would you do?
If I systematically made you bow down to
Then made you second class in society,
If I gave you an inferior education
Then dared you to show any frustration
If I segregated and dehumanized you too
I would love to know, Mr. Politician,
what would you do?
What would you do?
If I built a military to protect and keep me
Kept madness going and wouldn't allow it
Became so caught up in my madness that
I just wanted to destroy the earth,
Not caring about life and what it's worth,
Take your time and think this through.
Then tell me, Mr. Politician, exactly what
would you do?
We received this poem from a prisoner.