the Voice of
The Communist League of Revolutionary Workers–Internationalist
“The emancipation of the working class will only be achieved by the working class itself.”
— Karl Marx
the Voice of
The Communist League of Revolutionary Workers–Internationalist
“The emancipation of the working class will only be achieved by the working class itself.”
— Karl Marx
Jun 17, 2002
With a big fanfare, Attorney General John Ashcroft announced that the Justice Department had broken up an Al Qaeda plot. “We have captured a known terrorist who was exploring a plan to build and explode a radiological dispersion device or ‘dirty bomb,’ in the United States.”
This was only the latest in a series of announcements that came fast and furious after revelations concerning September 11 called in question the competency of the Bush administration and various federal police agencies.
Most of these leaks came from the agencies themselves, usually to cover their own butts by pointing at someone else. CIA leaks demonstrated the incompetency of the FBI, with the FBI returning the favor for the CIA.
From Bush on down, they have all been stung by the revelations. And so we have been besieged by constant announcements of plots they have discovered and warnings of possible attacks. Supposedly, all of official Washington is now on the ball.
Whether or not it’s on the ball: official Washington is also doing something. It continues to use the scare that it is itself creating to resurrect one repressive regulation after another, doing away with “inalienable” rights supposedly automatically granted to all citizens in a democracy. In the case of the supposed dirty bomber, the “Justice” department completely ignored the right of a person, when picked up by police, to be either arrested and charged or rapidly released. Instead the suspect was held incommunicado for over a month, and then transferred to a military prison when questions were raised about his situation.
Of course, in police states, this kind of behavior by authorities goes on. But it supposedly is ruled out in a democracy.
Not so–says Bush. When criticized for this conduct, he cited a 1942 Supreme Court decision which justified the rounding up of supposed German spies, under the guise of war-time necessities. The Court reasoned similarly when it OK’d the round-up and imprisonment in concentration camps of all Japanese-Americans for the duration of World War II.
Bush says that we are in another war today–a “war against terrorism.” In the 1940s, ’50s and early ’60s, the government said we were engaged in a “cold war.” They too referred to the rulings of 1942, so that they could round up up vast numbers of citizens–the “crime” of most of whom was having been active in the movement to build the CIO unions or in the movement against Jim Crow segregation.
In other words, in this “democracy” we have rights, except when we don’t have them–and, in the years since the beginning of World War II, that has meant most of the time.
Whatever this latest “Al Qaeda” suspect turns out to be, the fact remains that justification for suspending his democratic rights is in reality a justification for moving toward more suspension of democratic rights for everyone.
The pollsters tell us today that most people are comfortable with more repressive regulations if that can protect us against terrorism.
In fact, such measures do not protect against terrorism. If we want proof of that, just look at Israel today. The military is everywhere, and there is no such thing as democratic rights for the Palestinians and less and less for Israelis themselves. Not only has this not put an end to the terrorism, it has helped inflame it.
Turning the country into an armed camp–where all of us live under constant surveillance, threatened with arbitrary arrest–will not stop the terrorists here either. Terrorists carry out military operations–and they don’t need democratic rights to do that.
But what this suspension of democratic rights will do is make it more difficult for workers to strike, for worker militants to organize unions, for black people to protest against racial injustice, for anyone to protest against wars, lack of educational opportunities for their children, and so on.
When Bush was challenged that this erosion of democratic rights violates the constitution, he simply brushed off the question. Like a dictator, he felt no need to answer.
Jun 17, 2002
After the sudden collapse of the formerly high-flying Enron Corporation last year under a cloud of accounting scandals, top executives at many other companies have been forced out, either fired, resigned or retired. Some committed suicide. These were not just the executives of some fly-by-night internet companies, but top executives at Global Crossings, MCI, Adelphia, Dynergy, and CMS Energy, to name just a few.
At the same time, a shadow has been cast over many of the very largest companies, including General Electric, AT&T, American International Group (or AIG, the second largest financial company in the world, after Citicorp), AOL Time-Warner (the largest media company).
