Category Archives: financiers

Heckuva Job, David! Is Flooding in Northern England Cameron’s Katrina?


British Prime Minister David Cameron is trying to cover the government’s tracks as disastrous flooding in the north of England makes a mockery of his claims to be taking responsibility for citizens’ safety. The press and parliament have so far not made an effective challenge to his public relations spin, but victims of the floods have shown their contempt. In a rare sighting of the prime minister by a member of the public, a woman shouted: “No more cuts to public services.”

During a photo-opportunity visit to emergency workers in York on Monday (so avoiding working-class Leeds), Cameron called the disaster unprecedented, rhetorically disconnecting it from his government’s defunding of state agencies. In reality it is a disaster of refusing to act on documented warnings by state officials and a willingness to take risks with people’s lives and property for the sake of advancing a destructive agenda of austerity.

After the flooding of three major British cities – York, Leeds, and Manchester – Cameron claimed that a lot of money was already being spent on flood defences and thousands of homes had been protected, pledging that the government would “help people in their hour of need and respond to unprecedented levels of rainfall.” As the Independent pointed out, “the implication here is that the freakish weather is so outlandishly unreal, so Old Testament, that no amount of government preparation, no flood defences, no civil contingency planning could possibly have mitigated its effects.”

However, the Guardian reported, as late as October this year the government decided not to develop a strategy to address the risk of increased flooding even after being warned by its official climate change advisers that it urgently needed to take action. And the cautions were specific: “Yorkshire’s regional flood and coastal committee (RFCC) warned about the potential impact of the region’s revenue funding gap just weeks before floods overran towns and cities in the region.” The actual state of the defences was brought into sharp relief after pumping equipment in York was overwhelmed by the sheer volume of water.

The conservative Yorkshire Post said Cameron “was left on the back foot after Judith Blake, the leader of Leeds Council, claimed the disaster was ‘preventable’ and would not have been allowed to occur in the South. … [he] is facing a tide of public anger after it emerged that the Government dug deep last December to finance a £300m scheme to protect the Thames Valley after previously rejecting a £180m scheme to safeguard 4,500 homes in Leeds city centre, one of the areas worst affected by the Christmas deluge.”

The same paper commented in an editorial: “The prime minister repeatedly used the word ‘unprecedented’ to describe this winter’s storms. Yet every fortnight brings ‘unprecedented’ levels of new flooding and the same pious platitudes from politicians, such as the environment secretary, Liz Truss, whose rhetoric is increasingly economical with the truth.” While claiming her department is spending more on flood prevention, “she chooses to overlook the fact that many schemes are subject to partnership funding from councils and other agencies whose budgets have been decimated by spending cuts.”

Earlier, in 2012, “the government’s own research showed increased flooding is the greatest threat posed by climate change in England. But when heavy flooding hit in the summer of 2012, the Guardian revealed that almost 300 proposed flood defences had not gone ahead as planned following the cuts. A £58m scheme in Leeds – one of the cities hit in the latest round of flooding – was one affected project, which would have saved many times its cost in avoided damages.”

In Mytholmroyd, West Yorkshire, residents attacked the government’s inaction. The town was devastated by floods in 2012, but the latest flooding was worse, they said. “The government has done nothing to help us,” said local shop owner Janet Chew-Tetlaw. “They come round and say what they are going to do and make big promises, but nothing ever comes out of it. … All this is because culverts do not get cleared by the Environment Agency, the water is running off the moors because the trees are being cut down – destroying natural flood defences – and planning permission has been given for big housing developments on the hillsides, so there is no earth to soak up the water.”

What the situation demands is a bold political intervention to change land usage and to rebuild flood defences for future storms, like the Dutch, who have spent the past decade “deepening and widening rivers, creating new side canals that provide extra capacity, and setting aside land as dedicated flood plains. … All this so that when the water does come, the swollen rivers can expand without flooding homes and causing misery.” However, the British government’s role is one of cutting infrastructure spending and succumbing to business interests like farming and real estate that put short-term profit over longer-term safety.

