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Canada Wages a “Low Level War” Against Iran

Context: As yet there are no context links for this item.

Bio

Yves Engler is a Canadian commentator and author. His most recent book is The Ugly Canadian - Stephen Harper's Foreign Policy, and previously he published The Black Book of Canadian Foreign Policy and Canada in Haiti: Waging War on The Poor Majority

Transcript

PAUL JAY, SENIOR EDITOR, TRNN: Welcome to The Real News Network. I'm Paul Jay in Baltimore.

We're continuing our series of interviews on Canadian foreign policy based on the book The Ugly Canadian. Now joining us is the author of that book, Yves Engler. As I said, he's a Canadian commentator and author, and his book is—the full title—The Ugly Canadian: Stephen Harper's Foreign Policy. He now joins us from Ottawa. Thanks for joining us again, Yves.YVES ENGLER, AUTHOR AND POLITICAL COMMENTATOR: Thanks for having me.JAY: So kick us off. Again, as we've been going through these interviews, I've been—keep saying it should be The Uglier Canadian, because it's not that Harper's setting a whole new course for Canada, but it does seem to be positioned in a more, what, militant way. Is that also true in terms of Canadian-Iranian relations?ENGLER: For sure, for sure. The Harper government has—that's one where I think is—there is some—they've gone out of their way to be at the forefront in condemning Iran in shutting—they shut down—about two months ago, they shut down the Canadian embassy in Tehran and shut down the Iranian embassy in Canada and expelled Iranian diplomats, and that was a pretty aggressive move that is often seen as the step before a full-scale declaration of war.JAY: And why would they have done this? I mean, in a sense you would think with Canada having an embassy there, there's some pragmatically useful role to having an outpost there. The Americans get to use it covertly. There's some practicality to it. And closing it is sort of a symbolism for whom? Like, who cares that Canada closes their embassy?ENGLER: Yeah, well, that. And there is longstanding allegations of Canadians spying in Iran for Washington. And, of course, going back to 1979, obviously, the American diplomats that are, you know, taken into the Canadian embassy there and taken out of the country, which the movie Argo, Ben Affleck's recent movie, is in large part about. So there is—that was clearly use of the embassy.I think the main reason for the timing of the shutting down of the embassy, one is that I think the Harper government wants to fully support Netanyahu's belligerence vis-à-vis Iraq. And so this shutting down the embassy was a sort of a small contribution to that, sort of creating the dynamic for an attack against Iran, or at least to, you know, heighten sanctions and sort of controlling Iran.But I think the specific timing was motivated partly because two weeks before—ten days, two weeks before shutting down the embassy, Iran had the Nonaligned Movement, a very successful Nonaligned Movement meeting there, where I think it was 110 different countries represented, 60 heads of state. The head of—Ban Ki-moon from the UN was on visit even after both John Baird (Canadian foreign minister), Hillary Clinton from the Obama administration, and Netanyahu had all publicly criticized Ban Ki-moon for going and asked him not to go. So I think this was a reaction, this was a sort of an attempt to—after the successful Iranian meeting where they were able to break out of some of this isolation that the U.S. and Israel and Canada and some of Europe are trying to isolate, this was somewhat of a success. So the response that Canada did to that was to try to, you know, attack Iran diplomatically by shutting down the embassy.JAY: Which, as you say, supports Netanyahu's narrative and may even be something they asked for.ENGLER: Exactly. That's certainly possible [incompr.] And also there was some speculation even at the extreme end that this was to support Netanyahu when he was kind of in battle with Barack Obama, and there are some, you know, disagreements there where, you know, obviously, Netanyahu did the whole red-line thing at the UN, and this was sort of Canada's kind of contribution to that. I'm not sure that that's—necessarily was a conscious attempt to sort of somewhat undermine Obama's decision. I don't quite go that far, but certainly clearly wanting to support Netanyahu.And it fits within a longstanding—a lot of other different elements to Canada's policy. There's Canadian naval vessels patrolling off the coast of Iran, running provocative maneuvers alongside U.S. armada. There's Canadian troops in Afghanistan, occupying country bordering Iran. There's Joint Task Force 2, the Canadian special commandos in Afghanistan. Everything they do is secretive, so I have no proof of this, but I wouldn't exclude the possibility that the JTF 2 were involved in crossborder incursions into Iran. So I think the Conservative government has really been [incompr.] I consider it a low-level war that Canada's waging against Iran. The economic sanctions—the point of those sanctions is basically to have the Iranian economy [incompr.] You know. And what that means at a human level is people who are having difficulty getting milk and eggs having that much more difficulty getting those foodstuffs. And so the Conservative government has been participating in what should really be understood as a low-level war against Iran, and it's having a consequence on, you know, millions of Iranians' lives. Hopefully, it won't escalate into a full-scale war, but that's still a clear possibility.JAY: And we pointed out on The Real News many times that this sanctions war, economic sanctions, to quote Biden, killer sanctions still are taking place at a time when there's no credible evidence from the IAEA that there actually is a nuclear weapons program in Iran, and American intelligence agencies, as far as we know, continue to say there's been no decision to create a bomb in Iran, yet, quote-unquote, killer sanctions are on anyway, and, as you say, Canada's fully part of it.Let me ask one other question. Canadian foreign policy traditionally is very connected to making money. It's usually somehow to do with some trade advantage for Canada. It seems they'd be the overriding concern for most Canadian foreign policy. Is there some straight economic advantage in terms of this closer relationship with Israel which seems to be partly driving Canadian Iran policy?ENGLER: Yeah. Well, a couple of things just on that. One thing I'll say about the—one of the reasons for closing down the embassy, why it was made easier to close down the embassy in Tehran, is the fact that the Harper government has had a policy of trying to dissuade economic relations with Iran. And so one of the main objectives of the Canadian embassy anywhere in the world is basically to advance the interests of Canadian corporations in that country. And because they've had—this campaign to try to dissuade economic relations with the radicals goes back before the actual formal sanctions, there's so little Canadian business going on in Iran. So shutting down the embassy becomes that much easier, because you don't have a pushback from, you know, sort of business interests that are active in that country. So that's sort of one of the elements to sort of explaining the shutting down of the embassy in Iran.The other—in terms of the Israel element, I don't know that—I don't think it's motivated by business interests. There are deepening ties between Canadian companies and Israeli companies, and that's been going on for quite a while. There was a free trade agreement that a previous government in 1997 signed with Israel, and since that time there's been a real growth of trade and investment between the two countries. And I think where there's clear deepening of ties is at the corporate, if you like, the military-industrial complex level, where Canadian military companies are increasingly tied in with Israeli companies. And a lot of that's facilitated by public money and different programs—the Canada-Israel Industrial Relations Accord, I think it's called, where there's $7 million of public money a year devoted to that. And so you have, you know, a Canadian company involved in drone-making with the Israeli company.JAY: Yeah, I was about to say I think a lot of people don't know just how big an arms manufacturer Canada is. I mean, last time I looked, I think Canada was in the top ten. It's the ninth or tenth biggest arms manufacturer in the world.ENGLER: Yeah, different groups have—I think it's as high as six; between six and twelve is kind of—depending on the formula used to quantify such things. So there is significant—you know, Canada's a huge aerospace country. I think it's the third or fourth biggest aerospace industry in the world. And those aerospace—a company like CAE, Montreal-based company, they do—I think they're considered sort of one of the best of the flight simulation. And so a big chunk of what they do is training, you know, military pilots. So there is a significant Canadian arms industry that goes right down into, you know, producing bullets, even, you know, at the—most of it's more at the components level, tied into American military companies, but there are, you know, still Canadian companies that produce even, you know, sort of more traditional kind of weapons like bullets. And so they're a big lobby. And Israel is a very successful high-tech military economy, and so from the standpoint of the Canadian military companies, developing ties with their Israeli counterparts is, you know, quite lucrative, and it's sort of cutting-edge kind of stuff. And I think that's definitely an important part of understanding the deepening of ties between Canada and Israel.JAY: Alright. Thanks very much for joining us. And we're going to continue this series on Canadian foreign policy. If you'd like to see more programming like this, we need your support. We're in our year-end fundraising campaign. Every dollar you donate gets matched until we reach $100,000 in this campaign. There's a Donate button somewhere over here. If you don't click on that, we can't do this.

End

DISCLAIMER: Please note that transcripts for The Real News Network are typed from a recording of the program. TRNN cannot guarantee their complete accuracy.


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by Stephen Lendman

It wants truth suppressed. It wants its own message alone reported. It wants fundamental freedoms eliminated altogether.

Neo-Nazi fascist regimes operate this way. Ukraine is by far the region's worst. It menaces its own people. 

It launched premeditated aggression. It continues against Eastern Ukrainian freedom fighters. Against noncombatant civilians. 

Against opposition elements nationwide. Against independent journalists. Against Russian ones.

Some were denied entry. Others were deported. Various ones were attacked. 

LifeNews journalists Oleg Sidyankin and Marat Saichenk were harassed. They were arrested. They're detained. 

They're held incommunicado. They're lives are endangered. They're charged with "aiding terrorist groups." 

They released damning video images. They showed Kiev military forces using UN-marked attack helicopters against their own people.

RT International stringer Graham Phillips was targeted. He was arrested. Right Sector thugs put a bounty on his head. 

They offered $10,000 for his capture. They lied calling him a "Russian spy." 

Washington supports violent Kiev crimes. It urges more of the same. State Department spokeswoman Jen Psaki finds new ways to disgrace herself.

She regurgitated official Kiev lies. She outrageous suggested detained Russian journalists "aid(ed) terrorists." On May 20, she duplicitously said:

"The Ukrainian Security Services, according to reports, have detained a number of people who were in possession of fake journalist credentials issued by the non-existent Donetsk People's Republic."

Washington supports illegitimate coup-appointed putschist rule. It opposes democratic freedoms. 

It does so worldwide. It prevents real democracy at home. It's longstanding US policy.

Putin responded to Kiev targeting Russian journalists. He called detaining them on terrorism charges outrageous.

"Now they have been accused of all deadly sins already," he said. They include "transport(ing) some weapons…"

Claiming it "is utter nonsense," he said. It's "absolute nonsense and rubbish," he stressed.

"This is absolutely unacceptable and, of course, initially big questions regarding the legitimacy of all (Kiev) political procedures will emerge." 

"I hope that the Ukrainian authorities will take necessary steps in order to dignify political processes…"

"(I)t will be very difficult for us to build relations with people who come to power on the background of the punitive operation that continues in the southeastern regions of Ukraine and impedes the work of the press."

He urged an internationally monitored new constitution national referendum before holding elections.

"I believe it would be much cleaner and easier, from a legal viewpoint, to hold a referendum on all main issues, on the constitution, bearing in mind that the current Ukrainian Constitution does not allow elections because there is a lawful president," he said.

"I would like to reiterate that," he stressed. Viktor Yanukovych remains Ukraine's legitimate president, he said.

He called a new constitution vital for electing a new president and parliament. 

"In my view, it would be much more logical to do it that way, and it would lead to greater stability." he stressed.

"We are watching very closely all movements of some radical groups in Ukraine, and some have been detained in Russia."

He called Odessa's May 2 massacre disturbingly unaddressed. Failure assures repetition, he said.

On May 21, US-led Western Security Council members blocked Russia's proposal. It called for investigating Odessa's massacre responsibly.

Moscow's UN envoy Vitaly Churkin said:

"Unfortunately, UN Security Council members have been unable to back our call to turn to the secretary general with a request to conduct an objective probe."

At the same time, Russia's lower house Stat Duma Foreign Affairs Committee chairman Aleksei Pushkov accused Parliamentary Assembly of the Council of Europe (PACE) members of inaction regarding Ukrainian crisis conditions.

"I think that the PACE leadership is following an absolutely vicious path turning a blind eye to what the regime in Kiev is doing, as a result of which it is getting more and more impudent," he said.

"The Kiev authorities do not even pretend that they are trying to keep to internationally recognised norms and rules, including the documents signed and accepted by Ukraine itself." 

"They actually do not recognise or implement a so-called ‘road map’ of the OSCE (the Organisation for Security and Co-operation in Europe), which has been negotiated and put forward as a single document serving as a basis for the settlement of the situation.”

“Instead of this, the Kiev leadership has proposed its own 'road map' which is aimed not at negotiations but at violent suppression, and vacuous and stupid use of forces and heavy armaments against the civil population." 

"Sloviansk has become the only place in Europe in the 21st century where people have to hide in basements sheltering from permanent gunfire by Kiev.s military."

"All this is happening with the connivance of the US Administration, which deliberately ignores all these atrocities and human rights violations." 

On Wednesday, coup-appointed Kiev defense ministry deputy head Bogdan Senyk commented on arrested journalist Graham Phillips.

He "was detained at a National Guard checkpoint," he said. He "was handed over to law enforcement officials for the violations he committed."

He ludicrously claimed "he was filming facilities which are forbidden from being filmed." 

"And this was pointed out to him. His footage proved the violations, as we were told."

Proceedings against him are concluded, he added. "He will be, or might have been already handed to the (British) consul."

At the same time, Kiev's Security Service refused comment. Phillips' whereabouts remain unknown.

As of early evening May 21, it's unclear whether or not he'll be freed. 

Britain's Foreign Office provided little encouragement. On the one hand, it's aware of his detention.

It knows holding him violates fundamental press freedom.

On the other, it only said it's looking into his situation. It's "in contact with the Ukrainian authorities."

It's "ready to provide consular assistance." It stopped short of explaining further. 

It suggests providing little or no help whatever. It remains to be seen what happens going forward.

Russia's Foreign Ministry Special Human Rights Representative Konstantin Dolgov denounced Kiev aggression.

He cited "large-scale military force, including artillery and armor, against civilians in Eastern Ukraine."

Washington turns a blind eye, he said. So do complicit EU partners.

"They actually justify (and support) arrest(ing) foreign, especially Russian journalists in Ukraine" he said.

They turn a blind eye to Kiev's worst crimes. They include torture, intimidation, murder and premeditated aggression.

They reflect longstanding US-NATO policy. Russia's Foreign Ministry accused Kiev of escalating Eastern Ukraine state terror.

"Contrary to the obligation of refraining from any violent actions, intimidation, and provocations, not only has Kiev not canceled a punitive operation against its own people, but it is also consistently stepping it up and regularly shelling cities in the eastern part of the country at night, including with the use of heavy weaponry," it said.

Aggressive war continues. So does suppressing free expression. It bears repeating. 

Fascist regime operate this way. Kiev putschists enjoy full US-led Western support.

Stephen Lendman lives in Chicago. He can be reached at [email protected] 

His new book as editor and contributor is titled "Flashpoint in Ukraine: US Drive for Hegemony Risks WW III."

http://www.claritypress.com/LendmanIII.html

Visit his blog site at sjlendman.blogspot.com. 

Listen to cutting-edge discussions with distinguished guests on the Progressive Radio News Hour on the Progressive Radio Network.

It airs three times weekly: live on Sundays at 1PM Central time plus two prerecorded archived programs. 


http://www.progressiveradionetwork.com/the-progressive-news-hour 

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Low Wage America

Low Wage America

by Stephen Lendman

Welcome to low-wage America. Lousy jobs, rotten pay, eroding benefits, and poor working conditions reflect things for growing millions. 

Most workers live from paycheck to paycheck. They have few or no savings. They're trapped in financial insecurity. They struggle to survive out of sight and mind. 

They do so to cover bare essentials. They're hard-pressed to do it. They're more than ever debt entrapped. They're increasingly on their own. 

They're one missed payday from possible destitution, homelessness, hunger and despair.

Raising the minimum wage obscures things. Debating it crowds out reality. Where have all the good jobs gone?

They've been offshored to low-wage countries. Monthly employment reports show mostly low-pay/poor-or-no-benefit/part-time or temp jobs created.

Most pay poverty or sub-poverty wages. Households need two or more to survive. High unemployment makes finding one hard.

Previous articles explained. Reported 6.6% unemployment is fake. Real unemployment is 23.2%. Over 100 million working age Americans can't find jobs. 

It's 10 million more than when Obama took office. His job creation boasting is phony. He's a jobs destroyer, not creator. 

His job creation scheme is cutting corporate taxes. Doing so doesn't create jobs. It improves bottom line performance. It benefits shareholders. It does nothing to help workers or job seekers.

Real unemployment persists at Depression era levels. No federal policy was instituted to change things. Minimum wage debates divert attention from what's needed.

Americans deserve living wage protection. They deserve good benefits. They need Washington guaranteeing both.

They need policies instituted to do so. They need progressive governance. They need what bipartisan complicity denies.

Fairness isn't America's long suit. Class warfare defines official policy. Since the mid-1970s, inflation-adjusted wages declined. Workers earn less real money today than then.

Benefits steadily eroded. Good jobs disappeared. Class struggle between haves and have-nots persists. 

Never have so few benefitted at the expense of so many. Privileged Americans never had things so good.

Wealth disparity extremes are unprecedented. Inequality defines America. Social justice is disappearing in plain sight. 

Business as usual is policy. Ordinary people are exploited. Growing millions face poverty, unemployment, underemployment, homelessness, hunger and overall deprivation.

Government of, by and for everyone equitably doesn't exist. Monied interests alone thrive. Neoliberal harshness harms most others.
Bipartisan complicity force-feeds it.

It's institutionalized when vital aid is needed. Doing so wages financial war on millions. It's official policy. Most people struggle to get by.

Welcome to today's America. It's no fit place to live in. Progressive governance demands waging war on concentrated wealth and power.

Doing so would institute social justice. It would be official policy. Peace would be prioritized. Imperial wars would be end. So would foreign occupations. 

Defense spending would be hugely slashed. Minimally to half its current size. Ideally much more.

America's empire of bases would close. Force levels would be cut to a small fraction of current size.

Progressive taxation would replace today's policy. No more free lunches. Corporate America would be forced to pay its fair share. So would rich elites.

Washington would support organized labor's right to bargain with management on equal terms.

Living wage protection would be instituted. It would take urban, rural, state and local conditions into consideration.

Legislation would penalize companies offshoring jobs for profit. Corporations moving abroad to escape penalties wouldn't work. 

Doing business in America would require obeying fair practice policies. Exploitive companies would be shut out.

Anti-trust laws with teeth would be instituted. Monopoly and oligopoly power would be abolished.

Public education would be supported. It would be reinvigorated. It would be federally funded. States would have to conform to federal standards. It would be the law of the land.

Universal/single-payer healthcare would be instituted. Everyone covered. No one left out. Predatory insurers would be excluded. Except as a voluntary option.

Money power would return to public hands where it belongs. Wall Street crooks would be prosecuted. So would other lawless corporate predators.

Tobin taxation would be instituted. Large investors would be targeted. Speculation would be discouraged.

At one-half of one percent, hundreds of billions annually would be raised. A one-tenth of one percent tax on daily derivatives trading would raise over half a trillion dollars annually.

Imagine the benefits this kind of revenue could produce. Imagine social justice like no country ever before experienced. Imagine ending a broken system.

Imagine unprecedented fairness. Imagine making America fit to live in. Imagine making it a model to emulate.

Minimum wage debates obscure these issues. They're smoke and mirrors deception. They divert attention from what really matters.

Not according to New York Times editors. On February 8, they headlined "The Case for a Higher Minimum Wage," saying:

"(E)vidence show(s) that increasing the minimum wage is vital to the economic security of tens of millions of Americans, and would be good for the weak economy."

"An hourly minimum of $10.10, for example…would reduce the number of people living in poverty by 4.6 million..."

Fact check

Obama's $10.10 minimum wage scheme applies only to federal contractors. What about all public employees. 

What about state and local ones. What about private sector workers. What about restoring lost benefits. What about strengthening them.

What about explaining what $10.10 an hour means: x 40 hours x 52 weeks = $21,000. The federal poverty level for a family of four is $23,500.

It's woefully below reality. It's based on a decades old guideline. Households need at least double that amount to avoid poverty.

They don't need minimum wage protection. They need guaranteed living wages. Enough to cover all essential expenses. Enough to live like most working Americans did decades ago.

Obama's scheme is smoke and mirrors mumbo jumbo. "Give America a raise," he said. His rhetoric rings hollow. 

Working American wages eroded for decades. Inflation adjusted, they decline annually. Real inflation is multiples higher than fake numbers.

Times editors are right saying minimum wage debates are more political than economic. They're wrong supporting higher minimum pay at the expense of what people need to live on.

They're right saying it's no "cure-all." It's "not bold or innovative." It doesn't matter, they suggest. "(I)t deserves to pass," they say.

Americans deserve much better. What about restoring the dream of millions. What about instituting policies discussed above. 

Longstanding Times policy supports wealth, power and privilege. Endorsing more crumbs for workers doesn't wash. 

Ending let 'em eat cake policy really matters. So does making America fit to live in. Don't expect Times editors to explain.

Paul Craig Roberts discussed "recover(ing) justice." Doing so requires "a reasonable distribution of income, the accountability of government, (and making) corporations and banksters (conform) to the rule of law..."

Reinvigorating demand requires ending "the existing order that serves the one percent...The ladders of upward mobility must be restored."

Roberts justifiably opposes higher minimum pay to buy "compliance." To keep the rabble in line. To curb discontent. To let business as usual continue.

"By purchasing compliance, Washington can continue to masquerade as…indispensable, 'a light unto the world,' " a benevolent society, while..."murder(ing) people in half a dozen countries," and waging war on ordinary people at home, Roberts explained.

Ruthless unfairness defines today's America. Institutionalized policies are legally, morally and ethically degenerate.

Hardwired inequality harms growing millions. Changing things requires entirely dismantling an unjust system. It requires a total makeover. 

It requires replacing injustice with fairness. It requires government of, by and for everyone equitably. 

It requires what never before existed. It never will without organized people demanding no less.

Stephen Lendman lives in Chicago. He can be reached at [email protected] 

His new book is titled "Banker Occupation: Waging Financial War on Humanity."

http://www.claritypress.com/LendmanII.html

Visit his blog site at sjlendman.blogspot.com. 

Listen to cutting-edge discussions with distinguished guests on the Progressive Radio News Hour on the Progressive Radio Network.

It airs Fridays at 10AM US Central time and Saturdays and Sundays at noon. All programs are archived for easy listening.


http://www.progressiveradionetwork.com/the-progressive-news-hour

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In today’s On the News segment: Five million low-income people will go without basic health benefits because of their Republican governors; in the debt ceiling standoff, our nation lost at least 900,000 jobs, our economy lost at least $24 billion dollars, and our national credit rating is once again on the brink of being downgraded; California voters want to put marijuana legalization on the ballot; and more.

Thom Hartmann here – on the news...

You need to know this. Only hours before the debt limit deadline, Congress finally passed a temporary measure to avoid default. The plan was approved 81 to 18 in the Senate, and 285 to 144 in the House. The Continuing Appropriations Act funds the government through January, suspends the debt limit until February, and directs both parties to agree on a long-term budget by December 13th. After two weeks of Tea Party hostage-taking, Republicans only got a continuation of the sequester and an Obamacare income-verification rule in exchange. But, they caused serious harm to our nation in their effort to extract more demands. Because of the standoff, our nation lost at least 900,000 jobs, our economy lost at least $24 billion dollars, and our national credit rating is once again on the brink of being downgraded. After both chambers approved the legislation, President Obama made a short statement. He praised Congress for passing the measure, but said, "We've got to get out of the habit of governing by crisis." However, the temporary measure that Congress passed could simply have scheduled the next one. Senate Minority Leader Mitch McConnell said that the deal "is far less than many [Republicans] hoped for, quite frankly, but it's far better than what some had sought. Now it's time for Republicans to unite behind other crucial goals." Presumably, those goals include trying to dismantle Obamacare, and slash the budgets of other social net programs. In addition to the economic consequences, the debt-limit standoff produced record-low approval ratings for Republicans, so it's unclear why they would want to have the same fight over again. The American people want to see Congress move on to working on ways to improve our nation, and stop this governing-by-hostage-taking.

In screwed news... Five million low-income people will go without basic health benefits because of their Republican governors. These are some of the poorest people who live in red states, where lawmakers have refused to expand Medicaid. And, these Americans can't get subsidies under Obamacare, because their income is low enough to qualify for Medicaid under the new guidelines. Twenty-two states have refused to expand the low-income health program, despite the fact that it would be completely funded by the federal government until 2016 – and 90% federally funded thereafter. In those states, many people are stuck in a "gap" between extremely harsh state guidelines for Medicaid, and the minimum income required to get subsidies to buy health insurance. These Republican governors would rather see people suffering in the cracks, than do anything that could be seen as supporting the president. Some red states have come around to accepting the Medicaid expansion, and there's at least five million people around our nation who hope that their governors will accept it as well.

In the best of the rest of the news...

California voters want to put marijuana legalization on the ballot. Supporters of the Marijuana Control, Legalization, and Revenue Act of 2014 are circulating a petition to get the measure before voters in 2014. And, the bill is an open-source creation that was drafted by a group of activists and supporters. Last year, the initiative's sponsor, Dave Hodges, came up with idea to collaborate on a proposal with others. So he created a website, email list, and Google document, which activists and supporters used to exchange ideas. Although the process did provide some edits and suggestions that weren't very useful, it eventually led to the creation of a final propsal. Medical marijuana is already legal in that state, but the new initiative would give "Californians the freedom to use, grow, transport, and sell cannabis, subject to reasonable regulation and taxation in a manner similar to alcohol." The proposed bill would also prevent cities from banning medical marijuana dispensaries, which has prevented owners from opening stores in some areas. Hopefully, Mr. Hodges will get enough signatures to put the measure before the voters of California, and they approve this common-sense legislation.

It turns out that ensuring access to birth control doesn't only benefit women. A new paper from University of Michigan economist Martha Bailey explains that family planning services actually help society as a whole. Ms. Bailey examined contraceptive policies as far back as the 1950s and 1960s, and found that expanding access to birth control has long-term positive effects, like higher family incomes and better college graduation rates. In fact, women being able to chose when to give birth actually benefited their kids much later in life. Ms. Bailey found that "individuals' access to contraceptives increased their children's college completion, labor force participation, wages, and family incomes decades later." By deciding when to have kids and how many kids to have, women were more likely to have more time and money to devote to each of their children. Thus, their kids had a better chance of succeeding all the way through life. Those benefits translate into better workers, higher average incomes, higher education levels, and more tax revenues for society as a whole. It isn't only women who benefit from being able to plan their families as they choose, it turns out that we are all better off when women have access to contraceptives.

And finally... Ted Nugent is making threats again, but not in his usual Second Amendment fashion. This time, the Nuge is threatening to run for office. In an interview with Florida-based CBS host Chad Tyson, Ted Nugent said, "The threat of me running for public office is alive and well because obviously our government has been overtaken by gangsters and America-haters." He then went on to add a few nonsense talking points about President Obama being a racist, the need to run the federal budget like a family budget, and the "engineered obsolescence" of federal employees. Just in case that wasn't enough to make you want to contribute to his campaign, Ted added "I have a message for Harry Reid and the president, 'Eat Me!'" Glad to see Ted Nugent's keeping it classy – I'm sure his campaign ads will elevate the political debate.

And that's the way it is today – Thursday, October 17, 2013. I'm Thom Hartmann – on the news.

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As part of the austerity programmes across Europe in response to the economic crisis, European Union (EU) institutions have increasingly become involved in an attack on trade union rights. In this guest post, Anne Dufresne highlights especially the attack on national wage formation and considers potential responses by European trade unions.

Photo by habeebee
Wages, and thus trade unions, are being violently attacked by European authorities. Until now, wages have remained an exclusively national issue as a negotiated right at the very core of trade unions’ identity. It had been excluded from the EU’s competences since the Maastricht Treaty. Yet, for approximately two years, with the implementation of the new ‘European economic governance’ (Pact for the Euro, Six-Pack,..), the economic actors of the EU have kidnapped wages. The ECB, DG ECFIN and the ECOFIN Council transformed it into a statistic figure of ‘Unit labour cost (ULC)’, measured as an indicator that should be contained in order to improve competitiveness. A threshold of wage increases should be respected to avoid a financial penalty. So, from a negotiated right at national level, wages have become a European market price!

According to the European Council ‘the obstacles of institutional nature to a flexible adjustment of prices and salaries to market conditions (must be) suppressed’. And this is why since 2010, wage institutions have been suffering all over Europe, more or less violently so depending on the state of subordination of that particular country to the EU: with the authoritarian interventions of the Troika (Commission, ECB, IMF) and its compulsory austerity plans in the so-called ‘peripheral countries’ of the South, the East and in Ireland (unilateral reduction of minimum wages, brutal cuts in public services) or through recommendations of the Commission in the countries of the North (questioning of the indexation and wage stop in Belgium, reduction of minimum wages in France, etc.). Dismantling collective bargaining systems that people fought for is equal to a frontal attack on the very existence of trade unions in each of the member states. The Commission makes no secret about this and indicated in a recent report of DG ECFIN that it should be possible ‘to promote measures that lead to a global reduction of the ability that trade unions have to set wages’ (2012).  As they are facing this threat, how do European trade unions fight back?

Photo by Kheel Center, Cornell University


For too long, wages have remained a taboo issue for the European Trade Union Confederation (ETUC), which preferred the European Social Dialogue, excluding precisely wages. But the frontal attack perpetrated by the EU brought the subject to the foreground. In April 2008, the ETUC organised the first European demonstration with the slogan ‘increasing salaries and better sharing of profits’, and not a vague slogan such as ‘for a Social Europe’. In May 2011, at its latest Congress in Athens, the ETUC was able to express a common diagnosis by the vast majority of European trade unions (only CFDT was of a different opinion): it clearly opposed the Commission and its governance and demanded the stop of the anti-salary bulldozer strategy of the EU. So, if there is a real consensus amongst trade unions to refuse persistent wage austerity, the key question is: how can we proceed? What could be the trade unions’ counter-strategy?

A first answer goes back to the 1990s. The ETUC, following the track of the European Metalworkers’ Federation, which in the meantime merged in the Federation of European Industries, with the chemical and textile Federations, had developed a strategy to fight wage dumping: the coordination of collective bargaining.The idea was to promote a ‘union’ wage norm, according to which real wages should at least increase in parallel with the increase of productivity. While the EU (regardless of inflation) now promotes nominal wages ‘according to productivity’ and pleads for a downwards harmonisation all over Europe, it is important to update this union norm and to reinforce the European coordination attempts by trade unions. A more offensive approach against the current European wage policy would be to promote the reinforcement of all collective bargaining institutions in the different countries in order to back a European growth policy driven by wage increases.

Photo by HatM


A second line of inquiry: the European minimum wage, is a watchword that could impose itself given the differences in wages paid within the EU and the lack of a minimum level in some countries. A European regulation allowing for a relative increase in all countries could be the introduction of a minimum wage calculated in relation to the national average wage: 50% in the short-term and then 60% in the longer term. Trade unions in big countries are broadly in favour: French organisations with the ‘SMIC’ model, English unions with the success of their recently obtained minimum and the German unions that are looking for a universal standard before the next elections. Nevertheless, the ‘no front’, with the Italians and the Scandinavians in particular, is clearly against this because they fear that their bargaining systems of minimum sectoral wages, that are often very high, might suffer. Their veto has been blocking all demands in this matter since the beginning of the century. The current impossibility to find an agreement on this issue, despite the ever increasing assaults against wages, shows that there is still a long way to go before obtaining a common bargaining dynamic at the transnational level.



Photo by HatM
So a lot of questions are left over: how can we break the deadlock of national withdrawal by trade unions? How can we avoid an unbalanced increase between countries, social tensions and eventually the stalemate of the trade union movement? How can we create a new balance of power in response to the economic players of the EU?

The challenges this implies are huge: on the one hand, there is the implementation of a strategy of ‘Europeanisation’ of social movements, already underway with the increasingly rapid success of decentralised movements. A good example was the transnational strike of 14 November 2012, which was new because it was organised simultaneously in all southern countries, hit most severely by austerity measures. On the other hand, the social partners should regain their power with respect to wages. If wages are to be dealt with at EU level then they are the only ones who can manage this and not the economic actors which pursue a policy of surveillance of wage moderation. This is likely to be a long way…

This post was first published by the Social Europe Journal.


Anne Dufresne is a Researcher at FNRS-FRS of the Université Catholique de Louvain, Belgium and a Research Fellow at IRES, France.

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Paul Krugman makes a point in this post about Cyprus that I’d like use to make a broader and more important point. His point is that Cyprus is already off the euro and has created its own currency, the Cyprus Euro, which at the moment is pegged to the other euro at 1:1. Why is a euro in a Cyprus bank different from other euros? Because you can’t move it freely, so it has less real value. (Read here to see why he thinks that; also here.)

My point, though, is a little different. My point is about unrestricted free trade and capital flow in general and why understanding both is crucial to understanding:

▪ The neoliberal free-trade project, and
▪ Wealth inequality in America

But don’t let your eyes glaze over; this is not hard to understand. It just has a few odd terms in it. Please stick with me.

There’s a straight line between “free-trade” — a prime tenet of both right-wing Milton Friedman thinking and left-wing Bill Clinton–Robert Rubin neoliberalism — and wealth inequality in America. In fact, if the billionaires didn’t have the one (a global free-trade regime) they couldn’t have the other (your money in their pocket). And the whole global “all your money are belong to us”  process has only three moving parts. Read on to see them. Once you “get it,” you’ll get it for a long time.

What does “free trade” mean?

In its simplest terms, “free trade” means one thing only — the ability of people with capital to move that capital freely, anywhere in the world, seeking the highest profit. It’s been said of Bush II, for example, that “when Bush talks of ‘freedom’, he doesn’t mean human freedom, he means freedom to move money.” (Sorry, can’t find a link.)

At its heart, free trade doesn’t mean the ability to trade freely per se; that’s just a byproduct. It means the ability to invest freely without governmental constraint. Free trade is why factories in China have American investors and partners — because you can’t bring down manufacturing wages in Michigan and Alabama if you can’t set up slave factories somewhere else and get your government to make that capital move cost-free, or even tax-incentivized, out of your supposed home country and into a place ripe for predation.

Can you see why both right-wing kings (Koch Bros, Walmart-heir dukes and earls, Reagan I, Bush I and II) and left-wing honchos (Bill Clinton, Robert Rubin, Barack Obama) make “free trade” the cornerstone of each of their economic policies? It’s the song of the rich, and they all sing it.

I’ve shown this video before, but it bears repeating. When you think about “free trade,” you probably think of the Walmart heirs (or Apple owners) wallowing in wealth from the world’s slave factories. But it’s a joint project by all of our owners (sorry, major left- and right-wing campaign contributors and job creators).

This is Barack Obama making his case for campaign funding to Robert (Hi “Bob”) Rubin and others in 2006:

Brand-New Senator Barack Obama, 2006
The opening of Robert Rubin’s Hamilton Project Thinktank

At 1:20: “The forces of globalization have changed the rules of the game,” and at 5:52: “Most of us are strong free-traders.” (His “yes-but” to Rubin in that second segment is an appeal to actually do the worthless retraining for non-existent jobs that Clinton earlier supported but never did. See? Pushback. Independence.)

