Will China Save the Global Economy?
| August 27, 2015 | 12:58 pm | Economy, political struggle | No comments
Understanding the People’s Republic of China (PRC) constitutes a formidable challenge to every Marxist. Of course it’s not a challenge based on some racist notion of “oriental inscrutability” or even the task of unraveling the obstacles presented by size, diversity, and complexity. Instead, it is the perplexing doctrine of “socialism with Chinese characteristics” that confounds many of us. While no one can contest that the Chinese Communist Party is the leading force in Chinese society, some see the Party as leading the PRC in the wrong direction– along the path of capitalist restoration.
That capitalist relations of production exist and and have grown in the PRC is unquestionable. Both domestic private corporations and multinational capitalist enterprises have gained far more than a toe-hold in the national economy. Nonetheless, it is pointless to engage in the popular parlor game on the left of declaiming the PRC as socialist or capitalist. The more pertinent and useful question is: “Where is the PRC headed?”
I raised that question in an essay– The Chinese Puzzle— in December of 2011. Despite many reservations about the deceptively dubbed “reforms” accepted by the Chinese leadership, my judgment was that the socialist underpinnings of the economy, while dangerously weakened, were still intact: the state sector, relative to national annual product, was still five times greater than a typical European social democracy like France; the financial sector was predominantly state owned; and the planning mechanism was weak, but functional.
At the same time, I was fully cognizant of the many problems wrought by capitalist “reforms”:
The entry of capitalist features into the PRC economy has plagued it with the maladies that arise from the anarchy of markets: imbalances, speculative fervor and bubbles, inflation, labor unrest, grey and black markets, and labor market chaos. In the spring and summer of 2010, workers rose against low wages and working conditions in many areas. Again, this year [2011], there were significant actions for better pay, working conditions and against layoffs. In the fall, the PRC’s sovereign wealth fund was forced to buy shares in major Chinese banks. Despite the fact that private investors own a quarter or less of the country’s biggest banks, a sell-off by foreign investors caused a near panic met by the sovereign wealth funds’ intervention. Today, inflation, a construction bubble, and over reliance on exports weigh on the economy. (my emphasis)
But the PRC’s economic stability during the worse years of the global economic crisis demonstrated, in my estimation, the existence and value of the remaining socialist base.
I concluded on a note of caution:
The country’s participation in global markets could present problems that even its remaining socialist tools cannot overcome. Moreover, it is not clear if the PRC will strengthen these safeguards or jettison them, as its leading Communist Party shapes this awkward mix of socialism and capitalism.
A Right Turn
Four months later, alarms sounded with the publication of a joint World Bank and the PRC State Council’s Development Research Center report that urged an acceleration of privatization, deregulation, financial market liberalization, and openness to foreign corporate penetration. Of course this prescription is the conventional wisdom promoted by the World Bank. But most alarming was the endorsement of this agenda by such a prominent PRC body. The report urges:
In the financial sector, it would require commercializing the banking system, gradually allowing interest rates to be set by market forces, deepening the capital market, and developing the legal and supervisory infrastructure to ensure financial stability and build the credible foundations for the internationalization of China’s financial sector.
The study, China 2030, clearly represented the manifesto of the rightist “capitalist roaders” in the PRC leadership. As I noted at the time (The Battle for China’s Future, 3-06-12), “…the leadership [walks] the thin, risky line between emerging capitalism and the remaining socialist institutions. But, clearly, The World Bank and its Chinese allies are determined to influence that direction. And there should be no doubt which direction China 2030 is intended to push those leaders.”
With the subsequent ascendency of the Xi Jinping leadership group, it became clear that further “reforms”– economic liberalization– were forthcoming. Xi sought to unleash market forces, diminish the power and size of the public sector, and court, in various ways, foreign capital and corporations. Keen to minimize the rampant corruption that accompanied the expansion of the private sector, the government also mounted an aggressive campaign to investigate and prosecute the most flagrant abusers. They hoped that this would dampen public resentment of economic inequities that invariably comes with the expansion of private profiteering.
