“We are the 99 percent” movement opens up a new historical moment

“Occupy Wall Street/We are the 99 percent” has announced that “A new uncompromising movement against NYPD’s notorious Stop & Frisk program began yesterday [Friday] as hundreds of demonstrators marched from the Harlem State Office Building to Harlem’s 28th precinct. At the station, Cornel West, author and Princeton professor, Carl Dix of the Revolutionary Communist Party, Rev. Stephen Phelps, interim senior minister of Riverside Church, and dozens of others were arrested in an act of non-violent civil disobedience. Among those arrested and protesting was a large contingent from downtown’s Occupy Wall Street.”

This extension of the OWS protest is an important step in broadening the campaign. An “Occupy Harlem” protest is due to start next week, and if successful will not only challenge the unconstitutional police harassment experienced by African-American and Latino youth in New York, but also involve these youth with OWS’s struggle against bank control of the political system. This would be a huge breakthrough for the movement.

OWS’s direct action tactics have also re-energized the unions, not at the leadership level, which is still oriented to the Democratic leadership, but at the more militant base. Bloomberg Businessweek reported that on Friday “dozens of Occupy Wall Street protesters joined the picket line outside Sotheby’s, the Manhattan auction house, where 42 unionized art handlers have been locked out in a labor dispute since July 29. ‘Walking around in a circle outside that building is not an easy job,’ said Jason Ide, the 30-year-old president of Teamsters Local 814, which represents the handlers and commercial movers. ‘When they show up, our guys feel a real kick because they care’.”

The reason the protests resonate with so many different social groups is because of the long-term deterioration in people’s living standards which is now accompanied by an acceleration of job layoffs and increased poverty since the bank crash of 2008. This is grudgingly verified by Businessweek, “Income and wealth inequality in America have been growing for decades with little public outcry. The catalyst for the [OWS] movement now is that during the worst financial crisis since the Depression, there is a perception that Wall Street and the wealthy were taken care of while average folks suffer. That isn’t a fringe view. … One of the critics of the Wall Street demonstrations cited a survey showing that three-quarters of the protesters favored higher taxes on the rich. In major U.S. media polls – by the Wall Street Journal/NBC News and Bloomberg News/ Washington Post – two-thirds of the public agree.”

This is very different from the Tea Party whose support from conservative whites stemmed from blaming government for their loss of privilege. The televised search for a Republican presidential candidate reveals the Tea Party’s shrinking base by its increasing extremism and denial of human empathy for the sick, gay soldiers, and unemployed. The vicious demonization of OWS by Tea Party spokespeople like Glenn Beck reflects the fact that their support relied on a monopoly of a populist rhetorical space.

The mass support for the Occupy protests is not going to fade away, since a much greater banking crisis is on the horizon. Bank failures in Europe and the euro’s convulsions threaten to hit Wall Street hard, and in defiance of regulatory bodies Bank of America has moved some of its toxic exposure to the European debt crisis from its subsidiary Merrill Lynch to the main Bank of America account where they are insured by the FDIC and ultimately become the liability of the taxpayer.

At the same time, the government is paralyzed by the rightward ideological push of the Republican Tea Partiers, which Obama’s administration has implicitly accepted by setting up the bipartisan “Gang of Six” to agree on a $1.5 trillion reduction in the federal budget which will further contract the economy leading to further job losses, and dismantle the social safety net. This in turn will draw many more into support for the OWS movement’s confrontation of the political system.

The historical moment we are in is a different one from the period of resistance to union-busting laws in Wisconsin, which was the precursor to the OWS movement, even though only a few months have passed since then. At that time, the Tea Party Republicans appeared ascendant by using their control of the state legislature to steamroller through their agenda. The union leaders led the reaction against them which focused on reversing state laws, although this was extended by the occupation of the state Capitol building in Madison.

Democratic legislators and the graduate students’ union in Wisconsin led the occupation from the beginning, and it was this occupation of public space that became the focus for large demonstrations of support. The occupiers organized themselves with the same kind of horizontal democracy as OWS, although the mass movement still considered Wisconsin Democrats its leadership. The defection of 14 state senators to Illinois was a form of direct action within the political system that denied governor Walker a quorum on his anti-union budget bill, and gave validation to mass actions in Madison and around the state.