It turns out that many of the largest companies in the country–and the world–have more in common with the now-defunct Enron than they would like to admit–and everyone knows it. To one degree or another, they cooked their books to make it seem like they were bigger and richer than they really were. Even though they reported vast revenue increases, these companies did not have more money coming in, nor were they selling more.
Some of them simply engineered fictitious trades. Others attached a much greater value to deals than what they were really worth. At the same time, real costs and expenses were kept off the books they made public. The expenses might be deferred to a later date that never came, or else they were relegated to off-the-books footnotes in financial reports.
GE, for decades considered the “most admired company in America,” was famous for what seemed like a steady march of profit growth. Year after year, profits increased by 15%. Its chief executive, the now-retired Jack Welch, used to say that this very predictable increase fed the stock market.
In fact, GE’s profit statements were too good to be true, more a product of hundreds of billions of dollars in short-term debt that was constantly being rolled over, than a product of actual production and sales.
Of course, these companies had plenty of incentive for cooking their books. The higher the fictitious profits went, the higher the stock prices went. And this fed the frenzy on the stock market. So long as stock prices kept going up, the companies could hide the problems with their fictitious account books, just as Enron did.
The entire capitalist class fattened on the financial “bubble” which resulted. Top executives made millions of dollars each year on the stock “options” they cashed in. Some executives actually made over a billion dollars in just a few short years’ time. The rise of stock prices then boosted all the other speculative markets: bonds, commodities, currencies, real estate–all of which are controlled by the same tiny minority. Five% of the population owns 81% of all stock.
Of course, the companies that specialized in financial activity–banks, brokerages, accounting companies, investment bankers, insurance companies–grew stupendously. They brought in mathematicians and physicists, who invented trading strategies they said couldn’t lose.
The financial companies were also indispensable to the major industrial companies, granting them credit, floating new stocks and bonds, engineering mergers and acquisitions. Of course, they did all this at a very high profit in interest, fees and commissions.
“Analysts” employed by the big financial companies recommended the stocks of their client companies to the ordinary traders. These analysts became celebrities, since the stocks they hyped all seemed to go up. It has now come out, with the threatened prosecution of Merrill Lynch and ten other brokerage houses, that these analysts knew that the companies they praised were not worth very much. The analysts simply touted their stocks because it fed business and profits.
At the height of this speculative frenzy, government regulators and agencies supposedly in charge of policing these companies turned a blind eye. In 1996, Alan Greenspan, the chairman of the Federal Reserve, warned of “irrational exuberance” on Wall Street. But a few short months later, with the market going down, he changed his advice, pushing the stock market like all the other hacks.
As for the other government agencies, such as the U.S. Treasury Department and the Securities and Exchange Commission, they were not about to blow the whistle and risk bringing down the whole house of cards.
Of course, all this speculation could not last forever. In March 2000, the bottom fell out of stocks traded on the NASDAQ, many of which were issued by the so-called “new economy” technology sector. In fact most of these new companies did little more than ... sell stocks!
This was only the first, smaller financial bubble to burst. Since then, other sectors–including energy trading, telecommunications, and large conglomerates–have also seen their stocks drop considerably. And some major companies have been forced to declare bankruptcy, including Enron, K-Mart, Bethlehem Steel, Polaroid, Federal Mogul, Sunbeam, W.R. Grace, Fanny Mae Candies, etc. The question is whether this is only the beginning of a catastrophic collapse–and with it a grinding economic crisis–or a new period of slow stagnation and decline.
Of course, the future is impossible to predict in detail. But the past couple of years show that much of what we have been told about the “new” economy during past decade was false. The supposedly unprecedented economic expansion was little more than a financial bubble, fed by fraudulent accounting by the biggest companies.
Capitalism does not have any new miracles up its sleeve–just the same old lies and theft.1
Jun 17, 2002
Pacific Gas and Electric (PG&E), the utility that serves northern California, reported that it made 1.1 billion dollars in profit last year. This was the second-best year in PG&E history.