Three things to note:

1. The “forces of globalization” he refers to are not acts of god, whether Yahweh, Juno or Joxer. They were created by the Clinton- and Rubin-crafted CAFTA and NAFTA treaties. If a god did it, that god also caused a certain blue dress to need a dry-cleaning it never got.

2. If Obama doesn’t say what he just said in that room, he doesn’t get a Rubinite dime for his next political campaign. Period. This is his application speech.

3. Never forget that if Oklahoma knuckle-dragger Sam Walton were in that room, or not-America-first Steve Jobs, Obama would say those same words. “Most of us are strong free-traders.” It’s the tie that binds the left and the right. Bind yourself to Obama economically, and you’re tied to the Waltons. Period.

Bonus points for noting that the push to roll back social insurance is part of the NeoLiberal agenda, for example at 1:30 and elsewhere. It’s why we have the Obama Grand Betrayal, the Catfood Snack That Won’t Go Away (do click; there’s a kitty inside).

Finally, listen again to his opening praise of “Bob” Rubin and the others in the first 30 seconds or so. When Obama says that the men he’s praising have “put us on a pathway of prosperity,” what he means is that they’ve put themselves on a path to prosperity. This is wealth inequality in action, wealth inequality on the hoof. Those slave-wage jobs in China (or Indonesia or the Philippines) replace the unionized, high-paying wages you don’t have and will never get back; the men in that room, including Obama, are the reason; and “free trade” is both the cover story and the tool (more on that duality below).

Never forget — “Free trade” is a bipartisan, hands-across-the-aisle screwage of American incomes and wealth. It’s the necessary cornerstone of both left-wing and right-wing economic policy. Period.

The three tools of wealth extraction

Free trade is a primary tool of wealth extraction. What are the others?

Recall that corporations aren’t actors per se, they are machines by which wealth is vacuumed from workers and consumers into the hands and pockets of the corps’ true owners, the CEO and capital class. As we’ve said before:

(1) Corporations are not people, and they don’t have ideas or will. They are empty vessels. If you took a neutron bomb to the home office of MegaCorp.com and let it rip, the building, filled to the brim with inventory and IP, would be empty of humans and a dead thing. You could wait for weeks for the offices to act; they wouldn’t.

(2) This is especially true today, since the corporation now serves a different function than it was designed for. At first, a corporation served to make its stockholders moderately wealthy — or at least wealthier.

Modern corporations serve one function only — to make the CEO class obscenely rich.

The looting of global wealth into the hands of the capital and CEO class is a simple two-step process: Corps use free trade to loot the world. CEOs then loot the corps and live higher and better than the kings and presidents they control.

Yes, “kings and presidents they control.” The only thing needed to make the looting worldwide is government protection. If the capital class doesn’t control government, they can’t institute … global free trade regimes. And there you have it. So what are the three tools needed by the capital-controlling class?

  • CEO capture of corporations
  • Wealth capture of government
  • A global free-trade regime

And that’s all it takes. With those three tools in your pocket, you can loot and own the world, literally.

Hmm, we have all three now. “Mission accomplished,” as they say in private jet circles.

Free trade keeps the rest of the world in crisis

And now we come back to Krugman. A direct consequence of a world in which capital flow is completely unrestricted is constant economic crisis. The Professor explains that well in the context of the Cyprus problem (my emphasis and some reparagraphing):

Whatever the final outcome in the Cyprus crisis … one thing seems certain: for the time being, and probably for years to come, the island nation will have to maintain fairly draconian controls on the movement of capital in and out of the country. …

That’s quite a remarkable development. It will mark the end of an era for Cyprus, which has in effect spent the past decade advertising itself as a place where wealthy individuals who want to avoid taxes and scrutiny can safely park their money, no questions asked. But it may also mark at least the beginning of the end for something much bigger: the era when unrestricted movement of capital was taken as a desirable norm around the world. …

Then he compares the era of capital control to the era of capital freedom:

It wasn’t always thus. In the first couple of decades after World War II, limits on cross-border money flows were widely considered good policy; they were more or less universal in poorer nations, and present in a majority of richer countries too. Britain, for example, limited overseas investments by its residents until 1979; other advanced countries maintained restrictions into the 1980s. Even the United States briefly limited capital outflows during the 1960s.

But like all good things, that changed:

Over time, however, these restrictions fell out of fashion. To some extent this reflected the fact that capital controls have potential costs: they impose extra burdens of paperwork, they make business operations more difficult, and conventional economic analysis says that they should have a negative impact on growth (although this effect is hard to find in the numbers). But it also reflected the rise of free-market ideology, the assumption that if financial markets want to move money across borders, there must be a good reason, and bureaucrats shouldn’t stand in their way.

What marks the difference between those two eras, the era of capital control and our current free-trade era? Near-constant economic crisis:

[U]unrestricted movement of capital is looking more and more like a failed experiment. It’s hard to imagine now, but for more than three decades after World War II financial crises of the kind we’ve lately become so familiar with hardly ever happened.

Since 1980, however, the roster has been impressive: Mexico, Brazil, Argentina and Chile in 1982. Sweden and Finland in 1991. Mexico again in 1995. Thailand, Malaysia, Indonesia and Korea in 1998. Argentina again in 2002. And, of course, the more recent run of disasters: Iceland, Ireland, Greece, Portugal, Spain, Italy, Cyprus.

Notice the date of change? “Since 1980, however…” Him again. This is not just a coincidence. The Reagan era didn’t just initiate national looting, but international looting as well. Krugman ties these crises, here and elsewhere, to large and unrestricted inflows of capital, followed by large and unrestricted outflows that create economic bubbles, then leave them thoroughly deflated:

[T]he best predictor of crisis is large inflows of foreign money: in all but a couple of the cases I just mentioned, the foundation for crisis was laid by a rush of foreign investors into a country, followed by a sudden rush out.

The rest of the piece shows that this idea doesn’t originate just with The Professor; it’s widely held by many not paid by Money to represent it in the court of public opinion.

There’s an opportunity in Spain, let’s say, to take advantage of cheap labor and prices. Money flows in, builds huge capacity, then flows out as soon as it finds better opportunity elsewhere. What’s left behind? The Spanish in a crashed economy, and in a world in which the holders of their debt (German bankers et al) are using the EU (remember, capture of government) to make sure that creditors are made whole at the expense of whole populations.

Kind of like how Walmart comes into a town, builds a huge store, drives all the other retailers out of business, then leaves as soon as the low-wage-earners in that town can’t keep the store more profitable than other stores in the state.

What’s left? The wreck of an economy. Where’s the money? In the pockets of the Walton family, ‘natch. Win-win for someone (but not for you).

Your “economic crisis” is just their “cost of doing business”

Keep in mind, the purpose of unrestricted “free trade” is to advantage the holders of capital over everyone else on the planet. Great wealth insulates these men and women from crises, so even global economic crisis is just the externalized price (that we pay) for their wealth extraction enterprise — just like a burdened health care system is the externalized price (that we pay) for wealth extraction by billionaire owners of tobacco companies from the constant stream of lung cancer patients.

What’s “a world in constant crisis” to them? Just the cost of doing business. Nothing personal. It’s just business.

Is free trade an ideology or a tool?

One last point. Framing free trade as an ideology may be technically correct in a few cases — there are true believers in almost anything (I believe in kittehs) — but if “free trade” weren’t a money machine for the wealthy, you’d never hear of it. Crickets, as the kids say.

Put simply, the reason you heard Barack Obama tout “strong free trade” with Robert Rubin in the room, is that bankers like Robert Rubin grow obscenely wealthy by financing billionaire store-owner Billy-Bob Walton’s slave factories in Asia.

And non-millionaire Barack Obama wants millionaire Bill Clinton’s post-presidential money — $80 million and counting. (Click the link for a stunning connection between public policy — in this case, the repeal of Glass-Steagal — and a post-presidential payday.)

Obama may not say he wants “Clinton money.” He might even know it, in that self-blind sense of “know.” But I’ve met lots of drunks who’ve explained themselves so long, they really do “know” they’re just “prone to be ill in the morning.” Right. Occam’s Switchblade, Upton Sinclair edition:

“It is difficult to get a man to understand something, when his salary depends on his not understanding it.”

“I’m doing it for the kids,” Obama edition.

Bottom line

The bottom line is simple: A “free trade” system is a regime in which capital always wins, everywhere. It’s the tool by which global wealth is extracted. It’s supported by both parties. The Democratic Party version is called NeoLiberalism. “NeoLiberal” means not-FDR-liberal in the same way that Tony Blair’s “New Labour” means not-Clement Attlee-Labour. Because, framing counts on CNN, and it’s always opposite day there.

And Barack Obama, Bringer and Betrayer of Hope and Change, is the lead NeoLiberal warrior, the point of the spear until 2016, at which point he’ll pass the torch to another testosterone-branded neoliberal, retire into the sunset of global acclaim, create his Foundation for NeoLiberal Love and Global Kittens, and collect his checks. (Or not.)

My suggestion, given the above — don’t help him. You have enough on your conscience, if you’re at all like the rest of us. Unless, of course, you like your economic crises served always on tap. In which case, do sign up.

Corporate-Approved State Bills Kick Low-Wage Workers While They’re Down

President Obama called for a modest raise in the federal minimum wage to $9 in his State of the Union Address, and several Democratic legislators have upped his bid with a proposed increase to $10.10.Prevailing wage laws, which protect local construction sector workers from private sector undercutting, are the kind of legislation that ALEC-affiliated state legislation would dismantle. (Photo: Rubber Dragon / Flickr / Creative Commons)

But an insidious effort to lower the wage floor is already underway much closer to the ground—in the state legislatures where right-wing lobbyists have been greasing the skids for years for an onslaught of anti-worker policies.

An extensive analysis recently published by labor advocacy organization the National Employment Law Project tracks more than 100 bills introduced in 31 states since January 2011 that “aim to repeal or weaken core wage standards at the state or local level." Each bears the fingerprint of notorious super-lobbying organization the American Legislative Exchange Council (ALEC), which acts as a forum for “private sector leaders” to advise public officials. Most of the anti-worker bills were proposed by lawmakers directly linked to ALEC and include language that echoes that of "model legislation" developed by ALEC. Among the proposals are measures to undercut minimum wages for teenage workers, restrict overtime pay and repeal or ban local laws to improve working conditions.

ALEC has been called out by activists for pushing legislation that advances a classic right-wing agenda, from school privatization to rolling back healthcare reform. But the “wage suppression” tactics are a particularly callous attempt by ALEC-affiliated legislators to feed corporate profits by starving workers.

The wage-suppression laws are the latest strike in a war of attrition waged by ALEC and “private sector leaders” (as the organization calls them) against labor and workplace rights, aimed at forcing low-wage workers into even deeper economic insecurity.

While efforts to pass pro-worker policies in Washington have met with resistance, ALEC-sponsored bills seek to outlaw protections for workers at the state and local level, such as living wage ordinances and paid leave mandates. In several states, including Arizona, Connecticut, Maryland and Michigan, lawmakers have introduced ALEC-associated legislation to preempt prevailing wage laws, which ensure workers receive relatively fair wages in government-contracted work, including the public infrastructure projects that fuel local construction sectors.

NELP points out that only a minority of these bills have actually been enacted, but the sheer volume of anti-worker legislative proposals is nonetheless alarming at a time when the labor movement, which has traditionally struggled to beat back pro-corporate legislation, is weaker than ever. 

The ALEC-inspired bills to weaken state minimum wage laws strike directly at state’s efforts to lift workers above the absurdly low federal minimum of $7.25 an hour. Some states have set base wages significantly higher than the federal minimum—like Vermont's minimum hourly wage of $8.60, adjusted automatically to keep pace with the cost of living.

Losing the state minimum wage could leave some workers completely unprotected, because they are excluded from the federal Fair Labor Standards Act (FLSA). Home health aides, for example, have long been exempted from federal minimum-wage rules, despite strong grassroots campaigns to include them, but are covered by minimum wage law in some states, including New York and Massachussetts. Their incredibly low wages—typically less than $10 an hour across the industry—could be bumped down further if state wage floors are ripped from under them.
Overtime pay is another labor issue on which states have filled gaps in federal law. While the FLSA guarantees time-and-a-half overtime pay for many sectors, some low-wage workers, including certain federally-exempted domestic service jobs, are entitled to that wage boost only under state law. Legislators in some states—including the “right to work” battlegrounds of Ohio and Michigan, where unions are under siege—have tried to allow certain employers to get around overtime by instead paying workers “comp time,” or time off equal to one regular hour of work, even if they work more than 40 hours a week. One ALEC-affiliated bill proposed in 2011 in Nevada explicitly sought to exclude home care workers from overtime laws.

Noting that conservatives will hold majority control of most state houses this year, NELP analyst Jack Temple says, “Since legislation to raise the federal minimum wage usually depends on momentum from the states, bills like these that weaken or repeal wage standards at the state level serve to undercut the momentum needed to pass national legislation in Congress.”

The measures to prevent local officials from raising the bar for workers betrays ALEC’s underlying agenda. Though the organization purports to champion the “rights” of local authorities to act independently of “big government,” NELP reports, it’s really more about emancipating big business from regulation:

Despite ALEC’s putative support for limited government and local sovereignty, living wage preemption proposals would establish state-wide mandates that severely restrict the freedom that city governments have to set standards for businesses that receive public support.

According to Temple, with so many wage-suppression bills clogging state legislatures, even if many do not pass:

The significance of these bills for advocates at the state level concerns the sheer amount of energy and time that must be spent fighting back bills like these, which drains the time and resources that could otherwise be dedicated to improving wage standards rather than just protecting the laws already on the books.

A bill creeping through the Florida legislature seems poised to undercut emerging efforts to improve workers’ lives. HB 655 would ban towns and cities from taking local initiatives to raise wages and give workers paid leave time, thus blocking key policies that could improve the lives of workers surviving on the state’s threadbare minimum wage of $7.79 (about a third of what a single parent of two would need to earn a decent living). On the heels of a recent campaign, led by local labor groups, to establish paid sick days in Miami-Dade County, the bill would effectively block local officials from granting workers the basic protection of not having to lose wages for calling in sick.

Florida is just one battleground in a nationwide movement to improve protections and wage standards for the working poor, as labor advocates push for raises in state and federal minimum wages in tandem with the White House's proposal. But NELP's report reveals how groups like ALEC have already gotten a head start in our state legislatures. 

Without strong unions or even an adequate social safety net, minimum wage laws are the last line of defense between low-wage workers and abject poverty. So it makes sense that ALEC is now driving to pull the floor from under them; they might as well kick them when they’re down.

‘You’re Not Allowed to Use Public Transportation At All’: A Report from Israel’s Segregated...

Mondoweiss Editor's Note: The following report is from February 28, 2013. Although it was reported that Israel would begin segregating bus service in the West Bank starting March 4, the practice has been in effect for much longer. Yeshua-Lyth explained in an email: "The practice of banning Palestinians from public buses has been in evidence for months. News of plans for 'Palestinian only' buses were in the Israeli press already in November. It seems that the coercing and harassment have the purpose of 'educating' Palestinians about the way to choose public transport. The announcement yesterday coincided with my Thursday report by coincidence, or perhaps it was rushed following the considerable uproar this report has managed to create. I have been listening to blatant lies on Israeli radio about the new buses being a 'helpful measure' for the workers all day yesterday. The fact remains that public transport is a system based on a grid serving people who should be able to choose their own routes. If you live in London you do not wish to be allowed on buses from Paddington to Oxford only.."Palestinian workers with Israeli work permit wait in line to broad a Palestinian-only bus after crossing the Eyal checkpoint, near the West Bank city of Qalqilya, March 4, 2012. (Photo: Oren Ziv/ Activestills.org)

1 March 2013

I arrived at 4 PM at the bus terminal (near what is called the “Shomron Gate Junction”). Until five it looked like nothing was going to happen. Blessed boredom. Travellers get on and get off, including some who look like Palestinians. A military vehicle behind the bus honked with pointless violence and suddenly activated a siren, surely that was nothing more than the simple boorishness of the soldiers who are the lords of the land.

At five o’clock sharp the action begins: a policeman, First Sergeant Shai Zecharia, portentiously boards Bus 286, which is stopped at the station. Soldiers order all the Palestinians to get off. Right away they collect their ID cards upon their exit from the bus. That way they can’t go anywhere until they get permission. Nearly thirty workers, ages 30-50, obediently file out. The soldier/officer roars: “Udrub!” (Move!) And then: “Sit on your butts! On your butts!” They are then marched to the terminal fence and made to stand along it in a line, then to sit on the cold ground and wait. The soldiers check the green IDs (Arabic: hawwiye) and demand to see their “tasrih” (work permits). A lucky few get their IDs back and board another bus – complaining only about having to pay twice for the same trip. But our forces immediately block this channel: one by one the workers are told to leave the terminal and walk to the Azoun-Atme checkpoint, 2.5 kilometres from the Shomron Gate junction. By now it’s cold; the sun has set. Most of them got up at three in the morning for the trip to work. Their homes are only a few kilometres from nearby Ariel. All they ask is to be allowed to ride the bus for another two or three stops. They paid for the trip. And by the way, a “tasrih” costs 8,000 shekels. You have to work hard to cover that sum before you earn your first shekel.

IMG 1135

The soldiers nabbed four workers who had dared to work without a “tasrih”. The short one venomously says, “They can spend some time in the Yoav fortress.” Then the next consignment arrives, about another 25 workers. The armed and heroic little guy is soon shoving them with both hands. The procedure is repeated: “Udrub”, on your butts, hawiyye, tasrih. Now move it to Azoun-Atme. Within half an hour about eighty men have been subjected to this humiliation by a few armed soldiers and one policeman. They all responded with restraint and dismay, at most asking the obvious questions and now and then getting enlightening replies, such as:

“You’re not allowed to be on Highway 5.” At long last: official confirmation that there are apartheid highways in Israel, despite all the denials.

“You’re not allowed to use public transportation at all.”

First Sergeant Zecharia provided the following crucial information to one of the older Palestinians: It’s better to travel in the special vans and not in Israeli buses. Palestinians claim that there has been an unwritten commercial alliance between some in the security forces and the Bedouins who operate the vans, which cost five times as much as the buses for short trips. For a trip of a few minutes, each one of them pays one or two hour’s wages.

I should note that the First Sergeant answered my questions as the law requires when I asked his name and rank, but he immediately declared that my questions were “causing agitation” and that “pretty soon” I too would find myself spending a few hours in the nearby police station.

On the way back, via the Ayalon Highway, my heart goes out to the thousands of Israelis who are delayed on the way home in Thursday evening traffic jams.

Questions and thoughts:

How many hundreds of Palestinians gone through this permanent institutionalized harassment this evening, at the end of a work week during which they cleaned, built, plastered and paved our Homeland?

What is the idea behind this harassment? How is it that workers represent no “security risk” in Tel Aviv and Rishon LeZion from morning to evening, but their presence on a bus on the way home is a matter that requires the armed intervention of the soldiers of the “Israel Defence Force”?

Should not those who are constantly warning us that the Third Intifada will break out any moment have an interest in obedient and industrious workers being allowed to get home in peace? (Incidentally, I have heard this observation from the workers, who may be poor but are by no means stupid)

And furthermore: when a woman is told to “sit in the back” of a bus full of Haredim, Israeli society responds with anger and revulsion and we demand that the instigators of this obscurantist discrimination be stopped. But Palestinian workers are forbidden to travel in “our” buses – even in the back, and standing. And that is quite all right legally – unless something is very, very wrong with the law.

How fitting it is this evening to excoriate the unknown judge who beat his unfortunate children, and the judicial system that did not deal with him severely. Because, as everybody knows, civilization, progress, human rights, the rights of the child and equality before the law are our guiding principles.

Happy Apartheid Week to *all* of you!

This post originally appeared on Facebook. It has been translated from Hebrew by Mark Marshall

© 2013 Mondoweiss

Ofra Yeshua-Lyth served as correspondent for Israel's second largest newspaper Maariv in Germany and in the US. Her book "A State of Mind; Why Israel should become Secular and Democratic" (Hebrew) was published in 2004.

Why are Unionization Rates at Historic Low?

Context: As yet there are no context links for this item.

Transcript

PAUL JAY, SENIOR EDITOR, TRNN: Welcome to The Real News Network. I'm Paul Jay.

The Bureau of Labor Statistics last week reported on the numbers of workers in unions. Let's just back up a step first. In 1955, 35 percent of workers were in unions. Most of those were private-sector workers. Well, last week's report says that private-sector workers were down as low as 6.6 percent. Thirty-five percent of public-sector workers are unionized, for an overall rate of 11.3. One more time: 1955, overall rate of unionization 35 percent; last week, 11.3 percent.Now, in that same week, the Dow Jones Industrial Average on the stock market broke 14,000 for the first time in five years—the market's at a historic high.Now joining us to talk about all of this is Stephanie Luce. She's an associate professor of labor studies at the Murphy Institute School for Professional Studies at the City University of New York. She's the author of Fighting for a Living Wage and coauthor, The Living Wage: Building a Fair Economy and The Measure of Fairness. She joins us from New York. In fact, she's in Brooklyn. Thanks for joining us, Stephanie.PROF. STEPHANIE LUCE, LABOR STUDIES, THE MURPHY INSTITUTE, CUNY: Thanks for having me.JAY: So let's focus on the main number here, which is from 35 percent in '55 down to 11 and change now. That's a rather drastic decrease. Why do you think this is happening?LUCE: Well, I think, you know, this steady decrease has been going on for several decades. And for a while, the number of workers in unions was going up as an absolute number, but the density was falling. And now density is falling as well. And I think really you can kind of divide this into different categories of explanations. One of the explanations is that unions themselves are to blame. They were slow to recognize a changing global economy. They were resistant to immigrant workers belonging to unions. They were not innovative in their organizing strategies and not aggressive about corporate globalization. But on the other hand, there's a lot of external forces, too, which is that employers have really been on the offensive against unions in the last 30 years and have in fact changed laws, changed regulations, and even broke—you know, they've—breaking laws as a way to fight unions and keep unions out of the workplace. So we see weak labor law, weakly enforced labor law, but also changing global rules and regulations around workers' rights.JAY: Well, let's start with some of the internal factors first, and then we'll go to external. I mean, it seems to me one of the internal factors is that the leaders of many of the major unions get paid very, very well. I mean, some of them are in the $200,000, $300,000 mark, plus they get all this expense accounts. You can often run into, you know, leaders of major unions eating steaks, you know, $40, $50 steaks and such for lunch. And I've seen it. This isn't just some stereotype. And, frankly, it's, you know, their argument as well: people that run businesses, you know, live this way; why shouldn't the leaders of workers live like this? But that's exactly the point is they started living and thinking like people that run businesses.LUCE: Right. Yeah. There's no doubt that we've had bureaucratization and some corruption and a greater hierarchy within the labor movement. That certainly is a problem. There are a lot of unions that are not really democratically run. They don't really involve their members. You know. And I think that for some people to say, well, that should suggest that we don't need unions or unions are outdated, I often say, well, that's also true in Congress. We see a lot of members of Congress, you know, engaging in corruption and not so democratic. But we're not necessarily calling to abolish Congress, right? We're calling for reform and revitalizing to make it more democratic and more engaging. And I think the same is true of unions, which is that, you know, unions' leaders have had faults, but I'm not ready to give up on them as institutions. I think they still represent one of the only chances that workers have for a democratic voice in the workplace.JAY: Well, one of the numbers in a recent blog you wrote I think is important, which is, the average union member earns 27 percent more than the average nonunion member. So, I mean, I think that shows that, you know, whatever the weaknesses of our unions are, they're still rather—it's a hell of a lot better being in one than not being in one. But in some ways has that not also been part of the problem, which is, for, you know, post World War II there was a kind of a gravy train, especially for the upper tier of workers, like autoworkers and workers in transportation and critical sectors of the economy, where they got very significant wage gains—it wasn't just the union leaders; many of the workers were doing very well. It wasn't unusual to, you know, have a couple of cars and know you could afford university and all the rest. But they didn't give a damn about all the unorganized workers and some of the other sectors of the economy. They kind of were just looking after their own people. And then one day they look around and they find out, oh-oh, we're next.LUCE: Yeah. Well, I mean, I think on the first part is that, yes, unions led to, you know, workers getting a decent income and having some stability, maybe buy a home and send their kids to college. I don't know that we want to—I don't know that I would critique that as too high, because I think workers were getting a share of what they were producing.But on the second point, you're right: they should have been aggressively trying to organize more workers, getting nonunion workers into unions, keeping ahead of what's going on in the economy in terms of changing industries and sectors. And I think not enough of them did that. I wouldn't say no one was doing that, but certainly not enough. And they for the most part, you know, got lazy and behind the trend and didn't keep up with where the economy was going.JAY: Yeah. I mean, I think it's important. There are some unions that are actively organizing and a few unions that are quite militant about their own members and reaching out to others. But I would say the majority have not been—although now that they're being targeted, I mean, maybe you could see a kind of turning point with Reagan and the air traffic controllers. Since that point, sort of the guns have been pointed at some of these stronger American unions. Again, before we get to external factors, let's talk a little bit about the politics of this. I mean, part of the issue is, when there's been Democratic Party governments, either at state levels and nationally, the unions don't seem to have used the clout they used to have to get legislation that might have made it easier to organize unions. And now that they're so weak, they don't have much clout.LUCE: Yeah. And, in fact, even going back to when they were stronger, in the 1970s, we had, you know, Jimmy Carter in office, and we—the Democrats controlled everything, and yet unions were not able to win major labor law reform. So I think that the Democrats have really not been the friend of labor that unions might think that they are. It's not that union leaders are all stupid, but they also realize that they don't have a real exit strategy in this political system, so they've aligned themselves with the Democrats, and for the most part that's been a losing strategy.I think that it didn't work so well even in the '70s when they were strong, and today, as you just said, it certainly is not a way to win any major reform. I think that unions have to seriously rethink their allegiance to the Democratic Party. If it's not realistic to start their own party, they could at least think about withholding their contributions in terms of money and time that they give to electing Democrats over and over again who turn around and sometimes stab them in the back.JAY: This number stands out for me, that unionized workers make 27 percent more than nonunionized workers. Why isn't that fact better known? Like, instead of spending all these millions of dollars of union money promoting the Democratic Party, why don't they spend millions of dollars promoting the fact that unionized workers make more than nonunionized workers? 'Cause I don't think most nonunionized workers know that.LUCE: Well, I think, you know, it's not just wages. They're actually much more likely than nonunion workers to receive health insurance, pension, paid days off, and job security. And a union contract is one of the only ways that workers have to gain any kind of job security in our employment-at-will system. I think there's a little bit of a double-edged sword there, which is, sometimes by promoting that union workers do better, they're afraid that they make themselves more of a target from employers. Like, if they highlight how much, you know, they provide to workers, then does that in fact make unions a greater target? I think that's a mistake, because they already are a target. Employers certainly know this themselves. You know. And another interesting point, though, that I want to highlight is it's not just that—union members make more money than nonunion members, but a lot of research suggests that by having greater union density actually brings up the economy as a whole. So it's good for even nonunion workers when there's greater union density. Some research by Bruce Western at Princeton, he estimates that about 20 to 33 percent of the growth in inequality in this country is because of the falling union density, and he says that what unions did is create a general sense, a norm of equity, a general sense of wage fairness. And what unions do is also reduced inequality between workers. They actually reduced discrimination, for example, between male and female workers or between white and black workers. So there are lots of positive benefits of unions that help not just workers but the economy as a whole.JAY: There's quite a deep-seated feeling, though, amongst unorganized workers that organized, unionized workers, higher-paid unionized workers, is pushing work outside the country, and they blame the unionized workers.It's interesting. We covered a strike in Sudbury, Canada, which—the dynamic here is similar, although unionization rates in Canada are still somewhat higher than in the United States. But this is essentially a one-industry town, a nickel mining town. The nickel miners spend all their money in the town. It's because they've been highly paid that the town does relatively well. They go on strike. And I think—you know, I can't give a scientific take on this, but a majority of ordinary people in the town we talked to were actually blaming the workers for wanting to be highly paid even though they're the spending money in the town, because the company's threatening to go get the nickel somewhere else in the world—which is kind of funny, 'cause obviously, you know, they wanted that nickel. But this division between organized and unorganized workers, I don't see the unions actively fighting it, 'cause even in Sudbury the union wasn't doing that much public relations work to make people understand why that's good for the town.LUCE: Well, I do think some unions are trying. Some unions are active in things like living-wage campaigns and labor-community coalitions to help, you know, low-end workers. But I think, you know, you're right that they need to do a better job of explaining what's going on. I mean, what's interesting is a lot of the drop in unionization in the last year was not because—you know, some of it's jobs moving overseas, but a lot of it is in the public sector. These are not jobs that are moving overseas. This is just, you know, governors attacking workers' rights to form unions. Another huge drop in unionization over the last several decades was in construction. Again, these are not because the employer's moving those jobs to China. These are the same jobs, they're staying here in the United States, but they're being converted to nonunion jobs. So I think you're right. We need a better story and understanding of what's going on in the economy, and that it's not just an inevitable result of globalization that, you know, unions are going to die off.JAY: Yeah. The one words or letters that we have not heard from President Obama during the last presidential election—we haven't heard anything now that he's been inaugurated—was EFCA, the Employee Free Choice Act. This was supposed to be the grand bargain, if you want, with the unions, that President Obama's going to reform labor legislation. And not a whisper of it now.LUCE: Right. Right. And I'm not surprised, because I didn't ever believe that Obama was just going to come in and sign this sweeping labor law reform that, as I said, Jimmy Carter and the Democrats didn't do in the 1970s. I don't think we're going to see any kind of widescale reform like that without massive social protest. I think the unions were grossly mistaken to think they were going to get something in through backdoor channeling, lobbying, or whatever it might be instead of having, you know, massive sit-downs or, you know, people marching in the streets or other forms of social protest. And I feel Obama himself even kind of made that comment when he was first elected. But the unions really didn't pursue that avenue.JAY: Right. Well, thanks for joining us, Stephanie.LUCE: Thank you so much.JAY: And thank you for joining us on The Real News Network.

End

DISCLAIMER: Please note that transcripts for The Real News Network are typed from a recording of the program. TRNN cannot guarantee their complete accuracy.


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Guest Post: Cheap, Abundant Credit Creates A Low-Return, Bubble-Prone World

Via Charles Hugh-Smith of OfTwoMinds blog,

By bailing out banks and targeting equity prices, the central banks are exacerbating the misallocation of savings/financial capital to historically overvalued corporate equity.

What happens when central banks make credit cheap and abundant? All that cheap money chases scarce productive assets. The yields on assets drop, and speculative "risk-on" assets are boosted into bubbles.

Even as corporate profits have skyrocketed, equity valuations have risen apace, keeping yields at historically low levels.

Just to state the obvious: does that trajectory strike you as sustainable? Up almost 300% in less than four years? In a debt-burdened global economy, where are the next $1.75 trillion in corporate profits going to come from?

Anyone who claims "stocks are cheap" would do well to study these charts, which are courtesy of longtime correspondent B.C.:

Another measure of the S&P 500 yield using corporate bond yields (Baa):

In response to my observation that this looked like too much cheap credit chasing too few productive assets, B.C. added these explanatory comments:

This is characteristic of the liquidation/hoarding of a debt-deflationary Long-Wave Trough depression. The financial media and economists want us to believe that the Fed printing is "stimulus" when in fact it is part of the "liquidation" of Fed member banks' balance sheets of bad assets. 

With the 10-yr. avg. P/E of 22-23, a 10-yr. earnings yield of 4.5%, a dividend of 2% (0% in real terms before fees and taxes), average reported earnings growth since '00 of 3-4%, the real yield on 10- and 30-year Treasuries of slightly negative to 1%, and real wage/salary growth of 0%, the imputed discount rate implies inferior returns to capital vs. continuing decline in returns to labor; these conditions are not conducive to private sector investment growth and employment. 

Historically, the only "solution" was debt deflation and consumption of financial capital to the point that debt and asset prices fell to a level at which the imputed discount rate rose to encourage investment at rising returns to labor's share of GDP, i.e., inflationary Long-Wave Upwave. 

By bailing out banks and targeting equity prices, the central banks are exacerbating the misallocation of savings/financial capital to historically overvalued corporate equity of the Fortune 25-300 firms, resulting in low-velocity hoarding and worsening wealth and income concentration, unproductive rentier speculation, further declines in labor's share of GDP, and contracting trend real GDP and gov't receipts per capita. 

Along with these conditions are the once-in-history effects of Peak Cheap Oil, falling oil exports per capita, deteriorating EROEI, population overshoot, and accelerating automation of labor and loss of income and purchasing power. 

Consider that market cap-to-GDP today is 110%, ~100% above the historical average and 230% above the average of secular bear market lows. The differential $8-$12 trillion in market cap, primarily held by the top 0.1-1% to 10% of households in form of the equity of the Fortune 25-300 firms, is effectively captive current and future savings/investment/business, household, and gov't consumption that otherwise would occur at the given ratio to wages, profits, and GDP. 

George Brockway made the case in his book, The End of Economic Man: Principles of Any Future Economics (1995), that a stock bull market is a disaster, because bull markets coincide historically with growing wealth and income concentration and gross misallocation of savings/financial capital that encourages unproductive gambling and speculating, bank leverage, and bubbles that burst and cause mayhem. 

However, we are conditioned by the dominant rentier zeitgeist that rising asset prices (debt-money proxy claims on wages, profits, and gov't receipts in perpetuity by the top 0.1-1%) are an unambiguous sign of widespread prosperity.

Thank you, B.C. for placing the charts in context. B.C. also passed along this investment-bank report on the same topic, The Low-Return World (Credit Suisse).

Your rating: None

Cambodian Workers Wait for Wages in the Street, Shaming H&M and Wal-Mart

The women of the Kingsland clothing factory in Phnom Penh have been losing sleep over their jobs. It’s not the grueling hours and poverty wages that keep them awake, nor the threat of violent retaliation they’ve endured for trying to organize, nor even the unsanitary, dangerous working conditions they've often complained about. They’re used to all that; what they can’t stand is not being paid for their work.Since early January, workers have maintained a 24-hour vigil in front of a Phnom Penh clothing factory to demand owed wages. (Still from Warehouse Workers United video.)

Since the factory shut down weeks ago, workers have held a 24-hour vigil on the street to demand back wages and severance pay. The encampment marks their desperation to make their plight visible and to expose the open secret behind the underwear Kingsland has exported for years: that their cheap labor supplied the global retail empires of Wal-Mart and H&M.

Heoun Rapi, one of about 200 protesting workers, stated in a public declaration:

I am 6 months pregnant. It was difficult to work while I’m pregnant but even though it’s hard I need to struggle. I don’t know what to do. I can’t survive with the salary cut. I will protest like this until there is a solution. I want the factory and Wal-Mart to rush to give us our severance pay.

The factory reportedly laid off workers in September due to a lack of work orders, but promised to pay partial wages until work resumed in January. In December, the company union announced the factory had closed and that the owners had declared bankruptcy and apparently left the country. Though the details are still murky, it seems the factory may well be reopened at some pointpotentially, advocates say, under even more precarious conditions than the already-miserable working environment prior to the closure.

