By James Thompson

As we close in on August 2, 2011 I am reminded of the drama associated with the election of George W. Bush. After the election closed, it dragged on and on and finally a packed Supreme Court ruled in favor of the short, plump dictator for the wealthy. This little demagogue resembled another short, plump dictator for the wealthy in Germany even though he lacked the oratorical skills of the German.

Now we face another crisis point in global capitalism in which red faced Republican demagogues are playing chicken with some of the most important programs in our limited social safety network to include social security, Medicare, Medicaid, veteran’s benefits, and public education as well as a host of other government funded public programs.

The question many people are asking is “Why would the Republicans risk political disaster by attempting to destroy some of the most popular social programs ever created in this nation?”

The answer is fairly simple. This struggle over the debt ceiling dramatizes the class struggle in ways not seen in this country since the Great Depression.

Republicans are merely following the dictates of their superiors, i.e. the captains of U.S. industry, the ultra wealthy capitalist class. They know that even if they lose the election, they will be well compensated for their heroic efforts to fight for the interests of the wealthy.

Republicans are on the front lines of the class struggle and doing a magnificent job of upholding the interests of the wealthy. They are saying “Who needs the working class in the U.S.? We can get cheap labor in other parts of the world. Why pay all these benefits to people we don’t need and educate their children to boot? Why provide them and their elderly and children with health care?” We must remember that the U.S. Government is of the wealthy people, by the wealthy people and for the wealthy people. With profits threatening to shrink, why should the wealthy class continue to throw bones to the poor? Why should the wealthy strengthen the position of the class with which they are struggling?

It is quite a drama for the world to see. Many people in other parts of the world are laughing so hard at the antics of our government that it is hard for them to keep from choking.

Who do the Republicans have to count on for support in their valiant efforts to defend the wealthy from the demands of the working class? It certainly is not the people of the U.S. The people support the continuation of funding of social programs by an 80 to 20 margin. So, they must turn to their only allies, the Democrats. Some people may want to blame the Republicans for the current mess, but it is also the Democrats who have participated in the creation of this nightmare for working people.

For many years working people have watched the coordinated effort of Republicans and Democrats to erode our social safety net. We are not stupid, as the ruling class thinks we are. We can see when Republicans block progressive legislation by filibuster and the use of many constitutionally condoned maneuvers. Similarly, we can see when craven Democrats do not use similar maneuvers to block legislation that is not in the interest of working people. We also see a President who fails to veto right wing legislation and leaves working people at the mercy of the wealthy. This is a President who was elected by a mass movement of working people which included all racial groups. Once in office, he turned his back on working people and has thrown many working class leaders under the bus to serve his well heeled masters. Current negotiations have broken down, but recently President Obama and his right wing sidekick, John Boehner, were licking their chops over the prospect of cutting $3 trillion from the government budget. More tax breaks for the wealthy, including tax incentives for offshoring more jobs, were under serious consideration. Who knows what sort of Frankenstein will emerge when the servants of the high and mighty finally decide what they can get away with without too much fuss and muss?

So, we working class people are not stupid. We can see that elected officials, both Democrats and Republicans, merely serve their masters once in office and forget about the needs of their constituents.

We know that Democrats and the President could block the funding of the endless wars started by George W. Bush and enlarged by Barack Obama. We know that they could also end the tax cuts for the wealthy. We know they could reduce the funding for the prison industrial complex and provide rehabilitation instead of indentured servitude for the incarcerated. We know they could decrease the military budget. We know they could save education, health care, social security and other governmental services for all the people. In fact, we know they could expand services for working people and this would strengthen our economy and reduce the risk of war.

But we also see that they are not doing what they were elected to do. They are “just following orders” from the masters who only care about increasing their own profits.