However, the union-led movement had difficulty connecting with other struggles in Wisconsin against bank foreclosures and other social issues because of their focus on restoring collective bargaining. Despite these limitations, in a state divided between Democratic-voting cities and mainly Republican rural areas and Milwaukee suburbs, Wisconsin Democrats showed energy and commitment to an election recall campaign which succeeded in reducing Walker’s senate majority to one, and are set on recalling Walker himself next year. The success of the “Occupy Wall Street/We are the 99 percent” movement is now rebounding back on Wisconsin and “Occupy” protests are springing up around the state and taking up social issues on a much broader front.

This will become a problem for the Democratic party leadership nationally, since they are heavily indebted to Wall Street, but on the other hand must respond to the mass movement (particularly at the local level). The divisions which will inevitably manifest themselves within the party open up opportunities to replace corporate Democrats with progressives who support the aims of OWC, which would be a parallel expression of the occupation movement.

Will Obama default on government’s debt to Social Security?

The question that has dominated the headlines recently asks if the Republicans are crazy enough to engineer a debt default, or will they retreat at the brink. But this is the wrong question. What really should be asked is how have the super-rich been able to frame the agenda of the Obama administration and control Congress?

The US national debt has escalated because of two things: wars of choice in the Middle East and Asia, and tax cuts for the super-rich. Under Bush, the budget went from fiscal surplus to a debt of $3 trillion. But the debate in Washington has centered on cutting spending, including Social Security and Medicare entitlements. There is an impasse at present because the Republican party as a whole has been captured by the wealthy extreme right who have pressured legislators to sign no-tax increase pledges.

Paul Krugman blames political commentators for not reining in the Republicans. “A number of commentators seem shocked at how unreasonable Republicans are being. ‘Has the G.O.P. gone insane?’ they ask. Why, yes, it has. But this isn’t something that just happened, it’s the culmination of a process that has been going on for decades. Anyone surprised by the extremism and irresponsibility now on display either hasn’t been paying attention, or has been deliberately turning a blind eye. … Here’s the point: those within the G.O.P. who had misgivings about the embrace of tax-cut fanaticism might have made a stronger stand if there had been any indication that such fanaticism came with a price, if outsiders had been willing to condemn those who took irresponsible positions.”

Apart from his over-estimation of the political influence of commentators, Krugman has avoided an important fact — there has been a struggle for control of the party by right-wing ideologues who have made it their mission to eliminate moderates. Moreover, they actively enforce their ideology by Mafia-style policing of candidates in the primaries.

The Washington Post reports that “… today’s GOP adheres to a ‘no new taxes’ orthodoxy that has proved far more powerful than the desire to balance the budget. … This orthodoxy is now woven so deeply into the party’s identity that all but 13 of 288 GOP lawmakers in Congress have signed a formal pledge not to raise taxes. The strategist who invented the pledge, Grover G. Norquist, compares it to a brand, like Coca-Cola, built on ‘quality control’ so that Republican voters know they will get ‘the same thing every time.’ … The work of reducing the national debt must be done entirely by shrinking government, he said. Any compromise that includes taxes would hinder that goal and taint the Republican brand…. How is the pledge enforced? Typically, Republican candidates sign the pledge to avoid attack in the primary. Once in office, violators might find that Norquist has contacted Republican voters in their state or district to inform them that their senator or representative is having “impure thoughts,” as he put it. …”

Norquist’s elitist anti-tax ideology found a fertile base in the new super-rich: the elevation  of rentiers to the ruling elite who cohere together around a rejection of collective responsibility and the social functions of the state. Capital gains taxes are seen as  a burden on the accumulation of unearned wealth, but they are also opposed by a constituency of company executives and managers whose compensation is based on stock options and who are aggressively anti-taxation and anti-regulation. One measure of the growth of this constituency is the number of billionaires in the US, which has grown from 13 in 1985 to more than 1,000 today. According to CNBC “This unprecedented wealth has been sparked by advances in technology that have allowed leaps in productivity and in turn created money. An explosion in global trade allowed that money to be invested all over the world. The result is that extraordinary sums have rained down on hedge fund managers, private equity partners, real estate tycoons and entrepreneurs.”