Clearly, PRC’s new generation of leaders have accepted the market dogma that further growth was threatened by regulation, a prominent public sector, and financial restraint. Clearly, they have been persuaded by liberal ideologues that more capitalism and less socialism is the order of the day.
And clearly, they have not foreseen the dangers lurking on that path.
The decision to go forward with liberalization was felt dramatically in PRC equity markets. PRC leaders urged investors to enrich themselves. Beginning in November of 2014, regulations against leveraging– margin buying– were relaxed, interest rates were cut, and international access to stock markets was expanded, resulting in the rapid advance of an already hot market. Initial public offerings (IPOs) multiplied; market capitalization increased five times in one year; margin loans doubled in six months, reaching 2.27 trillion yuan; individual investors surpassed 75 million, with even 31% of college students playing the market. The PRC leaders had unleashed a stock-market frenzy, resulting in Chinese combined equity markets, at their peak, becoming the largest in the world after the New York Stock Exchange.
The stock market “miracle” drove the benchmark Shanghai Composite index to a new high in mid-June of this year, reaching 5166 from 3334 at the end of last year.
But then the market collapsed. Less than a month later, $3.5 trillion in nominal value disappeared, with the market dropping to 3507. By late August it had further eroded to 3210.
Government measures to stem the crash were ineffectual. Despite suspending IPOs, suspending trading on many stocks, restraining margin buying, and allocating $19 billion to a market stabilization fund, the market continued to falter. Twenty-four million investors left the market, presumably after suffering large losses. To put a perspective on the losses, they were over 14 times the GDP of Greece.
Unlike in the past, the PRC had no socialist tools in their tool box (or they chose not to use them). Unlike in 2008 when the PRC leaders swiftly injected public funds into public enterprises and public projects to propel the economy away from the private folly of the global economy, the PRC leaders were overwhelmed by market forces that they were so eager to unleash.
In their enthusiasm to embrace markets, the leadership had pledged in February to allow the yuan’s exchange rate against other currencies to float and remove controls on capital flows. Despite four quarters of capital outflows, the government freed the yuan exchange rate on August 11, unleashing a devaluation that promises to accelerate capital outflows. In the face of a collapse of the PRC equity markets, the leadership chose to answer with further market “reforms.” Moreover, Western commentators (see Paul Krugman, for example) bizarrely blame the rout on too few market reforms rather than the aggressive liberalization that overheated equity markets, an endorsement of a demonstrably failed policy. Capitalist bromides brought the PRC economy to this juncture. Will the PRC leaders continue to embrace them?
Global Turbulence
The current chaos in world-wide equity markets has made the PRC a convenient whipping boy. The commentariat sees economic problems in the world’s second largest economy as dragging the global economy down. While China’s economy is moving in the wrong direction and, consequently, contributing to the enduring capitalist crisis, it is far from the efficient or final cause of the painful throes of the capitalist system. Long developing, deeply embedded processes are working to undermine the capitalist system (see my The US Economy: A Midyear Report Card, 6-12-15).
But it is important to stress, nonetheless, that the Chinese economy– even with its remaining socialist features– is no longer able to rescue the global capitalist economy as it did, in part, in 2008. As Lingling Wei and Mark Magnier wrote in The Wall Street Journal (China to Flood Economy with Cash, 8-24-15):
Beijing’s struggles this summer have spooked many investors into viewing China as a threat to,
 rather than a rescuer of, global growth. During the financial crisis of 2008 and early 2009, China, with a colossal stimulus plan, acted as a shock absorber. Lately, it is China that is providing the shocks.
This is a stark and candid admission of the abandonment to the market of important, critical elements of the socialist economy by PRC leaders. One can only hope that they will come to their senses before they join others in trying to manage the unmanageable.
Zoltan Zigedy
I went to a Bernie Sanders rally to ask fans why they ‘Feel the Bern.’ Here’s what they said.
| August 26, 2015 | 8:09 pm | Bernie Sanders, political struggle | No comments
SOURCE: Jewish Journal
Two weeks ago
Democratic presidential candidate and Vermont Sen. Bernie Sanders was in rally mode at the Los Angeles Memorial Sports Arena on Aug. 10 and the scene was, well, pretty wild.