Cameron’s social base is the financiers of the City of London who want negligible taxation on their wealth to avoid contributing to the common good. While in the last election he was successful in convincing enough of the property-owning middle class that austerity would secure their fortunes, it is now clear that defunding the state destroys essential conditions for normal life.

The only politician who has consistently spoken out for higher spending on public assets is Jeremy Corbyn. His social base is people who have already been affected by government cuts, for example in social services and public housing. Instead of repeatedly trying to undermine Corbyn, Labour MPs like the right-wing Simon Danczuk should forget about sending a few jets to Syria and get more helicopters to northern Britain. The biggest danger facing the British is not the threat of terrorism, but the Cameron government’s readiness to risk the lives of its own citizens in order to hang on to its support in the City of London.

Vying with UKIP leader Nigel Farage to be Britain’s answer to Donald Trump, Danczuk now calls for diverting the whole of foreign aid into shoring up the country’s aging infrastructure. This demagogic posturing accepts there is no alternative to austerity budgets by assuming no more money can be forthcoming for essential public projects from taxing the rich.

Will Cameron’s dishonest platitudes generate enough pushback from the electorate for this to be his Katrina moment? It certainly should. Heckuva job, David!

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Filed under Britain, British Labour party, british parliament, Cameron, David Cameron, financiers, Jeremy Corbyn, political analysis, Uncategorized

Eric Holder’s Legacy – Justice For All Except For Bankers


Eric Holder announced Thursday his decision to resign as Attorney General of Obama’s administration. His tenure has left a contradictory legacy, which in many ways mirrors that of Obama’s presidency. Both men believe in a strong federal state that will enforce civil rights. However, the corollary of this belief is that the state has to be kept strong by purging dissidents – whistleblowers like Edward Snowden from within and “terrorists” from without.

After Holder’s announcement, the NAACP called him “one of the finest attorneys general in the nation’s history,” while the ACLU on the other hand cited his record of approving the legality of drone killings of US citizens, approving the NSA’s mass surveillance program, failing to prosecute any Bush administration officials for torture, instead prosecuting whistleblowers and journalists.

His main achievements have been in the field of criminal justice policy: reforming federal drug law sentencing minimums, which disproportionately impacted African Americans, finding ways to sue states for passing discriminatory voter-ID laws even after the Supreme Court struck down key parts of the Voting Rights Act, and criticizing “stand your ground” laws after Trayvon Martin’s killing. He met personally with Ferguson residents and activists to talk about racial profiling, and pressured the police department to stop officers wearing bracelets bearing the message “I am Darren Wilson,” the officer who shot Michael Brown.

Holder earned the enmity of Republican politicians for reinvigorating the Justice Department’s Civil Rights division. He challenged them soon after Obama’s inauguration: “Though this nation has proudly thought of itself as an ethnic melting pot, in things racial we have always been and continue to be, in too many ways, essentially a nation of cowards,” he said. His bête noire, Republican congressman Darrell Issa, who had Congress declare him to be in contempt over the ill-fated “Operation Fast and Furious,” described Holder as the “most divisive U.S. Attorney General in modern history … needlessly injecting politics into law enforcement.” Surely there must be a market for t-shirts with the slogan: “I am in contempt of Darell Issa.”

The two radically different sides of his record were discussed in an important debate on Democracy Now: Robert Weissman of Public Citizen criticized his failure to prosecute any of the Wall Street executives responsible for the banking crash of 2008 and subsequent recession. The Justice Department “decided not to criminally prosecute them, on the grounds that they were too big to fail, or, as it became known, too big to jail. Essentially, a decision was taken that if you are a financial institution and you become big enough and powerful enough, you are above the criminal law.”

Sociology professor Michael Eric Dyson responded that Holder’s reforms of the justice system far outweighed his failure to prosecute bank criminals, because of the disproportionate imprisonment of the poor and minorities. He accused the left of neglecting “what is important to the masses and millions of people who were never under the purview even of the white left to be concerned about some of the issues that African-American people and Latino people … have been concerned about.”