But that’s not the most unusual feature of this report. Because PG&E also declared bankruptcy last year, in the middle of the phony electricity crisis in California. Under the cover of contrived blackouts, PG&E and the other big utilities got 10 billion dollars from taxpayers to bail them out. And they also doubled electricity rates.
Not only did “bankrupt” PG&E make its second-best profit ever, it also rewarded its top executives with 5.75 million dollars in cash bonuses, plus stock grants worth 24.8 million dollars.
No wonder electric utilities all across the country continue to push all the state governments to deregulate their electricity markets–despite the mess in California. They want a chance to go “bankrupt” like PG&E did!
Jun 17, 2002
With grand fanfare, the government this week announced an arrest in the war on terrorism and foiling a plot to explode a “dirty” bomb, that is, one exploded containing radioactive materials.
This may be another invented story to make the administration seem to be on the ball, since no bomb was made, no materials gathered, no plans drawn up, etc. And the government itself says it doesn’t intend to try the “suspect.” But the fact remains that many people in this country have already been victims of “dirty bombs” carrying radioactive materials long before Al Qaeda had ever been heard of.
It wasn’t a foreign enemy that exposed us to nuclear radiation–the U.S. government did the dirty work of contaminating us. And covering up the facts!
After dropping bombs on Hiroshima and Nagasaki, the U.S. government began to contract with private companies to produce the materials needed to make nuclear weapons. There were at least 300 companies thus contracted, working in 25 states, in plants in cities throughout the country–in New York, Chicago, Detroit, Brooklyn, Dallas, Richmond, Baltimore, Cleveland, St. Louis, among others. Some of these corporations still exist today–big companies like W.R. Grace, Dow Chemical, G.E., Westinghouse, DuPont; some were smaller and disappeared. All had contracts which required their workers to handle uranium, plutonium, thorium and beryllium.
These radioactive materials were known to cause fatal cancers, leukemia and kidney disease–and in the case of beryllium, smothering to death due to particles in the lungs.
In 1948, for example, a doctor with the U.S. Atomic Energy Commission, which ran the weapons program, visited Harshaw Chemical in Cleveland. There the radioactive waste was measured at 200 times the safe limits. The doctor wrote a report documenting severe hazards, but workers there were never told of any hazards. On the contrary, they were deliberately lied to and told that no unusual hazards existed. In a 1949 survey of 648 workers at three different sites, two of every five workers were exposed to at least five times the safe limits and one in ten workers was exposed to more than 100 times the safe limits for radioactive dust.
The Atomic Energy Commission did send memos to top program officials telling them not to alarm employees. The memos make it clear that the government and company officials wanted to avoid “baseless [insurance] claims and complicate collective bargaining.”
The workers doing nuclear weapons production were not followed for health problems. Many have since died and most are long past retirement. A number of the companies no longer exist. But the facilities where radioactive waste went into the air, the water and the workers’ bodies still exist.
Not until late in the Clinton administration–50 years after the work began–did the U.S. government begin to admit that workers at government facilities deserved medical assistance and compensation for exposure to dangerous radiation in nuclear weapons production. Of course, most had already died and compensation payments were very low. And workers at private companies doing the work were not included in the coverage.
This U.S. government took 50 years to admit that U.S. soldiers were exposed to dangerous amounts of radiation in weapons testing in the 1940s and 1950s. This same government is only now barely admitting that its nuclear weapons-producing program made workers sicken and die from cancer at rates far above average.
This is the same government which told a generation of U.S. soldiers that the Agent Orange used throughout the war in Viet Nam did not harm them or their children. It is the same government which has denied that Gulf War syndrome even exists, some ten years after soldiers began showing symptoms.
This is not a government we can trust. Whether it speaks of foreign enemies or its own supposedly benign activities, the lies roll out one after the other.
Jun 17, 2002
The following is taken from articles in the June 14th issue of Lutte Ouvrière (Workers Struggle), the newspaper of our comrades in France. In these articles they analyze the results of the recent two rounds of the presidential election and the first round of the legislative election, showing what these elections mean and don’t mean.