In the meantime, workers remain in limbo, with no resolution over the question of legally entitled back wages or severance pay. The advocacy groups Community Legal Education Center (CLEC) and the Workers Information Center (WIC) are now pressuring Wal-Mart and H&M “to ensure that Kingsland owners pay all wages and indemnity and comply fully with Cambodian Labor Law.” The International Labor Rights Forum, which has long campaigned against Wal-Mart and other retail giants' exploitation of factory workers in the Global South, has been tracking labor disputes at Kingsland since 2007, when workers tried to form an independent union and were violently attacked. According to the workers’ account of one clash in February 2008, after an independent workers’ group launched a strike outside the factory:

[Workers] were forced to wait an hour and a half past their usual payment time when the police came and argued with the workers about public security issues. The situation escalated when police began to beat workers, also allowing company cars to crush the waiting workers. Because of this, 15 workers were hurt, five sustaining serious injuries, including five leg injuries and one broken hand.

The conflict drew the attention of global labor watchdogs, including the International Labour Organization (ILO) but despite attempts at intervention, mediation of the dispute foundered.

The current crisis at Kingsland continues to test multinational giants’ claims of deniability. Wal-Mart did not respond to an inquiry from Working In These Times, but in statements published via CLEC and WIC, the megaretailer claimed it stopped contracting with Kingsland in October 2011 and had “paid in full for all merchandise." H&M offered a more elaborate explanation, arguing that the factory was “not an approved supplier of H&M” but acknowledging previous unauthorized work, and that “the last H&M unauthorized production of garments in Kingsland was completed by July 2012.” With no official affiliation with Kingsland, the company stated, "Unfortunately as H&M does not have any business relation with this factory we are not in a position of exerting any pressure on the factory owner.”

The CLEC and WIC have condemned the companies and cited workers’ testimonies that, in contrast to the companies’ claims, “Wal-Mart production continued until the first week of September, 2012” and that “H&M alterations and quality checks continued until the first week of September, 2012.”

Whatever date production actually ended, neither company seems interested in taking responsibility for the abandoned workers whose livelihoods had long depended on orders from their brands. The denials echo the claims of Wal-Mart late last year when it denied official connection to the Tazreen garment factory in Bangladesh after a horrific fire incinerated more than 100 workers and left several foreign labels, including Wal-Mart’s, in the ashes. Whether these multinationals are truly that ignorant about their subcontractors in Asia is debatable, but clearly, at the very least, malign neglect permeates every link in the supply chain. CLEC and WIC say the companies’ damage control tactics blatantly contradict the ethical sourcing principles touted in the corporations’ “social responsibility” policies.

As in other Asian export economies, Cambodia’s garment sector as a whole--the country’s critical, but volatile low-wage export industry--has been plagued by safety hazards and labor abuses. Joel Preston, an activist working with CLEC, tells Working In These Times: “Conditions at Kingsland were similar to those throughout the garment industry; poverty wage, forced labor of 12 hours per day, discrimination and violence against union leaders, fainting workers, etc.” On that last point, Preston was referring to spates of sudden faintings linked to hazardous and exhausting working conditions at several industrial facilities in recent months, including workplaces tied to brands like WalMart, Target, Reebok, and Urban Outfitters.

Anti-sweatshop groups have pushed for tighter regulation of the convoluted export supply chain and greater corporate accountability. Yet the business model of suppressing wages and labor conditions at the expense of equity and safety prevails. When they have no truly independent garment workers union, just the company or partisan unions that have long dominated Cambodian workplaces, Preston says consumer pressure is key for garment workers' struggles:

With the state of the rule of law in Cambodia, the fate of these workers often rests in the hands of consumers, observers and trade unions. … Will international trade unions and advocates stand behind these marginalized workers? In this case, the answer is yes. The international network is building and Walmart and H&M will be held to account.

In a country where people are worked until they fall unconscious, how long will it take for multinationals to wake up to their complicity in the horrific conditions of the industry status quo?

Cambodian Workers Wait for Wages in the Street, Shaming H&M and Wal-Mart

The women of the Kingsland clothing factory in Phnom Penh have been losing sleep over their jobs. It’s not the grueling hours and poverty wages that keep them awake, nor the threat of violent retaliation they’ve endured for trying to organize, nor even the unsanitary, dangerous working conditions they've often complained about. They’re used to all that; what they can’t stand is not being paid for their work.Since early January, workers have maintained a 24-hour vigil in front of a Phnom Penh clothing factory to demand owed wages. (Still from Warehouse Workers United video.)

Since the factory shut down weeks ago, workers have held a 24-hour vigil on the street to demand back wages and severance pay. The encampment marks their desperation to make their plight visible and to expose the open secret behind the underwear Kingsland has exported for years: that their cheap labor supplied the global retail empires of Wal-Mart and H&M.

Heoun Rapi, one of about 200 protesting workers, stated in a public declaration:

I am 6 months pregnant. It was difficult to work while I’m pregnant but even though it’s hard I need to struggle. I don’t know what to do. I can’t survive with the salary cut. I will protest like this until there is a solution. I want the factory and Wal-Mart to rush to give us our severance pay.

The factory reportedly laid off workers in September due to a lack of work orders, but promised to pay partial wages until work resumed in January. In December, the company union announced the factory had closed and that the owners had declared bankruptcy and apparently left the country. Though the details are still murky, it seems the factory may well be reopened at some pointpotentially, advocates say, under even more precarious conditions than the already-miserable working environment prior to the closure.

In the meantime, workers remain in limbo, with no resolution over the question of legally entitled back wages or severance pay. The advocacy groups Community Legal Education Center (CLEC) and the Workers Information Center (WIC) are now pressuring Wal-Mart and H&M “to ensure that Kingsland owners pay all wages and indemnity and comply fully with Cambodian Labor Law.” The International Labor Rights Forum, which has long campaigned against Wal-Mart and other retail giants' exploitation of factory workers in the Global South, has been tracking labor disputes at Kingsland since 2007, when workers tried to form an independent union and were violently attacked. According to the workers’ account of one clash in February 2008, after an independent workers’ group launched a strike outside the factory:

[Workers] were forced to wait an hour and a half past their usual payment time when the police came and argued with the workers about public security issues. The situation escalated when police began to beat workers, also allowing company cars to crush the waiting workers. Because of this, 15 workers were hurt, five sustaining serious injuries, including five leg injuries and one broken hand.

The conflict drew the attention of global labor watchdogs, including the International Labour Organization (ILO) but despite attempts at intervention, mediation of the dispute foundered.

The current crisis at Kingsland continues to test multinational giants’ claims of deniability. Wal-Mart did not respond to an inquiry from Working In These Times, but in statements published via CLEC and WIC, the megaretailer claimed it stopped contracting with Kingsland in October 2011 and had “paid in full for all merchandise." H&M offered a more elaborate explanation, arguing that the factory was “not an approved supplier of H&M” but acknowledging previous unauthorized work, and that “the last H&M unauthorized production of garments in Kingsland was completed by July 2012.” With no official affiliation with Kingsland, the company stated, "Unfortunately as H&M does not have any business relation with this factory we are not in a position of exerting any pressure on the factory owner.”

The CLEC and WIC have condemned the companies and cited workers’ testimonies that, in contrast to the companies’ claims, “Wal-Mart production continued until the first week of September, 2012” and that “H&M alterations and quality checks continued until the first week of September, 2012.”

Whatever date production actually ended, neither company seems interested in taking responsibility for the abandoned workers whose livelihoods had long depended on orders from their brands. The denials echo the claims of Wal-Mart late last year when it denied official connection to the Tazreen garment factory in Bangladesh after a horrific fire incinerated more than 100 workers and left several foreign labels, including Wal-Mart’s, in the ashes. Whether these multinationals are truly that ignorant about their subcontractors in Asia is debatable, but clearly, at the very least, malign neglect permeates every link in the supply chain. CLEC and WIC say the companies’ damage control tactics blatantly contradict the ethical sourcing principles touted in the corporations’ “social responsibility” policies.

As in other Asian export economies, Cambodia’s garment sector as a whole--the country’s critical, but volatile low-wage export industry--has been plagued by safety hazards and labor abuses. Joel Preston, an activist working with CLEC, tells Working In These Times: “Conditions at Kingsland were similar to those throughout the garment industry; poverty wage, forced labor of 12 hours per day, discrimination and violence against union leaders, fainting workers, etc.” On that last point, Preston was referring to spates of sudden faintings linked to hazardous and exhausting working conditions at several industrial facilities in recent months, including workplaces tied to brands like WalMart, Target, Reebok, and Urban Outfitters.

Anti-sweatshop groups have pushed for tighter regulation of the convoluted export supply chain and greater corporate accountability. Yet the business model of suppressing wages and labor conditions at the expense of equity and safety prevails. When they have no truly independent garment workers union, just the company or partisan unions that have long dominated Cambodian workplaces, Preston says consumer pressure is key for garment workers' struggles:

With the state of the rule of law in Cambodia, the fate of these workers often rests in the hands of consumers, observers and trade unions. … Will international trade unions and advocates stand behind these marginalized workers? In this case, the answer is yes. The international network is building and Walmart and H&M will be held to account.

In a country where people are worked until they fall unconscious, how long will it take for multinationals to wake up to their complicity in the horrific conditions of the industry status quo?

Italy consumer morale hits 17-year low

Italy’s consumer morale falls to its lowest level in about 17 years. (File photo)

Newly-released figures show Italy’s consumer confidence has unexpectedly slipped in January to its lowest level in at least 17 years as the country’s recession continues to take its toll.

Italy’s National Institute for Statistics (Istat) said Monday that the country’s confidence index dropped to 84.6 from 85.7 percent in December, the worst slump since the series began in 1996.

Raj Badiani, an economist at IHS Global Insight said, “With confidence bouncing around record lows, cautious household spending will serve as a major obstacle to any recovery in economic activity during 2013-14.”


Italy has been in recession since the middle of 2011. Most analysts expect gross domestic product to slash around 1 percent in 2013, following a contraction of around 2 percent last year.

Istat further said average wage inflation in 2012 came in at 1.5 percent, the lowest since the start of the historic series in 1983.

According to the statistics institute, the negative gap between wages and consumer price inflation last year was the widest since 1995.

On January 18, the Bank of Italy also said the country’s economy is likely to contract by 1.0 percent this year, far worse than a previously expected downturn.

The eurozone’s third-largest economy also faced a 2.1-percent decline in its energy production and a 1.3-percent drop in investment goods output in November.

Over the past decade, Italy has been the slowest growing economy in the eurozone.

The worsening debt crisis has forced the EU governments to adopt harsh austerity measures and tough economic reforms, which have triggered incidents of social unrest and massive protests in many European countries.

MKA/JR

‘Roe’ at 40: The Economic Divide That Denies Low-Income Women Their Right to an...

Happy fortieth, Roe! They say 40 is the new 20. And that might be fitting, because four decades later to the day it feels like in many ways we’ve moved back in time. While access to abortion is still in theory a right every woman in this country enjoys, an economic chasm has yawned between the well-off and the poor.

The Guttmacher Institute has some enlightening, if disheartening, infographics to celebrate the anniversary. As the first demonstrates, low-income women are the majority of those who seek abortions:

Their abortion rates are five times those of wealthier women. Yet it may be hardest for them to get the services they need. The average cost of a first-term abortion is $470, and many women are paying for that out of pocket:

A third of all abortion patients don’t have any health insurance to help defray the cost. Even so, most women don’t use insurance anyway – almost 60 percent pay out of pocket. Only about 20 percent use Medicaid, since those funds are prohibited from financing an abortion unless it results from rape, incest or endangers the life of the mother. Some states go even further in restricting its use, while only seventeen use their own funds to patch that hole for low-income women on Medicaid in need of an abortion.

But payment is only one piece of the puzzle. As the Nation editors recently noted, “87 percent of US counties lack an abortion provider, and several states have only a clinic or two staffed by a doctor who flies in from another state.” Thirty-five percent of all the country’s women live in those counties that don’t have a provider:

That means that some women have to travel more than fifty miles to obtain an abortion. Doing so requires time off work, transportation, lodging and child care, all of which start to bloat the cost very quickly. Once they get to the provider, they may face even more restrictions, such as waiting periods that mean they have to stick around for an extra twenty-four hours between the initial counseling session and the actual procedure, spending more money and losing more wages. They may have to pay for a medically unnecessary ultrasound. Suddenly a safe medical procedure that is the legal right of every woman becomes a near impossibility for those who don’t have enough money to foot all the bills.

As Guttmacher reports, “Women report having to borrow money from friends & family and forgo paying rent, groceries, & utilities to pay for their procedure.” Some may just not be able to scrape it all together. That could be part of why low-income women have an unplanned birth rate six times that of more well to do women.

The anniversary of the landmark case that paved the way for legal abortion isn’t just marked by doom and gloom. As the Nation editors point out, twenty new pro-choice legislators were elected to Congress in the last election. Last year was another record year for the number of abortion restrictions enacted at the state level, but it was down a bit from the year before.

But it’s clear that this is no time to drop our guard. The election also gave Republicans supermajority control over the legislatures of fifteen states, and four states already have plans to keep whittling away reproductive rights. If they have their way, abortion access will almost certainly continue to disappear, particularly for women who have fewer resources. Forty years later, some women can access abortion—but it’s far from a need-blind right.

© 2012 The Nation

Bryce Covert

Bryce Covert is Editor of New Deal 2.0.

‘Roe’ at 40: The Economic Divide That Denies Low-Income Women Their Right to an...

Happy fortieth, Roe! They say 40 is the new 20. And that might be fitting, because four decades later to the day it feels like in many ways we’ve moved back in time. While access to abortion is still in theory a right every woman in this country enjoys, an economic chasm has yawned between the well-off and the poor.

The Guttmacher Institute has some enlightening, if disheartening, infographics to celebrate the anniversary. As the first demonstrates, low-income women are the majority of those who seek abortions:

Their abortion rates are five times those of wealthier women. Yet it may be hardest for them to get the services they need. The average cost of a first-term abortion is $470, and many women are paying for that out of pocket:

A third of all abortion patients don’t have any health insurance to help defray the cost. Even so, most women don’t use insurance anyway – almost 60 percent pay out of pocket. Only about 20 percent use Medicaid, since those funds are prohibited from financing an abortion unless it results from rape, incest or endangers the life of the mother. Some states go even further in restricting its use, while only seventeen use their own funds to patch that hole for low-income women on Medicaid in need of an abortion.

But payment is only one piece of the puzzle. As the Nation editors recently noted, “87 percent of US counties lack an abortion provider, and several states have only a clinic or two staffed by a doctor who flies in from another state.” Thirty-five percent of all the country’s women live in those counties that don’t have a provider:

That means that some women have to travel more than fifty miles to obtain an abortion. Doing so requires time off work, transportation, lodging and child care, all of which start to bloat the cost very quickly. Once they get to the provider, they may face even more restrictions, such as waiting periods that mean they have to stick around for an extra twenty-four hours between the initial counseling session and the actual procedure, spending more money and losing more wages. They may have to pay for a medically unnecessary ultrasound. Suddenly a safe medical procedure that is the legal right of every woman becomes a near impossibility for those who don’t have enough money to foot all the bills.

As Guttmacher reports, “Women report having to borrow money from friends & family and forgo paying rent, groceries, & utilities to pay for their procedure.” Some may just not be able to scrape it all together. That could be part of why low-income women have an unplanned birth rate six times that of more well to do women.

The anniversary of the landmark case that paved the way for legal abortion isn’t just marked by doom and gloom. As the Nation editors point out, twenty new pro-choice legislators were elected to Congress in the last election. Last year was another record year for the number of abortion restrictions enacted at the state level, but it was down a bit from the year before.

But it’s clear that this is no time to drop our guard. The election also gave Republicans supermajority control over the legislatures of fifteen states, and four states already have plans to keep whittling away reproductive rights. If they have their way, abortion access will almost certainly continue to disappear, particularly for women who have fewer resources. Forty years later, some women can access abortion—but it’s far from a need-blind right.

© 2012 The Nation

Bryce Covert

Bryce Covert is Editor of New Deal 2.0.

NYC Bus Strike Kicks Off to Fight Privatization of Yellow Buses

The president of the union representing New York City school bus drivers announced earlier this week that a citywide strike will be starting Wednesday morning. This will be the first time in more than three decades that NYC’s largest union for school bus drivers will strike.

School buses lounge near the Coney Island boardwalk, July 8, 2007. (Photo:Jan-Erik Finnberg via Flickr) Michael Cordiello of Local 1181 of the Amalgamated Transit Union said that more than 8,000 bus drivers and matrons—workers who make sure children get on and off buses safely—would take part in the strike in response to a dispute over job protections in any new bus company contracts for the bus routes.

The city wants to cut transportation costs and has put bus contracts with private bus companies up for bid. The union is criticizing lack of employee protections, fearing current drivers may lose their jobs once contracts expire in June.

Writing for Alternet, Molly Knefel explains how the privatization effort is part of a push for widespread austerity:

The dispute is simple—it’s about saving money. As New York City schools chancellor David Walcott has noted, the city has operated its school-bus contracts without any “significant competitive bidding” for 33 years. During that time, something called “Employment Protection Provisions” ensured job security for senior workers, even if the city changed bus companies—meaning that experienced drivers were rehired year after year. But the contracts have gotten too pricey; more than twice what Los Angeles pays per student—and the city now plans to offer the contracts to the “lowest responsible bidder.” The union representing the school-bus drivers, Local 1181 of the Amalgamated Transit Union, is asking for Employment Protection Provisions to be included in the new contract to protect workers from losing their jobs to newer, cheaper labor. But due to a state court of appeals decision last year, in which the court ruled to exclude the provisions based on competitive bidding laws, the city says its hands are tied.

Part of the significance of this dispute is that while the importance of job protections for current bus drivers is difficult to quantify, the city’s need to reduce the budget is as plain and clear as the budget numbers themselves. In the face of the millions of dollars the city stands to save with cheaper contracts, why should it matter if, for example, 22,500 special-needs students find themselves with brand-new bus drivers one day?

It matters because how we treat those who care for certain children reflects how we value those children. It creates a system in which workers entrusted to be responsible for a child’s safety are utterly replaceable in the name of protecting the bottom line.

Even though under the city’s strike contingency plans, students, parents, or guardians would receive free MetroCards for mass transit, some politicians immediately rushed to condemn the strike and bus drivers.

Fully embracing the false paradigm that school contract disputes pit parents against education employees, Democratic NYC Council member David G. Greenfield tweeted, “School bus strike is 1st major test for NYC mayoral candidates. Whose side will they take: parents or unions?”

Greenfield then goes on to use the example of special needs children—not to illustrate the importance of protecting workers’ jobs as Knefel did in the above passage—but to depict striking drivers as being selfish.

When a parent responded to Greenfield that she is a parent and supporter of the striking drivers, he tweeted, “That’ very nice. I have dozens of parents of special needs children who have no way to get their kids to school b/c of strike,” and “the victims are the children. Especially the special needs children - many of whom won’t be able to get to school.”

Valdes-Dapena, the mother of a 10-year-old, told the AP, “I’m concerned about what happens if the drivers lose their seniority, if they’re less experienced. You can teach someone to drive a school bus, but what happens when all hell breaks loose behind them?” She added it takes experience to deal with situations like bus breakdowns, medical emergencies of kids with special needs or traffic, when kids get frustrated or unruly. “The drivers we have now—I’d trust them with my own life,” she said.

Any time a labor dispute like this arises, leadership from the top-down rushes to blame selfish workers for putting children in jeopardy rather than addressing issues of job security, privatization and how children are far more likely to suffer under budget cuts and teacher layoffs, while trying to learn in hostile education environments monitored by overworked, under-paid educators, than they are to suffer during a hiatus to settle a labor dispute.

Mayor Bloomberg perfectly demonstrated the “think of the children!” concern trolling when he remarked, “We hope that the union will reconsider its irresponsible and misguided decision to jeopardize our students’ education.” (Note: This concern for the children was missing when Bloomberg cut millions from after school programs.)

Herein lies the false choice. It’s not the children versus the bus drivers, but a choice between living wages and jobs with dignity, and the forces of privatization threatening workers everywhere.

© 2013 The Nation

Inequality Rages as Dwindling Wages Lock Millions in Poverty

The official unemployment rate in the US may be slowly ticking down, but the rank of those who classify as 'the working poor' has continued to skyrocket, according to a new report.

A server waits on customers. Hit hardest by the trend of stagnant wages are those in service industries, like retail jobs, food preparation, clerical work and customer assistance. (Jeff Adkins/For the Chicago Tribune) Along with overall income inequality growth in the US, a new report by Working Poor Families Project says that over 200,000 families fell into poverty in 2011 even with both parents working. 

National job growth saw a recovery from the worst days following the 2008 housing crash and subsequent financial crisis, but even as the recession ebbed in some areas or for some groups, many middle class or lower-middle class workers who returned to employment did so with much reduced wages.

As lead author of the report, Brandon Roberts, points out in an op-ed at Reuters on Tuesday:

These are not just the unemployed. Rather they are families that, despite having a working adult in the home, earn less than twice the federal poverty income threshold – a widely recognized measure of family self-sufficiency. They are working, but making too little to build economically secure lives. And their number has grown steadily over the past five years.

They are cashiers and clerks, nursing assistants and lab technicians, truck drivers and waiters. Either they are unable to find good, full-time jobs, or their incomes are inadequate and their prospects for advancement are poor.

The report, which analyzed figures from the US Census in 2011, determined that nearly 10.4 million such families - or 47.5 million Americans - now live near poverty, defined as earning less than $45,622 for a family of four.

Data showed that the top 20 percent of Americans received 48 percent of all income while those in the bottom 20 percent got less than 5 percent.

Statistics also showed that roughly 23.5 million, or 37 percent, of U.S. children lived in working poor families compared with about 21 million, or 33 percent, in 2007, the report said.

"Although many people are returning to work, they are often taking jobs with lower wages and less job security, compared with the middle-class jobs they held before the economic downturn," the report said. "This means that nearly a third of all working families ... may not have enough money to meet basic needs."

“We’re not on a good trajectory,” Brandon Roberts, who manages the privately-funded Working Poor Families Project, told The Washington Post. “The overall number of low-income working families is increasing despite the recovery.”

And Reuters reports:

The group's analysis adds to the body of data focused on the slipping U.S. middle class even as there are signs of the nation's economy slowly coming back to life with improvements in the housing sector and lower unemployment rate.

For some Americans, the comeback has yet to begin.

Data showed that the top 20 percent of Americans received 48 percent of all income while those in the bottom 20 percent got less than 5 percent, the report said.

The analysis also found regional differences.

States in the South, such as Georgia and South Carolina, and those in the West, such as Arizona and Nevada, had the greatest increase in the number of working poor. The increase was slower in the Mid-Atlantic and Northeast.

"It's important to draw attention to the fact that there are real families behind those statistics," said Alan Essig, who heads the Georgia Budget and Policy Institute, adding that his state is still struggling with housing and unemployment.

And the Washington Post adds:

The growth in the ranks of the working poor coincides with continued growth in income inequality. Many of the occupations experiencing the fastest job growth during the recovery also pay poorly. Among them are retail jobs, food preparation, clerical work and customer assistance.

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Free Expression on Trial in Israel

Free Expression on Trial in Israel

by Stephen Lendman

Israel mocks democratic values. It has no borders. It's to steal Palestinian land.

It has no constitution. Basic laws substitute. They fall woefully short. Ones in place are ignored.

Universally recognized rights are compromised. They include life, liberty and security. They assure privacy. They prohibit cruel and unusual punishments.

They assure everyone equal protection under the law. No distinction can be made based on race, nationality, ethnicity, gender or religious preference.

They guarantee free expression, free assembly, free movement, and free thought. They assure adequate food, shelter, clothing, healthcare, education and other vital services. 

They guarantee government of, by and for everyone equitably and fairly.

Israel is no democracy. It never was. For sure it's not now. It wants critics silenced. Legislation, policies and judicial rulings violate free speech, a free press, freedom of assembly and freedom of religion.

Military censors have final say on published content. They can prohibit material called harmful to national security. True or false doesn't matter.

Israel's Supreme Court limits content suppression to "tangible (or) near certain" instances of public endangerment. Interpretations are crucial.

Israeli authorities are hardline. Rulings are twisted advantageously. Others are ignored. Fundamental rights are systematically violated. Police state justice prevails.

Anat Kamm is Israel's Bradley (Chelsea) Manning. In October 2011, she was prosecuted for whistleblowing. 

She exposed Israeli crimes against humanity. They involved targeted Palestinian assassinations. Ordering them violates international law. Nothing justifies murder.

Kamm was initially charged with espionage. Plea bargaining reduced charges. Prior to conviction, she spent two years under house arrest. 

Tel Aviv's District Court gave her 54 months imprisonment. It added another 18 months suspended sentence.

It did so on charges of collecting, holding and passing on classified material without authorization. She justifiably exposed wrongdoing. It didn't matter. 

She was imprisoned. On December 31, 2012, Israel's High Court shortened her sentence to three and a half years. Her 18 month suspended sentence remained.

On January 15, Israel's Prison Service parole board approved her early release. It did so for good behavior.

On January 26, she was freed. It's after serving two years. Her conviction violated press freedoms. 

Journalists are supposed to report government wrongdoing. It's their job to hold culpable officials responsible.

Not in America. Not in Israel. Potential prison time awaits those who try. Others are vulnerable for demonstrating publicly.

Daphni Leef is a video artist, editor and social activist. Neoliberal harshness is official Israeli policy. Social inequality is extreme. 

Recent data show nearly 40% of Israeli families can't cover monthly expenses. Poverty affects growing numbers. Children and seniors are most vulnerable. Activist Israelis want change.

In summer 2011 and 2012, they rallied across Israel. Leef was a Tel Aviv tent camp organizer.

Israelis want long denied social justice. America, Britain and Israel are the most unjust developed societies. Neoliberal harshness writ large is policy.

Wealth, power and privilege matter more than human need. For two consecutive summers, Israelis said no more. 

Grievances they demanded addressing still fester. Things are worse now than then. Issues include:

  • unaffordable housing;

  • high food and energy prices;

  • low wages and eroding social benefits;

  • onerous taxes;

  • education and healthcare increasingly dependent on the ability to pay;

  • weak labor rights;

  • construction funding disproportionately allocated for settlement development; and 

  • the high cost of raising children.

Instead of addressing vital issues responsibly, Israeli officials ignore them. Privilege alone matters. Most Israelis increasingly are on their own, sink or swim.

Israeli police violence resembles America's. Peaceful protesters are viciously targeted. They're brutalized. They're arrested. They're treated like criminals.

Daphni Leef is Exhibit A. On June 22, 2012, Israeli police targeted her. They beat her. They acted on government orders to do so.

They dragged her out of a group of peaceful demonstrators. They did it violently. They threw her to the ground. 

She tried protecting herself from repeated blows. She sustained multiple injuries doing so. They included a broken arm.

Police claimed peacefully protesting was illegal. They said authorization was needed to do so. 

They lied claiming Leef and other demonstrators "disturbed the peace in a way that could intimidate" public order.

They wrongfully accused her of leading "angry demonstrators and encourag(ing) their acts against inspectors and policemen."

She and 11 others were arrested. They joined hundreds of other protestors. They rallied under the banner "Emergency protest! Returning power to the people."

They headed for Rothschild Blvd. In summer 2011, rallies, marches and tent cities were prominent there for weeks.

Leef and others planned more tent city activism. They were brutally targeted to prevent it. Police states operate this way. Israel is one of the worst.

Arab citizens are treated like fifth column threats. Dissenting Jews are treated like criminals.

Leef was forcefully dragged to a police van. She was thrown inside. Witnesses won't forget what happened. Police violence leaves lasting memories. 

Last June, Leef refused plea bargain terms. They required false self-incrimination. In return, she'd perform 60 hours of community service. She declined to settle for anything less than all charges dropped.

They wrongfully accuse her of participating in a riot, using force and threats, resisting arrest, and obstructing police.

In January 2013, she was formally charged. Days passed before she knew. Summoning to a Tel Aviv Magistrate's Court hearing alerted her.

She requested a postponement. She needed time to study charges. The court acquiesced. She rejects all charges.

"I've been fighting to make (Israel) a better place for a year and a half now," she said. "There's something crazy about receiving an indictment that has no basis in reality."

She protested peacefully. She acted responsibly. Cops responded like thugs. They belong in the dock, not her.

Attorney Gabi Lasky represents her.  Days after the incident, police admitted "arrest(ing) (her) was a mistake," she said.

"We'll prove that this indictment is an even greater mistake," she added.

On February 3, Haaretz editors headlined "Leave Daphni Leef alone," saying:

Police conduct "should be seen as a scare tactic aimed at deterring future demonstrators." 

The evidentiary phase of Leef's trial began days earlier. They reflect Kafkaesque proceedings. They mock legitimacy.

"…Attorney General Yehuda Weinstein and Police Commissioner Yohanan Danino (began) to comprehend the injustice and the damage entailed in (Leef's) show trial," said Haaretz editors.

They'll reexamine criminal proceedings, they said. Evidence so far is woefully lacking. 

It shows "video footage in which Leef does not even appear and testimony from a police special forces officer who said he saw Leef shove another officer, the identity of whom he could not remember."

Magistrate Court Judge Shamai Becker wasn't pleased. He criticized poor quality evidence presented. Other video clips showed police using brutal force against Leef.

It proves their culpability. Leef was brutally victimized. "It raises questions about the officers’ credibility and the motivation of the police in this affair," said Haaretz editors.

TheMarker is an Israeli publication. It interviewed Leef. "On the one hand I sit in court and know what a gap there is between what really happened and what the witnesses said, and on the other hand I understand how much this is a matter of the system," she said. 

Weinstein and Danino "must put an end to the Leef affair," said Haaretz editors. They must "compel the police to retreat from the criminal proceedings against her."

They violate "fundamental democratic principles." Doing so is longstanding Israeli policy. Haaretz editors didn't explain.

Leef is one of many victims. Many face false charges. Some react their own way.

In July 2012, Moshe Silman died for justice. He self-immolated. 

He left a letter saying:

"The state of Israel stole from me and robbed me. It left me helpless."

"Two Housing and Construction Ministry committees rejected me, even though I had a stroke."

Disabled and disheartened, he couldn't survive on his monthly $582 allowance. "I can't even live month to month," he said. "I won't be homeless, and so I am protesting."

He blamed "the state of Israel, Prime Minister Benjamin Netanyahu and Finance Minister Yuval Steinitz for the humiliation that the weakened citizens go through every day, taking from the poor and giving to the rich."

During a 2012 July 14 street protest, he poured gasoline on his body, self-immolated and died days later. He was too far gone to save.

Israel betrayed him like many others. Rights are systematically denied. Imagine dying for social justice. Rallies supported Silman after his death.

They did so under the slogan: "We're all Moshe Silman - The Blood is on the Government's Hands."

Targeting Leef represents Inquisition justice. She deserves widespread support. Doing the right thing demands it. 

Israel is one of the most socially unjust developed countries. Conditions go from bad to worse. Leef and likeminded activists demand change. It's more than ever needed.

Stephen Lendman lives in Chicago. He can be reached at [email protected] 

His new book is titled "Banker Occupation: Waging Financial War on Humanity."

http://www.claritypress.com/LendmanII.html

Visit his blog site at sjlendman.blogspot.com. 

Listen to cutting-edge discussions with distinguished guests on the Progressive Radio News Hour on the Progressive Radio Network.

It airs Fridays at 10AM US Central time and Saturdays and Sundays at noon. All programs are archived for easy listening.


http://www.progressiveradionetwork.com/the-progressive-news-hour

Making Connections: From “Shock and Awe” in Iraq to the Plague of Wall Street...

USdollars

This week marks the tenth anniversary of the “Shock and Awe” US invasion of Iraq.

The ravages of that invasion continue at home and in Iraq, the US is still at war in Afghanistan (troops and contractors remain in Iraq) and unofficially waging war on countries like Pakistan and Yemen, is aggravating aggression with North Korea as part of an Asian pivot encircling China, is putting more military into Africa and Obama is in Israel where he sings a duet for war with Netanyahu against Syria and Iran. Meanwhile, poverty, unemployment and homelessness continue to grow in the US with threats of austerity for everything except the national security state.

When we occupied Freedom Plaza in October, 2011, we made the connection between US Empire and the corporate control of our political process, between unlimited military spending and cuts to necessary domestic programs. We understood the misreporting in the corporate media about the Iraq War. Kathy Kelly from Voices for Creative Nonviolence was in Baghdad during Shock and Awe. On this tenth anniversary, she reminds us of the horrible price of war and warns of never ending war as the US seems to edge toward more war in the region. The need to understand those connections grows more important each day as we see the costs of war affecting people on every level.

And this report details the tremendous costs in loss of life, the US legacy of cancer in Iraq from poisons we brought there, the number of refugees, orphans, widows and people now living in poverty. Violence continues in Iraq including a series of attacks on the tenth anniversary that left 98 people dead and 240 wounded.

Iraq War veteran Tomas Young is bringing increased attention to the human costs at home as he prepares to die from his wounds. Over 130,000 Iraq vets have been diagnosed with PTSD. Over 250,000 are suffering from traumatic brain injuries. The ongoing costs of caring for veterans is expected to bring the total cost of the Iraq invasion alone to $6 trillion. And, vets fight homelessness, sometimes with the aid of Occupy activists who protest to save the homes of vets.  Veterans are also experiencing unemployment and medical debt.

These are some of the costs of war, not to mention that the US Military is the greatest polluter on the planet.

As we join the national week of actions in solidarity with the Strike Debt Rolling Jubileeand the coast-to-coast actions in support of the Tar Sands Blockade, let us remember that all of these issues are connected. As our allies at Veterans For Peace have been saying lately it is time to Stop the War on Mother Earth. VFP has been joining with groups like Radical Action for Mountain People’s Survival and the Tar Sands Blockade to protect the planet.

The breadth of opposition to the extraction economy that undermines the ecology of the planet is shown by the people involved in the Great Plains Tar Sands Resistance and the “Sacred Journey for Future Generations,” a march across Canada by hundreds in support of the Idle No More Movement. The fracking movement has also shown the kind of culture of resistance needed to stop hyrdo-fracking as we saw in Watkins Glen, NYthis week.

Let us remember that there is strength in solidarity and all these issues are connected by policies that put corporate greed before human needs and protection of the Earth.

Solidarity has produced some real successes recently. In the UK, 21 climate activists were being sued by the energy giant EDF for shutting down an energy plant for 8 days. But when 64,000 customers signed a petition in support for the “No Dash for Gas” activists; EDF dropped its civil suit. Criminal charges remain, so solidarity with the activists continues to be important. And in Cyprus, the EU tried to impose a tax on the population in exchange for assistance with their debt. Massive protests resulted in the Cypriot Parliament saying no to the tax.

