People Before Profit blog

Economic outlook is dim unless workers have a say

Fri, 28 Mar 2008 08:18:00 +0000

News Analysis

While some may take “what-goes-around-comes-around” satisfaction at the ruin facing Bear Stearns and other Wall Street investment firms, a financial meltdown could result in a freezing up of credit and growth for everyone. What happens on Wall Street might mean real hard times on Main Street. It could take a decade to recover.

The immediate cause is the unraveling of the real estate and mortgage speculation frenzy of the last few years. It is now likely to reduce homeowners’ equity by 30 percent to 50 percent, for a total of $6 trillion to $10 trillion. Home values have already dropped 10 percent.

Complete “unwinding” can spread the ruin to all, not just the speculators. Consequently the Bush administration is now jumping in to bail out these securities firms. In doing so, it is telling us to ignore its ritual worship of the “genius of markets,” its “no problem” commentaries, and its warnings against creating “moral hazards” by saving homeowners. But this also means we should scrap the Bush stimulus package, which contains no banking reform, no taxation of the speculators and little relief for those facing the risk of a genuine depression. Some say that perhaps it’s time to consider nationalization of banks and financial institutions that are responsible for gross management or market failures, as the UK did with Northern Rock last week.

The problem is, because of the war in Iraq and the Bush tax cuts, there very likely may not be enough money to finance the scope of this bailout. This meltdown is not simply a dip in the business cycles of capitalism. Instead, the current business cycle appears to be feeding into a pronounced major economic event — a prolonged recession or even depression. It is being fueled by the growth of parasitic financial activity like borrowing and lending money, and making huge profits, from trading pieces of paper such as mortgage securities that are not backed by any real value.

Huge layoffs, bank runs, long-term stagnation and a decade or more of low growth are now imminent dangers. If one follows the thinking of “big picture” economists from Karl Marx to MIT’s Charles Kindleberger, a structural realignment of global dimensions could be at hand, coinciding with the most important presidential election since that of Franklin Delano Roosevelt in 1933.

One result will be the weakening of U.S. economic strength relative to the rest of the world. In particular, the European Union and the emerging “middle” economies of the developing world, such as China, Brazil and India, are moving forward. The 1930s witnessed a realignment of this scope that favored the U.S. The 1970s through the 1990s saw powerful technological transformations that built the material foundation of the global high-tech and supply infrastructure that sustains globalization. The “new world order” of 1990 may have looked to the first President Bush like an era of U.S. world domination, but in fact it was the beginning of the end of U.S. dominance. Although the wealth of the new era has spread unevenly, and is in dire need of reform and regulation, it has nonetheless spread far beyond U.S. influence and control.

So it should be no surprise that the Bush administration has decided to welcome investments by “sovereign wealth funds” of cash-rich China, Saudi Arabia, Abu Dhabi, Kuwait and South Korea. Some are editorializing their patriotic disapproval — but have no alternative to propose themselves.

Yes, foreign countries not under the control of the U.S. government are about to help finance the bailout. They will obtain in return ownership and control of significant pieces of world financial capital and capital markets, at the expense of U.S. capital.

However, many believe, this will, and must, be just the beginning if the economic crisis is to find solution. The time is at hand, many observers say, for reform of major international financial and trade institutions, such as the International Monetary Fund, World Bank and World Trade Organization, to redress the inequities generated by the “long wave” of technological revolution and subsequent economic expansion. Labor unions, both here and abroad, are increasingly arguing that workers of the world, of all occupations and trades, need seats at negotiations on these issues. They argue that workers are the ones who bear the burdens of the inequities. They also look to presidential and congressional candidates to support trade union participation. Hooking workers into the world debate will provide answers that no one else is likely to provide.

jcase @commonhumanity.info

Blogging from India #4 Communist Party of India vows fight on food prices

Thu, 27 Mar 2008 03:53:00 +0000

Blogging from India #3 The larger context of Pelosis visit to India

Wed, 26 Mar 2008 04:33:00 +0000

PWW Editor Teresa Albano is blogging from India, where she is attending the conventions of the Communist Party of India and Communist Party of India (Marxist). The parties hold seats in the national Parliament and lead the governments in three of India’s states.

HYDERABAD, India — When newspapers here reported a visit to India by House Speaker Nancy Pelosi (D-Calif.), eyebrows were raised. Pelosi, the first woman to hold the position of House speaker, is known in the U.S. as a common-sense progressive on many important issues. For example, she has opposed the Iraq war from the start.

But one area toward which Pelosi takes a hawk position is China. Pelosi represents a district in San Francisco where a significant section of business favors Taiwan and takes an anti-Communist, hostile position towards China.