When the doors opened at 6 p.m., thousands of people were lined up outside hoping to get in before the arena filled to capacity, which it eventually did. Sanders told the crowd that more than 27,000 people were inside the arena and watching on big screens outside. Give or take a couple thousand, that’s totally believable, because it was packed.
The crowd looked mostly young (18-35), but there were plenty of middle-aged folks and senior citizens sporting some combination of Sanders pins, shirts, hats and signs. One older man even had his massive, beautiful dog decked out in some turquoise Sanders getup. The whole thing felt like a mixture of a neighborhood block party and a sports event (and not an L.A. sports event — they tend to be dull and cheerless).
There was a man in a Manning/Snowden ’16 shirt, a veteran who suggested he would support Rand Paul if Sanders weren’t in the race, and even more unkempt beards than you’d see on a trip to Seattle or Portland. Interviews with folks in the crowd were constantly interrupted by the screams that circled the arena as the “wave” made its way around a dozen or so times.
So, why is this grizzly 73-year-old senator from Vermont drawing the largest crowds so far of the 2016 presidential race? Two themes that came up again and again were that he’s not indebted to corporations and that Hillary Clinton isn’t a sufficiently genuine progressive. Asked how they view the “socialist” label attached to Sanders (in the Western European, democratic socialist mold), and whether it would hurt his chances in a general election if he became the Democratic nominee, here’s what some members of the crowd had to say:
Arrah Stamatakis, 27, singer-songwriter
“I’m excited to vote for a real progressive candidate. He offers authenticity more than Clinton does, and I want a single-payer health care system. I want free higher education.
“Hillary voted for the [Iraq] war, and she’s changed her position on many things.”
Brian Petras, 41, entrepreneur
“I feel Hillary has trust issues. I feel like there’s a little bit something that she’s hiding. Bernie’s very direct. He says what he wants. He’s not vague in his positions.
On the socialism label: It’s not socialism. He’s a democratic socialist. He still believes in democracy. He just has [elements] of socialist things that help the population, like health care and expanding Medicaid. He’s not against free markets or anything.”
Jamie Throgmorton, 54, drove 90 miles to attend
“I like him more than Hillary because he’s an outsider. He’s willing to speak truth to power, and I don’t think Hillary really is. I feel like she has a very kind of scripted, polished method that’s safe within the existing political structures.”
On the socialism label: “I think that’s one of the big challenges. You see people throw around that label and it’s, like, just a nasty word, and people don’t even stop to think. They don’t know what it means and we don’t define our terms very well, so I think that’s potentially one of the issues he has to educate people on. What does it really mean? What does he really stand for, and why is that not the right label to throw on it? Or maybe that is the right label, but the label itself kind of has a bad connotation.”
Zoe Raven, 18
“I came because I think Bernie Sanders is at least for my demographic, being a black 18 year old girl, he’s the best candidate to help me and the people that I know become successful and live in a country that’s unified.”
Patti Hollis, attended with her husband and daughter
“I think Hillary’s attached to corporate money.”
On the socialism label: “I need to understand what that word means, what it meant, what it means now, if it’s different.”
Kevin Eden, 27, protein scientist at UCLA
“I like that he’s a populist … Hillary hasn’t really showed that she has any populist agenda so far.”
On the socialism label: “I think a lot of people don’t actually know the definition of socialism and what it means to be a socialist, so the more he talks about what the agenda is of socialism, I think the more people agree. That’s why so many people are here.”
The actual rally began at 7 p.m., with various activists (including comedian Sarah Silverman) pumping up the crowd and making their case for Sanders based on a litany of progressive issues they hope will drive youth voters and the base to the polls during the primaries. #BlackLivesMatter, climate change, immigration, labor, corporate greed, single-payer health care — all were on the table even before Sanders took the stage. When he came out, the primed crowd went nuts — and stayed nuts throughout his nearly one-hour speech.
How much do these rallies really tell us? Polls and primaries will reveal whether they’re indicative of broad enough support for Sanders to truly challenge Hillary Clinton for the Democratic candidacy. Howard Dean drew big crowds in 2004 and then fizzled out quickly. But, while standing in the middle of a Bernie Sanders crowd, it feels like the Clinton camp should be at least a little concerned.
The music of Malcolm X