The plague of Wall Street banking affects people across the globe. Wall Street was a key focus of Occupy. This week, activists in Philadelphia explained their protest against Wells Fargo which led to their arrest and acquittal, indeed being thanked by the judge for their actions.  This was one of five recent court victories for Occupy. Now, people are standing up in New York with a class action lawsuit against the abusive stop and frisk searches which had beenprotested by occupiers and others.

Single payer groups are joining with Strike Debt to fight medical debt and our debt-based society. Chicago Teachers invited Occupy Wall Street to teach them protest skills. And, the Imokalee workers are walking across Florida to protest low wages. In Maryland, Fund Our Communities is holding a day long“Prosperity Not Austerity” Bus Tour that links issues such as health care, education and food security with the cost of war. The Strike Debt Resistor’s Manual provides a guide for communities to learn more about ways that debt affects them and what they can do about it.Perhaps you see opportunities for making connections around issues where you are?

It is through these connections that we can grow stronger and become more effective. And it is through these connections that we can have real conversations about the root causes of our shared situations, about the real needs that we have and how we can meet them together and build a unified movement that can say “No” to war at home and abroad. Let us not be afraid to talk about US imperialism and the effects of capitalism and a debt-based world. Let us look for the truth and not be lied into another war in Syria, Iran or North Korea. And let us all join together in the urgent need for climate justice.

We can succeed too. As we make connections and build solidarity, we are preparing for the day when we will shift power to the people. An important issue that needs your attention, particularly next week, is the hunger strike in Guantanamo. Don’t let these prisoners die in vain. Witness Against Torture is calling for a week of national solidarity actions starting March 24th. Join them.

This article is based on our weekly newsletter from October2011.org/OccupyWashington DC which covers protest and resistance movements.To sign up for this free newsletter, click here.

Kevin Zeese JD and Margaret Flowers MD co-host ClearingtheFOGRadio.org on We Act Radio 1480 AM Washington, DC and on Economic Democracy Media, co-direct It’s Our Economy and were organizers of the Occupation of Washington, DC. Their twitters are @KBZeese and @MFlowers8.

The True Cost of Food: Immigration and Agriculture Workers

Workers pick raisin grapes in Sanger, Calif., Sept. 20, 2012. (Photo: Max Whittaker / The New York Times)Workers pick raisin grapes in Sanger, Calif., Sept. 20, 2012. (Photo: Max Whittaker / The New York Times)When Modesto Hernandez, 35, walks these days, he grips the curved handle of a brown metal cane to steady himself.

In 2008, Hernandez was pruning rows of raspberry canes in Whatcom County along the northern border. Red raspberries, as a commodity, are valued at $44 million in Washington state. The fields that day were covered with shin-high snow, and Hernandez was wearing rubber boots.

After he complained of losing feeling in his feet, the farmer he was working for provided no real or long-term assistance, he said. A week later, a doctor removed half of both of Hernandez’s feet.

At one point, as thoughts of survival swirled in his head, he told one person: “If you cut your feet off, I’ll put your feet in mine and I’ll go work.”

In 2008, Hernandez was one of an estimated 1 million undocumented immigrants who planted, pruned and picked crops in the United States. He helped ensure that U.S. agriculture – worth $297.2 billion as an industry – made it to homes worldwide. But Hernandez had little, if any, health and worker protection.

For more than 25 years, the United States has not addressed immigration policy, at least comprehensively, and the people that policy affects. But this year could bring significant change to a system that many dub as “broken.”

President Obama and federal lawmakers are considering various aspects of immigration policy, including U.S.-Mexico border security and a path to citizenship for the 11 million undocumented people in the country.

Guest Worker Program

As lawmakers study policy changes, U.S. farmers and ranchers are pushing for a new agriculture guest worker program.

The current guest worker program, which traces its roots to the bracero (day laborer) program initiated during World War II, enables U.S. farmers to recruit people in other countries for temporary or seasonal agriculture work if they can show a domestic labor scarcity.

Farmers say their new labor proposal would offer stable access to a legal workforce for the agriculture industry as well as flexibility and employment freedom for at least some guest workers. For undocumented agriculture workers already in the country, it could mean permanent legal residency.

The American Farm Bureau Federation says the proposal could replace the H-2A program, which the federation of 6.2 million farmers and ranchers calls rigid and bureaucratic. The H-2A program is the current policy for international agriculture workers in the country.

For the federation, a new guest worker program is one of two top issues for 2013, said Kristi Boswell, the organization’s congressional relations director.

“It’s absolutely critical for agriculture and our food supply that we have a solution this year,” she said.

Boswell added that a comprehensive immigration bill might not succeed if it excludes a program for farmers to recruit in other countries.

“This is a huge issue for our members,” she said. “They have stress. They don’t know if they are going to be in business next year.”

In late February, Bob Stallman, the group’s president, testified before Congress in support of a revised program. He talked about the federation’s members’ need to be certain they have an available labor force, competitive costs and offering workers protection.

Rosalinda Guillen, a farmworker advocate in Washington state, however, questions whether such a program is needed at all.

“Farmers have said that they have a skilled and stable labor force — that has been on their farms for 10 years — that they want to see legalized,” she said.

There are enough people in the country, Guillen added, to do the agriculture work, especially if immigration reform provides legal status for the undocumented.

Guillen is executive director of Community to Community Development, a Bellingham, Wash.-based group devoted to supporting farmworkers, immigrants and food quality.

Farmworker and civil rights groups specifically point to documented cases of abuse, safety problems and wage theft in the guest worker program and agriculture industry.

This year, the Southern Poverty Law Center updated its 2007 report, “Close to Slavery,” which is a critical look at the country’s H-2 guest worker program.

The report found that guest workers from other countries end up being sources of inexpensive labor. In many cases, critics say, they become expendable.

“Congress should look before it leaps,” the report reads. “It harms the interests of U.S. workers … by undercutting wages and working conditions for those who labor at the lowest rungs of the economic ladder.”

One conclusion of the report: The current guest worker program should neither be duplicated nor expanded.

Agriculture Workforce

The categories of international guest workers and farm workers already in the United States can mix easily.

Farmers in the country need more than 1 million agriculture workers each year, the American Farm Bureau Federation’s Boswell said, but they have “low access” to a stable domestic workforce. “We have come to rely on an immigrant labor force,” she said.

In fiscal 2012, the federal government issued 65,345 H-2A visas for workers, the U.S. State Department reported. Nearly 96 percent of those visas were handed out in North America.

Ten years ago, in fiscal 2002, 31,538 H-2A visas were granted. In fiscal 1997, the number of H-2A visas issued was 16,011.

The United Farm Workers Union has told Congress that there are more than 1 million undocumented people in the country’s agriculture industry.

Some lawmakers estimate that noncitizens perform from 50 percent to 80 percent of the work in U.S. agriculture.

Seasonal agriculture work is hard and labor intensive. It can take place in remote areas.

Boswell expressed the farmers’ federation’s concern that undocumented farmworkers already in the country would leave the industry should they gain legal status in a comprehensive immigration law.

She noted that the Immigration Reform and Control Act of 1986 gave legal status to undocumented immigrants, and that, by the 1990s, farmers had difficulty finding field workers.

Although some parts of the country, such as California and the Southwest, might have enough people for seasonal work, other areas, such as upstate New York, might not, Boswell said.

A guest worker program, she said, makes sense.

Last month, the Washington Farm Labor Association confirmed it had started recruiting 3,000 guest workers from Mexico.

The association, which serves as a human resources agency for Pacific Northwest farmers, said growers brought in 4,000 guest workers to Washington state in 2012, according to the Yakima Herald.

Efforts to reach Dan Fazio, the labor association director, for comment were unsuccessful.

But Bellingham farmworker advocate Rosalinda Guillen asked: “Why are the farmers recruiting in Mexico? What is going to happen to the legalized work force or those who are going to be legalized? It’s like intellectual capital that you’re losing.”

And in an opinion piece for New America Media, Rick Mines and Ed Kissam contend that, after the 1986 immigration law offered legal status to undocumented immigrants, farmworkers who left the industry did so because of low wages and the seasonal nature of agriculture work — which made it difficult to support a family.

Cindy Hahamovitch, whose book, “No Man’s Land,” examines guest workers and deportable labor, pointed to a potential conflict between legalization for undocumented immigrants, including a path to citizenship, and a new guest worker program.

“You’d hate to deny legal status to 11 million people because of this issue,” she said.

“During the debate that led up to the 1986 immigration reform, there was a compromise between those who advocated legalization and those who wanted a bigger, less-regulated guest worker program,” she said. “Legalization occurred but the guest worker program grew dramatically.”

On the Ground

Inside a two-bedroom apartment in Whatcom County, Modesto Hernandez reclines on a faded blue couch.

He wears a gray baseball cap with the word “BULL DOG” on it. Often, during the conversation, his soft eyes gaze into the distance.

Even to this day, he does not know the name of the farmer for whom he worked in 2008. “Every door was closed,” he says, describing his feelings, through an interpreter.

Whenever possible, Hernandez talks with workers about safety and dealing with farmers who might just be “bad actors.”

Hernandez has found support among other workers and community organizations. He lives with relatives and roommates, several of whom are from his home state of Guerrero in Mexico.

In Whatcom County, the average farm worker earns about $10,000 per year, according to advocate Rosalinda Guillen.

Hernandez said he receives about $100 each month in assistance from the Washington state government. That money helps pay for the $600 monthly rent for the apartment he shares with five adults and a two-year-old girl.

With legal status or citizenship possible, he thinks about how immigration reform might affect him.

One wish, he says, is to be able to return to Mexico and visit his family in Guerrero. He lacks documents to travel. He also lacks a driver’s license.

“Maybe I’ll never be able to go back to Mexico to see my family,” he says.

Marcos Hernandez, a 34-year-old relative and roommate, sits on a couch on the other side of the room. His jeans are wet up to his knees. He had just returned from pruning berry fields.

He talks about a farmer not paying him and about his fear that if he speaks up, the police or U.S. Border Patrol might show up.

“We don’t want to say anything. We’re on his property. I don’t want to get in trouble,” he says, through an interpreter.

One farmer, he says, promised to pay him 33 cents for each berry bush that he pruned. But sometimes, the actual amount drops to 23 cents per bush.

Marcos Hernandez also thinks about immigration reform and gaining a social security card so he can have freedom to apply for jobs.

“Maybe this can change my life,” he says, referring to immigration reform.

For Modesto Hernandez, who is wearing a pair of sturdy boots, there are other concerns.

Splotchy patches of mold have formed on the walls near his bed, which sits in the living room.

He asks about the best way to remove the mold, which can cause asthma. Water damage is apparent in parts of the apartment ceiling. He also is concerned about the health of his nephew, who lives in the apartment.

Later at her office, Guillen describes Modesto Hernandez as an intelligent, persistent man. Her comments paint a vivid picture — he is a survivor.

Guillen says it pains her to look at raspberries for sale on market shelves.

“How much did it cost to raise those raspberries?” says Guillen, a former farmworker herself.

“How much did Modesto’s feet cost?”

NAFTA at 20: The New Spin

Intel engineers test new microprocessors at Intel's research unit in Guadalajara, Mexico's second largest city on July 23, 2008. (Photo: Janet Jarman / The New York Times)Intel engineers test new microprocessors at Intel's research unit in Guadalajara, Mexico's second largest city on July 23, 2008. (Photo: Janet Jarman / The New York Times)Only a few years ago, analysts were warning that Mexico was at risk of becoming a “failed state.” These days, the Mexican government appears to be doing a much better PR job. 

Despite the devastating and ongoing drug war, the story now goes that Mexico is poised to become a “middle-class” society. As establishment apostle Thomas Friedman put it in the New York Times, Mexico is now one of “the more dominant economic powers in the 21st century.”

But this spin is based on superficial assumptions. The small signs of economic recovery in Mexico are grounded largely on the return of maquiladora factories from China, where wages have been increasing as Mexican wages have stagnated. Under-cutting China on labor costs is hardly something to celebrate. This trend is nothing but the return of the same “free-trade” model that has failed the Mexican people for 20 years. 

The North American Free Trade Agreement (NAFTA), which was ratified in 1993 and went into effect in 1994, was touted as the cure for Mexico’s economic “backwardness.” Promoters argued that the trilateral trade agreement would dig Mexico out of its economic rut and modernize it along the lines of its mighty neighbor, the United States.

The story went like this:

NAFTA was going to bring new U.S. technology and capital to complement Mexico’s surplus labor. This in turn would lead Mexico to industrialize and increase productivity, thereby making the country more competitive abroad. The spike in productivity and competiveness would automatically cause wages in Mexico to increase. The higher wages would expand economic opportunities in Mexico, slowing migration to the United States.

In the words of the former President Bill Clinton, NAFTA was going to “promote more growth, more equality and better preservation of the environment and a greater possibility of world peace.” Mexico’s president at the time, Carlos Salinas de Gortari, echoed Clinton’s sentiments during a commencement address at MIT: “NAFTA is a job-creating agreement," he said. "It is an environment improvement agreement.” More importantly, Salinas boasted, “it is a wage-increasing agreement.” 

As the 20th anniversary of NAFTA approaches, however, the verdict is indisputable: NAFTA failed to spur meaningful and inclusive economic growth in Mexico, pull Mexicans out of unemployment and underemployment, or reduce poverty. By all accounts, it has done just the opposite.

The Verdict Is In 

Official statistics show that from 2006 to 2010, more than 12 million people joined the ranks of the impoverished in Mexico, causing the poverty level to jump to 51.3 percent of the population. According to the United Nations, in the past decade Mexico saw the slowest reduction in poverty in all of Latin America. 

Rampant poverty in Mexico is a product of IMF and World Bank-led neoliberal policies—such as anti-inflationary policies that have kept wages stagnant—of which “free-trade” pacts like NAFTA are part and parcel. Another factor is the systematic failure to create good jobs in the formal sectors of the economy. During Felipe Calderon’s presidency, the share of the Mexican labor force relying on informal work—such as selling chewing gum and other low-cost products on the street—grew to nearly 50 percent.

Even the wages in the manufacturing sector, which NAFTA cheerleaders argued would benefit the most from trade liberalization, have remained extremely low. According to the Bureau of Labor Statistics, Mexican manufacturing workers made an average hourly wage of only $4.53 in 2011, compared to $26.87 for their U.S. counterparts. Between 1997 and 2011, the U.S.-Mexico manufacturing wage gap narrowed only slightly, with Mexican wages rising from 13 to 17 percent of the level earned by American workers. In Brazil, by contrast, manufacturing wages are almost double Mexico’s, and in Argentina almost triple. 

Mexico’s stagnant wages are celebrated by free traders as an opportunity for U.S. businesses interested in outsourcing. According to one report by the McKinsey management consulting firm, “for a company motivated primarily by cost, Mexico holds the most attractive position among the Latin American countries we studied. … Mexico’s advantages start with low labor costs.” 

But even as the damning evidence against NAFTA continues to roll in, entrenched advocates of the trade agreement have been busy crafting new arguments. In his recent book, Mexico: A Middle Class Society, NAFTA negotiator Luis De la Calle and his co-author argue that the trade agreement has given rise to a growing Mexican middle class by providing consumers with higher quality, U.S- made goods. The authors proclaim that “NAFTA has dramatically reduced the costs of goods for Mexican families at the same time that the quality and variety of goods and services in the country grew.” 

Most of the economic indicators included in the book conveniently fail to account for the 2008-2009 financial crisis, which hit Mexico worse than almost any other Latin American country. The result has been skyrocketing inequality. As the Guardian reported last December, “ever more Mexican families have acquired the trappings of middle-class life such as cars, fridges, and washing machines, but about half of the population still lives in poverty.”

The indicators of consumption that suggest the rise of Mexico’s middle class also exclude the dramatic increase in food prices in recent years, which has condemned millions of Mexicans to hunger. Twenty-eight million Mexicans are facing “food poverty,” meaning they lack access to sufficient nutritious food. According to official statistics, more than 50,000 people died of malnutrition between 2006 and 2011. That’s almost as many as have died in Mexico's drug war, which dramatically escalated under Calderon and has continued under President Enrique Peña Nieto. 

The food crisis has coincided with the “Walmartization” of the country. In 1994 there were only 14 Walmart retail stores in all of Mexico. Now there are more than 1,724 retail and wholesale stores. This is almost half the number of U.S. Walmarts, and far more than any other country outside the United States. The proliferation of Walmart and other U.S. big-box stores in Mexico since NAFTA came into effect has ushered in a new era of consumerism—in part through an aggressive expansion built on political bribes and the destruction of ancient Aztec ruins.  

The arguments developed prior to the signing of NAFTA focused primarily on the claim that the trade agreement would make Mexico a nation of producers and exporters. These initial promises failed to deliver. Throughout the NAFTA years, the bulk of Mexico’s manufacturing “exports” have come from transnational car and technology companies. Not surprisingly, Mexico’s intra-industry trade with the United Sates is the highest of any Latin American country. Yet the percentage of Mexican companies that are actually exporters is vanishingly small, and imports of food into Mexico have surged.

Same Snake Oil, Different Pitch 

Because their initial promises utterly failed to deliver, the NAFTA pushers are now hyping “consumer benefits” to justify new trade agreements, including the Trans-Pacific Partnership. One of the most extreme examples of this spin is an article in The Washington Post that celebrates a “growing middle class” in Mexico that is “buying more U.S. goods than ever, while turning Mexico into a more democratic, dynamic and prosperous American ally.” Devoid of all logic, it goes on to say that “Mexico's growth as a manufacturing hub is boosted by low wages.” How can low wages make people more prosperous? 

The Post also boasts that in “Mexico’s Costco stores, staples such as tortilla chips and chipotle salsa are trucked in from factories in California and Texas that produce for both sides of the border.” Is this something to celebrate? The influx of traditional Mexican food staples, starting with maize, and goods from the United States has displaced and dislocated millions of Mexican small-scale farmers, producers, and small businesses. And not only that, Mexicans’ increasing consumption of processed foods and beverages from the United States has made the country the second-most obese in the world. 

In essence, NAFTA advocates have been reduced to saying: “so maybe NAFTA didn’t help Mexico reduce poverty or increase wages. But hey! At least it gave it Walmart, Costcos, and sweat shops.”

The bankruptcy of NAFTA’s promises is only compounded by the poverty of this consolation.

The Globalization of “Fast Food”. Behind the Brand: McDonald’s

The Globalization of "Fast Food". Behind the Brand: McDonald’s

The Above image of the McDonald label, Copyright McDonald’s 2011

This article was first published in The Ecologist

In the first of a major new series following on from the ground breaking Behind the Label, Peter Salisbury takes a look at one of the biggest brands in the world – McDonald’s – and asks: has the burger giant done enough to clean-up its act?

Chances are that you have had a McDonald’s meal in the past or if not, you certainly know a lot of people who have. It’s the biggest fast food chain in the world, with 32,000 outlets in 117 countries. The clown-fronted burger outfit employs a staggering 1.7 million people, and in the first three months of 2011 alone it made $1.2bn in profits on the back of revenues of $6.1bn. The company has come in for huge amounts of criticism over the past 20 years, for the impact it has on the diets of people worldwide, its labour practices and the impact its business has had on the environment. From Fast Food Nation to Supersize Me by the way of the McLibel trials of the 1990s, plenty has been written and broadcast to tarnish the golden arches’ shine.

Declining sales in the early 2000s, which saw franchises being shut for the first time in the company’s history, caused a major rethink of the way McDonald’s operates, and its recent rhetoric has been that of a firm with a newly discovered zeal for ethical end eco-friendly practices, garnering praise from champions as unlikely as Greenpeace and the Carbon Trust. But is this just marketing hype or has McDonald’s had a genuine change of heart?

The answer is yes and no. First of all, because of the way the company is run, it’s hard to generalise. Around 80 per cent of McDonald’s outlets are run by franchisees who have to meet standards set by the company, but who can – and do – go above and beyond them. Further, McDonald’s branches are run by country and regional offices, each of which are subject to domestic standards. The production of much of the raw products which go into McDonald’s meals, from burger patties to sauces, is subcontracted to different suppliers, making it impossible to assess the company in terms of a single golden standard. Its sole global supplier (for soft drinks) is Coca-Cola.

The UK branch of the company has certainly made great strides since the 1990s, when it became embroiled in the 1997 McLibel court case, in which McDonald’s Corporation and McDonald’s Restaurants Limited sued Helen Steel and Dave Morris, a former gardener and a postman, for libel after they published a series of leaflets denouncing the company.

Exploitation

The judge overseeing the case decided that, although the pair could not prove some of their accusations – that McDonald’s destroyed rainforests, caused starvation in the third world or disease and cancer in developed countries – it could be agreed that the company exploited children, falsely advertised their food as nutritious, indirectly sponsored cruelty to animals and paid their workers low wages: a major blow to the brand in an age of increasing consumer-consciousness.

Since then, the UK branch has committed to a number of initiatives to improve its image, running an aggressive marketing campaign at the same time to portray itself as an ethical employer which is both farmer and eco-friendly. It has also moved to become more transparent, putting ingredients lists for all of its products on its website and setting up another website, Make Up Your Own Mind, inviting customers to voice concerns and publishing accounts of critics’ visits to its production sites.

All of this should be taken with a grain of salt however. It’s not surprising that a multibillion-dollar corporation, which has been hurt in the past by concerns over its practices, will do its utmost to sell itself as a reformed character. And it’s suspicious that any web search of the company brings up a hit list of sites almost exclusively maintained by the company.

Yet research conducted by the Ecologist shows that in many areas the company has improved its record of ethical and environmental awareness over the last decade. The company’s burgers, for example, are now 100 per cent beef, and contain no preservatives or added flavours whatsoever. All of McDonald’s UK’s burgers are provided by Germany’s Esca Food Solutions, which claims to maintain rigorous standards at its abattoirs and production plants, and which works closely with 16,000 independent farmers in the UK and Ireland to maintain high standards.

‘No GM’

Since the early 2000s, McDonald’s UK has maintained that none of its beef, bacon or chicken is fed genetically modified grain. Farmers working for McDonald’s have independently confirmed to the Ecologist and Esca that they have a ‘decent’ working relationship with the company.

In 2007, Esca won the UK Food Manufacturing Excellence Awards for its burgers, and in 2010 McDonald’s announced that it was launching a three-year study into reducing the carbon emissions caused by the cattle used in its burgers (cattle account for four per cent of the UK’s emissions). Meanwhile, all of the fish used in Filet-O-Fish and Fish Finger meals in Europe are sourced from sustainable fisheries certified by the Marine Stewardship Council. Fries are largely sourced from McCain’s, the world’s biggest potato supplier, and McDonald’s claims that the vast majority are produced in the UK, again by independent farmers. The fries are prepared in-store and are cooked in vegetable oil containing no hydrogenated fats. At the beginning of the potato-growing season, dextrose – a form of glucose – is added as a sweetener, and salt is added after cooking (the company claims to have reduced the amount of salt used by 23 per cent since 2008).

The bread for McDonald’s buns and muffins is sourced from a single unnamed supplier based in Heywood, Manchester, and Banbury, Oxfordshire. McDonald’s would not comment on where it sources the grain for the bakeries but says once more that it does not buy genetically modified crops. Meanwhile, the company has been working with its suppliers and franchise-holders to make sure that they are as energy efficient as possible. In 2010, The Carbon Trust awarded McDonald’s its Carbon Trust Standard for reducing its overall carbon emissions by 4.5 per cent between 2007 and 2009. The company is currently experimenting with a series of energy initiatives based around turning its waste, from packaging – which is 80 per cent recycled – to vegetable oil into energy.

Certification

Since 2007, the company – which is one of the world’s biggest coffee retailers – has committed to selling only Rainforest Alliance certified coffee. Although the certification body has certainly been responsible for improving conditions and practices in many farming operations worldwide, it has been the subject of controversy – most recently after an undercover investigation by the Ecologist revealed allegations of sexual harassment and poor conditions for some workers at its certified Kericho tea plantation in Kenya which supplies the PG Tips brand.

Certification issues aside, McDonald’s has undoubtedly become considerably better at taking criticism. In 2006, Greenpeace activists stormed McDonald’s restaurants across the world dressed in chicken suits in protest at the destruction of the Amazon rainforest, which they attributed to greedy soy producers – who in turn were selling their produce to chicken farms, of whom McDonald’s was a major customer. They subsequently praised the fast food chain for leading a unified response among soy buyers, pressuring producers to adopt a ‘zero destruction’ approach to growing their crops. Despite praise from Greenpeace, the Carbon Trust and personalities such as Jamie Oliver who have praised the company for its ethical stance on meat and buying its produce locally, the firm is by no means perfect.

One of the biggest incongruencies in its newly discovered zeal for ethical practices comes from its seemingly differing approaches to the conditions chickens live in depending on whether they produce eggs or are used as meat in Chicken McNuggets and similar meals. The firm proudly trumpets that its UK branch only buys eggs from Lion-certified free-range producers, a laudable effort from a huge buyer of eggs, and that the meat in each nugget is 100 per cent chicken breast (the final product is around 65:35 meat and batter).

Factory farming

Yet by the same token, the company buys most of its chicken from two suppliers, Sun Valley in the UK and Moy Park in Northern Ireland, who are in turn owned by the controversial American firm, Cargill, and Brazil’s Marfrig. Sun Valley has been accused of using intensive chicken farming methods to produce their meat, which campaigners say can typically involve birds being cooped up in giant warehouses for much of their natural lives with barely any space to move. Sun Valley was embroiled in a scandal in 2008 when the activist group Compassion in World Farming secretly filmed poor conditions at its supplier Uphampton Farm near Leominster.

Furthermore, although McDonald’s is happy to advertise the provenance of its beef, dairy products and eggs, it is more circumspect about chicken meat. This may be because up to 90 per cent of the meat it uses in the UK is sourced from Cargill and Marfrag facilities in Thailand and Brazil, where regulations in the farming sector are perhaps less stringent than in the UK.

Meanwhile, the fact remains that despite attempts in recent years to cultivate a more healthy image, McDonald’s primary sales come from fast food in a time when there is increasing recognition that obesity has reached epidemic proportions in the UK and the US. Although the European, and in particular the UK arm of the company, have become increasingly ethically aware, the same cannot be said for the US arm, which uses livestock farmed using intensive methods and fed in some cases on GM crops. And by buying McDonald’s in the UK, you are still buying from the same clown.

Useful links:

McDonalds: www.mcdonalds.co.uk

Greenpeace: www.greenpeace.org.uk

Compassion in World Farming: www.ciwf.org.uk

The Carbon Trust: www.carbontrust.co.uk

US Sponsored Coup d’Etat: The Destabilization of Haiti

aristide

Author’s Note

This article was written nine years ago, in the last days of February 2004 in response to the barrage of disinformation in the mainstream media. It was completed on February 29th, the day of President Jean Bertrand Aristide’s kidnapping and deportation by US Forces.

The armed insurrection which contributed to unseating President Aristide on February 29th 2004 was the result of a carefully staged military-intelligence operation, involving the US, France and Canada. The 2004 coup had set the stage for the installation of US puppet government in Port au Prince, which takes orders directly from Washington.

Michel Chossudovsky, Global Research, February 26, 2013


(Minor editorial corrections were made to the original draft since its publication on February 29th 2004, the title of article predates the actual Coup D’Etat which was in the making at the time of writing)

original article published at http://globalresearch.ca/articles/CHO402D.html

by Michel Chossudovsky

The Rebel paramilitary army crossed the border from the Dominican Republic in early February. It constitutes a well armed, trained and equipped paramilitary unit integrated by former members of Le Front pour l’avancement et le progrès d’Haiti (FRAPH), the  “plain clothes” death squadrons, involved in mass killings of civilians and political assassinations during the CIA sponsored 1991 military coup, which led to the overthrow of the democratically elected government of President Jean Bertrand Aristide

The self-proclaimed Front pour la Libération et la reconstruction nationale (FLRN) (National Liberation and Reconstruction Front) is led by Guy Philippe, a former member of the Haitian Armed Forces and Police Chief. Philippe had been trained during the 1991 coup years by US Special Forces in Ecuador, together with a dozen other Haitian Army officers. (See Juan Gonzalez, New York Daily News, 24 February 2004).

The two other rebel commanders and associates of Guy Philippe, who led the attacks on Gonaives and Cap Haitien are Emmanuel Constant, nicknamed “Toto” and Jodel Chamblain, both of whom are former Tonton Macoute and leaders of FRAPH.

In 1994, Emmanuel Constant led the FRAPH assassination squadron into the village of Raboteau, in what was later identified as “The Raboteau massacre”:

“One of the last of the infamous massacres happened in April 1994 in Raboteau, a seaside slum about 100 miles north of the capital. Raboteau has about 6,000 residents, most fishermen and salt rakers, but it has a reputation as an opposition stronghold where political dissidents often went to hide… On April 18 [1994], 100 soldiers and about 30 paramilitaries arrived in Raboteau for what investigators would later call a “dress rehearsal.” They rousted people from their homes, demanding to know where Amiot “Cubain” Metayer, a well-known Aristide supporter, was hiding. They beat people, inducing a pregnant woman to miscarry, and forced others to drink from open sewers. Soldiers tortured a 65-year-old blind man until he vomited blood. He died the next day.

The soldiers returned before dawn on April 22. They ransacked homes and shot people in the streets, and when the residents fled for the water, other soldiers fired at them from boats they had commandeered. Bodies washed ashore for days; some were never found. The number of victims ranges from two dozen to 30. Hundreds more fled the town, fearing further reprisals.” (St Petersburg Times, Florida, 1 September 2002)

During the military government (1991-1994), FRAPH was (unofficially) under the jurisdiction of the Armed Forces, taking orders from Commander in Chief General Raoul Cedras. According to a 1996 UN Human Rights Commission report, FRAPH had been supported by the CIA.

Under the military dictatorship, the narcotics trade, was protected by the military Junta, which in turn was supported by the CIA. The 1991 coup leaders including the FRAPH paramilitary commanders were on the CIA payroll. (See Paul DeRienzo,   http://globalresearch.ca/articles/RIE402A.html , See also see Jim Lobe, IPS, 11 Oct 1996). Emmanuel Constant alias “Toto” confirmed, in this regard, in a CBS “60 Minutes” in 1995, that the CIA paid him about $700 a month and that he created FRAPH, while on the CIA payroll. (See Miami Herald, 1 August 2001). According to Constant, the FRAPH had been formed “with encouragement and financial backing from the U.S. Defense Intelligence Agency and the CIA.” (Miami New Times, 26 February 2004)

The Civilian “Opposition” 

The so-called “Democratic Convergence” (DC) is a group of some 200 political organizations, led by former Port-au-Prince mayor Evans Paul.  The “Democratic Convergence” (DC) together with “The Group of 184 Civil Society Organizations” (G-184) has formed a so-called “Democratic Platform of Civil Society Organizations and Opposition Political Parties”.

The Group of 184 (G-184), is headed by Andre (Andy) Apaid, a US citizen of Haitian parents, born in the US. (Haiti Progres, http://www.haiti-progres.com/eng11-12.html ) Andy Apaid owns Alpha Industries, one of Haiti’s largest cheap labor export assembly lines established during the Duvalier era. His sweatshop factories produce textile products and assemble electronic products for a number of US firms including Sperry/Unisys, IBM, Remington and Honeywell. Apaid is the largest industrial employer in Haiti with a workforce of some 4000 workers. Wages paid in Andy Apaid’s factories are as low as 68 cents a day. (Miami Times, 26 Feb 2004). The current minimum wage is of the order of $1.50 a day:

“The U.S.-based National Labor Committee, which first revealed the Kathie Lee Gifford sweat shop scandal, reported several years ago that Apaid’s factories in Haiti’s free trade zone often pay below the minimum wage and that his employees are forced to work 78-hour weeks.” (Daily News, New York, 24 Feb 2004)

Apaid was a firm supporter of the 1991 military coup. Both the Convergence démocratique and the G-184 have links to the FLRN (former  FRAPH death squadrons) headed by Guy Philippe. The FLRN is also known to receive funding from the Haitian business community.

In other words, there is no watertight division between the civilian opposition, which claims to be non-violent and the FLRN paramilitary. The FLRN is collaborating with the so-called “Democratic Platform.”

The Role of the National Endowment for Democracy (NED)

In Haiti, this “civil society opposition” is bankrolled by the National Endowment for Democracy which works hand in glove with the CIA. The Democratic Platform is supported by the International Republican Institute (IRI) , which is an arm of the National Endowment for Democracy (NED). Senator John McCain is Chairman of IRI’s Board of Directors. (See Laura Flynn, Pierre Labossière and Robert Roth, Hidden from the Headlines: The U.S. War Against Haiti, California-based Haiti Action Committee (HAC), http://www.haitiprogres.com/eng11-12.html ).

G-184 leader Andy Apaid was in liaison with Secretary of State Colin Powell in the days prior to the kidnapping and deportation of President Aristide by US forces on February 29. His umbrella organization of elite business organizations and religious NGOs, which is also supported by the International Republican Institute (IRI), receives sizeable amounts of money from the European Union.(http://haitisupport.gn.apc.org/184%20EC.htm ).

It is worth recalling that the NED, (which overseas the IRI) although not formally part of the CIA, performs an important intelligence function within the arena of civilian political parties and NGOs. It was created in 1983, when the CIA was being accused of covertly bribing politicians and setting up phony civil society front organizations. According to Allen Weinstein, who was responsible for setting up the NED during the Reagan Administration: “A lot of what we do today was done covertly 25 years ago by the CIA.” (‘Washington Post’, Sept. 21, 1991). 

The NED channels congressional funds to the four institutes: The International Republican Institute (IRI), the National Democratic Institute for International Affairs (NDI), the Center for International Private Enterprise (CIPE), and the American Center for International Labor Solidarity (ACILS). These organizations are said to be “uniquely qualified to provide technical assistance to aspiring democrats worldwide.” See IRI, http://www.iri.org/history.asp )

In other words, there is a division of tasks between the CIA and the NED. While the CIA provides covert support to armed paramilitary rebel groups and death squadrons, the NED and its four constituent organizations finance “civilian”  political parties and non governmental organizations with a view to instating American “democracy” around the World.

The NED constitutes, so to speak, the CIA’s “civilian arm”. CIA-NED interventions in different part of the World are characterized by a consistent pattern, which is applied in numerous countries.

The NED provided funds to  the “civil society” organizations in Venezuela, which initiated an attempted coup against President Hugo Chavez. In Venezuela it was the “Democratic Coordination”, which was the recipient of NED support; in Haiti it is the “Democratic Convergence” and G-184.

Similarly, in former Yugoslavia, the CIA channeled support to the Kosovo Liberation Army (KLA) (since 1995), a paramilitary group involved in terrorist attacks on the Yugoslav police and military. Meanwhile, the NED through the  “Center for International Private Enterprise” (CIPE) was backing the DOS opposition coalition in Serbia and Montenegro. More specifically, NED was financing the G-17, an opposition group of  economists responsible for formulating (in liaison with the IMF) the DOS coalition’s  “free market” reform platform in the 2000 presidential election, which led to the downfall of Slobodan Milosevic.  

The IMF’s Bitter “Economic Medicine”

The IMF and the World Bank are key players in the process of economic and political destabilization. While carried out under the auspices of an intergovernmental body, the IMF reforms tend to support US strategic and foreign policy objectives.