What can working people do? We must act in a concerted, unified way to not only oppose the draconian budget cuts but to push for more progressive legislation to support the interests of the working class. We must engage in struggle at all levels available to us. We must demand progressive legislation to support jobs, and an end to the countless wars. We must demand that the wealthy pay their fair share of taxes. We must demand that funding for prisons be reduced and funding for rehabilitation of the incarcerated be increased. We must demand that health and education be fully funded and their funding must be expanded to prepare for our future. We must demand that there be full funding for cultural programs and the arts. We must demand full funding for all governmental services.

These are short term goals and we must fight for them.

We must also realize that the only way to end the devastation of the class war, which is a huge burden on all sectors of the population, is to implement socialism. Only with socialism can we secure our future and the future of our children. As long as we wait on politicians who are bought and paid for by the wealthy to uphold the interests of the working people, we will be sorely disappointed. With the implementation of socialism, the working class can become the ruling class. This is the only way to save humanity from the inevitable devastation that capitalism will bring to us. Unopposed, endless wars will lead to countless more lives lost and could lead to the end of humanity and all living things on this planet.

It is time for working people in this country to step up to the plate and fight for our rights. We must learn from the heroic efforts of people in other countries such as Greece, Spain, Portugal, UK and many others. Failure to act responsibly and in solidarity with workers in other countries is merely complicity with the ongoing destruction fostered by the very wealthy at the expense of working people. Will working people continue to beg the wealthy for handouts or will we start to fight back and demand our share of the wealth we create? Only the working class can answer this question.

Will the working class demand a “deal” for workers and their interests or will they settle for “no deal?”

PHill1917@comcast.net

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To understand the fate facing the people of Greece, you have to imagine an intruder coming to your home, putting a gun to your head and demanding that you turn over your earnings, surrender your savings, and sell off your car, your television, and your refrigerator t. Greek citizens neither benefited from the profit frenzy of international bankers nor encouraged their irresponsible behavior, yet they are being asked – no, forced – to pay the price for the damage incurred in the collapse of the world capitalist system.

Greece – a small corner of the European Union – and its people know little of the exotic instruments concocted in the world’s financial centers to overproduce massive amounts of phantom capital fueling the growth of this rapacious system. They are only indirectly acquainted with the arrogant, irresponsible actions of giant investment banks like Bear Stearns, Lehmann Brothers or Goldman Sachs. Very few Greeks see their future tied to the success of the predatory financial behemoths that roam the global economy. And yet they are being forced, at gun point, to pay for their losses.

When the media fog lifts, this is clearly the plight of Greece’s eleven million citizens.

If home invasion, armed robbery, and extortion are crimes, then surely Greece is a crime victim. And the European Union, the European Central Bank and the International Monetary Fund are the criminals. They are aided and abetted by the bond bandits who prey on debt, pouncing on a country struggling to revive its sinking economy. And their puppets – pathetically willing accessories to the crime – are the PASOK leaders and parliamentarians who attempt to legitimize the crime.

With few exceptions, countries have been obliged to take on additional debt to stimulate economic growth in the face of a severe drop in global investment and broad demand. Capitalist economies have no option other than sinking further in decline. In earlier times, deficit, debt-producing spending produced improved growth and accompanying inflation. Growth and inflation, in turn, increased tax revenues and cheapened debt, allowing the public debt to shrink in proportion to the economic product. This has long been a feature of capitalist recoveries from mild to severe recessions. Conventional economists teach this as though it were a universal law.

But we live in exceptional times and conventional economists are seldom right about anything any more.

Today, two factors have changed this dynamic. First, the near-total domination of neo-liberal ideology has shaped opinion to fear public debt of any degree. What was once the dogma of the fringe right has, thanks to over forty years of focused, class-based intellectual encroachment, spawned a uniformity of thought among the media, politicians, and opinion makers bordering on faith and defying history and facts. What began as the so-called “Washington Consensus” in 1989 has become an international consensus, gaining near-theological obeisance. International capitalist institutions like the International Monetary Fund have eagerly embraced its tenets.