The right wing came out largely victorious in the first round of the legislative elections marked by the highest number of abstentions ever seen in this type of election. The parliamentary right very strongly improved its score in relation to the first round of the presidential elections and in relation to the first round of the legislative elections of 1997. It has benefitted by the decline of the left but also that of the National Front.
A part of the electors of the National Front clearly chose to vote on the first round for the candidates of the right in order to assure them a majority. But these extreme right voters obviously haven’t changed their opinions and prejudices because they voted in these elections for candidates endorsed by Chirac. They were able to switch to the Parliamentary right so easily because its parties and the government of the new Prime Minister Raffarin have taken up Le Pen’s demagogy about law and order, against immigrants, and phrases about state authority. This type of movement of votes from the National Front to the candidates of the parliamentary right is not a sign of the weakening of the influence of the extreme right over public opinion, but on the contrary, one of the signs of its influence. These voters will continue to influence the right wing politicians, by inspiring their language and weighing on the policies of Raffarin’s administration.
Chirac’s Party, the UMP (Union for the Presidential Majority), will doubtless have a majority by itself in the Assembly. The parliamentary representation of the left will be practically wiped out.
It’s necessary to say that what the left has done has brought this about. The policy which it led during the five years that it ran the government was so openly opposed to the interests of the popular classes that the two principal candidates of the governmental left in the presidential elections, Lionel Jospin of the Socialist Party and Robert Hue of the Communist Party, had four million fewer votes than they had in the 1995 election. In addition to its disastrous governmental balance sheet, the left shamelessly helped Chirac be elected by a landslide on the second round of the presidential election. It isn’t astonishing that a good part of the popular electorate, deceived and disappointed, chose to abstain in these legislative elections. As in the presidential election, the Communist Party paid most dearly because of its alignment with the Socialist Party. Winning 1,210,913 votes (4.70 % of the votes cast), the Communist Party saw its electoral support split almost in half compared with the legislative elections of 1997, where it had 2,523,405 votes. The Socialist Party, on the other hand, while losing a half million voters compared to 1997, maintained its samepercentage.
The push to the right has been increased still more by the majority electoral system–which the left didn’t modify–which favors the strongest parties.
The extreme left all together and the candidates of Lutte Ouvrière (Workers Struggle) in particular, suffered the repercussions of the general swing to the right and, within this framework, the “make your vote count” argument for the Socialist Party. One can suppose that the largest part of the voters of Arlette Laguiller (the candidate of Lutte Ouvrière in the presidential election) thought that voting in the legislative election for the candidates of Lutte Ouvrière made little sense, since they had practically no chance at all of being elected. Many among them must have joined the important number of voters in the population who, discouraged, preferred to abstain.
The candidates of Lutte Ouvrière received only 304,077 votes (1,21 % of the votes cast) compared to 1,630,045 voters (5,72 % of the votes cast) who expressed themselves for Arlette Laguiller. The candidates of the LCR received 328,620 votes (1.27 % of the votes cast).
The right, assured of its victory, openly proclaimed that it will lead an anti-worker policy. It will favor the richest. It will seek to maintain low wages, to increase deductions from workers’ pay checks for Social Security, to reduce pensions. A government of the right certainly isn’t going to oppose itself to all the bosses’ power and, in particular, to mass layoffs. But if the left had been elected, it would do exactly the same as the right, for during the five years, when it led the government, it did the same thing.
The popular classes had in any event nothing to gain from these elections, which were carried out in order that the voters would have the illusion of a change despite the continuation of policy.
Left-right, right-left, they have us go the electoral route which doesn’t offer any choice other than the alternation of the two big leading parties, of which one is openly anti-worker while the other is as much so, but hypocritically.
For more than 20 years now, in order to increase their profits, the bosses have unleashed a permanent offensive against the working class, considerably reducing its share of national income. The various administrations have gone along with and carried out the bosses’ policy. It’s very difficult to say whether the working class suffered the worst blows from government when the Socialist Party held both the presidency and controlled the parliament, or when the right wing held both positions or during the periods when they split the power.