Dyson argued that the left also underestimated the importance of racial politics in impeding black people in government taking an aggressive posture toward the banks. Since there had been uproar when Obama mildly criticized police who arrested Harvard professor Skip Gates, “in its real political context,” he said, “what do you think will happen then if Eric Holder, as the first African-American attorney general, is seen to be going after mostly white CEOs and other corporate titans within the economic infrastructure? … To ask him to … overcome an entire history of structural and perceptual inequalities that exist, I think is just asking too much.”

The flaw in Dyson’s argument is that he, like Obama and Holden, identifies power with the political establishment and not popular sovereignty. The uproar over the Skip Gates affair came entirely from within this establishment and its attendant media, not from the social movement that elected Obama precisely in order to settle accounts with the banks that defunded thousands of minority communities with subprime loans. It was Obama’s belief that banks are the “lifeblood of the economy” that led him to support the bank bailout, not his aversion to the headline “Nation’s First Black President Allows Financial Institutions to Fail.” Both he and Holder share an ideology that holds the rich must be allowed to continue enriching themselves for the poor to have equal rights – if not equal wealth.

The Occupy movement was in many ways a continuation of the movement that elected Obama, and far from having vanished, has splintered into a thousand community-based activist groups which are actively fighting on issues of concern to African Americans and Latinos, from housing to cancellation of subprime loans to low wages and lack of jobs.

Holder oversaw and encouraged the militarization of the nation’s police forces, which became concrete and visible in Ferguson. Security and constitutional rights issues may seem removed from the daily problems of the poor and minorities, but the build-up of resources in the name of Homeland Security is creating a force to suppress domestic resistance and preventing it from getting traction in poor communities.

Holder’s role model as Attorney General was Robert Kennedy – and in this lies the key to the contradictions in his record. He sees civil rights as something administered to the poor by an enlightened elite, relying on the federal state rather than social movements to enforce rights and ameliorate the excesses of a capitalist economy. But to be able to successfully do that, from this point of view, the elite and state must be protected by suppressing opponents and whistleblowers who could uncover the inner deliberations of the political class.

It was the determined protests by Ferguson residents that brought Holder to the city and made him push for federal intervention to reform the police department. That fight is by no means over, and looks set to continue until officer Darren Wilson is charged with Michael Brown’s killing. Justice under the law is one thing, but real social justice needs a much bigger movement to achieve it. The good news is that signs of such an inclusive and pluralist movement are present in the Fight for 15 and other struggles in America today.

[UPDATE] Anticipating Holder’s retirement, Cornel West told Salon in August that Obama sent Holder to Ferguson because he was “on his way out.” “He’s concerned about his legacy as if he’s somehow been swinging for black folk ever since he’s been in there,” he said. “That’s a lie … He’s made a couple of gestures in regards to the New Jim Crow and the prison-industrial complex, but that’s just lately, on his way out. He was there for six years and didn’t do nothing.” When Ferguson residents reacted to arbitrary police power, “what happens is you got Eric Holder going in trying to create the calm. But you also got Al Sharpton. And when you say the name Al Sharpton, the word integrity does not come to mind. So you got low-quality black leadership. Al Sharpton is who? He’s a cheerleader for Obama.”

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Filed under African Americans, Eric Holder, fast-food workers, Ferguson, Fight for 15, financiers, Obama, occupy wall street, Trayvon Martin

No Nostalgia for Thatcher, but a Tribute to the Welfare State by Ken Loach


The muted protests at Thatcher’s funeral on Wednesday gave the world a glimpse of the deeply-felt divisions in British society. She did not create this social cleavage, which at root is part of an international process: a shift of manufacturing out of Europe and the U.S., and a rapid expansion of speculation in financial centres like London and New York. What she is responsible for is ending the ruling elite’s Keynesian commitment to the mitigation of regional and social inequities.

Although her death evoked few tears in Britain’s industrial heartland, there was more than a little interest in showings of Ken Loach’s new documentary about the Attlee Labour government, “The Spirit of ‘45”. I was fortunate enough to see it while in the UK recently, and my own feelings were mixed: my childhood was spent under the wing of the welfare state, so I took state-provided health and education for granted, and share Loach’s affection for the cradle-to-grave policies that characterized the period.