The sociologists Judie Svihula and Carroll L. Estes describe how an ideological social movement seeking to privatize Social Security has been built by a broad network of well-funded think tanks, private foundations, and conservative politicians. “A confluence of corporate, political and religious interests asserting the morality of self-responsibility and the answer of the market” have institutionalized this movement and gained it societal consensus. Starting in the conservative politics of the Reagan era, the growing number of think tanks funded by billions of dollars of private wealth, reached its apex with “the 2008 founding by Peter G. Peterson of a billion-dollar foundation to promote the ideas of fiscal responsibility and capitalism that is touting the unsustainability of three entitlements, Social Security, Medicare, and Medicaid.” [“Social Security Privatization: The Institutionalization of an Ideological Movement”, Svihula and Estes, pp217-231, Social Insurance and Social Justice, Springer 2009]

Robert S. McIntyre, writing in The American Prospect, describes Peterson like this: “Peter G. Peterson, as he cheerfully admits, is not a member of the middle class. He’s a rich Republican Wall Street investment banker. But in his crusade against deficits and entitlements, he adroitly poses as a champion of the middle class. Given his circumstances, it’s not entirely surprising that Peterson is an outspoken opponent of the federal government’s two most progressive programs: the graduated income tax and Social Security. What is odd is that his pose as a friend of the common American succeeds; that he publishes in liberal journals like the Atlantic and the New York Review; and that he enjoys a largely uncritical press. [B]ecause Peterson cloaks his goals in the rhetoric of progressivity, the press has fawned over him. The misleading notions that entitlements are running up the deficit, stealing from future generations, and maintaining the elderly in affluence while young people suffer, have become received wisdom for many. Peterson’s bottom line is that the middle class gets too much from government and pays too little for it, while corporations and the rich deserve a break. Curiously, that’s not how he sells his program.” [The American Prospect. June 23, 1994, qtd in SourceWatch.]

This careful cloak of liberalism meant that when Obama initiated The National Commission on Fiscal Reponsibility and Budget Reform in 2010, it was “rife with those who were involved with the Peterson Foundation-funded America Speaks town halls. This includes the likes of Paul Ryan, Judd Gregg, and Kent Conrad, all of whom, not surprisingly, also partook in the Peter G. Foundation-lead April 2010 ‘Fiscal Summit,’ also known as America’s Crisis and A Way Forward.”

The American Prospect’s Mark Schmitt writes, “[I]n the complicated relationship here between a private foundation, built on the wealth of a single individual, and a public, government effort[,] [t]he two are co-piloting what looks from the outside like a joint project, with the privately funded project convening meetings that involve the same people and producing vast amounts of research and advocacy that reinforce the fiscal-crisis message and inform the commission. The Peterson Foundation was the primary advocate for the establishment of the public commission, was aggressive about its structure and composition, and now is running parallel to it and nudging it in what it sees as the right direction.” [The American Prospect. April 29, 2010, qtd in SourceWatch.]

Sourcewatch concludes: “On Dec. 1, 2010, in the aftermath of six lengthy meetings of the 18-person Commission, a controversial report titled “The Moment of Truth” was released to the general publicwith many of the suggested austerity measures strongly resembling those suggested in the Peterson-lead America Speaks town hall meetings, the Peterson-funded National Commission on Fiscal Responsibility and Reform, as well as those positions that Peterson has pushed for throughout his life. These include raising the retirement age for Social Security to 69 by the year 2075, decreasing the cost of living benefits for Social Security recipients, imposing new limits on Medicare health insurance programs, and ending several middle-class tax breaks, the elimination of funding for the Corporation for Public Broadcasting, the capping of jury awards in malpractice cases, and a major reduction in corporate income taxes.”

These positions underlie the compromise proposals on the budget being considered now by Obama and Boehner. “Talks focused on sharp cuts in agency spending and politically painful changes to cherished health and retirement programs aimed at saving roughly $3 trillion over the next decade. … the White House acknowledged that the emerging agreement is “to the right of the Gang of Six” — a bipartisan Senate debt-reduction framework unveiled this week — and far removed from what Democrats have said would be acceptable.” reported the Washington Post.