It has never been through the ballot box that the workers managed to stop the blows which were directed against it by the big bosses and the government. But what elections can’t give, struggle can impose. It’s necessary to remember that the last great victorious struggle in this country was led against a government of the right, that of Juppé.
What’s decisive for the world of labor is the relation of force between the big bosses and the workers. This measure of force isn’t measured by the respective parliamentary representation of the left and the right.
We have gone through round after round of elections. But what counts is the third round, the round of struggle. And the men of the right, who are preparing to monopolize all the institutional power, are wary. As in 1995, it can be their own arrogance which will unleash a social explosion that will make them back off, them and the big bosses.
Jun 17, 2002
On June 5, the State department released a study on slave labor and what it calls “human trafficking.” Secretary of State Colin Powell said the U.S. was determined “to stop this appalling assault on the dignity of men, women and children,” which the report estimated number from 700,000 to four million people worldwide. Powell also mentioned the 50,000 slave laborers in the U.S., the majority of whom are women and children kidnaped, then sold into prostitution.
The State department study categorizes countries according to the amount of slavery and the degree to which the government is implicated in it. The worst category, “Tier III,” includes a number of major U.S. allies, including Afghanistan, Saudi Arabia, the United Arab Emirates, Indonesia and Turkey. The State department said that in Saudi Arabia there is forced labor of domestic servants and laborers. “Many low-skilled foreign workers have their contracts altered and are subjected to extreme working conditions and physical abuse.”
Many more close allies are among the 52 “Tier II” countries. Effectively, there is no real distinction between those two categories. Slavery flourishes in both. But the U.S. State department awards “Tier II” status to those governments it considers to be making “significant efforts to bring themselves into compliance.”
It’s significant that countries which were moved up from Tier III to II this year were also countries with which the U.S. needs especially close relations: India, Israel, Japan, Mexico, Morocco, the Philippines and Pakistan.
In reality, the distinction between categories is simply a question of politics and which countries the U.S. is sporting as solid allies this year.
Republican Congressman Christopher Smith of New Jersey ridiculed the idea that such countries were making “significant effort”: “For governments whose own high-ranking officials are deeply involved in trafficking, holding an occasional training session with an international organization, or even a few ineffectual prosecutions, do not amount to ‘significant efforts.’” He went on to say, “several of the nations omitted from Tier 3 have governments with which the United States is trying to improve relations.”
One notable U.S. ally was simply left out of the study: Kuwait. That’s curious since the entire ruling class employs slaves in their homes, either as concubines or house maids. Undoubtedly, this would have been a bit embarrassing to Colin Powell and to Bush, whose father led the Gulf War in defense of what he called the “free world” in Kuwait and Saudi Arabia.
This report makes something very clear; the question of slavery is not going to stop U.S. imperialism’s relation with Saudi Arabia, Indonesia, Israel and the many other countries on its list. Nor does the report impede slavery. It just gives the U.S. a fig leaf.
Jun 17, 2002
According to documents the Bush administration was forced to release, Enron, before it went bankrupt, was moving to have the Tennessee Valley Authority (TVA) broken up and handed over to privately owned companies–like Enron.
In early 2001 Enron Chairman Ken Lay threatened TVA Chairman Craven Crowell, saying that unless Crowell did what Lay demanded, he would have Crowell fired. This was the same stunt that Lay had pulled at the Federal Energy Regulatory Commission (FERC). And, just as at the FERC, Lay asked Bush to replace the TVA chairman with someone more to Lay’s liking. Bush complied, anointing an Enron crony to head the TVA.
So, what was Enron–as well as other big energy companies–trying to get hold of?