Based on the so-called “Washington consensus”, IMF austerity and restructuring measures through their devastating impacts, often contribute to triggering social and ethnic strife. IMF reforms have often precipitated the downfall of elected governments. In extreme cases of economic and social dislocation, the IMF’s bitter economic medicine has contributed to the destabilization of entire countries, as occurred in Somalia, Rwanda and Yugoslavia. (See Michel Chossudovsky, The globalization of Poverty and the New World Order, Second Edition, 2003, http://globalresearch.ca/globaloutlook/GofP.html )

The IMF program is a consistent instrument of economic dislocation. The IMF’s reforms contribute to reshaping and downsizing State institutions through drastic austerity measures. The latter are implemented alongside other forms of intervention and political interference, including CIA covert activities in support of rebel paramilitary groups and opposition political parties.

Moreover, so-called “Emergency Recovery” and “Post-conflict” reforms are often introduced under IMF guidance, in the wake of a civil war, a regime change or “a national emergency”.

In Haiti, the IMF sponsored  “free market” reforms have been carried out consistently since the Duvalier era. They have been applied in several stages since the first election of president Aristide in 1990. 

The 1991 military coup, which took place 8 months following Jean Bertrand Aristide’s accession to the presidency, was in part intended to reverse the Aristide government’s progressive reforms and reinstate the neoliberal policy agenda of the Duvalier era.

A former World Bank official Mr. Marc Bazin was appointed Prime minister by the Military Junta in June 1992. In fact, it was the US State Department which sought his appointment.

Bazin had a track record of working for the “Washington consensus.”  In 1983, he had been appointed Finance Minister under the Duvalier regime, In fact he had been recommended to the Finance portfolio by the IMF: “President-for-Life Jean-Claude Duvalier had agreed to the appointment of an IMF nominee, former World Bank official Marc Bazin, as Minister of Finance”. (Mining Annual Review, June, 1983). Bazin, who was considered Washington’s “favorite”, later ran against Aristide in the 1990 presidential elections.

Bazin, was called in by the Military Junta in 1992 to form a so-called  “consensus government”. It is worth noting that it was precisely during Bazin’s term in office as Prime Minister that the political massacres and extra judicial killings by the CIA supported FRAPH death squadrons were unleashed, leading to the killing of more than 4000 civilians. Some 300,000 people became internal refugees,  “thousands more fled across the border to the Dominican Republic, and more than 60,000 took to the high seas” (Statement of Dina Paul Parks, Executive Director, National Coalition for Haitian Rights, Committee on Senate Judiciary, US Senate, Washington DC, 1 October 2002). Meanwhile, the CIA had launched a smear campaign representing Aristide as “mentally unstable” (Boston Globe, 21 Sept 1994).

The 1994 US Military Intervention

Following three years of military rule, the US intervened in 1994, sending in 20,000 occupation troops and “peace-keepers” to Haiti. The US military intervention was not intended to restore democracy. Quite the contrary: it was carried out to prevent a popular insurrection against the military Junta and its neoliberal cohorts.

In other words, the US military occupation was implemented to ensure political continuity.

While the members of the military Junta were sent into exile, the return to constitutional government required compliance to IMF diktats, thereby foreclosing the possibility of a progressive “alternative” to the neoliberal agenda. Moreover, US troops remained in the country until 1999. The Haitian armed forces were disbanded and the US State Department hired a mercenary company DynCorp to provide “technical advice” in restructuring the Haitian National Police (HNP).

“DynCorp has always functioned as a cut-out for Pentagon and CIA covert operations.” (See Jeffrey St. Clair and Alexander Cockburn,  Counterpunch, February 27, 2002, http://www.corpwatch.org/issues/PID.jsp?articleid=1988 ) Under DynCorp advice in Haiti, former Tonton Macoute and Haitian military officers involved in the 1991 Coup d’Etat were brought into the HNP. (See Ken Silverstein, Privatizing War, The Nation, July 28, 1997, http://www.mtholyoke.edu/acad/intrel/silver.htm )

In October 1994, Aristide returned from exile and reintegrated the presidency until the end of his mandate in 1996. “Free market” reformers  were brought into his Cabinet. A new wave of deadly macro-economic policies was adopted under a so-called Emergency Economic Recovery Plan (EERP) “that sought to achieve rapid macroeconomic stabilization, restore public administration, and attend to the most pressing needs.” (See IMF Approves Three-Year ESAF Loan for Haiti, Washington, 1996, http://www.imf.org/external/np/sec/pr/1996/pr9653.htm ).

The restoration of Constitutional government had been negotiated behind closed doors with Haiti’s external creditors. Prior to Aristide’s reinstatement as the country’s president, the new government was obliged to clear the country’s debt arrears with its external creditors. In fact the new loans provided by the  World Bank, the  Inter-American Development Bank (IDB), and the IMF were used to meet Haiti’s obligations with international creditors. Fresh money was used to pay back old debt leading to a spiraling external debt.

Broadly coinciding with the military government, Gross Domestic Product (GDP) declined by 30 percent (1992-1994). With a per capita income of $250 per annum, Haiti is the poorest country in the Western hemisphere and among the poorest in the world. (see World Bank, Haiti: The Challenges of Poverty Reduction, Washington, August 1998, http://lnweb18.worldbank.org/External/lac/lac.nsf/0/8479e9126e3537f0852567ea000fa239/$FILE/Haiti1.doc ).

The World Bank estimates unemployment to be of the order of 60 percent. (A 2000 US Congressional Report estimates it to be as high as 80 percent. See US House of Representatives, Criminal Justice, Drug Policy and Human Resources Subcommittee, FDHC Transcripts, 12 April 2000).

In the wake of three years of military rule and economic decline, there was no “Economic Emergency Recovery” as envisaged under the IMF loan agreement. In fact quite the opposite: The IMF imposed  “stabilization” under the “Recovery” program required further budget cuts in  almost non-existent social sector programs.  A civil service reform program was launched, which consisted in reducing the size of the civil service and the firing of “surplus” State employees. The IMF-World Bank package was in part instrumental in the paralysis of public services, leading to the eventual demise of the entire State system. In a country where health and educational services were virtually nonexistent, the IMF had demanded the lay off of “surplus” teachers and health workers with a view to meeting its target for the budget deficit.   

Washington’s foreign policy initiatives were coordinated with the application of the IMF’s deadly economic medicine. The country had been literally pushed to the brink of economic and social disaster.

The Fate of Haitian Agriculture

More than 75 percent of the Haitian population is engaged in agriculture, producing both food crops for the domestic market as well a number of cash crops for export. Already during the Duvalier era, the peasant economy had been undermined. With the adoption of the IMF-World Bank sponsored trade reforms, the agricultural system, which previously produced food for the local market, had been destabilized. With the lifting of trade barriers, the local market was opened up to the dumping of US agricultural surpluses including rice, sugar and corn, leading to the destruction of the entire peasant economy. Gonaives, which used to be Haiti’s rice basket region, with extensive paddy fields had been precipitated into bankruptcy:

. “By the end of the 1990s Haiti’s local rice production had been reduced by half and rice imports from the US accounted for over half of local rice sales. The local farming population was devastated, and the price of rice rose drastically “ ( See Rob Lyon, Haiti-There is no solution under Capitalism! Socialist Appeal, 24 Feb. 2004, http://cleveland.indymedia.org/news/2004/02/9095.php ).

In matter of a few years, Haiti, a small impoverished country in the Caribbean, had become the World’s fourth largest importer of American rice after Japan, Mexico and Canada.

The Second Wave of IMF Reforms

The presidential elections were scheduled for November 23, 2000. The Clinton Administration had put an embargo on development aid to Haiti in 2000. Barely two weeks prior to the elections, the outgoing administration signed a Letter of Intent with the IMF. Perfect timing: the agreement with the IMF virtually foreclosed from the outset any departure from the neoliberal agenda.

The Minister of Finance had sent the amended budget to the Parliament on December 14th. Donor support was conditional upon its rubber stamp approval by the Legislature. While Aristide had promised to increase the minimum wage, embark on school construction and  literacy programs, the hands of the new government were tied. All major decisions regarding the State budget, the management of the public sector, public investment, privatization, trade and monetary policy had already been taken. They were part of the agreement reached with the IMF on November 6, 2000.

In 2003, the IMF imposed the application of a so-called “flexible price system in fuel”, which immediately triggered an inflationary spiral. The currency was devalued. Petroleum prices increased by about 130 percent in January-February 2003, which served to increase popular resentment against the Aristide government, which had supported the implementation of the IMF economic reforms.

The hike in fuel prices contributed to a 40 percent increase in consumer prices (CPI) in 2002-2003 (See Haiti—Letter of Intent, Memorandum of Economic and Financial Policies, and Technical Memorandum of Understanding, Port-au-Prince, Haiti June 10, 2003, http://www.imf.org/external/np/loi/2003/hti/01/index.htm ). In turn, the IMF had demanded, despite the dramatic increase in the cost of living, a freeze on wages as a means to “controlling inflationary pressures.” The IMF had in fact pressured the government to lower public sector salaries (including those paid to teachers and health workers).  The IMF had also demanded the phasing out of the statutory minimum wage of approximately 25 cents an hour. “Labour market flexibility”, meaning wages paid below the statutory minimum wage would, according to the IMF, contribute to attracting foreign investors. The daily minimum wage was $3.00 in 1994, declining to about $1.50- 1.75 (depending on the gourde-dollar exchange rate) in 2004. 

In an utterly twisted logic, Haiti’s abysmally low wages, which have been part of the IMF-World Bank “cheap labor” policy framework since the 1980s, are viewed as a means to improving the standard of living. In other words, sweatshop conditions in the assembly industries (in a totally unregulated labor market) and forced labor conditions in Haiti’s agricultural plantations are considered by the IMF as a key to achieving economic prosperity, because they “attract foreign investment.” 

The country was in the straightjacket of a spiraling external debt. In a bitter irony, the IMF-World Bank sponsored austerity measures in the social sectors were imposed in a country which has 1,2 medical doctors for 10,000 inhabitants and where the large majority of the population is illiterate. State social services, which were virtually nonexistent during the Duvalier period, have collapsed.

The result of IMF ministrations was a further collapse in purchasing power, which had also affected middle income groups. Meanwhile, interest rates had skyrocketed. In the Northern and Eastern parts of the country, the hikes in fuel prices had led to a virtual paralysis of transportation and public services including water and electricity.

While a humanitarian catastrophe is looming, the collapse of the economy spearheaded by the IMF, had served to boost the popularity of the Democratic Platform, which had accused  Aristide of “economic mismanagement.” Needless to say, the leaders of the Democratic Platform including Andy Apaid –who actually owns the sweatshops– are the main protagonists of the low wage economy.

Applying the Kosovo Model

In February 2003, Washington announced the appointment of James Foley as Ambassador to Haiti . Foley had been a State Department spokesman under the Clinton administration during the war on Kosovo. He previously held a position at NATO headquarters in Brussels. Foley had been sent to Port au Prince in advance of the CIA sponsored operation. He was transferred to Port au Prince in September 2003, from a prestige diplomatic position in Geneva, where he was Deputy Head of Mission to the UN European office.

It is worth recalling Ambassador Foley’s involvement in support of the Kosovo Liberation Army (KLA) in 1999.

Amply documented, the Kosovo Liberation Army (KLA) was financed by drug money and supported by the CIA. ( See Michel Chossudovsky, Kosovo Freedom Fighters Financed by Organized Crime, Covert Action Quarterly, 1999, http://www.heise.de/tp/english/inhalt/co/2743/1.html )  

The KLA had been involved in similar targeted political assassinations and killings of civilians, in the months leading up to the 1999 NATO invasion as well as in its aftermath.  Following the NATO led invasion and occupation of Kosovo, the KLA was transformed into the Kosovo Protection Force (KPF) under UN auspices. Rather than being disarmed to prevent the massacres of civilians, a terrorist organization with links to organized crime and the Balkans drug trade, was granted a legitimate political status.

At the time of the Kosovo war, the current ambassador to Haiti James Foley was in charge of State Department briefings, working closely with his NATO counterpart in Brussels, Jamie Shea. Barely two months before the onslaught of the NATO led war on 24 March 1999, James Foley had called for the “transformation” of the KLA into a respectable political organization:

We want to develop a good relationship with them [the KLA] as they transform themselves into a politically-oriented organization,’ ..`[W]e believe that we have a lot of advice and a lot of help that we can provide to them if they become precisely the kind of political actor we would like to see them become… “If we can help them and they want us to help them in that effort of transformation, I think it’s nothing that anybody can argue with..’ (quoted in the New York Times, 2 February 1999)

In the wake of the invasion “a self-proclaimed Kosovar administration was set up composed of the KLA and the Democratic Union Movement (LBD), a coalition of five opposition parties opposed to Rugova’s Democratic League (LDK). In addition to the position of prime minister, the KLA controlled the ministries of finance, public order and defense.” (Michel Chossudovsky, NATO’s War of Aggression against Yugoslavia, 1999, http://www.globalresearch.ca/articles/CHO309C.html )

The US State Department’s position as conveyed in Foley’s statement was that the KLA would “not be allowed to continue as a military force but would have the chance to move forward in their quest for self government under a ‘different context’” meaning the inauguration of a de facto “narco-democracy” under NATO protection. (Ibid).

With regard to the drug trade, Kosovo and Albania occupy a similar position to that of Haiti: they constitute “a hub” in the transit (transshipment) of narcotics from the Golden Crescent, through Iran and Turkey into Western Europe. While supported by the CIA, Germany’s Bundes Nachrichten Dienst (BND) and NATO, the KLA has links to the Albanian Mafia and criminal syndicates involved in the narcotics trade.( See Michel Chossudovsky, Kosovo Freedom Fighters Financed by Organized Crime, Covert Action Quarterly, 1999, http://www.heise.de/tp/english/inhalt/co/2743/1.html )  

Is this the model for Haiti, as formulated in 1999 by the current US Ambassador to Haiti James Foley?

For the CIA and the State Department the FLRN and Guy Philippe are to Haiti what the KLA and Hashim Thaci are to Kosovo.

In other words, Washington’s design is “regime change”: topple the Lavalas administration and install a compliant US puppet regime, integrated by the Democratic Platform and the self-proclaimed Front pour la libération et la reconstruction nationale (FLRN), whose leaders are former FRAPH and Tonton Macoute terrorists. The latter are slated to integrate a “national unity government” alongside the leaders of the Democratic Convergence and The Group of 184 Civil Society Organizations led by Andy Apaid. More specifically, the FLRN led by Guy Philippe is slated to rebuild the Haitian Armed forces, which were disbanded in 1995.

What is at stake is an eventual power sharing arrangement between the various Opposition groups and the CIA supported Rebels, which have links to the cocaine transit trade from Colombia via Haiti to Florida. The protection of this trade has a bearing on the formation of a new “narco-government”, which will serve US interests.

A bogus (symbolic) disarmament of the Rebels may be contemplated under international supervision, as occurred with the KLA in Kosovo in 2000. The “former terrorists” could then be integrated into the civilian police as well as into the task of “rebuilding” the Haitian Armed forces under US supervision.

What this scenario suggests, is that the Duvalier-era terrorist structures have been restored. A program of civilian killings and political assassinations directed against Lavalas supporter is in fact already underway.

In other words, if Washington were really motivated by humanitarian considerations, why then is it supporting and financing the FRAPH death squadrons? Its objective is not to prevent the massacre of civilians. Modeled on previous CIA led operations (e.g. Guatemala, Indonesia, El Salvador), the FLRN death squadrons have been set loose and are involved in targeted political assassinations of Aristide supporters.

The Narcotics Transshipment Trade

While the real economy had been driven into bankruptcy under the brunt of the IMF reforms, the narcotics transshipment trade continues to flourish.  According to the US Drug Enforcement Administration (DEA), Haiti remains “the major drug trans-shipment country for the entire Caribbean region, funneling huge shipments of cocaine from Colombia to the United States.” (See US House of Representatives, Criminal Justice, Drug Policy and Human Resources Subcommittee, FDHC Transcripts, 12 April 2000). 

It is estimated that  Haiti is now responsible for 14 percent of all the cocaine entering the United States, representing billions of dollars of revenue for organized crime and US financial institutions, which launder vast amounts of dirty money. The global trade in narcotics is estimated to be of the order of 500 billion dollars.

Much of this transshipment trade goes directly to Miami, which also constitutes a haven for the recycling of dirty money into bona fide investments, e.g. in real estate and other related activities.

The evidence confirms that the CIA was protecting this trade during the Duvalier era as well as during the military dictatorship (1991-1994). In 1987, Senator John Kerry as Chairman of the Subcommittee on Narcotics, Terrorism and International Operations of the Senate Foreign Affairs Committee was entrusted with a major investigation, which  focused  on the links between the CIA and the drug trade, including the laundering of drug money to finance armed insurgencies. “The  Kerry Report” published in 1989, while centering its attention on the financing of the Nicaraguan Contra, also included a section on Haiti: 

“Kerry had developed detailed information on drug trafficking by Haiti’s military rulers that led to the indictment in Miami in 1988, of Lt. Col. Jean Paul. The indictment was a major embarrassment to the Haitian military, especially since Paul defiantly refused to surrender to U.S. authorities.. In November 1989, Col. Paul was found dead after he consumed a traditional Haitian good will gift—a bowel of pumpkin soup…

The U.S. senate also heard testimony in 1988 that then interior minister, Gen. Williams Regala, and his DEA liaison officer, protected and supervised cocaine shipments. The testimony also charged the then Haitian military commander Gen. Henry Namphy with accepting bribes from Colombian traffickers in return for landing rights in the mid 1980’s.

It was in 1989 that yet another military coup brought Lt. Gen. Prosper Avril to power… According to a witness before Senator John Kerry’s subcommittee, Avril is in fact a major player in Haiti’s role as a transit point in the cocaine trade.” ( Paul DeRienzo, Haiti’s Nightmare: The Cocaine Coup & The CIA Connection, Spring 1994, http://globalresearch.ca/articles/RIE402A.html )

Jack Blum, who was Kerry’s Special Counsel, points to the complicity of US officials in a 1996 statement to the US Senate Select Committee on Intelligence on Drug Trafficking and the Contra War:

“...In Haiti …  intelligence “sources” of ours in the Haitian military had turned their facilities over to the drug cartels. Instead of putting pressure on the rotten leadership of the military, we defended them. We held our noses and looked the other way as they and their criminal friends in the United States distributed cocaine in Miami, Philadelphia and New, York. (http://www.totse.com/en/politics/central_intelligence_agency/ciacont2.html )

Haiti not only remains at the hub of the transshipment cocaine trade, the latter has grown markedly since the 1980s. The current crisis bears a relationship to Haiti’s role in the drug trade. Washington wants a compliant Haitian government which will protect the drug transshipment routes, out of Colombia through Haiti and into Florida.

The inflow of narco-dollars –which remains the major source of the country’s foreign exchange earnings– are used to service Haiti’s spiraling external debt, thereby also serving the interests of the external creditors.

In this regard, the liberalization of the foreign-exchange market imposed by the IMF has provided (despite the authorities pro forma commitment to combating the drug trade) a convenient avenue for the laundering of narco-dollars in the domestic banking system. The inflow of narco-dollars alongside bona fide “remittances” from Haitians living abroad, are deposited in the commercial banking system and exchanged into local currency. The foreign exchange proceeds of these inflows can then be recycled towards the Treasury where they are used to meet debt servicing obligations.

Haiti, however, reaps a very small percentage of the total foreign exchange proceeds of this lucrative contraband. Most of the revenue resulting from the cocaine transshipment trade accrues to criminal intermediaries in the wholesale and retail narcotics trade, to the intelligence agencies which protect the drug trade as well as to the financial and banking institutions where the proceeds of this criminal activity are laundered. 

The narco-dollars are also channeled into “private banking” accounts in numerous offshore banking havens. (These havens are controlled by the large Western banks and financial institutions). Drug money is also invested in a number of financial instruments including hedge funds and stock market transactions. The major Wall Street and European banks and stock brokerage firms launder billions of dollars resulting from the trade in narcotics.

Moreover, the expansion of the dollar denominated money supply by the Federal Reserve System , including the printing of billions of dollars of US dollar notes for the purposes of narco-transactions constitutes profit for the Federal Reserve and its constituent private banking institutions of which the most important is the New York Federal Reserve Bank. See (Jeffrey Steinberg, Dope, Inc. Is $600 Billion and Growing, Executive Intelligence Review, 14 Dec 2001, http://www.larouchepub.com/other/2001/2848dope_money.html

In other words, the Wall Street financial establishment, which plays a behind the scenes role in the formulation of US foreign policy, has a vested interest in retaining the Haiti transshipment trade, while installing a reliable “narco-democracy” in Port-au-Prince, which will effectively protect the transshipment routes.

It should be noted that since the advent of the Euro as a global currency, a significant share of the narcotics trade is now conducted in Euro rather than US dollars. In other words, the Euro and the dollar are competing narco-currencies.

The Latin American cocaine trade –including the transshipment trade through Haiti– is largely conducted in US dollars.  This shift out of dollar denominated narco-transactions, which undermines the hegemony of the US dollar as a global currency, largely pertains to the Middle East, Central Asian and the Southern European drug routes.

Media Manipulation

In the weeks leading up to the Coup d’Etat, the media has largely focused its attention on the pro-Aristide “armed gangs” and “thugs”,  without providing an understanding of the role of the FLRN Rebels.

Deafening silence: not a word was mentioned in official statements and UN resolutions regarding the nature of the FLRN.  This should come as no surprise: the US Ambassador to the UN  (the man who sits on the UN Security Council) John Negroponte.  played a key role in the CIA supported Honduran death squadrons in the 1980s when he was US ambassador to Honduras. (See San Francisco Examiner, 20 Oct 2001  http://www.flora.org/mai/forum/31397 )

The FLRN rebels are extremely well equipped and trained forces. The Haitian people know who they are. They are Tonton Macoute of the Duvalier era and former FRAPH assassins.

The Western media is mute on the issue, blaming the violence on President Aristide. When it acknowledges that the Liberation Army is composed of death squadrons, it fails to examine the broader implications of its statements and that these death squadrons are a creation of the CIA and the Defense Intelligence Agency.

The New York Times has acknowledged that the “non violent” civil society opposition is in fact collaborating with the death squadrons, “accused of killing thousands”, but all this is described as “accidental”. No historical understanding is provided. Who are these death squadron leaders?  All we are told is that they have established an “alliance” with the “non-violent” good guys who belong to the “political opposition”. And it is all for a good and worthy cause, which is to remove the elected president and “restore democracy”: 

“As Haiti’s crisis lurches toward civil war, a tangled web of alliances, some of them accidental, has emerged. It has linked the interests of a political opposition movement that has embraced nonviolence to a group of insurgents that includes a former leader of death squads accused of killing thousands, a former police chief accused of plotting a coup and a ruthless gang once aligned with Mr. Aristide that has now turned against him. Given their varied origins, those arrayed against Mr. Aristide are hardly unified, though they all share an ardent wish to see him removed from power.” (New York Times,  26 Feb 2004)

There is nothing spontaneous or “accidental” in the rebel attacks or in the “alliance” between the leader of the death squadrons Guy Philippe and Andy Apaid, owner of the largest industrial sweatshop in Haiti and leader of the G-184. 

The armed rebellion was part of a carefully planned military-intelligence operation. The Armed Forces of the Dominican Republic had detected guerilla training camps inside the Dominican Republic on the Northeast Haitian-Dominican border. ( El ejército dominicano informó a Aristide sobre los entrenamientos rebeldes en la frontera, El Caribe, 27 Feb. 2004, http://www.elcaribe.com.do/articulo_multimedios.aspx?id=2645&guid=AB38144D39B24C6FBA4213AC40DD3A01&Seccion=64 )

Both the armed rebels and their civilian “non-violent” counterparts were involved in the plot to unseat the president. G-184 leader Andre Apaid was in touch with Colin Powell in the weeks leading up to the overthrow of Aristide;  Guy Philippe and “Toto” Emmanuel Constant have links to the CIA; there are indications that Rebel Commander Guy Philippe and the political leader of the Revolutionary Artibonite Resistance Front Winter Etienne were in liaison with US officials. (See BBC, 27 Feb 2004, http://news.bbc.co.uk/2/hi/americas/3496690.stm ).

While the US had repeatedly stated that it will uphold Constitutional government, the replacement of Aristide by a more compliant individual had always been part of the Bush Administration’s agenda.

On Feb 20, US Ambassador James Foley called in a team of four military experts from the U.S. Southern Command, based in Miami. Officially their mandate was “to assess threats to the embassy and its personnel.” (Seattle Times, 20 Feb 2004). US Special Forces are already in the country. Washington had announced that three US naval vessels “have been put on standby to go to Haiti as a precautionary measure”. The Saipan is equipped with Vertical takeoff Harrier fighters and attack helicopters. The other two vessels are the Oak Hill and Trenton.  Some 2,200 U.S. Marines from the 24th Marine Expeditionary Unit, at Camp Lejeune, N.C. could be deployed to Haiti at short notice, according to Washington.

With the departure of President Aristide, Washington, however, has no intention of disarming its proxy rebel paramilitary army, which is now slated to play a role in the “transition”. In other words, the Bush administration will not act to prevent the occurrence of killings and political assassinations of Lavalas and Aristide supporters in the wake of the president’s kidnapping and deportation.

Needless to say, the Western media has not in the least analyzed the historical background of the Haitian crisis. The role played by the CIA has not been mentioned. The so-called “international community”, which claims to be committed to governance and democracy, has turned a blind eye to the killings of civilians by a US sponsored paramilitary army. The “rebel leaders”, who were commanders in the FRAPH death squadrons in the 1990s, are now being upheld by the US media as bona fide opposition spokesmen. Meanwhile, the legitimacy of the former elected president is questioned because he is said to be responsible for “a worsening economic and social situation.” 

The worsening economic and social situation is largely attributable to the devastating economic reforms imposed by the IMF since the  1980s. The restoration of Constitutional government in 1994 was conditional upon the acceptance of the IMF’s deadly economic therapy, which in turn foreclosed the possibility of a meaningful democracy. High ranking government officials respectively within the Andre Preval and Jean Bertrand Aristide governments were indeed compliant with IMF diktats. Despite this compliance, Aristide had been “blacklisted” and demonized by Washington.  

The Militarization of the Caribbean Basin

Washington seeks to reinstate Haiti as a full-fledged US colony, with all the appearances of a functioning democracy. The objective is to impose a puppet regime in Port-au-Prince and establish a permanent US military presence in Haiti. 

The US Administration ultimately seeks to militarize the Caribbean basin.

The island of Hispaniola is a gateway to the Caribbean basin, strategically located between Cuba to the North West and Venezuela to the South.  The militarization of the island, with the establishment of US military bases, is not only intended to put political pressure on Cuba and Venezuela, it is also geared towards the protection of the multibillion dollar narcotics transshipment trade through Haiti, from production sites in Colombia, Peru and Bolivia.

The militarisation of the Caribbean basin is, in some regards, similar to that imposed by Washington on the Andean Region of South America under “Plan Colombia’, renamed “The Andean Initiative”. The latter constitutes the basis for the militarisation of oil and gas wells, as well as pipeline routes and transportation corridors. It also protects the narcotics trade.

Beneath the ‘Fair Trade’ Label, Union-Busting Lurks

A new International Labor Rights Forum report claims that Theo Chocolate's management practices contradict its trendy "fair trade" image. (TheLivingRoominKenmore / Flickr / Creative CommonSince the 1990s, an unprecedented--but sometimes uneasy--alliance of activists and industry has tried to braid together business and humanitarianism under the label of “fair trade,” a system of standards aimed at injecting ethical checks into the sprawling global trade structure. Today, fair-trade branded coffees, skincare products and designer chocolates are hot commodities. But beneath the label lie ideological tensions over what “fair” means.

According to the International Labor Rights Forum (ILRF), the fair-trade certification system is riddled with loopholes that enable corporations to suppress labor rights and union activism. The ILRF’s new report focuses on the Seattle-based Theo Chocolate and its fair trade certification body, Switzerland-based Institute for Market Ecology (IMO). According to workers interviewed for the report, a campaign to form a union affiliated with the Teamsters in early 2010 at Theo's Seattle factory was met with discrimination, intimidation and anti-union propaganda.

A campaign to discourage unionization would not be unusual in a typical U.S. workplace, but the ILRF has called out Theo Chocolate for simultaneously deterring unionization in its workplace while publicizing itself as a “fair trade” brand. ILRF also criticizes Theo’s much-touted partnership with the IMO in a certification system designed to ensure compliance with fair trade standards—its Fair for Life certification program. The ILRF’s report grew out of its work with the Teamsters to help Theo workers complain to the IMO about the management's alleged anti-union actions.

According to the ILRF, in early 2010, a group of Theo workers sought to form a union to address problems they had discussed among themselves, including “safety issues in the factory, short notice shift and furlough changes, untenable workloads, low wages... and suspicion of wage discrimination against non-English speaking workers.” In the end, the report says, 19 out of 30 eligible workers signed cards affirming their approval of union representation. In a company like Theo, with a brand built on a hip, youthful image of global social responsibility, workers might well have expected that such organizing would be welcomed.

Instead, according to the report, Theo’s management fought to keep out the union through tried-and-true pressure strategies, including hiring a consultant to aid with union-deterrence efforts. One psychological tactic described in the report was painting unionization as an act of grave disloyalty:

Workers were made to feel that forming a union would ruin the gains that fair trade principles had made for cocoa farmers supplying Theo its cocoa.... A senior manager told one union supporter, “You can’t imagine how hard life is in Africa—your situation pales in comparison to theirs.”

True, Theo’s working conditions may be a cut above your average cocoa plantation. But according to testimonies in the ILRF report, the company still failed to address the supposedly pettier complaints that employees raised with management. The report criticized the company's attempt to resolve the conflicts by setting up non-union mediations that seemed aimed primarily at preempting the union, not comprehensively addressing workplace grievances.

The ILRF’s report focuses on the role of the IMO and the dubious integrity of fair trade certification when it comes to workplace fairness. When the ILRF and the Teamsters brought workers’ allegations of union-busting to the IMO, they found there was no effective way to seek fair recourse. Despite explicit provisions on freedom of association in the Fair for Life code, the ILRF says, “IMO’s certification of Theo Chocolate provided no independent mechanism for workers to challenge IMO’s flawed investigation of Theo’s violations of workers’ human rights.”

According to private email correspondence provided to In These Times, the IMO recently indicated it was open to reviewing some provisions of Fair for Life, without saying whether it would consider major changes in accordance with ILRF’s concerns. Underscoring some of the intrinsic conflicts highlighted by labor activists, the IMO referred to “confidentiality” protocols for client companies, which complicated issues of transparency in the auditing process.

Theo has criticized the report and its allegations as unfair and unfounded. In a statement sent to In These Times, Vice President of Sales and Marketing Debra Music argued that Theo honors labor rights, pointing out that in October 2010 (well after the initial pro-union vote described in the ILRF report), “our employees initiated, drafted, and distributed a petition indicating they did not want to unionize.” According to Music, this petition (like the management) denied “[a]ccusations made about Theo’s reaction to the proposed introduction of a union" and claimed that when employees met to discuss the issue, "it was made clear that the majority of [workers] were not interested in a Teamsters union.” (Statement posted here.)

To the ILRF, Theo’s labor dispute represents a broader dilemma in the fair trade world—a lack of attention to the labor rights of hired workers, who play a significant role in sectors targeted by global fair-trade campaigns. Because the fair trade movement was born from initiatives to promote small cooperative farms in the Global South, the system has historically been oriented toward traditional grassroots agriculture, rather than wage labor or industrialized workplaces.

Now a deeper controversy is brewing within the movement over dealing with issues of equity and rights for hired labor, which turns on the authority and scope of third-party certification programs.

The ILRF recommends that the fair-trade community partner with groups in the labor movement to set up an independent system for pursuing recourse against fair trade violators, which might operate parallel to legal structures like the National Labor Relations Board. The report also points out that the industry and its auditors must “identify, recognize and address the inherent conflicts of interest that arise when a fair trade certifier or auditor, working with or paid by the employer, is also the judge between a worker-management dispute about worker organizing or collective bargaining.”

"Fair trade is meant to be a social movement,” ILRF Executive Director Judy Gearhart tells ITT. “It's therefore looked [toward] to be answerable to the poorest individuals meant to benefit from [the] system."

As a consumer-driven effort to draw an ethical baseline in global commerce, fair trade certification alone can’t answer all of the labor and economic justice issues that corrode industrial supply chains. But the principles of fairness in trade should take us deeper into a global conversation about what we value as consumers and as workers, and whether the labels we choose reflect those ideas.

The Pain In Spain Falls Mainly… Everywhere

Authored by Mint's Bill Blain,

European GDP and Spain – where it’s going?

Europe Q4 GDP declines 0.6%, and economy contracts 0.9%. No one should be surprised at the latest disappointing European GDP numbers, but they hide important trends – Germany’s Q4 0.6% GDP drop was worse than expected, although the expectations remain for growth later this year. France is going to miss the 3% GDP deficit target because of low growth. For the rest of Europe the numbers were generally worse than expected – and no one credible is talking about significant growth prospects. (Sure, the Euro Elites are telling us they see growth tomorrow.. but tomorrow is always tomorrow..)

The poor GDP numbers are likely to have significant knock-on effects in terms of confidence and the Euro – sure enough European Stocks are lower. France GDP was down 0.3%, Netherlands down 0.2%. And the critical peripheral worries: Italy down 0.9% in Q4. Spain Q4 contracted by 0.7% when its number was released in Jan.

Of course, slowing economies would normally be good news for bonds – rates should fall as the need for economic stimulus rises. True for Germany, but since the rest of Europe moves in step with Germany… until it doesn’t, and renewed doubts about the Euro economies take over!

Are we likely to see another round of Euro Peripheral weakness?

The difference now is NO-ONE really believes the Euro is going to break up. There are some doubts about Italy as the political tensions rise, and the Euro Elites face up to the implications of a Berlusconi resurgence. He’s back, and this time he’s serious... Get over it.

Let’s look at Spain. I’m assured there is nothing to worry about. The country is determined to stick with the programme and stay within the Euro. Sure, there have been some wobbles in terms of agreeing GDP/deficit targets, bailing out the banks, and refusing to be handcuffed to OMT shackles.

Let’s go back to 26th July 2012, the day Draghi promised to “do what is needed to preserve the Euro”... If you bought Spain that July day, you are sitting pretty. 5-year Spain CDS rallied from 642 to 244 in Jan. Spain’s worst of a bad bank bunch, Bankia, has seen its senior CDS tighten from 1575 in July to 709 currently! Spain stocks, IBEX, is up 38%.

What’s not to like..? Think hard about that one.

As we all know, the moment to exit a position is when you first think about it... not when you have to. So if you are bought into the Spain rally, let me ask... what’s the next move? Hold for now, hold to maturity, or sell?