But until 2010 and the rise of the bogus Tea Party movement, whenever voters have known details of anti-tax schemes, they have defeated them in polls. It’s not an accident that Tea Party candidates were vague about what they actually intended to do. In 2008-9, anti-tax initiatives in a number of states like Massachusetts, North Dakota, and Oregon were defeated. “In Washington State and Maine, voters rejected so-called TABOR (‘Taxpayer Bill of Rights’) initiatives that would have created rigid tax raising formulas that would have crippled those states’ capacity to provide services like education, health care, emergency services, and public safety. … Across the country, over thirty state legislatures raised taxes to deal with deficits this year and a number have specifically targeted tax increases on the wealthy - a bugaboo of the rightwing. And at the ballot, the anti-tax right has just lost and lost.”

Social Security is not in deficit and does not contribute to the national debt. What has happened is this: by an accounting trick, the surpluses gained from Social Security and Medicare FICA withholdings have been appropriated by the Treasury and spent. Michael Brenner, Professor of International Affairs at the University of Pittsburgh, explains: “The way the dodge has worked is that money taken from the Social Security and Medicare Trust Funds is replaced by Treasury IOUs. Since we have a consolidated budget, the numbers we see about deficits are misstated since they do not register those borrowings and IOUs as expenditures. They implicitly suppose that we’ll never have to make good on them. The budget in fact is not truly consolidated since those Trust Funds have a separate legal and financial standing from tax revenues and expenditures. The hope of our politicos is that we never will have to honor the IOUs if we can keep claims for Social Security and Medicare at an artificially low level and thereby access only the funds remaining after we SUBTRACT the IOUs. That’s the story behind the scare campaign that the Trust Funds are insolvent.”

Through his multiple think tanks and tame intellectuals like David Brooks of the New York Times, Peterson institutionalized his  entitlement-cutting agenda in Washington to such an extent that he has been able to frame the policy of the Obama administration. Peterson’s propaganda efforts on Social Security have met with little success with the general public, but resonated with the Republican conservative base and helped to push it rightwards.

In the New Yorker, George Packer sums up Obama’s position like this: “President Obama, responsibly acceding to the reality of divided government, is now the leading champion of fiscal austerity, and his proposals contain very little in the way of job creation. More important, he no longer uses his office’s most powerful tool, rhetorical suasion, to keep the country focussed on the continued need for government activism. His opponents’ approach to job creation is that of a cargo cult—just keep repeating “tax cuts”—even though the economic evidence of the past three decades refutes such magical thinking. What does either side have to offer the tens of millions of Americans who have settled into a semi-permanent state of economic depression? Virtually nothing.”

It’s not that Obama is enamoured of intelligent white men. He is a prisoner of their ideology because he has been trained in this ideology and has no alternative to it. Moreover, conservative Democrats like Jim Clyburn are very much in favor of benefit reductions – as long as they’re not called cuts – by pegging federal Cost of Living Adjustments to a new, stingier measure of inflation. Clyburn is a senior member of the Democratic leadership and was closely connected with the Deficit Commission. In an interview in 2010 he said “you cannot possibly not modify a program that at the time of its enactment, we had 17 people working for every one person that was a retiree. Today, you have about three people working for every one person that is a retiree. Now that is unsustainable.” He is uncritically repeating Peterson’s argument and bogus statistics about the unsustainablity of Social Security.

The last word belongs to the academic editors of Social Insurance and Social Justice: “The market paradigm has dominated the corridors of power, the airwaves, and cyberspace for so long that the alternative paradigm of collective good, the commons, and shared risk and responsibility has been seriously repressed. The national debate is now expanding to encompass conversations concerning the rationale and need for a safety net in the nation. As the failures of the market and the greed that has consumed the promise of our way of life are revealed, the case for social insurance becomes more apparent in the urgency of this political and economic moment.” [Epilogue, pp 437-8, Rogne Leah, Estes, Grossman, Hollister and Solway (eds), Social Insurance and Social Justice, Springer, NY, 2009.]

Republican Chokehold on Wisconsin Justice

As the legislation ending collective bargaining rights for state employees in Wisconsin comes into effect, the process of getting constitutional legitimacy for the law has produced extreme tensions within the judiciary. Narrowly re-elected Supreme Court Justice David Prosser expressed this by physically attacking fellow Justice Ann Walsh Bradley in a heated argument on June 13. “The facts are that I was demanding that he get out of my office and he put his hands around my neck in anger in a chokehold,” Bradley told the Milwaukee Journal Sentinel.