The TVA is a power company, today supplying electricity to over eight million people in parts of seven states around the Tennessee River basin: Alabama, Georgia, Kentucky, Mississippi, North Carolina, Tennessee and Virginia. But the TVA is much more than that. In 1933, the federal government established the TVA to plan and develop the 41,000 square mile region of the Tennessee River basin, including some of the poorest areas of the south. They had long suffered from devastating floods, poor and overworked farmland and a lack of electricity. There was little or no private investment. Privately owned utilities wouldn’t string the power lines, since it wasn’t profitable enough. Despite the objections of private utility companies, the federal government stepped in and built a series of dams and reservoirs. These dams provided power for electricity, controlled the flow of water and stopped the devastating floods. They also made the rivers useable for commerce and transport. In other words, the TVA was the key to the economic development of the entire region. Whole industries located there, from the manufacture of aluminum and nitrate fertilizer, to new port facilities.
TVA also gave the people of this region access to electricity for the first time. It transformed their lives, allowing farm families to bring in electrical machinery to run their farms. It also allowed farm families to have lighting and electrical appliances in their homes for the first time.
Of course, the purpose of the TVA was first of all to open up the region for investment, and the federal government often ran roughshod over the poor farmers. People living in areas that were flooded by the new reservoirs lost their land, receiving little or no compensation. When the U.S. entered World War II, the government used the power generated by the TVA to set up war industries, most famously the facilities for making the first atomic bombs at Oak Ridge.
However, the TVA was an enormous step forward, one that only the government had the means to carry out.
Certainly, today, there is much to be desired about how the TVA is run. It continues to run old, coal-fired plants that belch tremendous amounts of pollution. Its nuclear power plants are considered unsafe. But the reforms proposed by companies like Enron have nothing to do with making it more efficient, safer and cleaner. On the contrary, as the people of California can attest, these so-called reforms would not result in more investment in the TVA, but only more expensive electricity and other services. The difference would go into the pockets of the capitalists.
Private capital which would not invest to build TVA now wants to drain off profit from it.
Jun 17, 2002
For ten years, the Environmental Protection Agency (EPA) has been studying the most widely used pesticide in the country–atrazine. In August, the EPA is due to publish new rules for its use.
More than 75 million pounds of this pesticide are spread to control weeds each year, especially on corn crops in the Midwest and on lawns in the South. Studies have for decades linked its use to an increase in cancers. Short term side effects have included heart congestion, muscle spasms and damage to adrenal glands. Long term exposure to atrazine has been shown to cause cardiovascular damage, retinal and muscle degeneration, as well as cancer.
For more than a decade, the EPA had listed atrazine as a cancer causing chemical. But in 2000, the EPA pulled it off the list. Had the properties of this dangerous pesticide changed? Did the EPA’s own scientists doubt it was a carcinogen? Neither was the case.
Instead, Syngenta–the largest agri-business in the world and the maker of atrazine–began pressuring policy-makers, pretending to challenge the EPA’s scientific studies. Syngenta claimed that studies showing atrazine producing cancerous tumors in rats didn’t apply to humans. Syngenta even declared that nothing was proved by the fact that workers producing atrazine at its plants had higher than normal cancer rates.
The tobacco industry pulled out the same arguments for decades after tobacco was shown to be a carcinogen. The industry making asbestos-filled products argued the same, while thousands and thousands of workers suffered more and more difficulty breathing and often death.
When it comes to protecting their profits, whatever their products, corporations are always ready to dispute scientific results. If we waited for the kind of “proof” the corporations want, every human in contact with a carcinogenic product would already be dead.
So Syngenta is following a long corporate tradition in challenging results they don’t like. The most recently released study of atrazine showed that frogs fed it suffered growth deformities: they grew both testes and ovaries. The study was done by a scientist who used to work for Syngenta but had left!
Not only do environmental groups want to force the EPA to stop dragging its bureaucratic feet, its own scientists have done similar studies to show the dangers of heavy use of atrazine.
But the heads of the EPA, under the current and former administrations, are not just satisfied to be the Excuse Perfection Agency. Their goal is to become the Profit Protection Agency.