Many who follow U.S. and Indian politics wondered if Pelosi's visit was intended to be used against China. The answer appeared in the Deccan Chronicle, the area’s largest English-language daily newspaper, with its headline, “Pelosi in India to tick off China.”

After Pelosi met with Indian Prime Minister Manmohan Singh, she met with the Dalai Lama in Dharamsala, India. In a speech given in New Delhi afterwards, she urged the world to denounce China for its alleged repression in Lhasa, Tibet.

China was quick to reply that Tibet is an “internal affair.' China's ambassador to India Zhang Yan told reporters, 'We don't allow any country to meddle in China's internal affairs.”

India and China have had a long and mixed history, including an ongoing border dispute which at times has erupted in armed conflict. During the Cold War and after the Soviet-Chinese split, India was viewed as pro-Soviet. And China developed military and economic relations with Pakistan.

India and China, the world’s two most populous countries, each have growing economies and needs including energy. In competitive capitalist terms, there is a rivalry between the two, something the U.S. would like to use to pit one against the other. The Communists in India and China, however. emphasize peaceful cooperation and sharing mutual interests to bring their countries’ populations out of deep poverty.

U.S. corporate and military interests seek to build relations with India and to weave her into their grand geopolitical web to isolate China and stop its rise as an economic and political powerhouse.

U.S. Secretary of Defense Robert Gates recently toured Asian countries, including India, to counter China’s rise in the region.

Writing in the Deccan Chronicle, Harsh V. Pant, a professor at London’s King College, says Gates’ visit “sends a clear sign to China that the U.S. is back and has no intention of ceding strategic space to China.”

In recent years, U.S. imperialist influence has lost ground in the region to the Chinese alternative. Many fault the Bush administration’s neo-conservative obsession with the “war on terror,” which has led to the disasters in Iraq and Afghanistan, for not keeping up with U.S. corporate and military interests in other parts of the world.

Alternatively, China tells neighboring countries that its “rise” in the region would be different than other powers in history. They call it the “Peaceful Rise.”

Gates’ visit to India garnered much attention because of an emerging “U.S.-India partnership,” which the Communists and the left in India see as a dangerous development for India’s historic “independent” foreign policy.

The U.S.-India nuclear pact is deadlocked in the Indian Parliament by Communists and left parties who say “mend it or end it.”

India has also emerged as one of the biggest buyers of arms in the global market, writes Pant. As the U.S. is the largest seller of arms, it would want to tap into the $40 billion India is expected to spend in the coming years. India has already signed a controversial deal with the U.S. to buy C-130 transport planes and a “used” warship.

Pelosi’s visit to India and denunciation of socialist-oriented China perhaps represents a different section of U.S. ruling interests but it takes place in this larger context of the U.S. anti-socialist, anti-China geopolitical strategies.

Read Albano's earlier posts:

Blogging from India #2 Roommates

Tue, 25 Mar 2008 07:14:00 +0000

PWW Editor Teresa Albano is blogging from India, where she is attending the conventions of the Communist Party of India and Communist Party of India (Marxist). The parties hold seats in the national Parliament and lead the governments in three of India’s states.

HYDERABAD, India — The Communist Party of India started its congress (convention) March 23. International guests are arriving now. Some 25 countries are expected to be represented. Besides the U.S., delegates from Brazil, Bangladesh, Spain, Vietnam, Nepal, Australia, Greece, Czech Republic, Cyprus and Sri Lanka have already arrived.

My roommate is from the Communist Party of Bangladesh. She told me to call her LIna.

Lina said she was worried about rooming with an American, since her English is not “good.” But Lina’s English is much better than my Bengali so I’m lucky.

Communists are always interested in talking politics. So we’ve been able to communicate. Lina is interested in what’s going on in the U.S. I try to explain what our struggle is like. The new possibilities for change, especially during this election year. But Lina is worried. She hears from her friends who live in the U.S. that nothing is happening. That the only quest in the U.S. is to make money. That the younger generation is very satisfied with their lives. Everything is easy, she hears. A push of a button and you get what you need.

I try to explain that so many young people oppose the Iraq war, are against Bush and are getting very active in the 2008 elections.

But she's not convinced. Lina is a leader of a peasant/farmer organization. She said her elder son is jobless but her other son is a teacher. 'Life is very hard in Bangladesh,' she said.

With 17 sugar mills in Bangladesh — some slated to be closed this coming year — Bangladesh has to import its sugar. The Adamjee Jute Mill, the biggest jute mill in Asia, has been closed under the order of the World Bank’s so-called reform program.