The immediate cause of the argument was the pressure exerted by the Wisconsin legislature to resolve the legal challenge to their budget bill. Assembly Speaker Jeff Fitzgerald had stated that the Wisconsin Republicans would introduce the changes as a budget amendment if the court did not act quickly.

Prosser and the three other conservative judges on the Supreme Court arrived at Bradley’s office concerned about delays in issuing the decision, voted on a few days previously. The encounter grew heated, according to the Sentinel: “Bradley asked Prosser to leave, but he did not and the justices continued to argue. Abrahamson said she did not know when her [dissenting] opinion would be ready, saying it might take a month. Prosser then told Abrahamson – with whom he has often clashed publicly and privately – he’d lost faith in her leadership. Bradley got close to Prosser and again demanded that he leave, with some sources saying she charged at him with her fists raised.”

The opinion was in fact released the following day, only eight days after the court had heard oral arguments in the case. The court ruled 4-3 on ideological lines in support of the collective bargaining bill, clearing the way for it to become law.

This is not the first time that Prosser had clashed with Bradley and Abrahamson. In March, it was reported that “As the deeply divided state Supreme Court wrestled over whether to force one member off criminal cases last year, Justice David Prosser exploded at Chief Justice Shirley Abrahamson behind closed doors, calling her a ‘bitch’ and threatening to ‘destroy’ her.” “I probably overreacted,” Prosser said later, admitting the incident, “but I think it was entirely warranted. They are masters at deliberately goading people into perhaps incautious statements.”

But the recent outburst was about more than mercurial personalities. As an editorial in the progressive “Cap Times” comments, Prosser and the conservative majority made “an unprecedented reinterpretation of the state’s open meetings law that said rules requiring official transparency and accessibility do not apply to the Legislature. Only by gutting the open meetings law could the court’s conservative majority rule that the Legislature’s passage of Walker’s plan, which did not follow open meetings requirements, was legitimate.”

Abrahamson, as the senior jurist on the court, made a stinging criticism of the ruling. In her dissenting opinion, she wrote: “The order and Justice Prosser’s concurrence are based on errors of fact and law. They inappropriately use this court’s original jurisdiction, make their own findings of fact, mischaracterize the parties’ arguments, misinterpret statutes, minimize (if not eliminate) Wisconsin constitutional guarantees, and misstate case law, appearing to silently overrule case law dating back to at least 1891.”

The legal arguments in the ruling, and Prosser’s concurrence, “are clearly disingenuous, based on disinformation,” reaching “unsupported conclusions.” Abrahamson’s point is that the conservative majority’s judgment in support of Walker’s bill is so hastily reached that they have authored “an order … lacking a reasoned, transparent analysis and incorporating numerous errors of law and fact.”

What is the urgency driving the judicial and legislative Republican majority in Wisconsin? On his election, Walker rejected any possibility of working with Democrats or union leaders in favor of a head-on clash. Basing himself on an unholy alliance of local real estate interests, mining and manufacturing, together with the financial and ideological support of the super-rich and their front organizations, his strategy is to ram through a full menu of right-wing legislation so as to preempt resistance.

Unlike states such as New Jersey, where Democratic leaders voted with Republican governor Christie for measures to eliminate collective bargaining rights, 14 Democratic state senators in Wisconsin gave leadership and legitimacy to a mass movement against Walker’s budget bill. As a result, a deep-going and spontaneous recall campaign is progressing steadily to overturn the Republican lock on the legislature.

The impact of the Democratic senators’ action is shown by recall campaign volunteers like Zach Schuster. He was an intern in Sen. Mark Miller’s office when the senators hatched a plan to go to Illinois to deny their Republican colleagues a quorum to vote on Walker’s collective bargaining bill. “The day Mark left was a turning point for me,” says Schuster, a UW-Madison graduate with a master’s degree in water resource management. “That was the day politics went from being an abstract thing that I followed … to something personal.”

Corporate Democrats within the party need to be replaced with candidates like these Democratic senators, already committed to defending union rights, social security, housing and jobs by legislating to increase taxes on the super-rich and restore state regulation of banks and industry.