What are the risks for Spain? We have few doubts it will stay in the Euro. If needed, it will get a bailout in whatever form the ECB can make acceptable -  unlimited bond purchases and/or direct cash injections if markets close. Anything will be done to avoid an embarrassing default. The risks are more subtle – economic and the long-term consequences of economics.

I spent yesterday’s quieter moments reading through rafts of Spain stuff – particularly some excellent stuff from David Watts at CreditSights. I generally ignore most of the bank analysis – it’s ever so slightly biased and as turgid as over-ripe halibut. No bank is going to write negative Spain comment when there are potential Spain bond mandates to be won.

My current interest in Spain was pricked by Blackrock CEO Larry Fink’s comments to ABC following a visit to Madrid. He reckons “Spain will be a star economy if reforms continue”  but it still faces 3-4 years of hard adjustment. Hmm.. so Blackrock has become establishment – agreeing with that the Spanish claims of an: “unprecedented fiscal consolidation effort”. However, there was nothing in the press release to back up any of Fink’s claims with real data or trends.

Data and graphs are the territory of my Macro-Man – Martin Malone - but he’s currently glad-handing in Japan, so let me present my own Spain snapshot:

  • The government is extremely unpopular – that’s why the apparently faked attempts to frame them as slush fund recipients had limited effect. Rajoy et al are already marginally less welcome than Ebola fever.
  • The government still has many unpopular spending decisions to take. Domestic tension remains high and with still rising unemployment, it could get worse. Which could spawn yet more anti-centralisation from the regions.
  • Lowering Spain wages has made Spain more “competitive”, but only in European wage terms.
  • Sadly, Spain’s only competitive advantage is lower wages: Spain isn’t a leader in the value-added factors of mature European economies; like cutting edge technology, unmatched engineering prowess, world class design, financial innovation or even sophisticated marketing. There are exceptions; Spain’s top company Zara is successfully selling middle market clothing on a pile ‘em high, sell ‘em cheap basis. Otherwise, Spanish manufacturing is basically making things cheaper than others.
  • While European manufacturers may well be looking to move production to Spain because of low wages, it doesn’t help the strong Euro makes the whole country uncompetitive  on the world stage, and that European consumers aint consuming very much.
  • The improvements in Spain do mean it’s well placed in the short-term if… if… there is a recovery. Long-term prospects look worse with the university educated future generation now working as barista’s in London or anywhere outside Europe, and little being done to invest in a technology driven future.
  • Emigration of the best and brightest adds to the demographic time bomb ticking in the Spain pension funds.
  • Although the 25% plus Spain unemployment probably underestimates the black economy – it’s a simple fact the whole Spanish private sector is massively overleveraged, especially as family heads are losing their jobs. Falling wages and job losses increase the burden. Banks remain massively vulnerable to rising retail distress.
  • All the above without even mentioning fact the economy is burdened by millions of unsellable homes with no one likely to buy. I really don’t understand how SAREB (the Spanish bad bank) is apparently selling property 30% above market.. If I don’t understand it.. my default position is its dodgy.
  • Spanish banks may be funding again.. whoopee.. But that’s not a factor of better conditions or outlook – it’s entirely a factor of the scramble for yield rather than better Spain financial fundamentals.

When I ask the question.. what’s not to like about Spain..? Well actually quite a lot.. What are the positives. Well, turning to Mr Fink, the Euro Elites and the IMF, they all praise Spain for making great progress.. In what way? Last year the Spaniards told us they were targeting a 6.3% Deficit GDP. Everyone harrumphed and whined, but had little choice but to accept the number.

Guess what. Spain will miss that number by a significant margin. Now they say 7.4% is likely due to the cost of bank bailouts. But as CreditSights point out, they are probably underestimating the true impact of the 3.5% GDP cost of the bank bailouts. Even the Spain MOF predicts a 8.1% deficit number!

CreditSights suggests a significant Deficit miss will undermine Spain’s borrowing position. They say investors should lighten up on Spain because the likely deficit miss is one sided: if the number was hit, it won’t move market higher, but on a miss there will likely be a sell off – particularly at the long end.

Perhaps... but I’d add Spain’s borrowing position is only sustained by the Draghi promise of OMT support. What if that proves to be just talk and illusion? If Spain is so obviously failing to control its deficit, name a German politician who will be keen to allow them access to emergency OMT funding if there is a reversal? German election later this year.

One Key CreditSights soundbite: “Spain last ran a balanced budget in Q1 2008 when growth was 2%. Now the economy is shrinking 1.7% on an annualised basis.” That’s a massive amount of catch up to be achieved.

The real danger in Spain is long-term. Thus far the government has contained youth unemployment and social unrest. But long-term how will that fare as Spain comes to realise that the only future for it within the Euro is to remain the most competitive production country by dint of lower wages. That’s hardly an attractive option within the United States of Europe – being little more than low-paid arbiters for Corporate Germany.

We are looking at another 3-4 years of economic misery just to get the Spanish economy back into the EU’s 3% deficit/GDP groove. Then we’re looking at on-going relative poverty for Spanish workers within Europe. At some point... something has to give...

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Immigration Reform Prevents Employer Abuse

Oscar came to the United States at the age of 16 to work. There were no jobs for him in his native Guatemala, and he felt obligated to help support his parents.

He was lured across borders by the promise of work. He believed, as so many immigrants do, that there would be a job for him in America.

For the past five years, he has worked at a Los Angeles car wash that cheated him and other immigrant workers out of pay, refused protective gear and even denied drinking water.

Employers such as car washes, corporate farms, construction companies and lawn care businesses entice immigrants into the United States by providing jobs with no questions asked. They lure undocumented workers in, and then abuse them with impunity. This endangers all workers because the low-wage, hazardous conditions undocumented workers endure can become the standard. This is especially true in bad economic times. More border security is fine. But to ensure safe, family-supporting jobs remain the norm, America must hold employers to account for baiting immigrants.

Like many immigrants, Oscar, now 29, stayed with a relative when he arrived in America. At first, he found work delivering cosmetics. The company treated him decently but laid him off when business declined. That’s when he got the job at Vermont Car Wash in L.A.

The owner promised minimum wage, which was $8 an hour then in California. But when Oscar received his first paycheck, he discovered Vermont paid him $7 an hour and compensated him for only about half the hours he worked.

And that was good treatment according to two studies and an investigation by the Los Angeles Times. The L.A. Times inquiry in 2008, which was about the time Oscar began at Vermont, found the car washes “brazenly violate basic labor and immigration laws with little risk of penalty.” Some car wash companies gave workers only tips, so they were paid between $10 and $30 a day. Others paid as little as $1.63 an hour.

The University of Illinois at Chicago Labor Education Program investigated car washes in the Windy City and found they ripped off their mostly immigrant work force by about $2.2 million a year. Nearly a quarter of the workers subsisted below the federal level for extreme poverty – even after they worked more than 40 hours a week. Eighty percent received no protective equipment and many were cut, suffered rashes or experienced nausea and dizziness from the car wash chemicals. Two-thirds did not have access to clean or free drinking water at work.

In addition, a 2008 study by three non-profit organizations, “Broken Laws, Unprotected Workers,” found employers who paid low wages in New York City, L.A. and Chicago routinely violated labor laws, committed wage theft and exposed workers to hazards. The workers included undocumented immigrants but native Americans as well.

The L.A. Times investigation and the studies expose several causes for the exploitation. One is insufficient enforcement. Another is the vulnerability of undocumented immigrants.

When workers like Oscar complained, car wash owners threatened them. It’s not an empty threat. Last May, after Palermo’s Pizza factory workers in Milwaukee signed a petition to form a union, the company fired 89 workers, claiming they were undocumented and refusing to wait for documentation.

Oscar says when he asked his co-workers about the wage theft, they said the owner told them that he could do whatever he wanted because the workers had no rights.

Workers don’t really have rights unless they are enforced. Non-profit groups and unions in New York, Illinois and California have helped some workers attain their rights. They’ve filed numerous lawsuits against car wash companies and badgered state agencies to cite companies for violations. For example, last May, with the help of community groups, immigrant workers at a Bronx car wash sued and four workers at an LA car wash filed a class action suit for unpaid wages and other abuses.

In January of 2012, the California state attorney general’s office secured a $1 million settlement from eight car wash companies for wage theft. Last July, a New York judge sentenced a Bronx car wash owner to 32 days in jail and ordered him to pay $150,000 to workers denied minimum wage.

A little less than two years ago, Oscar and the workers at the Vermont Car Wash got help from the Community Labor Environmental Action Network (CLEAN) and the United Steelworkers (USW) union. Oscar said a co-worker told him that the USW could help them get paid their rightful wages if they organized and bargained collectively with the car wash owner. Oscar, who is unmarried and has no children, agreed to meet with an organizer because he was receiving so little in wages that he was having a hard time supporting himself and sending money to his parents. He explained:

“I couldn’t put up any longer with what the owner was doing.”

When a group of workers told the owner they wanted a union, Oscar thinks the owner was relieved that they weren’t filing a costly lawsuit. The owner agreed a year ago to recognize the union, and Oscar and his co-workers now receive the correct pay. They get breaks, drinking water and protective gear like rubber gloves. The USW represents workers at three L.A. car washes now, and the Retail Wholesale and Department Store Union represents workers at five in New York City.

Oscar said he believes that if no path to citizenship is provided to the 11 million undocumented immigrants already in America, business owners will feel free to continue to mistreat workers, documented and undocumented, because unions and community groups won’t be able to help them all.

President Obama has proposed new legislation that would provide a path to citizenship and further secure the boarders, but, critically, it would also crack down on companies that lure undocumented workers into the country by illegally hiring them.

That is essential to secure the dignity of all workers.

Weak Economy, Wrong Debate

What is it with this economy? The Dow hits 14,000, the unemployment rate rises in January, and GDP actually falls in the last three months of 2012. Could it be that what's good for the stock market is bad for the rest of the economy? Could it be that captains of industry like weak labor markets, high unemployment, low wages -- and a Federal Reserve that has to use ultra-low interest rates to try to keep things afloat?Getty

Well, yes, but the story is also richer and more complicated.

Basically, the economy is still weighted down by the legacy effects of the financial collapse of 2008 -- mortgages that exceed the value of homes, students staggering under the weight of college loans in a dismal job market, retired people for whom low interest rates mean low returns on savings, corporations looting pensions, and above all flat or declining wages.

It all adds up to a very weak recovery -- but the common element is insufficient purchasing power on the part of ordinary families. And this is about to be compounded by Fiscal Cliff II, namely Congress and the president deciding that what the economy really needs is a bracing dose of deflationary budget cuts.

What exactly happened in the last quarter of 2012 to cause the recovery not just to stall -- but to actually shrink the economy by a tenth of a point? According to the Commerce Department, there were multiple factors.

Exports slumped, business purchases to replenish inventory slowed, but here is the sentence that screams out: "Real federal government consumption expenditures and gross investment decreased 15.0 percent in the fourth quarter, in contrast to an increase of 9.5 percent in the third." In other words, cut government spending and you undermine a fragile recovery.

There was a little good news amid the bad news. Revised numbers indicate that the economy generated jobs in 2012 at a rate of about 32,000 a month more than first reported. But hidden unemployment -- part timers not finding full-time jobs -- rose again in January and wages have remained basically flat. The economy's gains still go mainly to the very top.

Seemingly, President Obama has moved off the deficit-hawk kick that marked his posture in 2010 when he appointed the Bowles-Simpson Commission, and 2011 when he agreed to a budget deal with massive cuts and automatic triggers adding up to about $4 trillion in deficit cuts over a decade.

Seemingly, too, the corporate-led "Fix the Debt Campaign" -- millionaires and billionaires telling the rest of America to tighten its belt for the greater good -- isn't getting a great deal of traction. Our friend Paul Krugman last week wrote a column, "Deficit Hawks Down," saying that we should pity this crowd -- for all the money they've spent, they keep being contradicted by events.

But despite the sheer unreality of their claims, the austerity lobby keeps winning by defining the terms of debate. Nearly everyone, right, center and left, is arguing about the economic recovery in terms of what the debt-to-GDP ratio should be in 2023.

That is the wrong question. The right question is: how do we get a stronger recovery going now? With robust growth, especially of wages, the debt ratio will come down. Excessive budget cutting in a depressed economy slows growth and worsens the debt ratio, but with the exception of Krugman, Joseph Stiglitz, and your faithful blogger, that's not a point widely made in the debate. (Let's also credit Jamie Galbraith, Bob Reich, Larry Mishel and Dean Baker.)

But our gang doesn't get invited into the rooms where deals are cut, and isn't having much influence on what passes for debate among what Krugman calls Very Serious People, namely the debate among Obama, the Republicans, the Wall Streeters, and the suite of deficit-hawk lobbies underwritten by billionaire Pete Peterson.

In 1945, the debt ratio was much larger than today -- 120 percent of GDP versus today's 72 percent. But anyone in 1945 urging that the main economic issue was the debt ratio in 1955 would have been laughed out of town. The main issue was how to re-employ 12 million returning G.I.s

Yet consider what passes for debate today.

President Obama, newly in deficit-dove mode, declares that we have achieved so much deficit reduction that we need "only" about another $1.5 trillion in deficit reduction over a decade to stabilize the debt-to-GDP ratio by 2022. Obama's budget actually cuts net public investment to achieve that goal. It cuts public investment!

Then, the center-left Center on Budget and Policy Priorities re-calculates the numbers, and pronounces that it will really take "only" $1.2 trillion in deficit cuts over a decade (counting saved interest costs) to stabilize the debt ratio.

Whoopee, only $120 billion a year in budget cuts a year and we hit the target.

And then the progressive EPI re-computes the data yet again, and figures that we can get to the holy grail of a stable debt ratio with only $670 billion in further deficit cuts -- and very helpfully challenges the entire premise that deficit reduction is the road to recovery.

Uh-oh -- the center-right is not amused.

The Pete-Peterson-funded Committee for a Responsible Federal Budget takes offense and warns that we really need another $2.2 trillion in new deficit cuts.

Rudy Penner, director of the CBO in the Reagan era, declares stabilizing the debt ratio at its current level of about 70 percent is not enough.

In this priceless twist of economic logic, Penner warns:

"Imagine facing the next recession with a debt-GDP ratio already above 70 percent. It is almost certain that we shall have another slump before 2022."

Yes indeed, Rudy, if we listen to folks like you and follow a fiscal policy of slash-and-burn, we are guaranteed to have another slump between now and 2022 -- quite possibly a continuing slump for the entire decade.

People: this is the wrong debate. Has any of these worthies taken a macro-economics course? If you slow down growth by excessive belt-tightening, tax revenues fall and the deficit goes up. You can't just assume that very dollar of deficit reduction equals a dollar credited to reduction of the debt ratio.

For budget wonks, this very useful piece by EPI's Ethan Pollack lays it all out.

President Obama should read every word of this.

In what passes for the debate about the budget and the economy, two other details keep being overlooked: The main driver of rising deficits over the long term is Medicare. You fix Medicare by reforming the larger health system of which it is a part, not by sandbagging the rest of the budget and economy.

And speaking of economic contraction, one other key item somehow got lost in the shuffle. As part of President Obama's tax deal with House Speaker John Boehner raising taxes "only" on the richest one percent, America's working people got a big tax increase when both parties agreed to let the two-point cut in the payroll tax expire.

So since January 1, wage and salary workers have had two percent less income to spend. That's a huge hit -- as if every American worker suddenly took a two percent pay cut. The tax deal amounted to a big tax increase on the bottom 99 -- terrible policy distributively, terrible policy macro-economically.

(Some liberals worried about the drain of the two-point tax break on the Social Security trust funds, but that money should be made whole by transfers from general revenue; reducing the burden of the regressive payroll tax was a huge gain for progressivity.)

In sum: unless we stop obsessing on cutting the debt ratio as an end in itself, we are condemned to a decade of economic underperformance.

President Obama got some nice political lift from his re-election and his new, more assertive tone. But he (and the economy) are still dragged down by the undertow of bad economic assumptions that continue to contour the debate.

© 2012 The Huffington Post

Robert Kuttner

Robert Kuttner is co-founder and co-editor of The American Prospect magazine, as well as a Distinguished Senior Fellow of the think tank Demos. He was a longtime columnist for Business Week, and continues to write columns in the Boston Globe and Huffington Post. He is the author of A Presidency in Peril: The Inside Story of Obama's Promise, Wall Street's Power, and the Struggle to Control our Economic Future, Obama's Challenge, and other books.

Weak Economy, Wrong Debate

What is it with this economy? The Dow hits 14,000, the unemployment rate rises in January, and GDP actually falls in the last three months of 2012. Could it be that what's good for the stock market is bad for the rest of the economy? Could it be that captains of industry like weak labor markets, high unemployment, low wages -- and a Federal Reserve that has to use ultra-low interest rates to try to keep things afloat?Getty

Well, yes, but the story is also richer and more complicated.

Basically, the economy is still weighted down by the legacy effects of the financial collapse of 2008 -- mortgages that exceed the value of homes, students staggering under the weight of college loans in a dismal job market, retired people for whom low interest rates mean low returns on savings, corporations looting pensions, and above all flat or declining wages.

It all adds up to a very weak recovery -- but the common element is insufficient purchasing power on the part of ordinary families. And this is about to be compounded by Fiscal Cliff II, namely Congress and the president deciding that what the economy really needs is a bracing dose of deflationary budget cuts.

What exactly happened in the last quarter of 2012 to cause the recovery not just to stall -- but to actually shrink the economy by a tenth of a point? According to the Commerce Department, there were multiple factors.

Exports slumped, business purchases to replenish inventory slowed, but here is the sentence that screams out: "Real federal government consumption expenditures and gross investment decreased 15.0 percent in the fourth quarter, in contrast to an increase of 9.5 percent in the third." In other words, cut government spending and you undermine a fragile recovery.

There was a little good news amid the bad news. Revised numbers indicate that the economy generated jobs in 2012 at a rate of about 32,000 a month more than first reported. But hidden unemployment -- part timers not finding full-time jobs -- rose again in January and wages have remained basically flat. The economy's gains still go mainly to the very top.

Seemingly, President Obama has moved off the deficit-hawk kick that marked his posture in 2010 when he appointed the Bowles-Simpson Commission, and 2011 when he agreed to a budget deal with massive cuts and automatic triggers adding up to about $4 trillion in deficit cuts over a decade.

Seemingly, too, the corporate-led "Fix the Debt Campaign" -- millionaires and billionaires telling the rest of America to tighten its belt for the greater good -- isn't getting a great deal of traction. Our friend Paul Krugman last week wrote a column, "Deficit Hawks Down," saying that we should pity this crowd -- for all the money they've spent, they keep being contradicted by events.

But despite the sheer unreality of their claims, the austerity lobby keeps winning by defining the terms of debate. Nearly everyone, right, center and left, is arguing about the economic recovery in terms of what the debt-to-GDP ratio should be in 2023.

That is the wrong question. The right question is: how do we get a stronger recovery going now? With robust growth, especially of wages, the debt ratio will come down. Excessive budget cutting in a depressed economy slows growth and worsens the debt ratio, but with the exception of Krugman, Joseph Stiglitz, and your faithful blogger, that's not a point widely made in the debate. (Let's also credit Jamie Galbraith, Bob Reich, Larry Mishel and Dean Baker.)

But our gang doesn't get invited into the rooms where deals are cut, and isn't having much influence on what passes for debate among what Krugman calls Very Serious People, namely the debate among Obama, the Republicans, the Wall Streeters, and the suite of deficit-hawk lobbies underwritten by billionaire Pete Peterson.

In 1945, the debt ratio was much larger than today -- 120 percent of GDP versus today's 72 percent. But anyone in 1945 urging that the main economic issue was the debt ratio in 1955 would have been laughed out of town. The main issue was how to re-employ 12 million returning G.I.s

Yet consider what passes for debate today.

President Obama, newly in deficit-dove mode, declares that we have achieved so much deficit reduction that we need "only" about another $1.5 trillion in deficit reduction over a decade to stabilize the debt-to-GDP ratio by 2022. Obama's budget actually cuts net public investment to achieve that goal. It cuts public investment!

Then, the center-left Center on Budget and Policy Priorities re-calculates the numbers, and pronounces that it will really take "only" $1.2 trillion in deficit cuts over a decade (counting saved interest costs) to stabilize the debt ratio.

Whoopee, only $120 billion a year in budget cuts a year and we hit the target.

And then the progressive EPI re-computes the data yet again, and figures that we can get to the holy grail of a stable debt ratio with only $670 billion in further deficit cuts -- and very helpfully challenges the entire premise that deficit reduction is the road to recovery.

Uh-oh -- the center-right is not amused.

The Pete-Peterson-funded Committee for a Responsible Federal Budget takes offense and warns that we really need another $2.2 trillion in new deficit cuts.

Rudy Penner, director of the CBO in the Reagan era, declares stabilizing the debt ratio at its current level of about 70 percent is not enough.

In this priceless twist of economic logic, Penner warns:

"Imagine facing the next recession with a debt-GDP ratio already above 70 percent. It is almost certain that we shall have another slump before 2022."

Yes indeed, Rudy, if we listen to folks like you and follow a fiscal policy of slash-and-burn, we are guaranteed to have another slump between now and 2022 -- quite possibly a continuing slump for the entire decade.

People: this is the wrong debate. Has any of these worthies taken a macro-economics course? If you slow down growth by excessive belt-tightening, tax revenues fall and the deficit goes up. You can't just assume that very dollar of deficit reduction equals a dollar credited to reduction of the debt ratio.

For budget wonks, this very useful piece by EPI's Ethan Pollack lays it all out.

President Obama should read every word of this.

In what passes for the debate about the budget and the economy, two other details keep being overlooked: The main driver of rising deficits over the long term is Medicare. You fix Medicare by reforming the larger health system of which it is a part, not by sandbagging the rest of the budget and economy.

And speaking of economic contraction, one other key item somehow got lost in the shuffle. As part of President Obama's tax deal with House Speaker John Boehner raising taxes "only" on the richest one percent, America's working people got a big tax increase when both parties agreed to let the two-point cut in the payroll tax expire.

So since January 1, wage and salary workers have had two percent less income to spend. That's a huge hit -- as if every American worker suddenly took a two percent pay cut. The tax deal amounted to a big tax increase on the bottom 99 -- terrible policy distributively, terrible policy macro-economically.

(Some liberals worried about the drain of the two-point tax break on the Social Security trust funds, but that money should be made whole by transfers from general revenue; reducing the burden of the regressive payroll tax was a huge gain for progressivity.)

In sum: unless we stop obsessing on cutting the debt ratio as an end in itself, we are condemned to a decade of economic underperformance.

President Obama got some nice political lift from his re-election and his new, more assertive tone. But he (and the economy) are still dragged down by the undertow of bad economic assumptions that continue to contour the debate.

© 2012 The Huffington Post

Robert Kuttner

Robert Kuttner is co-founder and co-editor of The American Prospect magazine, as well as a Distinguished Senior Fellow of the think tank Demos. He was a longtime columnist for Business Week, and continues to write columns in the Boston Globe and Huffington Post. He is the author of A Presidency in Peril: The Inside Story of Obama's Promise, Wall Street's Power, and the Struggle to Control our Economic Future, Obama's Challenge, and other books.

Europe “Fixed” Facade Crumbling As German Retail Sales Implode

Remember all those soaring German confidence indices that said ignore the negative GDP print and focus on a future so bright, ze Germans've got to wear Zeiss? Appears the confidence may have been a tad massaged upwards because following a spate of weak corporate results out of Europe's growth dynamo, the German HDE retail association said Christmas sales for November and December were down some 0.7% from the prior year. Specifically German retail sales plunged -1.7% from November on expectations of a modest -0.1% decline, while on a year over year basis December imploded a whopping -4.7% vs expectations of -1.5%. Did the Germans blame the weather of lack of government spending, or maybe say to only focus on the positive aspects of the report (if any)? No. They were not girlie men about it.

Elsewhere in Spain, inflation rose less than expected, as consumer prices rose 2.8% Y/Y - the slowest pace since August and less than the 3.1 percent increase economists predicted. This was somewhat surprising as the country posted a boost in its current account with the November surplus amounted to €1.8 billion compared with €865 million in October and a deficit of €3.9 billion a year earlier, the Bank of Spain said. That narrowed the cumulative shortfall for the first 11 months of 2012 to €13.1 billion from €33.6 billion in 2011. A big reason for this is that central banks and other banks rotated into Spanish bonds on the false assumption that Spain is fixed. Ironically, even the SNB said that it had boosted its AA rated bonds holdings, while trimming their AAA holdings in Q4.

In now traditional news, Greek retail sales in November followed suit and plunged just a tad more than in Germany imploding by some -16.8% in November. Remember: once they hit 0 they can only go up.

But the biggest news certainly was Germany, whose economy continues to deteriorate and is probably what spurred Buba president Jens Weidmann to say that ongoing bailouts could threaten the strongest members.

“If things stay the way they are, the consequences of unsound policies will be too easily passed on to others,” Weidmann said in Berlin late yesterday. “Sooner or later the economically solid countries will be weakened. Liability and control have to be brought into balance.”

Germany, Europe’s largest economy, has pledged more than 300 billion euros ($407 billion) in loans and guarantees to help shore up the finances of euro member states such as Greece, Ireland and Portugal. Weidmann, who’s also a member of the European Central Bank’s Governing Council, has argued that policies including the OMT bond-purchase program come too close to the banned practice of financing states by printing money.

Risks that have been shared via bailouts and ECB emergency measures have already reached a “substantial level,” Weidmann said. “If these risks rise, the culture of stability could be eroded as if we had explicit joint liability.”

Germany shouldn’t allow wages to rise too quickly in order to rebalance competitiveness within the euro area, Weidmann said. An increase in wages of even 5 percent would have no impact on the output of crisis-ridden countries, and would instead damage Germany.

But why would he say that if Europe was so very much was fixed?

In European market news, the picture is as follows:

  • Spanish 10Y yield up 2bps to 5.25%
  • Italian 10Y yield up 2bps to 4.33%
  • U.K. 10Y yield down 4bps to 2.08%
  • German 10Y yield down 4bps to 1.67%
  • Bund future up 0.37% to 141.95
  • BTP future down 0.39% to 112.51
  • EUR/USD down 0.03% to $1.3563
  • Dollar Index down 0.03% to 79.26
  • Sterling spot up 0.15% to $1.5824
  • 1Y euro cross currency basis swap down 1bp to -18bps
  • Stoxx 600 down 0.29% to 287.78

Keep an eye on Italy where things are going from bad to worse, and where we will likely see even more catastrophic bank sector revalations as the local election approaches.

More from DB:

Credit markets extended their relative underperformance yesterday in what is becoming an increasingly monitored theme by other asset classes. The CDX IG 19 index widened by a sharp 4.5bp overnight to 90.25bp bringing the series to the widest since the fiscal-cliff agreement reached at the beginning of the year. We highlighted this theme yesterday but to again give some context to the relative underperformance in credit, when CDX IG was last at these levels the S&P 500 was at around 1460. We are now about 2.8% above those levels.

We’ve also heard some comments about an increasing outflow from corporate bond ETFs lately and also more chatter about the ‘great rotation trade’ from FI to equities for a variety of possible reasons (eg. low yields, a growth rebound, relative tight spreads to yields, event risk concerns and credit supply indigestion).

It does feel that the strong technicals in fixed income are now being tested. While the technical picture may change at some point we are not sure it will be a 2013 story. The fact there is huge reliance on keeping over indebted entities funded and the fixed income market generally solvent will ensure that authorities and Central Banks keep yields artificially low for some time yet. So our feeling is that despite the recent wobbles, flows will still come into FI in 2013 which will limit the sell-off.

Away from the US it was similarly a weak day for markets in Europe. We saw major bourses finish the day lower with Italian equities being the notable underperformer. Indeed the FTSE MIB (-3.36%) suffered its biggest decline in about 6 months driven by a 34% fall in Saipem after announcing a big profit warning. The company said it expects a very significant reduction of about 80% in EBIT this year from its onshore business leading to a wave of broker downgrades. A regulatory investigation on a share sale transaction the day before the profit warning has also been launched. Peripheral bond yields also spiked higher overnight with Italian and Spanish 10-year bonds closing +15bp and +6bp higher at 4.317% and 5.225%.

In other news flow, Moody’s has placed Monte Paschi’s Ba2 rating on review for possible downgrade reflecting the considerably uncertainty over the impact of legacy structured trades entered into by prior management. Italian prosecutors are investigating the  bank’s former management for bribery over a series of structured finance trades. Monte Paschi’s shares fell -9.5% yesterday which also didn’t help the moves in Italian equities.

Asian markets are trading weaker overnight with most bourses trading lower across the region. The Nikkei, Hang Seng and the KOSPI are down -0.23%, -0.35% and -0.25%, respectively. Asian credit spreads are also trading wider although the Asia iTraxx index is now off the wides at 115bp , still +3bp on the day. The 10-year UST yield is steady at around 1.98%.

In terms of today we can expect initial jobless claims, the Chicago PMI and Personal Income/Spending in the US. We have a fairly packed data day in Europe featuring retail sales, unemployment and inflation numbers from Germany. We also have PPI and retail sales from France, CPI in Spain and PPI from Italy.

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Pension Panic Fueled by Anti-Worker Politics?

It’s a common refrain in local papers: State faces pension funding crisis! Retiree benefits out of control! Public pensions bog down taxpayers! Pension costs seem to loom over so many state and local budget battles like a sinister sword of Damocles, a dark reminder of Big Government’s tyrannical profligacy.New Jersey Gov. Chris Christie led the conservative charge to wiggle out of pension promises. (Bob Jagendorf/Flickr/Creative Commons)

Should we panic? Well, according to a new report by the Pew Center on the States, 61 cities face a collective fiscal retirement burden of more than $210 billion, in part because consistent underfunding of benefits leaves yawning gaps in long-term cost projections. The report surveyed all U.S. cities with populations over 500,000, along with the most populous city in each state. Some cities are doing better than others in maintaining funds, but gaps persist, according to Pew’s estimates for fiscal years 2007-2010, especially in municipalities where local governments have lacked the “fiscal discipline” to keep up pension fund contributionsa situation exacerbated by the Great Recession.

But different political actors have different motives for expressing alarm over pension gaps. In some cases, dubiously calculated figures have inflated public concern. 

Sometimes, politicians frame cost-cutting proposals as if “generous” benefits themselves are the problem, as opposed to officials failing to uphold the commitments they've made to civil servants.

In New Jersey, brazenly conservative Governor Chris Christie has pushed through short-term austerity measures that ostensibly shore up pensions by shifting costs onto beneficiaries, increasing employee contributions and freezing vital cost-of-living adjustments. But the long-term liabilities remained unresolved. Shortly after Christie trumpeted his pension fix, the New Jersey Star Ledger noted that liabilities would spike again after the stopgap measures petered out, warning, “because the state won’t be making full pension payments, the gap will swell again to $58 billion by 2019, according to the state’s estimates.”

While such fixes may be temporary, they threaten to bring lasting pain for labor. After lawmakers approved benefit reform legislation in 2011, the Communications Workers of America blasted the plan as “anti-worker and anti-union” because it not only attacked benefits, but contained provisions that eroded unions' collective bargaining rights, potentially undermining their leverage in future contract talks.

Proposals by far-right groups such as Americans for Tax Reform, however, make Christie's scheme look modest. Some pension alarmists have put a nuclear option on the table. Delicately ignoring the global chaos unleashed by financial markets in recent years, conservative groups have seized precisely this moment of crisis to push for more dependence on the “free market” as a fix for troubled public benefits systems.

In Louisiana, pension troubles have prompted Governor Bobby Jindal to move toward dismantling altogether defined-benefit pensions (which provide stable long-term income in retirement) in favor of a more unstable, market-oriented system of 401(k)-type benefits. According to one actuarial analysis by the Louisiana State Employees Retirement System, this reform could backfire on both public workers and the state, because eligibility restrictions would make the plan fail to meet a “Social Security equivalency test.” Since the current system of benefits effectively serves as a replacement for Social Security, a new scheme that falls short of that could ultimately heap extra costs on the state.

Other states, including California, along with some cities, have explored or implemented 401(k)-style restructuring schemes to replace traditional pensions.

The Pew report does not explicitly endorse 401(k)-type plans as a blanket solution but flags it as one potential reform idea. At the same time, Pew researchers point out that healthcare costs, not pensions, could pose an even larger fiscal burden. That healthcare funding “cliff” raises a broader debate about the role of the state and employers (which are one and the same in the case of civil servants) in providing for workers’ and retirees’ health.

The bottom line is that pension reform can be a political Trojan horse. The reaction to pension crunches reflects political priorities that are often hostile to workers. Across the country, governments have opted to protect their financial commitments to bondholders on at the expense of their commitments to future retirees and unions, who have seen benefits frozen or sharply cut.

More reasonable analyses by progressive economists show that public-sector benefits tend to offset relatively low wages, so the overall compensation package is fair and by no means lavish, as right-wingers like Christie suggest.

Monique Morrissey, an economist at the labor-oriented Economic Policy Institute, takes a different approach than anti-government politicians. In some cases, she acknowledges, state budget problems may require cuts or force renegotiations in benefit plans. But in her opinion, completely abandoning defined-benefit pensions (which are, on balance, a good value for workers) is pennywise and pound foolish. "With very few exceptions, all of the cities and states where there are severe problems, it's because the politicians for many years have neglected to make the pension payments. And this really doesn't have much to do with the pensions or the public sector workers,” she tells Working In These Times. “It doesn't reflect the pensions being too lavish or being expensive or being unaffordable or anything to do with that. What it reflects is simply that this is one way of getting around balanced budget rules. And certainly some of these cities that are flagged as having problems are chronic offenders."

Meanwhile, pensions are going the way of the dinosaur in the private sector and politicians are whipping disgruntled citizens into a bitter rage toward civil servants who have managed to hold onto a modicum of hard-earned retirement security.

Instead of dismantling public sector benefits, local governments might address budget deficits by, say, making the tax system more progressive. As with many of the cries of “crisis” coming from the right, the obsession over public pension “unsustainability” too often takes a real problem of governments failing to uphold public promises and spins it into a false problem of workers supposedly demanding too much.

© 2012 In These Times

Michelle Chen

Michelle Chen is a contributing editor at In These Times. She is a regular contributor to the labor rights blog Working In These Times, Colorlines.com, and Pacifica's WBAI. Her work has also appeared in Common Dreams, Alternet, Ms. Magazine, Newsday, and her old zine, cain.

Retail Rebellion: Reinventing Organized Labor in the Walmart Economy

In 1962, Arkansas businessman Sam Walton opened the first Walmart discount store, setting in motion the rapid ascendance of a corporate giant that would redefine markets around the world. With its focus on competitive prices and vast distribution networks that revolutionized the industry, Walmart grew over the course of the 20th century to become the world’s largest company.

Today, its retail empire covers 15 countries with over 8,900 stores employing 2.2 million people. Like all empires, its success is built on contradictions and exploitation.

It’s no secret that Walmart’s low-cost business model relies heavily on paying its employees what can reasonably be called poverty wages. The average worker makes about $8.80 an hour. Even a full-time employee makes roughly $15,500 per year, well below the official poverty line for a family of four. Walmart’s low pay and poor-to-nonexistent benefits forces many of its workers to turn to public assistance in order to survive.