The Music of Malcolm X

The evidence keeps pouring in: Capitalism just isn’t working
| August 25, 2015 | 12:40 pm | Analysis, Economy, political struggle | No comments

The Evidence Keeps Pouring In: Capitalism Just Isn’t Working
Published on
Monday, August 24, 2015
by Common Dreams

Paul Buchheit

(Photo: Jonny White/cc/flickr)

To followers of Ayn Rand and Ronald Reagan, and to all the business
people who despise government, ‘community’ is a form of ‘communism.’
Even taking the train is too communal for them. Americans have been
led to believe that only individuals matter, that every person should
fend for him/herself, that “winner-take-all” is the ultimate goal,
and that the winners have no responsibility to others.

To the capitalist, everything is a potential market. Education,
health care, even the right to water. But with every market failure
it becomes more clear that basic human rights can’t be bought and
sold like cars and cell phones. The pursuit of profit, when essential
needs are part of the product, means that not everyone will be able
to pay the price. Some will be denied those essential needs.

Common Dreams needs you today!

Global Failures

Capitalism hasn’t been able to control runaway global inequality. For
every $1.00 owned by the world’s richest 1% in 2011, they now own
$1.27. They own almost half the world’s wealth. Just 70 of them own
as much as 3.5 billion people.

Capitalism has not been able — or willing — to control the “race to
the bottom” caused by “free trade,” as mid-level jobs continue to be
transferred to low-wage countries.

Nor has capitalism been able to control global environmental
degradation, with trillions in subsidies going to polluters that
don’t even pay their taxes, and with corporations ignoring any
semblance of social responsibility as they seek ways to profit from
global warming.

Job Creation Failures I

With or without globalization, middle-class jobs are disappearing,
even higher-end positions in financial analysis, medical diagnosis,
legal assistance, and journalism. Artificial intelligence is making
this happen. Millions of Americans have had a role in the great
American productivity behind this technological takeover, but
capitalism allows only an elite few of us to reap the disproportional

Reports of job recovery are based on low-income jobs, many of them
part-time. Layoffs are cutting into the military and technology.
Gallup discounted Wall Street’s job-creating ability. As noted by
former Wall Street Journal Associate Editor Paul Craig Roberts, the
US rate of unemployment is 23 percent when long-term discouraged
job-seekers are included. That’s close to the unemployment rate of
the Great Depression.

Job Creation Failures II

Closely related to employment woes is the collapse of corporate
investment in new product R&D, from 40 cents per dollar in the 1970s
to 10 cents now. CEOs are choosing instead to spend almost all of
their profits on buybacks and dividends to enrich investors.

Health Care Failures

The capitalist profit motive allows the cost of a hepatitis pill that
costs $10 in Egypt to sell for $1,000 in the United States, and the
cost of a blood test to range from $10 to $10,000 in two California
hospitals (a 100,000% markup at the second hospital).

Patent abuse is one of the factors making this possible.
Pharmaceutical companies can tweak a drug with a minor change to
create a “brand new” drug with a new patent.

Another health-related scam that affects most of us is bottled water.
According to Food & Water Watch, about half of it is filtered tap
water with fancy names, as evidenced in one case by an actual “tap
water” label on a company’s product. Yet with the demise of community
water fountains, and the barrage of advertising for “safe and pure”
drinking water, unsuspecting Americans pay dearly: for the price we
pay for a bottle of water we would be able to fill up that bottle a
thousand times with tap water.

Housing Failures

Because of the “invisible hand” of the free market, in just 35 years
the investment wealth of the super-rich has gone from 15% of
middle-class housing to almost 200% of middle-class housing.

Education Failures

A remarkable story of privatization failure is told in the story of
charter schools in Florida, where Jeb Bush still holds dear to his
delusions of free-market educational success.

That’s just one example. In general, charters are riddled with fraud
and identified with a lack of transparency that leads to even more
fraud. Since 2001 nearly 2,500 charter schools have been forced to
close their doors, leaving over a quarter-million schoolchildren
between one bad business decision and the next. A report from PR
Watch summarizes the billions of dollars spent on charters without
accountability to the public.

Disposable Americans

Chris Hedges wrote: “Human life is of no concern to corporate
capitalists. The suffering of the Greeks, like the suffering of
ordinary Americans, is very good for the profit margins of financial
institutions such as Goldman Sachs.”

People become meaningless in a successful capitalist system.
This work is licensed under a Creative Commons Attribution-Share
Alike 3.0 License

Paul Buchheit is a college teacher, an active member of US Uncut
Chicago, founder and developer of social justice and educational
websites (UsAgainstGreed.org, PayUpNow.org, RappingHistory.org), and
the editor and main author of “American Wars: Illusions and
Realities” (Clarity Press). He can be reached at