What next for Wisconsin?

Wisconsin Governor Walker’s aggressive anti-union budget has finally been passed, after a political decision by the state’s Supreme Court which ruled that Republican manoeuvres to include measures restricting collective bargaining in the budget bill were constitutional. 14 Democrats had left the state in an attempt to prevent the measures coming into effect.

Although the unions are mounting other legal challenges, they are unlikely to prevail. The Republicans have succeeded in using their slim majority in the Supreme Court to line up the legal branch of the state with the legislative branch.

The budget bill, once signed, will take effect July 1. Already school systems are planning layoffs and enforced retirements for teachers, and health centers are feeling the pinch.

While Republicans have sold the plan to their supporters as putting the state on a better financial footing and improving the economy, the budget in fact transfers wealth to big corporations and significant corporate tax cuts will further impoverish the state. Since the state today is such an integral part of economic life, reductions in state employment and effectiveness actually works to contract the economy.

Paul Fanlund in The Capital Times writes that instead of trying to win over independent voters, “Walker and his legislative cronies chose instead to cater to any right-wing interest with deep pockets: Wisconsin Manufacturers & Commerce, charter school advocates, mining interests, payday loan sharks, the Koch brothers, the Club for Growth, social conservatives. The apparent goal has been to raise so much campaign money that Walker and allies can buy their way out of any messy electoral fix.”

Since the Republicans have carried out a budget assault on such a broad front, they have also succeeded in  bringing together organizations campaigning on social issues with public sector unions fighting for collective bargaining rights. It challenges the unions to abandon their sectional outlook and take part in building a new kind of civil rights movement. Mahlon Mitchell, the first African-American president of the Professional Fire Fighters of Wisconsin, made that analogy at a rally outside the Capitol building recently. “This is not just about union rights, it’s about workers’ rights, it’s about the middle class,” he said.

But some are critical of the unions’ commitment to social justice issues. Christine Neumann-Ortiz, director of a group which campaigns for immigrant workers’ rights, is reported as pointing out that “some individual unions have a ways to go in embracing the philosophy.”

According to The Capital Times, low-income people of color have not been participating in the protests at the Capitol, despite the impact of Walker’s budget on medical and food assistance programs which directly affect them. The movement has not made their issues central to the fight against the budget cuts and has not effectively reached out to them. The Capital Times quotes Monica Adams, an activist with “Take Back the Land,” a direct action group organizing resistance to bank foreclosures: “To build a collective movement, you have to develop a collective identity, and there’s no collective identity here,” she said. “To achieve that, we’d have to have some hard conversations about race.”

Adams’ criticisms need to be taken seriously. Evictions are not just the problem of people of color, but are a danger to anyone with a mortgage — including state workers now facing the loss of their jobs. The issue has a direct political connection to the budget fight. M&I Bank in Wisconsin gave financial support to Walker’s election campaign and took over $1.7 billion in TARP bailout money while evicting homeowners and promising executives close to $70 million in golden parachutes. “M&I is taking public money and using it to create homelessness,” points out Adams.

Banks across the country are evicting people from their homes even when existing occupiers offer to pay rent, or negotiate a modification of the loan based on changed market valuations. Even though the banks themselves were bailed out with billions of taxpayers’ money, they are intransigent in their refusal to turn foreclosed properties over to the community. They want to keep the fear of homelessness as a whip to prevent people from defaulting on mortgages they can no longer afford. They need to keep extracting repayments so that the revenue stream, which has already been capitalized and sold on, will maintain its nominal value. They could care less about encouraging job creation as a way of resolving the mortgage crisis because they are part of a rentier economy which is the source of superprofits for the rich.

The labor movement must take up this struggle against homelessness and evictions. It can’t rely on electoral activities to restore the social compact which guarantees the right to organize.  It should campaign for a new charter of human rights – one which includes the right to a home, a job, education, healthcare, pensions, and citizenship.

The unions need to take this fight into the national Democratic Party. Obama’s administration wants the government to act as a mediator between entrenched interest groups which have an inordinate sway in U.S. politics. But the super-rich dominate and control the Republican Party and are now going for broke. Democrats must be made to validate and legitimize a new mass movement for civil rights.