Jun 17, 2002
The efforts in Michigan by politicians to convert Blue Cross Blue Shield of Michigan to “for-profit” status are just part of a trend that’s been occurring all over the country. There has been at least some action taken on changing the status of the Blues in at least 31 states, plus the District of Columbia and Puerto Rico. The Blues have gone “for-profit” in at least 19 states. Two companies, Anthem Insurance Companies, Inc. and WellPoint Health Networks have between themselves bought up Blues plans in eleven states and are looking to buy more soon.
We can see from the experience in other states what the conversion to for-profit means. In a number of states, consumer groups have had to fight to stop company executives from being paid high bonuses by companies acquiring the Blues. In several states, Anthem and WellPoint have been accused of selling coverage with very high deductibles, making health care unaffordable for many people.
The profits of these two companies are increasing greatly. For both companies, profits are up at least 40% over a year ago, and that’s on top of 30 to 50% increases last year. The profits for these two companies are likely to be around a billion dollars.
The conversion of the Blues to for-profit just makes more obvious the kinds of profits that are to be had in a profit-making health care system. Even while Blue Cross was “non-profit” they had their own for-profit subsidiaries. And Blue Cross has always been a conduit, channeling enormous sums of money into “for-profit” hospitals, pharmaceutical and medical supply companies, and other insurance companies for many decades. And that doesn’t even take into account other industries, like construction and banking that have provided services to the medical industry.
Paying for health care in a profit-making system has catastrophic results for human health.
Jun 17, 2002
In early June, Edison Schools, with 75,000 students in 22 states, the for-profit education venture of Chris Whittle, gained a 40 million dollar contract, which helped it put off bankruptcy.
This drew headlines because Edison schools had been portrayed as a success and hyped as a model for schools in the future. Its “Success for All” curriculum was supposed to do what the public schools couldn’t do: educate everyone.
But the results have not matched the hype. When California ranked San Francisco elementary schools last year, Edison Academy was in last place. The contract was terminated. In at least three states, when Edison asked for permission to expand to more grades, school boards turned them down and terminated some of their management contracts.
Of course, school success is especially difficult in big cities where many students come from poor families and have numerous problems. These big city school systems have above average numbers of students needing special services as well.
Edison Schools simply tried to avoid these problems, by taking fewer students from disadvantaged families. City school systems cannot avoid such problems, which demand more educational services, at a higher than average cost.
But Edison was not set up by Chris Whittle to improve school education: it was set up to make profits. Its stock price went as high as $39 a share each during the years when for-profit schools were being hyped.
Whittle’s and his top executives received six figure salaries, plus thousands of stock options. At one point, Whittle gained 16 million dollars by selling shares of Edison. There couldn’t be a better example of the way Wall Street makes money for a few wealthy individuals no matter whether they deliver a service or a profit to anyone else.
This was not Whittle’s first education venture. He was the man who came up with the idea for Channel One, the television station aimed at students while they were in school, providing them with a small amount of news and a large amount of commercials.
Throughout his career, Whittle figured there was money to be made in the school system. He is hardly alone. A managing director of investment firm Lehman Brothers, said, “Wall Street is interested in any big-spending industry.” She knew that America’s public schools “are ripe for takeover by private management companies.”
Public schools are already sources of profit for some private enterprise, such as book publishers. Coke and Pepsi battle a never-ending war over which corporation will supply vending machines in a number of big city school systems.
Neither Whittle nor his investors nor Wall Street has education in mind. They hope they can make a profit managing certain schools, schools they choose so they can ignore more expensive educational needs. It is not their concern that the children of the poor and the working class receive a miserable education from which they scarcely learn to read, let alone prepare themselves for any kind of decent paying job.
The public school system was established when working people fought to get education for their children. But establishing public schools doesn’t end the quest for a good education. There’s also the problem of what resources the schools have. And in a society split along class lines, the schools educating the wealthy get significantly more resources. And this is true, whether these schools are private schools or public schools in wealthy areas or magnet schools.
Educational success is split along the same class lines as is capitalist society. A better education will go to the children of the wealthy. An inferior education, if any, goes to the children of the poor and working class majority.
The current move to establish “for profit” schools doesn’t challenge that reality. In fact, it adds to the problem, draining more resources out of education and putting them into profits.