The World Bank is leading a whole deindustrialization program in Bangladesh. But that institution’s donations make up only 2 percent of Bangladesh’s economic development budget. So the Communists and others are demanding that the government stop listening to the World Bank’s advice.

This is why people are jobless, Lina says.

There are people in Bangladesh, she says, that have so much money they can get medicine to save their lives. But there are so many more that don't have money, so they can't save their lives if they are sick.

Bangladesh is one of the world’s poorest countries even with its rich supply of natural gas and other resources including human and cultural resources.

Lina said the partition of India still negatively affects Bangladesh to this day. Bangladesh, like Pakistan, was part of India before the British partition of the country. Before partition there were East Bengal and West Bengal. After partition West Bengal became an Indian state, East Bengal became East Pakistan and after its people fought for and won independence from Pakistan it became Bangladesh.

I asked how people call themselves: “Bengali” or “Bangladeshi?” She said the term Bangladeshi comes from imperialism, but added that she uses the term when she writes for the CPB’s newspaper.

Many sons and daughters of Bangladeshis go to the U.S. for educational and economic opportunities, as do youth from many countries. The contradictions between the world’s richest and the world’s poorest countries are spurring needed change on the U.S. political front.

Yet there aren't big contradictions in our room, even though I come from the biggest and richest imperialist power on the planet and Lina comes from one of its poorest and industrially-developing countries. That's the strength of working-class internationalism.

Blogging from India #1 Hyderabad: Great advances, great challenges

Tue, 25 Mar 2008 07:01:00 +0000

PWW Editor Teresa Albano is blogging from India, where she is attending the conventions of the Communist Party of India and Communist Party of India (Marxist). The parties hold seats in the national Parliament and lead the governments in three of India’s states.

HYDERABAD, India — As I arrived at the Begumpet airport here, part of a two-person delegation of the Communist Party USA, we were greeted by a delegation of bank workers and members of their union. Standing by the baggage claim area were eight members of the Communist Party of India, holding a red flag with a white hammer and sickle and the initials, CPI. Did I mention it was 4:30 in the morning?

The Communists who are active in and lead the bank employees union took the responsibility to meet all the international delegates. They said this particular union, associated with the CPI, has about 600,000 members.

Our comrades told us there have been and will be strikes at this airport since the government is planning to close it down. The workers are saying that even though a new airport has been built, Begumpet airport should be kept open. Many are worried about what most working-class people the world over worry about, the loss of jobs.

On arriving at the “holistic resort” just outside the city where the international guests are staying, we had coffee with two of our escorts. A few hours later, after breakfast, we headed to the CPI’s offices. A six or seven story yellow stucco building with the hammer and sickle flag flying on the top, it was a scene of great activity. The CPI's general secretary, A.B. Bardhan, had just arrived from Delhi and some press was there filming him. He warmly greeted all of the international guests in this impromptu meeting, joking with the Australian comrade about the Indian-Australian cricket rivalry. Cricket is a huge sport in both countries.

The CPI holds a few seats in the Andhra Pradesh state assembly. But their roots are much deeper than the number of seats reflect. The party is widely credited with a massive land reform fight in the state during the early years of independence and continues to enjoy much respect and support from the people.

We met many party staff workers — beautiful, modest working-class men and women who reminded me of the salt-of-the-earth comrades I know in the U.S.

We drove and walked a bit around the city. This is a weekend full of religious celebration. There are the Christian celebrations of Good Friday and Easter. Hyderabad's twin city, Secunderabad, has a sizeable Christian population.

Then there is the Hindu celebration of Holi. Plus the Muslim celebration of Eid-e-Milad. Hyderabad has a significant Muslim population. You see many mosques around the city.

That these celebrations come at the same time may not be purely coincidental since they all seem to celebrate Spring and the ritual of “rebirth” of life and faith.

Holi is by far the biggest celebration. Pictures of children and adults covered in “colors” grace the front pages of every newspaper. Dyes or paints of yellows and pinks are poured over or smeared on faces and arms. We passed a group of young men with motorcycles parked, taking a break and play-fighting by smearing these festive colors on each other. Holi is a time to have fun with some abandon.

Driving through Hyderabad, a city of about 3 million where the Muslim Nizzam reigned many years ago, you see so much going on that it’s overwhelming. Start with the traffic — buses, cars, trucks, motorcycles and three-wheeled taxis race through the streets in a never-ending competition to get ahead. Plus it’s left-side driving, somewhat disorienting for right-side drivers as in the U.S.