These conditions extend beyond the boundaries of Walmart’s own business. As a dominating force in the global economy, Walmart is a standard bearer across multiple industries. Its model of cost-cutting and squeezing workers has been adopted by competitors, suppliers and contractors alike.

Substandard wages are just one facet of the Walmart economy – just as notably, its stores have resisted workers’ attempts to unionize for their entire history. A recent wave of strikes by workers at Walmart stores and warehouses in the U.S. has challenged the mega-retailer’s sophisticated anti-union machinery. That machinery runs on a combination of intimidation, harassment, illegal firings, court injunctions, and systematic anti-union inoculation.

Walmart has successfully beaten back every attempt at unionization among its U.S. employees since the 1970s.

But the latest surge of labor unrest may signal a turning point for Walmart and its workers – and the labor movement.

Walmart has sparred with many groups that have raised concerns about its business practices, including community organizations, environmental groups and class actions. But robust “union avoidance” has been at the center of its operations for decades. A 1997 manual titled “A Manager’s Guide to Remaining Union-Free” instructs managers to be on constant alert for any signs of organizing among store associates, and derides labor unions as “a big business.”

In 2000, the United Food and Commercial Workers International Union (UFCW) successfully organized meat cutters at a Walmart store in Texas. The company responded by closing its 180 meat counters and replacing them with prepackaged cuts. Walmart staved off other organizing efforts by UFCW and the Service Employees International Union (SEIU) in the 1990s and 2000s, and it quashed an earlier Teamster campaign to organize drivers the 1980s.

Then something different started happening in 2012.

In June, workers at CJ’s Seafood, a Walmart supplier in Louisiana, went on strike against wage theft and threats by management. The workers’ bold action forced Walmart to drop the supplier, while the Labor Department ordered CJ’s to pay over $200,000 in back wages. This spark ignited a much larger and unprecedented wave of strikes that spread through Walmart’s supply chain and hit hundreds of its stores nationwide.

Walmart warehouse workers in Southern California and Illinois launched a historic campaign in September. Under the banners of Warehouse Workers United and Warehouse Workers for Justice – two groups formed by the Change to Win labor federation and the United Electrical Workers (UE), respectively – workers and activists engaged in a series of walkouts and acts of civil disobedience highlighting dangerous working conditions, wage theft and intimidation.

Although it does not directly employ the striking warehouse workers, Walmart was the target of worker protests because it dictates industry standards for contractors in its network of distribution centers. This month, a California judge named Walmart as a defendant in a class action suit over wage theft at contractor warehouses, boosting warehouse workers’ claim that Walmart is responsible for conditions at supplier facilities. After 21 days on strike in September, Illinois warehouse workers won their principal demand for an end to company retaliation and received full back pay for the days they were out on strike.

Acting Like a Union

Inspired by this victory and the new vulnerability of Walmart that it exposed, store employees struck at 30 locations in 12 states in October. More job actions at other stores the following month helped to build momentum for the big day of action on Black Friday, the busiest shopping day of the year.

The Black Friday Rebellion was a massive step forward for the movement to change Walmart. Hundreds of store employees and thousands of supporters in 46 states took part in walkouts and rallies, demanding living wages, better conditions and respect on the job. The actions were buoyed by the effective use of traditional and social media that helped spread the walkouts and win public sympathy for the strikers.  

Even while company spokespersons diminished the strikes and called them mere “publicity stunts,” Walmart filed an unfair labor practice charge with the National Labor Relations Board, arguing that the rolling pickets were illegal because the workers had not begun working toward an NLRB election for union representation. But the new worker-powered formation that coordinated the Black Friday strikes has been clear that is it separate from UFCW. The Organization United for Respect at Walmart, or OUR Walmart, is not a union. Although it is supported by UFCW and its community coalition, Making Change at Walmart, OUR Walmart’s protests are aimed at pressuring Walmart to improve working conditions, not unionization.

This is perhaps the most important thing to understand about the recent strikes at Walmart stores and what sets them apart from previous campaigns. Workers and labor organizers know that Walmart has mastered the process of cutting down traditional union organizing drives; now they are attempting to apply a different model of workplace organizing that circumvents the typical roadblocks built in to U.S. labor laws, a regime tilted against employees and one which Walmart is an expert at manipulating.

The alternative organizing strategies being attempted by Walmart workers could have implications throughout the labor movement. In particular, their emphasis on industry-wide mobilizing, disruptive tactics, and self-organization could help inject a new militancy into labor struggle.

OUR Walmart’s approach also differs from previous coalition efforts to change Walmart, which were focused more on disrupting its glossy public image. Union-backed groups like Wake Up Walmart and Walmart Watch ran campaigns in the 2000s that were less focused on worker involvement and more dedicated to media messaging designed to expose Walmart’s bad practices.

In contrast, OUR Walmart is a membership-based organization whose strength is defined by the size and activity of its membership rather than foundation funding and non-profit expertise. It began a year and a half ago with fewer than 100 members. Today it has over 1,000 members in chapters across 43 states. While it’s still too small to have a decisive impact on Walmart’s operations, its rapid growth and appeal among Walmart workers joining its ranks is remarkable.

Using management retaliation charges as the basis for work stoppages, OUR Walmart is able to secure some legal protection for non-union workers who otherwise have little recourse in taking collective action against their employer. Ultimately, OUR Walmart members would like to unionize Walmart stores, but that isn’t the immediate goal. For now, organizers are focused on growing an organization which they describe as “open source” in that it functions as a network providing tools for workers to self-organize.

“Workers can engage in actions that both make them feel powerful and that impact the company, and they don’t need to just spend their life waiting for some [government-supervised] processes to demonstrate they want a union,” former SEIU organizer Stephen Lerner told The Nation. Lerner, the originator of the Justice for Janitors campaign, argues that what’s important about OUR Walmart is that it’s acting like a union.

Striking Back Against the War on Workers

Another important part of the new Walmart campaign is the climate in which it’s unfolding.

Over the past two years, the labor movement has been under the gun of anti-union right-wing ideologues and austerity-driven politicians in both parties. Unions have suffered massive setbacks in states like Wisconsin, where tea party conservatives won an effort to strip collective bargaining rights in the public sector.

In 2012, two new states joined the ranks of so-called “right to work” states, bringing crippling restrictions on the collection of union dues to a region that has historically been a stronghold for labor. If the passage of right-to-work-for-less legislation in Indiana earlier in the year was a painful strike against unions, its recent and sudden passage in Michigan, the birthplace of the modern labor movement, was a devastating body blow.

In the meantime, working-class living standards continue to decline, as they have for decades. While income inequality has soared to levels not seen since the 1920s, the shrinking union movement has been largely on the defensive. The war against workers has accelerated since 2011 as unions find themselves embroiled in state-level battles in which their very existence is at stake.

Against this backdrop, it is significant that Walmart workers have chosen to go on the offensive. Workers are being battered in the private and public sectors, and unions have been making huge concessions in industries that have typically been more union-friendly in the past. Walmart workers have linked arms with allies in the labor movement to mount a highly organized and aggressive campaign in an environment that is quintessentially anti-labor.

“Walmart has designed a particular business model that demands inhumane and unsustainable working situations and poverty wages,” says UE Political Action Director Chris Townsend. “At a certain point, workers rebel, they push back. Walmart and the employers who imitate Walmart rely on astronomical turnover as a safety valve. But when workers stay on the job – now because of sheer desperation – more and more will choose to fight back rather than quit.”

Walmart isn’t the only place where workforce turmoil has given way to tenacity. On November 28, some 200 fast food workers from dozens of New York City restaurants staged a flash strike. Protesting the notorious low wages of fast food chains like McDonald’s, Burger King and Taco Bell, workers risked retaliation and walked off the job in a rare strike targeting a mostly non-union industry. With the support of New York Communities for Change, the workers formed the Fast Food Workers Committee and have been aided by other community-based groups and SEIU.
 
Unlike OUR Walmart, the fast food workers are explicitly demanding a fair process to unionize at their restaurants. But the workers, most of whom make little more than minimum wage, are also asking for a raise to $15 an hour. It’s a bold demand, but it’s one that Townsend argues is desperately needed if labor is going to survive as a movement.

“One of the tragedies of the current moment is that just at the time when wages have hit sub-poverty levels, the labor movement as a whole is afraid to ask for a raise, or even resist the wage-cutting offensive of the employers,” he says. “Asking for a raise has been replaced by elaborate begging for ‘shared sacrifice.’ That’s not going to inspire anyone to join a union. Militant struggles demanding a raise are long overdue, especially in low-wage industries like retail and fast food.”

A New Era for Organized Labor?

The organizing model being pursued by both OUR Walmart and the Fast Food Workers Committee – using strikes to raise workplace demands prior to unionization – could point to a new era for organized labor in the U.S. as it adapts to an increasingly adversarial corporate and political environment.
 
Under the NLRB structure, unions gain recognition to represent workers based on exclusive representation of an entire worksite after majority support is demonstrated. Companies like Walmart easily use this structure to their advantage in blocking union drives, and the penalties they suffer for breaking the law are negligible at best.
 
That’s why organized labor and Walmart workers have turned to a model that resembles what’s known as minority unionism, a strategy that involves collective action to press for change before majority support among the workforce has been reached. It also relies on the collaboration among different unions to mobilize workers on a regional basis.

As labor reporter Josh Eidelson writes, union leverage under this model doesn’t hinge on majority representation at a single worksite. Instead, Walmart workers and organizers “are hoping that aggressive strikes will make majority support possible, rather than the other way around.”

However, the minority union model at Walmart is still experimental and its paradigm-shifting possibilities are yet to be seen.

“Most of the work is shaped and led in NGO form, and not traditional union form,” says Townsend. “That’s not necessarily a ‘right’ or ‘wrong’ issue, but as is the case with all organizing, the ultimate goal is to construct union organizational structures which can continue as effective forces once the initial paid staff and NGO staff move on.”

Townsend argues that not many of the organizing efforts being undertaken – including UE’s – could stand for long without outside support, owing to Walmart’s fierce anti-union attacks.
 
Certainly, the wave of walkouts and protests in 2012 mark only the beginning of what will necessarily be a years-long campaign for justice at Walmart. But the workers have already made history by putting their jobs on the line and standing up against a juggernaut.

If there is a tipping point in the struggle between corporate America and workers, then we are surely on the verge of breaching it. Workers are being backed into a corner and increasingly have little to lose in fighting back. While companies like Walmart and McDonald’s have been abusing employer-friendly labor laws for decades to keep wages low and unions out of their businesses, corporate lobbyists and conservative billionaires have teamed up with politicians to chip away at the few protections and rights afforded to workers under existing labor law.

Walmart workers – who for so long have stood outside of the labor movement – may be clearing a new path toward a revived labor movement in the U.S. If they should fail, the race to the bottom for workers will continue uninterrupted.

But if they win, it will mean nothing less than the surrender of an empire and a path-breaking comeback for the working class.

Published on Tuesday, January 15, 2013 by The Neoprogressive

Brian Tierney

Brian Tierney is a freelance labor journalist in Washington, DC. Read more of his work at Subterranean Dispatches, where this article first appeared.

What are the German Bankers Thinking?

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Transcript

PAUL JAY, SENIOR EDITOR, TRNN: Welcome to The Real News Network. I'm Paul Jay in Baltimore.

I've been wondering for a while what is in the minds of German bankers, who seem willing to let Europe go into a deep recession and do not seem to be having any flexibility on how they collect their debts. Now joining us to try to unpack all of this is Michael Ash.Michael is a professor of economics and chair of the economics department at the University of Massachusetts Amherst. Thanks very much for joining us, Michael.MICHAEL ASH, PROF. ECONOMICS, UMASS: Thanks for having me, Paul.JAY: So German banks look at this situation. They see Greece going into deep recession, Spain, Portugal. Even France is starting to teeter, in a sense. What is in the minds of these German bankers?ASH: Well, I think you've asked the question just the right way. And it's really important that we focus our attention on the German banks. I mean, a fish rots from the head down. And really, if you want to look at the [unintel.] causes of the European problem and have good predictions about what's going to happen next, it's essential to think about what's going on in the German banking system. This is really the birthplace of the crisis. So asking what next from them is a really valuable question. You've asked: how can they let things slide this far? Well, to be honest, I'm shocked at how far they have let things go. I think at this point an ideology has taken hold that, hey, we've been paying the bills for Southern Europe for so long, we're going to stop. That ideology's completely backwards. I can explain why, if you're interested.JAY: Yeah, sure. Yeah, go ahead. Explain.ASH: So, well, the ideology is, we've been writing—we the Germans have been writing the checks for these profligate Southern Europeans. And in fact, it's almost the opposite situation. In fact, it's Southern Europeans who have been buying the German goods that have kept the German economy afloat until now.So I think you've got kind of a collision coming between this growing Northern European ideology that they've been paying the bills and the fact that much of their reasonably good times before the crisis were made possible by the earning and spending of Southern Europeans. I mean, you really have a circular-flow economy in Europe, and it's been very badly disrupted in the south. And I think that, you know, there's going to be some unpleasant consequences as they spread from the south up through France and Germany.JAY: So German banks are essentially undermining, weakening, destroying their own best markets. Most of German exports have been going to these quote-unquote "peripheral" countries of Europe. So, you know, what is this a strategy about? I mean, whether it's a strategy or not, what they're going to end up with is much lower wages in all these countries. They're going to try to unravel, and probably will, in Greece and Spain, at least, and Portugal, unravel much of the social safety net. And Italy, I should say, as well. So they're going to have this big pool of skilled, cheap labor who can't buy as much product. So what is the objective here? To better compete in the developing world? In Asia and China and India, Brazil, and such?ASH: I think strategy is overstating what we're seeing from the German banks. I think it helps if you think about the German banks as kind of a four-faced statue or four-faced monster, that there isn't—nobody is at the wheel. And so it's a mistake to think somebody old and sensible is in charge. There's really nobody in charge at the German banks. There are just kind of fragments of several systems.So, you know, there's this one German banker who's incredibly inflation-o-phobic. We're told, oh, the memory of the Weimar inflation—90 years ago at this point—haunts this banker so much, couldn't possibly imagine an expansionary monetary policy. So that's one of the faces of the German banker. And this guy is dead-set against any sort of expansionary activity. It might cause inflation—very, very scary. And then you've got this other guy who seems nothing like his very conservative anti-inflationary counterpart. He's the gambler who went down to the Spanish Riviera looking for some action and just loved rolling the dice and was willing to take these very large gambles on Southern European real estate, on, you know, coastal real estate in Spain, float the Greek sovereign debts because it seemed really profitable. So this was the kind of let the good times roll German [crosstalk]JAY: And you could add to that their plays in the American real estate market, and not just subprime mortgage. I mean, I think Deutsche Bank now owns one of the biggest casinos in Las Vegas.ASH: Yeah. So, right. So it wasn't just playing their own real estate markets. I mean, I think they picked up the lesson. I think you can—you know, there's kind of a lesson here that bad banking drives out good, that this German banker, the high-roller, looked across the Atlantic, saw the American cousin, his cowboy cousin, making out like a bandit, so he said, I want to take some of those big bets too, and then did, on Southern European real estate, Greek sovereign debt, but also buying CDSs (credit default swaps) and other exotic derivatives straight from the U.S. market. So that high-roller was really a newcomer to German banking.The inflation-o-phobe and the kind of really very careful German banker were one wing of German banking. Then we got these high-rollers. Their combination—the high-rollers brought on the immediate crisis. And their combination has led to the, you know, stern, nasty bill collector German banker, who says, ah, the bill must be paid, and is really insisting that the bills be paid even if that collection effort is going to, you know, ultimately drive the German economy into the ground. And it's already done a very—it's done very serious damage to the Portuguese, Spanish, Greek, and Irish economies. And really, I think, you know, Italy is kind of teetering on the brink. You've got these three.Let me tell you about the last German banker, the one who's been kind of shoved into the corner, who was actually the first one I learned about, and he's a fairly likeable fellow. That's the benevolent social planner. That's the German banker from the '60s and '70s who owned a lot of stock in German companies and was therefore willing to make long-term plans for the future, wasn't too averse to talking to labor, would invite labor to the table, would even invite labor to be on the board of directors. So that was kind of the good face. So you've got these four faces. The good face has kind of been crammed into the corner, and these other three are sort of staring at each other, not really in full agreement, but kind of paralyze because they don't know what to do next.JAY: I mean, is part of this that they kind of all buy into this Austrian school of economics, that there needs to be a catharsis, there needs to be a cleansing, capitalism needs to go through these periods where it gets rid of excess capacity and better disciplines the workforce? I mean, do they not just believe that capitalism just is resilient, and to go through, quote-unquote, the pain, and out the other side will come a vibrant Europe? But I don't know what the evidence for that is. But is that what they believe? They've got to believe something here.ASH: I don't know that there's such a Randian fellow at work in the German banks. I mean, I think that the stern bill collector simply has a—the bills must be paid; we made the loans, you must pay back the loans; you know, kind of a very—you know, sort of the you must pay the rent landlord who comes to the door, you know, the evil drooping mustache.So I don't think that, you know, the cleansing, a cleansing dose of capitalism, liquidate, liquidate, liquidate is really what these bankers have in mind. I think that they've more kind of hit a number of contradictions and that they sort of don't know which of these bankers is bought. They know that the high-roller got them into very serious trouble, so they're not willing to start lending. The inflation hawk and the stern bill collector are maybe of a piece, that they are unwilling to try anything too expansionary. You know, I think it's—nobody is planning enough for this to be a kind of a well-coordinated strike on the European welfare state. I think that the European bankers are willing to sweep up a couple of chips along the way if they fall on the table and they're easy pickings. But I think it's sort of—too much planning would be involved to say, oh, this was an engineered crisis that allowed [crosstalk]JAY: But whether it's an engineered crisis or not, they're certainly taking advantage of the crisis. And, I mean, what you're seeing is massive amounts of privatization, you know, in Greece and some of these other same countries. You're going to see lower wages. They're—you're—enormous pressure on the social safety net. And years—I don't see how it's anything but years of deep recession and high unemployment. I mean, that much is objective, is it not?ASH: Yeah. I think these are good points, and they bring to mind a couple of thoughts. The first is that capitalists can't live with stagnation either. So taking advantage of the recession, as I said, to sort of pick up a couple of quick hits, you know, some chips have fallen on the table, some free $20 bills on the sidewalk. I can see that well and good.But I really think that the extent to which the bankers have allowed the European situation to really at this point spiral out of control is self-destructive, but they can't do anything about it. They are really—it is not in their constitution. It's really going to take, I think, a new political political movement, a kind of a new political orientation in Europe to do something about this. I think the bankers have hit the end—you know, sort of hit the end of their bag of tricks, and they simply cannot envision themselves overseeing a Keynesian-type expansion. But they also—I don't think it's planned for a fully stagnated economy [crosstalk]JAY: This has to come back and bite them in the bum. I mean, how can this not lead eventually to much more serious stagnation in Germany itself?ASH: Well, it has to. I mean, as you pointed out, they've cut off the fuel to their main markets. They are not—they've cut off the fuel to their main markets. They are not—I do not think they can realistically expect to make up the sales, even with the burdgeoning elite in China, in number, if not in percent. So I really think that they have backed themselves into a rough corner.Now let me make a couple—I want to take a step back and make a couple of other observations. The first is that it's interesting to think about where the German working class has been during this period. The German working class on the one hand has stayed employed. So they don't have the problems of mass unemployment that the Spanish and Portuguese and Greek working class. On the other hand, the German working class has really taken it on the chin in the last generation. They've been kind of an unwilling or a semi-willing participant in the Germans' euro-based plan. So they've accepted increasingly low wages. And the German wage share has fallen something like 10 percentage points, which is a massive redistribution from labor to capital in Germany over the last generation. The German working class has been told that's the price of staying employed. So you won't be as rich, you know, you won't have as big a share of the pie, but you at least won't be in the same boat that the Southern Europeans have found themselves in.So it'd be very interesting to see what happens as this promise becomes increasingly untenable, the promise of, well, at least you're employed, even if you're not paid as much. That becomes increasingly untenable. It'd be very interesting to see if there is mobilization by the German working class and other working class, other union labor movement in Northern Europe.JAY: Alright. Well, thanks for joining us, Michael.ASH: Well, thanks very much for having me.JAY: And thank you for joining us on The Real News Network.

End

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What Are the German Bankers Thinking?

Paul Jay, Senior Editor, TRNN: Welcome to The Real News Network. I'm Paul Jay in Baltimore.

I've been wondering for a while what is in the minds of German bankers, who seem willing to let Europe go into a deep recession and do not seem to be having any flexibility on how they collect their debts. Now joining us to try to unpack all of this is Michael Ash.

Michael is a professor of economics and chair of the economics department at the University of Massachusetts Amherst. Thanks very much for joining us, Michael.

Michael Ash, Erof. Economics, UMass: Thanks for having me, Paul.

Jay: So German banks look at this situation. They see Greece going into deep recession, Spain, Portugal. Even France is starting to teeter, in a sense. What is in the minds of these German bankers?

Ash: Well, I think you've asked the question just the right way. And it's really important that we focus our attention on the German banks. I mean, a fish rots from the head down. And really, if you want to look at the [unintel.] causes of the European problem and have good predictions about what's going to happen next, it's essential to think about what's going on in the German banking system. This is really the birthplace of the crisis. So asking what next from them is a really valuable question.

You've asked: how can they let things slide this far? Well, to be honest, I'm shocked at how far they have let things go.

I think at this point an ideology has taken hold that, hey, we've been paying the bills for Southern Europe for so long, we're going to stop. That ideology's completely backwards. I can explain why, if you're interested.

Jay: Yeah, sure. Yeah, go ahead. Explain.

Ash: So, well, the ideology is, we've been writing—we the Germans have been writing the checks for these profligate Southern Europeans. And in fact, it's almost the opposite situation. In fact, it's Southern Europeans who have been buying the German goods that have kept the German economy afloat until now.

So I think you've got kind of a collision coming between this growing Northern European ideology that they've been paying the bills and the fact that much of their reasonably good times before the crisis were made possible by the earning and spending of Southern Europeans. I mean, you really have a circular-flow economy in Europe, and it's been very badly disrupted in the south. And I think that, you know, there's going to be some unpleasant consequences as they spread from the south up through France and Germany.

Jay: So German banks are essentially undermining, weakening, destroying their own best markets. Most of German exports have been going to these quote-unquote "peripheral" countries of Europe. So, you know, what is this a strategy about? I mean, whether it's a strategy or not, what they're going to end up with is much lower wages in all these countries. They're going to try to unravel, and probably will, in Greece and Spain, at least, and Portugal, unravel much of the social safety net. And Italy, I should say, as well. So they're going to have this big pool of skilled, cheap labor who can't buy as much product. So what is the objective here? To better compete in the developing world? In Asia and China and India, Brazil, and such?

Ash: I think strategy is overstating what we're seeing from the German banks. I think it helps if you think about the German banks as kind of a four-faced statue or four-faced monster, that there isn't—nobody is at the wheel. And so it's a mistake to think somebody old and sensible is in charge. There's really nobody in charge at the German banks. There are just kind of fragments of several systems.

So, you know, there's this one German banker who's incredibly inflation-o-phobic. We're told, oh, the memory of the Weimar inflation—90 years ago at this point—haunts this banker so much, couldn't possibly imagine an expansionary monetary policy. So that's one of the faces of the German banker. And this guy is dead-set against any sort of expansionary activity. It might cause inflation—very, very scary.

And then you've got this other guy who seems nothing like his very conservative anti-inflationary counterpart. He's the gambler who went down to the Spanish Riviera looking for some action and just loved rolling the dice and was willing to take these very large gambles on Southern European real estate, on, you know, coastal real estate in Spain, float the Greek sovereign debts because it seemed really profitable. So this was the kind of let the good times roll German [crosstalk]

Jay: And you could add to that their plays in the American real estate market, and not just subprime mortgage. I mean, I think Deutsche Bank now owns one of the biggest casinos in Las Vegas.

Ash: Yeah. So, right. So it wasn't just playing their own real estate markets. I mean, I think they picked up the lesson. I think you can—you know, there's kind of a lesson here that bad banking drives out good, that this German banker, the high-roller, looked across the Atlantic, saw the American cousin, his cowboy cousin, making out like a bandit, so he said, I want to take some of those big bets too, and then did, on Southern European real estate, Greek sovereign debt, but also buying CDSs (credit default swaps) and other exotic derivatives straight from the U.S. market. So that high-roller was really a newcomer to German banking.

The inflation-o-phobe and the kind of really very careful German banker were one wing of German banking. Then we got these high-rollers. Their combination—the high-rollers brought on the immediate crisis. And their combination has led to the, you know, stern, nasty bill collector German banker, who says, ah, the bill must be paid, and is really insisting that the bills be paid even if that collection effort is going to, you know, ultimately drive the German economy into the ground. And it's already done a very—it's done very serious damage to the Portuguese, Spanish, Greek, and Irish economies. And really, I think, you know, Italy is kind of teetering on the brink. You've got these three.

Let me tell you about the last German banker, the one who's been kind of shoved into the corner, who was actually the first one I learned about, and he's a fairly likeable fellow. That's the benevolent social planner. That's the German banker from the '60s and '70s who owned a lot of stock in German companies and was therefore willing to make long-term plans for the future, wasn't too averse to talking to labor, would invite labor to the table, would even invite labor to be on the board of directors. So that was kind of the good face.

So you've got these four faces. The good face has kind of been crammed into the corner, and these other three are sort of staring at each other, not really in full agreement, but kind of paralyze because they don't know what to do next.

Jay: I mean, is part of this that they kind of all buy into this Austrian school of economics, that there needs to be a catharsis, there needs to be a cleansing, capitalism needs to go through these periods where it gets rid of excess capacity and better disciplines the workforce? I mean, do they not just believe that capitalism just is resilient, and to go through, quote-unquote, the pain, and out the other side will come a vibrant Europe? But I don't know what the evidence for that is. But is that what they believe? They've got to believe something here.

Ash: I don't know that there's such a Randian fellow at work in the German banks. I mean, I think that the stern bill collector simply has a—the bills must be paid; we made the loans, you must pay back the loans; you know, kind of a very—you know, sort of the you must pay the rent landlord who comes to the door, you know, the evil drooping mustache.

So I don't think that, you know, the cleansing, a cleansing dose of capitalism, liquidate, liquidate, liquidate is really what these bankers have in mind. I think that they've more kind of hit a number of contradictions and that they sort of don't know which of these bankers is bought. They know that the high-roller got them into very serious trouble, so they're not willing to start lending. The inflation hawk and the stern bill collector are maybe of a piece, that they are unwilling to try anything too expansionary.

You know, I think it's—nobody is planning enough for this to be a kind of a well-coordinated strike on the European welfare state. I think that the European bankers are willing to sweep up a couple of chips along the way if they fall on the table and they're easy pickings. But I think it's sort of—too much planning would be involved to say, oh, this was an engineered crisis that allowed [crosstalk]

Jay: But whether it's an engineered crisis or not, they're certainly taking advantage of the crisis. And, I mean, what you're seeing is massive amounts of privatization, you know, in Greece and some of these other same countries. You're going to see lower wages. They're—you're—enormous pressure on the social safety net. And years—I don't see how it's anything but years of deep recession and high unemployment. I mean, that much is objective, is it not?

Ash: Yeah. I think these are good points, and they bring to mind a couple of thoughts. The first is that capitalists can't live with stagnation either. So taking advantage of the recession, as I said, to sort of pick up a couple of quick hits, you know, some chips have fallen on the table, some free $20 bills on the sidewalk. I can see that well and good.

But I really think that the extent to which the bankers have allowed the European situation to really at this point spiral out of control is self-destructive, but they can't do anything about it. They are really—it is not in their constitution. It's really going to take, I think, a new political political movement, a kind of a new political orientation in Europe to do something about this. I think the bankers have hit the end—you know, sort of hit the end of their bag of tricks, and they simply cannot envision themselves overseeing a Keynesian-type expansion. But they also—I don't think it's planned for a fully stagnated economy [crosstalk]

Jay: This has to come back and bite them in the bum. I mean, how can this not lead eventually to much more serious stagnation in Germany itself?

Ash: Well, it has to. I mean, as you pointed out, they've cut off the fuel to their main markets. They are not—they've cut off the fuel to their main markets. They are not—I do not think they can realistically expect to make up the sales, even with the burdgeoning elite in China, in number, if not in percent. So I really think that they have backed themselves into a rough corner.

Now let me make a couple—I want to take a step back and make a couple of other observations. The first is that it's interesting to think about where the German working class has been during this period. The German working class on the one hand has stayed employed. So they don't have the problems of mass unemployment that the Spanish and Portuguese and Greek working class.

On the other hand, the German working class has really taken it on the chin in the last generation. They've been kind of an unwilling or a semi-willing participant in the Germans' euro-based plan. So they've accepted increasingly low wages. And the German wage share has fallen something like 10 percentage points, which is a massive redistribution from labor to capital in Germany over the last generation. The German working class has been told that's the price of staying employed. So you won't be as rich, you know, you won't have as big a share of the pie, but you at least won't be in the same boat that the Southern Europeans have found themselves in.

So it'd be very interesting to see what happens as this promise becomes increasingly untenable, the promise of, well, at least you're employed, even if you're not paid as much. That becomes increasingly untenable. It'd be very interesting to see if there is mobilization by the German working class and other working class, other union labor movement in Northern Europe.

Jay: Alright. Well, thanks for joining us, Michael.

Ash: Well, thanks very much for having me.

Jay: And thank you for joining us on The Real News Network.

The Crisis of World Capitalism: the Myth of Canadian Exceptionalism

The interview was conducted by Rebekah Wetmore and Ryan Romard. Rebekah Wetmore is an independent researcher and community organizer. She has an MA in Sociology from Acadia University in Wolfville, Nova Scotia. Ryan Romard is a MA Candidate in Sociology at Acadia University. He studies the Sociology of Agriculture in Cuba.

This interview forms part of Great Recession-Proof? Shattering the Myth of Canadian Exceptionalism, and is published in the most recent issue of Alternate Routes: A Journal of Critical Social Research.

Rebekah Wetmore and Ryan Romard (RW/RR): The crisis of world capitalism starting in 2007 was the most severe crisis of capitalism since the Great Depression and thus far the recovery, both globally and within Canada, has been weak at best. With this mind, to what extent is the current crisis cyclical and in what ways is this related to a broader, systemic crisis of the capitalist system?

Michael Lebowitz (ML): This is not a question for which there is a quick answer. What do we mean by a crisis of capitalism? I distinguish between a crisis in capitalism and a crisis of capitalism. For me, there is only a crisis of capitalism when there is an organized and conscious subject prepared to put an end to capitalism.

There are always crises, though, within capitalism. Understanding this distinguishes a Marxian perspective from the perspective of mainstream neoclassical economists for whom the normal state of capitalism is equilibrium and crises are aberrations. For Marx and Marxists, crises are inherent in capital’s tendency toward overaccumulation. It is inherent in the nature of capital that its orientation is to grow, to expand – to accumulate, accumulate! In a crisis, though, that process of accumulation is checked.

All crises take the form initially of the inability of capital to realize the surplus value extracted from workers through exploitation in the process of production. If capital is unable to realize the surplus value which is contained within commodities through sale of those commodities, it will cut back on their production. And, the result is unemployment as well as reduced demand for investment – in other words, reduced demand for the sector producing means of production. Growing unemployment in both the consumer goods sector and the sector producing means of production means that there will be greater difficulties in selling commodities. Thus, the initial emergence of the inability to sell commodities brings with it a deepening crisis within capitalism.

Part of that deepening of the crisis involves a significant reduction in the values of capital – in the value of raw material stocks, for example, but especially what is called fictitious capital. By fictitious capital, we mean the capital invested in various vehicles which, while linked ultimately to the fortunes of real capital within the spheres of production and circulation, takes on a life of its own. For example, the values of shares in corporations (which have their real basis in the profitability of those corporations) expand significantly in the period of a boom. Presumably, these values are related to expectations of that profitability but those stock values are determined instead by prospects of money to be made in the stock market. Until the moment of truth, there comes a point as a crisis within the real economy emerges in which there is an enormous destruction of those values contained in this particular form of fictitious capital – i.e., a crisis of the stock market. And this is not the only form of fictitious capital. We’ve seen a great destruction of fictitious capital in the form of various financial instruments such as derivatives, etc. as well as real estate values. All of this has its impact and feeds back on the real, underlying economy to deepen a crisis.

None of this explains why crises occur, though – why capital’s drive to expand comes up against barriers. In Marx’s Capital, he indicated that capital develops an ability to grow by leaps and bounds and comes up against no barriers except those presented by the availability of raw materials and the extent of sales outlets. Both those barriers are the result of capital’s tendency for overaccumulation. In the case of the first, Marx described how overaccumulation tends to be manifested in lagging production of raw materials and other products whose source is nature. Agriculture and extractive industries such as mining, Marx noted, are modes of production sui generis – they cannot be expanded in the same way as spheres of production which are users of raw materials. Precisely for this reason, then, in an extended period of accumulation, capital often comes up against the problem of the rising value of raw materials with the result that a greater proportion of capital outlays must be for what is called constant capital. These will be periods in which the rate of profit tends to fall because overaccumulation in industry has as its counterpart underaccumulation in the production of raw materials. You can see my discussion of Marx’s argument in “The General and the Specific in Marx’s Theory of Crisis,” which is reprinted in my book, Following Marx: Method, Critique and Crisis.

The second barrier that Marx identified is rooted in the antagonistic conditions within which capital functions – in other words, in the nature of capitalist relations of production themselves (recall that Marx stressed that the real barrier of capital is capital itself). Capital’s drive to increase the rate of exploitation brings with it a tendency for its ability to produce more and more articles of consumption to come up against a barrier in terms of its ability to realize the surplus value contained in those commodities; this tendency for overproduction of capital often takes the form of intensification of capitalist competition. The begged question, though, is if a rising rate of exploitation is significant, why doesn’t the relatively increased share of income for capital lead to increased capitalist expenditures (investment and consumption)? The answer is that capitalists are not likely to expand productive capacity if there is already unused capacity in the productive sector (because of overaccumulation) and falling profit rates because of the burden of the high costs of raw materials. The situation is one in which workers can’t spend and capitalists won’t. It’s a situation when capitalists choose to place their funds elsewhere – in securities, real estate, etc.

I have been describing a crisis which is essentially a cyclical crisis. Cyclical crises, though, by definition don’t last. For one, the process of destruction of values can restore the conditions for resumption of profitable production. But crises can be more than cyclical; they can also be structural. When we talk about the overaccumulation of capital, it is essential to recognize that capital does not expand in unison. There is an inherent tendency toward unevenness: some capitals will be the major contributors to the growth and accumulation of capital while others may bear the brunt of the effects of overaccumulation. In particular, there are periods in which capital expands in new areas, new geographical regions, more rapidly than in the old regions of capitalist expansion. This process may reflect new, advanced productive forces (thus, better means of securing relative surplus value) or very high rates of exploitation based upon low real wages and a high length and intensity of work – and sometimes it may be both modern techniques and very low wages.