Jun 17, 2002
In 1994, Peggy Stillwagoner was two months on the job as a temporary home care nurse when she was killed in a car accident. When her family asked her employer, Advantage Medical Services Inc., about insurance, the owner of the company tearfully informed them there was no insurance.
A few months later, her husband received a call from an insurance investigator asking him to sign a release for her medical records. He learned that the company did have a $200,000 insurance policy on her life, but that it was the company, not the family, that would receive the benefits.
Workers like Stillwagoner, whose lives are insured for the company’s benefit, don’t know that a policy exists in their name. The company that employs them gets all the benefits, which are often sizeable. A music store received $339,302 when a clerk died; a convenience store got $250,000. Companies keep track of ex-employees and retirees, looking through the Social Security records to see when they die so they can collect the money.
For years, companies could insure only “key employees.” But a loosening of state regulation in the 1980s allowed companies to insure all workers. According to The Wall Street Journal, this is called “janitors’ insurance” in the insurance industry. A large supermarket chain based in the South had another name for the workers covered by these polices: “Dead Peasants.” Companies buy these insurance policies as tax shelters. As the policy rises in value, the gain is tax-free. When the worker dies, the company collects the benefit and doesn’t have to pay taxes on it. The Wall Street Journal estimates that companies have saved billions of dollars in tax breaks in this manner over the years.
Companies justify their policies, arguing that they have an “insurable interest” in the lives of these workers.
Sure! Then why do they lay off people so often? And why do they continue to insure workers who were fired or retired?
Above all, why do they allow employees to work in such obviously dangerous conditions? (Perhaps to collect on these policies?)
Not only do companies profit from the living labor of their workers, they have found a way to make money from their deaths as well.
Jun 17, 2002
California’s largest school district, Los Angeles Unified, claims that it will run a 440-million-dollar deficit in its 5.2-billion-dollar general budget. The school board has already approved cuts for next year, increasing class sizes in fourth through twelfth grades, reducing funding for counselors and nurses and limiting custodial and maintenance services for campuses. This comes in addition to the 110 million dollars cut last winter during the so-called “midyear crisis,” which had resulted in layoffs of campus aides and other workers.
L.A. Unified is not the only district in the state undergoing budget cuts. Dozens of other large and mid-size districts are also making similar cuts, as well as laying off teachers, cutting pay, eliminating art, music and science classes and remedial and after-school programs. These cuts will directly affect the education of students, and the schools will be more overcrowded, broken down and filthy than they already are.
District officials blame these cuts on California’s overall “budget crunch,” a 24-billion-dollar deficit in the state’s 2002 budget, which has reduced the state’s contribution to education.
Of course, this deficit was not produced by spending on education. Instead, this deficit results from the priorities set by state and local governments to serve the interests of the wealthy few and the big corporations.
The politicians’ own words prove this. According to Democratic Governor Gray Davis, the main reason that the state deficit has skyrocketed is that much less tax money is coming in from the capital gains tax, that is, the main tax paid by wealthy people. But the wealthy are paying much less of this tax because it was drastically cut by Congress.
At the same time, the politicians are doling out countless billions in subsidies to the big corporations. Last year, for example, as a result of the phoney electricity crisis, the state of California paid electricity traders and brokers over six billion dollars in taxpayer money, and it is going to pay much more this year.
The local governments operate no differently. The city of Los Angeles is now proposing to subsidize private developers for a brand new, 450-million-dollar professional football stadium in downtown L.A. The proposed stadium is part of a much bigger commercial real estate development, for which the city will provide over 20 acres of prime land. (These same politicians, for decades, have claimed that there is no land available in or around downtown L.A. for desperately needed new schools.)
Politicians always claim that education is their “first priority.” And Governor Davis even had the nerve to say that he had to raise taxes on vehicle license fees and cigarettes, taxes that hit the working-class and low-income taxpayers the hardest, because he “won’t sacrifice the future of our children, particularly in public education.”
What a blatant lie!