A visual cacophony of buildings, signs, people, cows, dogs and the mess of construction vies for your eyes’ attention. Everyone is in motion. At one construction site very dark-skinned women wearing shirts and saris in bright colors and patterns carry baskets of bricks from one spot to another on their heads. Barefoot construction workers.

Then you speed by stores and malls with recognizable brand names in the windows: “Lee” and “The Gap.” Then whiz — a small Hindu shrine has a figure in its center and the remains of a fire in front of that. Then whiz — a group of boys, covered in dust, are playing cricket. Then policemen and security guards outside some government offices, then cart after cart with sellers of lime and lemon juice, coconut water or watermelons. These thousands upon thousands of small stands and carts are how many people scrape together a living for themselves and their families.

If you are by a street, there is no such thing as a quiet walk. Even along the large lake with the single carved stone Buddha statue in the center, the traffic whizzes by, constantly tooting horns to warn the others, “Here I come.”

This is part of India heaving itself into the new century. Great advances and great challenges, great wealth and great poverty, great technological education and advances while women still carry bricks on their heads.

Book Review: Field Notes from a Catastrophe

Tue, 11 Mar 2008 10:16:00 +0000

Book Review

“Field Notes from a Catastrophe”

By Elizabeth Kolbert

Bloomsbury USA, 240 pp, 2007

Greenhouse gases can be both a curse and a blessing. Too little in the atmosphere leads to the cooling of the earth, too much to its heating up. If the atmosphere were free of greenhouse gases, the average temperature of the earth would be approximately zero degrees Fahrenheit (a new ice age), instead of the present 57 degrees.

For nearly 12,000 years a rough stabilization of these gases in the atmosphere has created favorable conditions for the steady and continuous evolution of nature and society.

Swings in the concentration of greenhouse gases occurred during this period, but were never of a magnitude that either heated up or cooled down the planet to the point where catastrophic ecological consequences, say mass extinctions of species, occurred. But this “golden” ecological age is coming to an end.

The reason is this: the period of rough stabilization of greenhouse gases in the atmosphere is giving way to another period in which the concentration of greenhouse gases is rapidly building up. The effect of this is to trap and reradiate solar energy, the source of heat, back to the earth that would otherwise dissipate into space. In so doing, the earth’s average temperature is rising to levels not reached in millennia

Carbon dioxide, the most conspicuous of the greenhouse gases and a product largely of the burning of fossil fuels, has been accumulating in the atmosphere in the past century at a pace faster than anytime over the past 20,000 years. To make matters worse, over the last two decades, the rate of increase has spiked upward. As a result, compared to pre-industrial levels, the earth’s average temperature has nudged up 0.6-degrees Centigrade.

Tipping point That doesn’t seem like much, but nothing could be further from the truth. Its impact on our planet is observable and serious. Moreover, if temperatures rise another 1.4 degrees Centigrade, the consequences, many scientists argue, will be catastrophic. Global warming is not a linear process in which the impacts are additive and easily reversible. Rather it contains threshold or tipping points which when reached will quickly accelerate the warming process and amplify its impacts manifold. Sea levels, say experts, could rise as much as 16 feet if global temperatures climb two-degrees Centigrade tipping point.

While the earth’s temperature fluctuates due to the normal oscillations of greenhouse gases, what is notable about the current warming is that its explanation lies elsewhere.

Product of human activity The current rise is the product of human activity that emits, and increasingly so, more greenhouse gases into the atmosphere than the earth is able to reabsorb. Or to say it differently, a virtuous circle, in which the emission of greenhouse gases into the atmosphere and their re-absorption by natural processes was in rough equilibrium for thousands of years, has given way to a vicious circle wherein the discharge of greenhouse gases //as a result of human activity// is overwhelming the earth’s ability to absorb them and thus heating up the planet.

Global warming widely accepted Admittedly, there remain naysayers of global warming, but then again you can probably find a few people who still contend that the earth is flat. For some time, global warming was, forgive the pun, a hotly contested issue, in part because it was an altogether new phenomenon and in part because of the denial industry funded by the oil, gas, and coal corporations that profit handsomely from the exploitation of these natural resources. These corporations and their extreme right supporters in political corridors of power went to great lengths to claim that climate science and its discovery of human driven climate change were a fraud.

But in recent years, as incontrovertible evidence has piled up, the denial industry has been reduced to rearguard actions, such as obstructing legislative action, portraying as quixotic alternative forms of energy, and extolling the possibilities of easy technological fixes – not to mention insisting on tax payer dollars to develop and promote these fixes that in many cases are untested, illusory, and of little help.