This emergence of new capitals and new forms of production provides a basis for a structural crisis – in other words, a crisis which is the result of the changing structure of capital. Although it does not occur with the periodicity of a cyclical crisis, this definitely has happened before – in what was called the Great Depression in England in the latter part of the 19th century (as the result of the growth of production in Germany and elsewhere on the Continent as well as the U.S.) and in the 1930s (after the growth of mass production in the U.S. and the growth of the rate of exploitation in the 1920s). Crises in capitalism which embody both cyclical elements but also significant structural elements will be deeper and longer than those which only involve cyclical swings. Further, structural crises may generate significant tensions because the change in the geographical locus of capital resulting from unevenness may lead to an attempt to redivide spheres of influence and power (and thus inter-imperialist rivalry). Finally, their resolution may require a process of restructuring of capitalist institutions in order to incorporate the new elements and manage these new relations – the obvious case being the restructuring which occurred with the Bretton Woods agreements after the depression of the 1930s and World War II.

I have been stressing this question of restructuring because it is obvious that the current crisis within capitalism is both cyclical and also structural in this sense. There’s been a very significant growth in productive capacity, an accumulation of capital, in centres such as China, South Korea, India, Brazil, etc. A significant part of the explanation of this process has been the enormous reserve armies of labour in the countryside which could be drawn upon for the expansion of wage labour within industry at wage rates well below the levels in the old capitalist centres. As a result, this has been a period marked by a rising rate of exploitation on a world scale and at the same time a rising demand for raw materials from these new expanding centres of capitalist accumulation (reflected in prosperity in raw material producing centres).

Both these characteristics tend to generate a crisis within world capitalism; however, within that general crisis, the unevenness is obvious. In the old centres of capital, we see that rather than the expansion of productive capital, money has flowed into finance and real estate; thus, one can speak accurately about the separation of finance capital from productive capital there (much like England’s shift toward rentier capitalism in the late 19th century). But there is more: in the context of capitalist competition and pressures upon profits we see that capital in these old centres has managed to insulate itself somewhat because of its success in shifting the tax burden to the working-class – reducing taxes upon corporations and upon those with high income (who are described as the ‘job creators’). Capital has been able to do this because the defeat of the working-class in these centres.

It is obvious that there is a very serious problem of an emerging ecological crisis to which capital is contributing substantially. However, that is a crisis of humanity – not a crisis of capital. ”

To describe, though, the growth of finance capital at the expense of productive capital as characteristic of this crisis in capitalism (and especially to see this as a sign of the crisis of capitalism) is an example of one-sidedness (which happens to coincide with the location of those who come to this conclusion). It doesn’t look at all like a crisis of capitalism in China, Vietnam, India, Brazil etc. In short, what we are seeing is a change in the structure of world capitalism, and the attempt to manage the change in that structure is reflected in such developments as the shift from the G7 to the G20. Will that restructuring of capital succeed? I suggest that, in the absence of the ability of the working-class throughout the world to prevent it, capital will succeed in this as it has in the past.

Let me turn, though, to a question which you didn’t ask explicitly: is there anything in this existing situation which points to the ultimate, final crisis of capitalism? Although there are many Marxist economists who are predicting the end of capitalism (something Marxist economists are prone to do), my perspective is somewhat different. It is obvious that there is a very serious problem of an emerging ecological crisis to which capital is contributing substantially. However, that is a crisis of humanity – not a crisis of capital. How and if this crisis of humanity can be prevented depends upon a serious movement of working people to put an end to capitalism by all means possible and as soon as possible. And that will be the crisis of capitalism.

RW/RR: Canada’s Prime Minister Stephen Harper has unashamedly promoted the myth that the financial crisis did not greatly affect Canada. Is this notion of Canadian exceptionalism warranted? If not, what might the next couple of years be like for Canadians, particularly in light of the recent austerity measures?

ML: It is true that Canada has not been as affected by the financial crisis as the United States. But that has really little to do with the actions of the Harper government. In part, it reflects the difference in the nature of the banking system and the traditions of finance in Canada. In part, too, it also reflects the difference in the risk orientation of Canadians. But this is not a case of Canadian exceptionalism at all. Not unless you forget about all those other exceptions like Chile, Ecuador, Venezuela, Brazil, and indeed all countries exporting raw materials to China and experiencing a boom based upon this.

There have been two distinct tendencies affecting the Canadian economy. One is the tendency related to the depression in the United States, given Canada’s long-term dependence upon that market. The other tendency reflects the resource boom based upon exports to China and other Asian countries. Those two tendencies reflect the changing structure of world capitalism, and the geographical division involved is reproduced within Canada itself. Thus, provinces like Québec and Ontario, which have focused upon manufacturing, are suffering significantly whereas Prairie provinces like Alberta, Saskatchewan and Manitoba in particular have been benefiting from their resources.

The Harper government has thrown its lot in with the latter group of provinces and with the emerging new centres of capital. In its so-called budget bill, its determination to push through pipelines to serve China, its interest in Chinese foreign investment, its removal of environmental protection measures, etc, we can see that it is placing a wager on the structural changes in capital. This strategy has major implications for the Canadian economy. Thomas Mulcair of the NDP has raised the question of the ‘Dutch disease’ – i.e., the blow to Canadian manufacturing as a result of a rising value of the Canadian dollar linked to resource exports. I think that’s a bit premature because we cannot say at this point how much of this particular decline is cyclical and how much is structural. However, over a long time period, I think it is correct to talk about the spectre of the Dutch disease. The Harper government strategy points in the direction of a new model – actually a return to the old model, that of the hewers of wood and drawers of water (i.e., to a hollowing-out of the economy similar to what happened to Venezuela over a number of years as the result of its oil wealth).

In this period, the two tendencies interact. Budget deficits reflect the fate of the old capitals – in particular, the problems in the U.S. economy and the pattern of tax cuts for corporations and high income earners that have occurred here. As in the case of the United States, the defeat of the working-class and the weakness of working-class institutions has meant the successful imposition of capital’s austerity plan which is an attack on the working-class. To this can be added the effect of resource exports which have significantly elevated the value of the Canadian dollar relative to that of the U.S. and seriously affected manufacturing exports as well as those of sectors such as the forest industry (and thus employment in these sectors).

Of course, it is essential to recognize that these two tendencies are not occurring in two separate worlds. The rapid accumulation of capital in China and other emerging capitalist countries has itself been based on the existence of markets in the developed North. To the extent that the latter continue to slump, it cannot help but affect the accumulation of capital in the former and thus their demand for resources. When that happens (and I think the only thing in question will be its extent), Canada faces the real prospect of a serious decline. All other things equal, this will accelerate and intensify the capitalist austerity project.

So, when you ask the question as to what may the next couple of years be like for Canadians, it is difficult to provide a definite answer. It depends. All other things are not necessarily equal. If the working-class continues to be defeated, we can look forward to one defeat after another – one attack after another on social services, health and safety, education, everything that people have made sacrifices and struggled to achieve in the past. It’s not, of course, inevitable. Nothing is inevitable when it comes to the question of class struggle.

RW/RR: In The Socialist Alternative, you argue that “given the heterogeneity of the collective worker (and its various forms of immiseration) and capital’s use of differences to divide the working-class in order to defeat it, a political instrument is needed to mediate among the parts of the collective worker, provide the welcoming space where popular movements can learn from each other and develop the unity necessary to defeat capital.” Is the anti-capitalist left in Canada ready to form such a party? If not, what can be done to foster the development of this type of party?

ML: My immediate response is no, the anti-capitalist left in Canada is definitely not ready to form a party which can defeat capital. But there is also the question as to whether an anti-capitalist left as such can ever defeat capital. I doubt that. When I was involved in Rebuilding the Left in Vancouver, I argued that we needed to go beyond organizing on the basis of anti-capitalism and instead to stress explicitly the necessity for a socialist alternative. Anti-capitalism means something different for everyone. For some people, it is opposition to big corporations; for others, it is opposition to the banks or the capitalist state or money or large-scale industry, international capital or inequality in income and wealth. Accordingly, the perceived alternative can range from breaking up the corporations to developing alternative currencies to supporting cooperatives and credit unions to putting an end to private ownership of the means of production and to returning simply to the good old days when people could anticipate a good job, a home of their own and all the amenities that their parents had. The multiplicity of views about what we don’t like about capitalism (ie., anti-capitalism) was apparent in the Occupy movement.

Of course people should struggle against every assault by capital and every violation of our conceptions of justice. Marx made the point well: without the struggles of workers over wages, workers would be a “heartbroken, a weak-minded, a worn-out, unresisting mass” and would be incapable of any larger struggles. Of course, too, it is essential to try to link these struggles. However, in the absence of a positive vision, capital can and will separate and defeat those who oppose it. Trade unions under attack and facing capital’s demand for concessions, for example, can look at issues outside their immediate concerns and say, ‘what’s this got to do with our members?’

Sometimes, though, capital and the capitalist state make it easier to connect issues. In 1983, a simultaneous blanket assault by the Social Credit government in BC created conditions in which it was possible to unify teachers, hospital workers, renters, poverty movements and private sector trade unions who were injured by the proposed legislation in a movement toward a general strike. Similarly, when capital is in a crisis period and moves to administer its affairs through a general programme of capitalist austerity, it is possible to bring together those under attack – both those suffering from the crisis itself and those under attack by the capitalist state. That is what Occupy, the Enraged and the Middle East Spring demonstrate. And, right now that potential is there as the result of the Harper Government’s so-called Budget Bill.

But, as the disintegration of the General Strike movement in BC demonstrated, many ‘No’s’ do not make a big ‘Yes’. At the present time, people are fighting against reductions in social services, against measures which make universities and education inaccessible for many, against the removal of measures protecting against the destruction of the environment, against the removal of support for our current healthcare system – against, indeed, many characteristics of what is viewed as our entitlement, an entitlement which didn’t drop from the sky but which was the result of years of struggle. In short, people are struggling out of a sense of fairness. But there’s a difference between struggling over questions of fairness (sometimes identified as characteristic of moral economy) and being able to understand why all this is occurring – enough so to be able to put an end to such attacks. If you don’t understand the underlying factors, you are likely to look upon what you’re fighting for as the restoration of the good old days.

Marx made this point in talking about the limits of wage struggles. 99% of those struggles, he said, were reactions against capital’s previous actions to drive down wages. They were attempts to restore the traditional standard of life and occurred under the conservative banner of a fair day’s pay for a fair day’s work. And, it was accurate to describe this as a conservative slogan because workers fighting under that banner were seeking to conserve or preserve the pre-existing conditions. While though those struggles were essential for developing their collective strength and dignity, Marx stressed the necessity for workers to go beyond those guerrilla wars against capital and its state and to struggle under the revolutionary banner of putting an end to capitalist relations.

We need to understand the nature of capitalism, and we need a vision of a socialist alternative if we are to defeat capital. This is my point in The Socialist Alternative: Real Human Development, where I argue for a vision of socialism which involves social ownership of the means of production, worker and community decision-making and production for social needs rather than exchange. A focus upon human development unifies these elements and, indeed, has the potential to unify all our separate struggles. This vision of a society in which all human beings are able to develop their capacities and realize their potential is the vision contained in The Communist Manifesto – a society in which “the free development of each is the condition for the free development of all.” We need to communicate and struggle for the realization of that vision.

We need but we’re not ready to form a socialist party that can defeat capital. But we can develop a socialist project, one which listens, educates and helps to create the basis for a new type of party which is integral to and does not stand over and above social movements. ”

Defeating capital won’t happen spontaneously through some kind of collective epiphany. It requires conscious effort. But any attempt to create at this point a party to defeat capital would be viewed correctly as just another vanguard sect promising to deliver socialism. It is important to start from people’s conception of fairness and to understand why they are moved to struggle. However, we need to recognize the limits of guerrilla wars against capital and to learn to work together in practice to build an understanding about the nature of capitalism and the need for a socialist vision. That means finding ways to create spaces where popular movements can learn from each other – spaces and new forms like people’s assemblies at every level. We need but we’re not ready to form a socialist party that can defeat capital. But we can develop a socialist project, one which listens, educates and helps to create the basis for a new type of party which is integral to and does not stand over and above social movements.

RW/RR: Drawing on your work in Venezuela, Cuba and the former Soviet Union what might a socialistic response to the ongoing economic crisis look like? What has been Venezuela’s response to the economic crisis? What can socialists in Canada and elsewhere learn from these experiences about how to respond to the crises of capitalism?

ML: I’ve just completed a new book, Contradictions of ‘Real Socialism’: the Conductor and the Conducted, which stressed, among other things, the importance of building upon aspects of the ‘moral economy’ of the working-class in the former Soviet Union in order to move forward to socialism. As we know, however, what did happen was precisely the opposite – an attack on the concepts of fairness and justice of workers as part of the process of moving to capitalism. Unfortunately, too, there are many signs in Cuba that the response to their current crisis is to move in the same direction although it is still too soon to rule out the possibility that there can be a return to the ideas of Che Guevara about the importance of building socialist human beings.

Venezuela, though, does offer some ideas that Canadians can draw upon – precisely because it is a capitalist country with resource wealth, has the experience of suffering the Dutch disease and now has a government with the articulated goal of building a new socialism different from the experiences of the 20th Century. In particular, the government of Hugo Chavez has decided to use its resource wealth to expand enormously access to health services and education, to reclaim as state property the oil and other basic industries as well as telecommunications, electricity, steel, cement, airlines and a host of other sectors seen as important for satisfying the many needs of Venezuelans. By building up local industry, housing and agriculture with oil revenues, it is explicitly attempting to demonstrate that there is nothing inevitable about the Dutch disease if you have a government committed to food sovereignty and to creating opportunities for jobs that can serve the needs of people.

There are many problems in Venezuela, and not the least is the inherited culture of clientalism and corruption (as well as a tendency to populism) to which the Chavez government is not at all immune. But there are elements that can inspire many people within Canada who don’t think of themselves as part of an anti-capitalist or socialist Left. The idea of neighbourhood government where people can work together with their neighbours to solve local problems and to plan (something embodied in the communal councils and communes in Venezuela) and the idea of workers’ councils (without which, Chavez has said, you can’t build socialism) – these are ideas which don’t need oil revenues or major state-directed programmes. This concept of protagonistic democracy, a concept of democracy as practice through which people can develop their potential, can appeal to people precisely because of their sense of their powerlessness in modern capitalist society.

Are there ideas here for Canadian socialists to draw upon in the context of the current crisis and the capitalist austerity programme under way? Think about it. Taking resource wealth away from private corporations to be used for fostering the education and health of the people and building new socially-owned industry, creating new institutions which allow for the development of the capacities of people through their own practices, i.e., developing the ultimate productive forces – wouldn’t these be elements with which to counter capital’s austerity programme and to substitute for it a socialist austerity programme (i.e., austerity for capital)?

Consider how different would be the situation in the current crisis in Canada if resource revenues were poured back into the economy for education and health and for building and modernizing economic activity – investments for the future as well as a means of mitigating (instead of exacerbating) the current crisis. Capitalism, as Chavez has said, is a perverse system – one which doesn’t care about human beings. We can use the opportunity of the current crisis to demonstrate how it is a system that we need to go beyond. •

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A man identifying as a Tesla employee claims that workers are seeking union help to improve...

Sweden Took 162k Refugees Last Year, 494 Got Jobs

Just 494 out of the 162,000 refugees who applied for asylum in Sweden in 2015 have managed to get a job, according...

The Ongoing War Against Trump

Eric Zuesse, originally posted at strategic-culture.org The Obama-Clinton (and Democratic Party newsmedia) war against Donald Trump — a war to delegitimize him as the U.S....

Obama’s Failed Presidency

Eric Zuesse, originally posted at strategic-culture.org I’m a former lifelong Democrat, stating here a clear and incontestable fact: Barack Obama is a failed President. It’s true...

Burn the flag on inauguration day!

by William T. Hathaway / December 9th, 2016 Let’s welcome our new Commander in Chief by demonstrating how little he knows about the Constitution of...

‘All we’re asking for is what’s fair’: Teamsters strike at UCLA

500 Teamsters employed by the University of California, Los Angeles (UCLA) hit the streets to protest...

A generation of UK children will suffer in poverty. Suddenly that’s normal

“Austerity” may be an abstract term to much of the public – or a thing of the past, if you listen to Theresa May...

Free Trade Meets Populism at the IMF

Photo by Daniel Lobo | CC BY 2.0 I was taken by surprise by the headline of the Latin American Herald Tribune: Global Elites Insist on Greater...

3rd party candidate Jill Stein responds to Clinton-Trump duel in real time (WATCH LIVE)

Barred from participating in the Clinton-Trump showdown at New York’s Hofstra University, Green Party presidential candidate...

Staggering class inequality ‘contributed to Brexit’ – Oxfam

Britain’s staggering social inequality – where the richest 1 percent possess more than 20 times...

‘Incarcerated Workers’ stage nationwide prison labor strike 45 years after 1971 Attica riot

On the 45th anniversary of the famous Attica riot, inmates across the US are attempting to...

‘Invisibilizing the Workers Who Actually Do the Work’ – Transcript of CounterSpin's special Labor...

Janine Jackson assembled some of CounterSpin‘s best segments on workers and media for a special September 2, 2016, episode for Labor Day. This is...

US maternal death rate soars by 27 percent since 2000

Via WSWS. This piece was reprinted by RINF Alternative News with permission or license. Kate Randall The maternal death rate in the United States is rising...

Middle Britain becomes the ‘new poor’ as poverty stalks the nation

The middle classes are the “new poor” with half of families renting rather than owning...

Blacks, Cops, and a Sinking Economy

In Ethnic America, Thomas Sowell observes, “American pluralism was not an ideal with which people started but an accommodation to which they were eventually...

Twenty-first Century “Canadian” Corporate Capitalism is Quite the Racket

Built with public subsidies, a Montréal firm can shift its ‘head office’ to a tax haven and workforce abroad, but Ottawa will continue to...

US adds only 38k jobs in May, weakest growth since 2010

US companies hired at the slowest pace in nearly six years, adding only 38,000 new jobs...

What Britain Forgot: Making Things Matters

It’s being blamed on the Brexit jitters. But the weakness in the UK economy that the latest figures reveal is actually a symptom of a much...

Reports document growing income inequality, declining manufacturing pay

America in the 21st century Kate Randall A new study from the Pew Research Center shows that more than four-fifths of US metropolitan areas have seen...

On the News With Thom Hartmann: Wealthy Americans More Likely to Have Retirement Accounts,...

Don't trust the corporate media? Neither do we. Make a tax-deductible donation to Truthout and support accurate, independent journalism. In today's On the...

Can you hear them now? 40k Verizon workers go on strike

More than 39,000 workers at one of the largest US telecoms have gone on strike, protesting...

UK prime minister defends super-rich in statement on Panama Papers revelations

Via WSWS. This piece was reprinted by RINF Alternative News with permission or license. Julie Hyland Britain’s prime minister, David Cameron, used his statement to parliament...

The rich are taking the biscuit

Colin Davies OK, so we live in a time when right wing politics is on the rise. People like Donald Trump are gaining support by...

Walling off Common Sense

Jill Richardson “We’re going to do the wall,” Donald Trump told a cheering crowd of supporters in a victory speech following the South Carolina Republican primary....

Finnish government outlines onslaught against working class

By Ellis Wynn In his New Year message, Finnish Prime Minister Juha Sipilae declared that 2016 would be a “moment of truth.” “When confidence in the Finnish...
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Video: Sotheby Scuffles: Police and protesters clash during rally in UK

Protesters scuffle with police at a rally in support of the 'Sotheby four,' a group of cleaners fired from the UK auction house after...

UK child poverty rising as government seeks cuts to tax credits

Via WSWS. This piece was reprinted by RINF Alternative News with permission or license. By Margot Miller Child poverty remained at a high of 2.3 million in...

Ukrainians testify to a life of poverty and violence under US-backed government

Via WSWS. This piece was reprinted by RINF Alternative News with permission or license. By Jason Melanovski Last month marked the one-year anniversary of the election of...

Los Angeles workers demand fairer pay

Low wage US workers in Los Angeles, California have held rallies to demand a wage increase on the 25th anniversary of Justice for Janitors...

McDonald’s Workers Deliver 1.4 Million Petition Signatures to Company’s Annual Shareholder Meeting Calling for...

Oak Brook, Ill. - Less than 24 hours after 5,000 workers marched on McDonald’s corporate headquarters, the burger giant’s cooks and cashiers returned to...

5,000 Cooks and Cashiers Wage Largest-Ever Protest at McDonald’s Shareholder Meeting

Oak Brook, Ill. - Marching behind a giant banner that read, “McDonald’s: $15 and Union Rights, Not Food Stamps,” 5,000 cooks and cashiers massed...

Raising the Minimum Wage Is Step One in Making the Economy Work for the...

A basic moral principle that most Americans agree on is no one who works full time should be in poverty, nor should their family. Yet...

THE ENDURING REALITY OF GOVERNMENT BY WEALTH AND SOME OF ITS CONSEQUENCES

John Chuckman RINF Alternative News If you really want to understand the world in which we live — its endless wars, coups, interventions, and brutality towards...

Wealth of World’s Billionaires Surges Past $7 Trillion

Joseph Kishore The combined net worth of the world’s billionaires has reached a new high in 2015 of $7.05 trillion, according to the latest compilation...

McDonald’s accused of €1bn tax evasion

This piece was reprinted by RINF Alternative News with permission or license. Fast-food chain McDonald’s has been accused of avoiding over €1 billion in European...

Trojan Hearse: Greek Elections and the Euro Leper Colony

By Greg Palast for το χωνί (Greece) [updated January 26, 2015] Europe is stunned, and bankers aghast, that the new party of the Left, Syriza, won Sunday's parliamentary elections in Greece. Syriza won on the promise that it will cure Greece of leprosy. Oddly, Syriza also promises that it will remain in the leper colony.  That is, [...]

George ‘Slasher’ Osborne – wanted for austerity heist

Politicians have their eyes on the general election. The leaked proposals from George Osborne’s last pre-election Autumn Statement were all about spinning the line...

On Black Friday, Americans Confront the Walmart 1%: Pay Employees a Living Wage

Peter Dreier Walmart won't pay its employees enough to afford Thanksgiving dinner, so they're holding food drives for their employees. Seriously. It's been reported that...

Walmart workers strike as they gear up for largest Black Friday protest yet

Kate Aronoff Twenty-three Walmart workers were arrested last Thursday for blocking an intersection in Pico Rivera, Calif., outside a Walmart store in the Los Angeles...

McDonald’s Had to Hire a Fact-Checker to Prove It Serves Real Food

Tom Philpott For McDonald's, 2014 has been like a Happy Meal that's missing a trinket: a major bummer. Its China operations (along with those other...

Kwame Nkrumah: Neo-colonialism, The Last Stage Of Imperialism, 1965

Lenin Nightingale  RINF Alternative News Kwame Nkrunah described the model by which Yankee America would enslave the world and its own people: 'The neo-colonialism of today...

Care UK pay cuts made me homeless, says Doncaster striker

Care UK workers in Doncaster are fighting pay cuts so devastating that they have already made one woman worker homeless. Mags Dalton has been a care worker for 26 years. But...

Workers speak out against privatization of French railways

Anthony Torres On June 17, approximately 1,000 demonstrators gathered near the National Assembly in Paris for a protest called by the General Confederation of Labor...

Minimum Wage Support Grows

During a recent talk at Northwestern's Kellogg School of Management, McDonald's CEO Don Thompson indicated his support for legislation in Congress to raise the...

Brazil Readies ‘RoboCop’ Riot Squads for World Cup Protests

Demonstrators call out government for spending billions on soccer tournament as poor sidelined and public services are diminished nationwide As Brazilians opposed to outrageous sums...

Unions Must Tackle Corporate Power – ITUC

ITUC general secretary Sharan Burrow called for union power to be used to combat the spread of the “corporate jungle” today. The labour organisation representing...

Shockingly, This Fast Food Company Treats Their Workers the Worst

Anna Brones RINF Alternative News As if fast food weren’t bad enough, there’s the plight of fast food workers. Low wages and bad working conditions have brought...

5 Stunning Facts About America’s Prison System You May Not Know

We’ve done several exposés on the prison system in America, including The Prison System Runs Amok, Expands at Frightening Pace (Sept 6, 2012) and Selling the American Dream...

Exploitative practices exposed at McDonald’s restaurants

Danielle DeSaxe RINF Alternative News Last March, several court cases were filed on behalf of McDonald’s food service employees in California, Michigan and New York....

Poverty Is Killing Us

According to a new study from the Brookings Institute, wealthy Americans are living considerably longer lives than Americans who are struggling with poverty. The report points out that...

The Myth of American Democracy — Money Talks and Those Without Money Have No...

Margaret Kimberley RINF Alternative News A new study confirms the obvious: the will of the people carries no weight in the United States. Within the nation’s...

An Apartheid of Dollars: Life in the New American Minimum-Wage Economy

Peter Van Buren There are many sides to whistleblowing. The one that most people don't know about is the very personal cost, prison aside, including the...

Walmart Admits: ‘Our Profits’ Depend on ‘Their Poverty’

Critics cite irony of annual report filing: 'This is a company that everywhere it goes it creates poverty' Lauren McCauley RINF Alternative News Although a notorious recipient...

McDonald’s Admits Worker Strikes Pose Risks to Its Corporate Model

"The company should be worried about continued worker protests" Andrea Germanos RINF Alternative News Growing calls to address inequality and the nationwide strikes demanding fast food...

8 Ways Corporate Greed Is Perverting the Idea of the ‘Sharing Economy’

Andrew Leonard  RINF Alternative News Silicon Valley venture capitalists are raking it in while pretending to espouse progressive ideals. Here’s a new term you’ve probably heard recently:...

4 Most Profound Ways Privatization Perverts Education

Paul Buchheit  RINF Alternative News Compared to other developed countries, equal education has been a low priority in America. Profit-seeking in the banking and health care industries...

The High Cost of Wal-Mart

Pete Dolack  RINF Alternative News Each United States Wal-Mart costs taxpayers nearly $1 million because of the company’s miserably low pay at the same time that...

The American Human Rights Hypocrisy Part 1: Economic and Social Apartheid

Cory V. Clark  RINF Alternative News After the re-election of president Obama, I wrote an opinion piece titled Pepsi Vs. Coke that spoke about the Left/Right...

The Real Causes of the Catastrophic Crisis in Greece and the “Left”

1. The integration of Greece into the EU is the real cause of its catastrophic crisis The almost complete destruction of the lower classes...

Feds: Walmart Broke the Law

Giovanna Frank-Vitale & Derrick Plummer RINF Alternative News The National Labor Relations Board issued the largest-ever complaint against Walmart today for breaking federal labor law by violating...

4 Reasons Why the Corporate Income Tax Should be Doubled–Not Abolished

U.S. corporations need to pay for...

Amazon’s Bogus Anti-Apple Crusade

Behold tech's fiercest legal battle: Price-fixing,...

La Chamber of Raza: Bipartisan elites push for amnesty…(again)

Laura Ingrahamlauraingraham.comJanuary 10, 2014 These amnesty fanatics won't stop. They will do everything in their power...

Why FDR Did Not End the Great Depression — and Why Obama Won’t End...

Alan Nasse From Cambridge University in 1932-1933, John Maynard Keynes observed a promising new U.S. president presiding over what he saw as half-baked and confused...

Anti-immigrant campaign intensifies in Britain

By Jordan Shilton 7 January 2014 Seizing on the lifting of temporary controls on the movement of Romanians and Bulgarians seeking work across Europe on January 1,...

Poverty in Germany hits new high

By Konrad Kreft 6 January 2014 A few days before the Christmas holidays, the Joint Welfare Association published a report on the regional development of poverty in...

“Democratic Dictatorship”: The Transition towards Authoritarian Rule in America

Dr. Robert P. Abele RINF Alternative News As must appear self-evident to both historians and astute observers by now, the United States, in its history, has...

10 Companies Vying for 2013 Corporate Hall of Shame: What’s Your Pick for the...

There is tight competition this year,...

America’s greediest: The 2013 top ten

The headlines havenâ„¢t been particularly kind to Americaâ„¢s most relentlessly greedy over the past year. The headlines havenâ„¢t been particularly kind to Americaâ„¢s most...

Invest in People, Not War

Earlier this month, a delegation of activists took to Capitol Hill to demand a decrease in the massive, out-of-control military budget. As millions of...

Age of Crushing Anxiety: How the Bottom Fell Out in America

How economic security was destroyed.

10 Greediest People in America

The worst of the worst.

Getting the Minimum Wage Just Right

Workers need a break. Few are happy with our economy, and for good reason. Today we lack an economy that is “just right.” Such...

Australian government rescinds childcare and aged care pay rises

By Will Morrow14 December 2013 The Liberal-National Coalition government of Prime Minister Tony Abbott this week scrapped a $300 million fund for providing meagre...

Exporting Apartheid to Sub-Saharan Africa. The Legacy of Nelson Mandela

This article was first published in French in the Monde diplomatique in 1996. It was subsequently published in the African Journal of Political...

More Capitalism for the Chinese

A deeper integration into the world capitalist system appears to be the goal of the Chinese Communist Party, a decision obscured but not occulted...

US mayors’ report: Hunger and homelessness rise as aid programs are cut

By Kate Randall 13 December 2013 A new report on hunger and homelessness paints a devastating picture of the conditions facing millions of workers and poor...

6 Reasons There’s No Such Thing As Compassionate Conservatism

Conservatives worship Ayn Rand, who said...

Must It Keep Getting Worse?

It must be hard for people who came of age politically during the past thirty-five years to appreciate how it used to be taken...

How US inequality became so typical

Last week, five days after Black Friday�™s Walmart strike and the day before a nationwide fast-food workers strike, President Obama delivered a speech at...

The Most Homeless Children In New York City Since The Great Depression

At a time when Wall Street is absolutely swimming in wealth, New York City is experiencing an epidemic of homelessness. According to the New...

Doing the math on Walmart

Protesters participate in a "Global Day" of action against Walmart on December 14, 2012 in Hialeah, Florida. On the shopping day known as �œBlack Friday,”...

Walmart Opens First Two Stores in D.C. After Wage Fight

When Washington, D.C.'s city council passed an ordinance raising the minimum wage just for Walmart's employees, Walmart threatened to pull five stores planned for...

Mandela’s Disturbing Legacy

Mandela's Disturbing Legacyby Stephen LendmanOn December 5, Mandela died peacefully at home in Johannesburg. Cause of death was respiratory failure. He was 95. Supporters called him a dreamer of big dreams. His legacy fell woefully short. More on ...

WH evades talk of minimum wage

American fast-food workers organized national walkout over low wages on Dec. 5, 2013 The White House on Friday sidestepped questions about whether President Obama would...

Renewed strikes at Amazon sites in Germany

By Dietmar Henning7 December 2013 At the end of November, around 1,000 employees took further strike action at Amazon's facilities in Bad Hersfeld and...

Former South African President Nelson Mandela dies

By Patrick O'Connor6 December 2013 Long standing leader of the African National Congress (ANC) and the first president of post-Apartheid South Africa, Nelson Mandela,...

“Haiti is Open for Business!”: Government Complicity in Wage Theft by Foreign Factories

PORT-AU-PRINCE – Haiti's minimum wage will nudge up 12% on Jan. 1, from $4.65 to $5.23 (or 200 to 225 gourdes) per day. Calculated...

Facts about Thursday’s fast-food strike

Demonstrators outside a McDonald's restaurant near New York's Times Square as part of a nationwide protest of fast-food workers on Dec. 5, 2013 This Thursday,...

Union-organized Walmart protests seek to pressure Democratic Party

By Kristina Betinis3 December 2013 Last week, the United Food and Commercial Workers (UFCW) and the union-backed Organization United for Respect at Walmart (OUR...

Sorry, Neoliberals: Inequality Is Driven by Greed, Not Technology

A new study shows low wages...

Tens of Thousands Protest, Over 100 Arrested in Black Friday Challenge to Wal-Mart

After rallies across the country, burning...

Walmart Workers Mobilize for ‘Unprecedented’ Nationwide Strikes

Wal-Mart workers rallied outside a store in Pico Rivera, Calif. in October (Jonathan Alcorn/Reuters)As the shopping extravaganza known as Black Friday came early this...

Crowds Line Up For Black Friday, Walmart Workers Form Nationwide Picket Line

Wal-Mart workers rallied outside a store in Pico Rivera, Calif. in October (Jonathan Alcorn/Reuters)As the shopping extravaganza known as Black Friday came early this...

Activists plan Walmart protests

OUR Walmart, the group behind last year�™s Black Friday activism, has promised even more actions this year with 1,500 protests scheduled at stores all...

Can Right and Left Rally Against Walmart?

One of the most profitable corporations in America is having a holiday food drive. Sounds good — it's the least Corporate America can do...

6 Outrageously Greedy Companies That Make Scrooge Look Like a Softie

Meet the companies offering sh*t sandwiches...

US workers: From bounty to bleakness

Thousands of protesters march during America�™s largest anti-Walmart rally on June 30, 2012, in Los Angeles, California. At the first Thanksgiving, there was no expression...

Chile’s former president set to win second-round election

By Rafael Azul26 November 2013 Chile's former president Michele Bachelet is overwhelmingly favored to win a second round presidential election set for December 15. In...

10 Biggest Myths About Retail Workers

Over 1 in 10 US jobs...

7 Signs the National Outcry Against Walmart Will Lead to Big Changes

Walmart workers are not backing down...

Dallas Walmart workers go on strike

Walmart strikers in Dallas holding OUR Walmart flag. Walmart workers went on strike at seven stores in Dallas, Texas, on Wednesday protesting against their working...

Poor workers, rich executives

Demonstrators in support of fast food workers protest outside a McDonald�™s as they demand higher wages and the right to form a union without...

Wal-Mart Holds Food Drive For Its Hungry Employees

Wal-Mart tries to show its concern for some of society's most vulnerable and deprived: Wal-Mart workers. What seems like an Onion story come to...

Boston’s New Labor Mayor: Could His Win Be A Progressive Blueprint for America?

Marty Walsh's victory proves that blue-collar...

Boston’s New Labor Mayor: Could His Win Be Progressive Blueprint for America?

Marty Walsh's victory proves that blue-collar...

Sri Lankan SEP announces workers’ inquiry into Weliweriya water pollution

By the Socialist Equality Party19 November 2013 The Socialist Equality Party (SEP) is launching a workers' inquiry into the pollution of the local water...

Corporate America’s New Scam: Industry P.R. Firm Poses as Think Tank!

How the media fell hook, line...

Target – The Emperor Has No Clothes!

What's the difference between Target and Walmart? Many liberal-minded people bristle at the name Walmart and think of its well-documented history of low wages,...

UK: Campaign for “living wage” conceals falling pay rates

By Barry Mason12 November 2013 Last week was designated a “celebration” of the so-called living wage in the United Kingdom, with new rates defining...