Debt hysteria, like patriotic fervor, induces baseless fears that perversely shape policy decisions. Like contrived patriotism, debt fright masks a hidden agenda – in this case, a hatred of all socially useful public spending.

Secondly, for decades, changes in the global economy ushered in a new dynamic that manipulates and exploits debt far beyond anything we have seen before. With many of the capital-rich countries surrendering their manufacturing to low-wage areas, financial activities – the management, manipulation and creative expansion of capital – took on a greater role in these economies. New techniques, instruments and institutions evolved to accumulate surplus value – profits – in the hands of the few engaged in the financial game.

As capital accumulated – US financial profits accounted for over two-fifths of all profits before the collapse – it became increasingly difficult to maintain the rate of return spurred by financial ascendancy. (In Marxist terms, the tendency for the rate of profit to decline reared its ugly head.) Riskier and riskier speculation sought to find a home for the overproduction of capital until the system collapsed, the scenario that we all know so well.

Fueled by an injection of public funds, the financial sector has returned to speculation with a vengeance. In addition, they are now finding new profits in attacking the debt of the most fiscally vulnerable countries and forcing the conversion of private debt into public debt. The financial sector was neither wounded nor chastened by its folly. Instead, it has roared back, attacking sovereign debt in vulnerable countries like Greece, Ireland, Portugal and Spain. Speculative capital has turned virulently predatory.

The combination of these two elements – one subjective, one objective – has placed Greece in a death spiral. With unemployment soaring over 16%, taxes on the poor enacted, homelessness on the rise, salaries and benefits sliced, and social services eviscerated, Greek workers face a future of decline.

II

If there is one insight central to the science of Marxism, it is that appearances seldom reveal the real social realities; indeed, they most often mask them. The interplay of personalities, the clash of proclaimed interests, or the statements of policy makers conveyed by the corporate media are seldom the actual forces at play in social developments. Instead, material forces evolving from the system’s dynamics are usually the decisive factors in driving change.

In the case of Greece and, soon, the other vulnerable European Union countries, finance capital — particularly its most predatory elements (hedge funds and private equity firms) — has exploited the crisis to generate profits by betting against Greece’s ability to manage its debt. These bets have predictably influenced the market, making it even more difficult for Greece to secure and pay off its debts. As selling and redeeming bonds became more costly, Greece lost the ability to generate a recovery from further deficit spending.

Without a boost from public sector spending to jump-start economic activity, tax revenues shrank further, crippling Greece’s ability to meet debt payments and again find favor with the bond profiteers. The painful, tortured route to economic destruction ensued.

The only sensible exit from the vise gripping Greece was to stand up to finance capital and extract a new deal or exercise its sovereignty by voiding its debt – defaulting. But Greece’s “socialist” party, PASOK, instead turned to the eager criminals of the IMF, the EU and the European Central Bank for “help”. Only the Greek Communist Party and the advanced sector of the working class, PAME, advocated swift exit from the financial vise.

III

Where the media presents Greece’s plight as simply one of irresponsible government bringing pain on itself and the attendant economic hardships as the market’s revenge, the truth is far different. The Greek crisis is what an unrestrained, dominant, and predatory financial sector produces. But we must also recognize that the financial monster devouring Greece is itself the product of a capitalist system dependent upon finance to sustain its continued accumulation of surplus value. Those who think that taming the financial behemoth will restore a kinder, gentler capitalism are ignorant of the system’s logic.

By turning to the triumvirate (the EU, IMF and the ECB), the PASOK government surrendered the country’s sovereignty and its economy to three enemies of the Greek people, three enemies with often contradictory agendas.

The European Central Bank is the strong-arm enforcer for European banks. Its goal is simply to ensure that Euro-banks are not damaged by any Greek events, that the banks’ investments and loans are protected. It adamantly opposes any policy that will ask euro-banks to sacrifice. The ECB opposes default at all costs, threatening to not buy Greek bonds if Greece defaults. It supports EU bailouts because they transfer Greek debt from the private sector to the public sector. J.P. Morgan estimates that public sector sovereign debt liabilities against Greece will surpass their private sector counterparts in 2013 as outstanding bonds are paid off. This trend is expected to continue, going forward. The ECB welcomes this exit by private banking since it will leave the banks immune from any negative consequences. They have no interest in the fate of Greece’s working people.