In the meantime, the reality of global warming and its anthropogenic cause, that is, warming is the result of human activity, has become broadly accepted.

And none too soon And none too soon! After all, as temperatures climb upward, weather events (hurricanes, tsunamis, tornadoes, etc.) become more frequent and intense; the thawing of the permafrost covering vast tracts of northern lands in Russia and elsewhere continues and releases more methane (a greenhouse gas) into the atmosphere; drought and raging forest fires become commonplace; sea levels are rising or receding depending on where you live; and animals are migrating to the poles, but in many instances not fast enough. In fact, alpine animals are being pushed off the planet while the habitat of polar bears is literally melting underneath them.

The greatest threat, say some scientists, is the destabilization of ice sheets in the Artic, Antarctica, and Greenland, which are disappearing faster than anyone predicted.

Ten years to act According to James Hansen, one of the foremost experts on climate change, we have only 10 years – not to decide, but to dramatically reduce greenhouse gas emissions into the atmosphere. Failing that, he contends, we will enter into a new geological epoch. In other words, the next decade can’t be business as usual, continuing willy-nilly our present production and consumption patterns. Rather we are in a race against time, a race against the onset of //the warmest interglacial period in a half million years.//

Captured in Kolbert’s book All this and much more is captured in Elizabeth Kolbert’s highly readable and compelling book on global warming, “Field Notes from a Catastrophe.” Readers of Kolbert’s book will be both fascinated and frightened as she takes us, as the book’s title suggests, to locations where global warming is happening or is the subject of scientific study. At each location, we meet interesting people who give a vivid, concrete, and troubling picture of the causes and impacts of global warming. In Alaska we learn of the receding ice shelves; in Siberia the thawing of permafrost; in Iceland the shrinkage of the glaciers; in England the changing migratory patterns of butterflies; and in laboratories; we hear experts of climate change discuss the mushrooming danger.

What makes the book especially appealing is that while it doesn’t go overboard in technical jargon, it doesn’t sacrifice scientific understanding either.

‘Silent Spring’ of our time Some reviewers have called it the “Silent Spring” of our time, referring to the landmark book written by Rachel Carson in the 1960s that presciently warned our country of the gathering dangers of human-made environmental destruction.

At the time of its publication in 1961, some heeded Carson’s warning, Barry Commoner and the late Communist environmentalist Virginia Brodine among others come to mind, but most of us didn’t understand the enormity of the environmental threats. We went along in our lives believing that the world had dangers (thermo-nuclear war for one) to be sure, but never thinking that the sustainability of our planet and its diverse species was one of them.

On some level we assumed that the capacity of the earth and its biosphere (the zone of the earth where life naturally occurs, extending from the deepest crust to the lower atmosphere) to absorb our destructive patterns of production, consumption, and living were without limits, that the natural world would reproduce itself no matter how badly we abused it. Nature in this view was to be dominated and its bountiful resources and variety were simply fodder to be consumed as desired or as profitable. Now we know that such views are both mistaken and extremely harmful.

Unexplored: capitalism What Kolbert doesn’t explicate in her book is the connection between planetary warming and the internal dynamics of capitalism. Had she done this, she would have found that capitalism’s main dynamic is one of endless growth and endless accumulation of capital (profit maximizing). Indeed, if we were looking for a metaphor to capture the dynamic of capitalism, the word treadmill would come to mind and, moreover, a destructive treadmill that would over time undermine the natural and human conditions for economic, societal and biospheric sustainability.

And yet, while the transcendence of capitalism is a necessary step to fully resolve global warming as well as to create a sustainable economy and society, it would be a profound mistake to say that little or nothing can be done until socialism’s arrival. It is imperative to take measures to mitigate and reverse planetary warming now. Waiting for socialism is not an option.

Immediate steps Of special importance in this regard is the immediate formation of a broad and active coalition of diverse political forces, cross class alliances, if you will, at the local, national, and international levels. Their overriding task is to take immediate and radical steps to curb carbon emissions into the atmosphere.

In the course of this (and other) struggles, millions will come to understand from a new angle the destructive power of capitalism and the compelling necessity of socialism – a deeply democratic society that neither exploits nature nor labor.

“The private property of individuals in the earth will appear just as absurd as the private property of one man in other men. Even an entire society, a nation, or all simultaneously existing societies taken together, are not owners of the earth. They are simply its possessors, its beneficiaries, and have to bequeath it in an improved state to succeeding generations, as boni partres familias (good heads of households).” Karl Marx, Capital Vol. 1

Sam Webb (swebb @cpusa.org) is national chair of the Communist Party.