Sanders, socialist hopeful, gains in race against Clinton
| August 24, 2015 | 8:07 pm | Bernie Sanders, political struggle, socialism | No comments
Aug. 21, 2015
SOURCE: ProgresoWeekly
He has always said that he is a socialist; he has always promoted progressive proposals on health, public education, Social Security and the environment.
He has always been a severe critic of imperial policies of interference and unjustifiable wars, and he always has pronounced himself on the side of the workers and the most vulnerable against the so-called One Percent Oligarchy that is usurping democracy in the United States.
Now he calls for a political revolution to rescue his country, that is, the positions that usually remain on the sidelines of the national political contests.
So far, those are the positions of the presidential candidate who — out of more than 20 presidential candidates in both parties — has attracted the largest crowds of likely voters. Surveys show that he already threatens the queen of the Democratic Party, Hillary Clinton, in some key states. Nobody predicted this development; nobody imagined it.
Senator Bernie Sanders amazes the political cupola and alarms other pre-candidates who are seeking the Democratic nomination for president, including the party’s grande dame. In recent weeks, his rallies have been five times larger than any of Clinton’s so far.
His message always wages a frontal attack on economic injustice and the famous 1 percent, a legacy of the Occupy Wall Street movement.
“The issue of wealth and income inequality is the great moral issue of our time, it is the great economic issue of our time, and it is the great political issue of our time,” he says. “We face a billionaire class that has bought our political system in order to enrich itself.”
In another speech, he said: “What this campaign does is to send a strong and clear message to the billionaire class — its greed is destroying the United States. This country belongs to all of us, not just a few billionaires.”
“Our campaign deals with creating a political revolution that tells the billionaire class that they can’t have it all. This country, this government belongs to us all. When we come together, when we don’t allow others to divide us because of the color of our skin or our sexual orientation, because a man or a woman was born in the United States or elsewhere, when we unite there is nothing, nothing that we can’t achieve,” he says, to the applause of his followers.
In his website, the message of welcome is “Are you ready to start a political revolution?” (https://berniesanders.com).
Sanders, who has always defined himself as a social democrat, is an independent Senator from Vermont. Previously, he was a representative (24 years in the House) and, before that, was the very popular mayor of Burlington, Vt.
Originally, though, he was a New Yorker from Brooklyn, where he and his followers were called “Sanderistas.” In fact, he was one of the critics of U.S. policy in Central America during those years.
He never had the support of the Democratic Party leadership and political leaders, analysts and commentators rule out his chances as a presidential candidate, never mind the possibility that he might make it to the White House.
But an important sector of the party base — especially the youth — surprises the experts and party leaders with its enthusiastic support for the 73-year-old politician, who is well known for his white, uncombed mane, and his simple, frank and furious rhetoric delivered with the accent of his native Brooklyn.
On Aug. 9, more than 20,000 people showed up for a Sanders rally in Portland, Ore. On Aug. 11, he attracted 27,000 or more supporters in Los Angeles (a number five times larger than any of Clinton’s public events, The Washington Post reported). Thousands have come to hear him in small and midsize cities, in numbers that occasionally surpass the crowds attracted by Barack Obama in his historic campaign in 2007.
Meanwhile, in cyberspace, more than 100,000 joined a live broadcast to 3,500 house parties in late July to listen to him speak from an apartment in Washington. His Facebook page contains 1.6 million names who “like” Sanders, almost half a million more than Clinton and a lot more than the other candidates of both parties. Tens of thousands of volunteers have joined his campaign.
His approval index has soared. A recent CNN poll showed Sanders only 6 points behind Clinton in New Hampshire, a state important not because of its size but for the fact that it holds the first primary election. A New Hampshire pollster had him in first place.
At the national level, he recorded an increase of 10 points in only one month, rising to 29 percent vis-à-vis 47 percent for Clinton. Both were far above the three candidates who followed.
Sanders’ campaign stands out because of the source of funds — an overwhelming majority of ordinary citizens — as compared with Clinton and the others, who get their money from a few billionaires. It is a campaign based on self-organization, where the senator generates a massive grassroots movement led by the bases, not political professionals.
Some opine that, like the Donald Trump phenomenon in the G.O.P., Sanders’ unexpected success is due to the fact that people are sick of professional candidates packaged by the political machine. This, even though Sanders has been a politician for more than three decades.
In contrast with Trump, Sanders has kept his commitment to certain progressive principles throughout his career and has confronted the established leadership. Trump is an integral part of that leadership. In fact, Sanders has denounced the billionaire for his anti-immigrant message, which he calls a shame for our country.
The consensus among experts is that Clinton’s huge political machine and billion-dollar funding will eventually crush all opposition, including the man who is now in second place.
However, almost everyone has to admit that Sanders’ presence has a substantial impact on this political contest and forces everyone — including Clinton — to broach the issue of the 1 percent against the 99 percent as one of the linchpins of the great electoral dispute in this country.
Meanwhile, the fact that Sanders’ message (and his anger) has massive resonance reveals the existence of a sector broader than anticipated by the experts — a sector headed by young people — that favors a profound progressive change, perhaps toward a political revolution in the U.S.
Maybe thanks to him, the word “socialist” will cease to be taboo in this country.
Phil Lempert on the surge in non-GMO crops
| August 23, 2015 | 2:40 pm | Action | No comments

Petition supporting Bernie Sanders
| August 23, 2015 | 2:38 pm | Bernie Sanders, political struggle | No comments