The International Monetary Fund, on the other hand, serves as an active agent for international capital. Through extortionate loans, it imposes the conditions for capitalist exploitation upon countries desperately in need of financial help. Privatization, diminished social securities, and dis-empowered workers constitute its agenda. Clearing a path for US imperialism drives the policies of the IMF, with the interests of the other imperialist powers playing a secondary role.

The details of the austerity package for Greece – privatization, unemployment (to discipline workers), destruction of social services, etc. – are the work of the IMF. It was with glee that international capital welcomed the demand for a $71 billion privatization of Greek public assets, including Athens Airport and Greek railways. The Wall Street Journal cynically dubbed it a “National Tag Sale.” The IMF, too, has no interest in the fate of Greece’s working people.

The European Union, a political body, reflects the political will of the dominant governments of the EU: Germany and France. Both countries’ governments subscribe wholeheartedly to the neo-liberal dogmas, prescribing austerity for growing public debt. In this respect, they endorse and lead the EU to support the IMF regimen. But they have political reservations about the terms of the extortionate deals crafted to impose austerity. They resist committing their own public funds to buy the Greek government’s collaboration in selling out the Greek people. So-called “bailouts” come at the expense of public funds provided by the EU constituent governments. They prefer to find another weapon to hold to the head of the Greek people. But the EU, as well, has no interest in the fate of Greece’s working people.

Like all criminal syndicates, the unity of the triumvirate is threatened by selfish interests. The German government recently proposed a restructuring of privately held Greek debt (largely euro-banks), but the ECB slammed the door on this since it would call on European banks to sacrifice. France is now proposing similar actions with the ECB similarly in opposition. Neither government wants to commit its own public funds to the sustenance of Greek government debt. While they agree on the crime, they cannot agree on the weapon.

IV

It would be a profound mistake to see the mugging of Greece as an isolated, inconsequential event. Rather, it is a template for the way ahead for international capital.

In the days before the betrayal of the Greek people by the 155 PASOK representatives, stock markets world-wide were falling, in fear that the massive strike and demonstrations of the Greek people might frighten these spineless politicians into rejecting the extortionate deal demanded by the IMF, the ECB and the EU. The mere possibility that resistance would derail the program shook the foundations of capital. In the days following, the markets leaped forward more than they had in months.

Greece is neither isolated nor inconsequential.

The pattern established in Greece is being repeated in other countries, like Portugal, Ireland and Spain. Italy and the UK are next in line, with others to follow. The game plan will undoubtedly be tailored to different circumstances and different balances of forces, but capital will relentlessly strive to squeeze profit from the living standards of working people and expropriate the public wealth held socially. The weapon in this assault is debt manipulation.

Some on the left sounded the death knell of neo-liberal capitalism in the depths of the crisis. Clearly, that was a profound mistake. Neo-liberalism, financial predation and global capital have mounted a vigorous counter-attack, leaving those illusions dashed.

We can, however, draw important lessons from the Greek struggle. While the Greek people, led in this conflict by Communists and class-conscious workers, failed to stop the mugging, they are not defeated. They will have much to say about the next chapter in this unfolding story.

For us in the US, the assault on the Greek people should remind us of what we face. While we should be inspired by the resistance in Wisconsin, Ohio and other states, we must recognize what a daunting, difficult struggle lays ahead. And we should not be seduced by phony political allies like the Democratic Party, the US counterpart to PASOK, in this fight.

With all respect to our many causes, this is the central battle of our times.

Zoltan Zigedy
zoltanzigedy@gmail.com

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Posted By zoltan zigedy to ZZ’s blog at 7/06/2011 04:58:00 PM