The interviews with people who were children in the 1930s and 1940s were very moving. They remembered the harsh and degrading conditions of that time and the optimism for a better future after the 1945 election, articulating the general disaffection with prewar society and the determination that things were going to be different.

The interviewees vividly recounted the social impact of the Labour government’s nationalization and house-building program. The experience of state-directed industry during the war had established the feasibility of state intervention to achieve social goals. There was a huge sense of pride and ownership of the newly-nationalized industries, especially the National Health Service, which brought free health care to working-class families who had never been able to afford it. The government channeled state resources into solving the immediate problems of poverty, unemployment, and bad health. Housing for millions of families living in slums or private boarding houses was made a priority.

The weaker part of the film was the final segment, which showed participants urging a return to the collectivist spirit of the postwar era. While Thatcher was the clear villain of the piece, the discussion gave the impression that she imposed privatization and unemployment from above, an arbitrary political decision that could be reversed by a revived social-democratic party in Britain.

But the world has changed since Labour’s manifesto was written in 1945.  Globalization has made national forms of struggle increasingly ineffective in resisting corporate power. What troubled me was the message that the younger generation should look to the history of the Attlee government for an alternative to austerity, which amounts to advocating old solutions to qualitatively new problems.

The achievement of a welfare state after World War II was essentially a political compromise between an organized and homogeneous working class and a capitalist class that had survived the war and needed to restart capital accumulation. This cemented the priorities of the Labour leaders to the recovery of British-based capital within the economic boundaries of the old empire.

The Labour electoral landslide was not the result of some mass revolutionary wave, as some on the left like to think, but rather came from a popular determination to continue the state planning established during the war. State technocrats were more enthusiastic about nationalization than the government, which never intended to change the balance of power in industry, and obsolete production relations were kept intact along with antiquated machinery.

While making a huge difference in people’s lives by alleviating the prewar degradation of the working class, nationalization also released capital bound up in older industries with more than generous compensation to the former owners. Later Conservative governments continued the social compromise, while full employment and expanding markets gave shopfloor militancy leverage to gain a larger share of the surplus being produced. As production rapidly accelerated, the focus of capital accumulation shifted from the national arena to the global. The revival of the German and Japanese economies intensified competition in the world market, and the boom began to falter.

Signs of the erosion of the postwar political compromise were evident by the time of the Heath government, with a wave of inflation and industrial slowdown in 1973; national control of the economy dissolved with the IMF loan to the Callaghan government in 1976. As Michael Hudson explains it: “Labour Prime Minister James Callaghan made a token attempt to address [problems of the economy] by requesting an IMF loan in 1976 to finance tangible industrial re-investment as bridge financing until the UK’s North Sea oil could begin generating foreign exchange. But US Treasury Secretary Bill Simon read him the riot act. IMF and U.S. policy was to provide credit only to pay bondholders, not to build up the real economy. Britain would be advanced loans only if it reoriented its economy to let high finance do the planning.”

At the same time, industries based on new technology were expanding in the south of England, dividing the country socially and politically, and intensifying existing class divisions which had been left unchanged even after thirty years of the welfare state. This created the upwardly-mobile forces Thatcher was able to mobilize to champion populist capitalism against the Keynesian compromise. Her neoliberal agenda corresponded to the changes in international production and exchange that had weakened the unions and enabled her to change the ideological climate within the British ruling elite to toleration of the harsh monetarist doctrines shared by U.S. capital.

She did not set out to empower bankers, but that was the inevitable result of lifting restraints on capital as soon as she took office. As Hudson puts it: “Attacking central planning by government, she shifted it into much more centralized financial hands – the City of London, unopposed by any economic back bench of financial regulation and ‘free’ of meaningful anti-monopoly price regulation. … The Iron Lady was convinced she was rebuilding England’s economy, while in reality it was only getting richer from London’s outlaw banks.”  Her administration was the last to stridently claim an independent nationalism before later governments succumbed to the dictates of international finance – there is no pretense today that British foreign or economic policy is anything but dependent on the US and the City bankers.

Like the rest of Europe and the US, Britain has moved to a low-waged, service economy dominated by global corporations. The labour movement is faced with finding new ways of organizing and fighting in line with the realities of this globalized economy. That is why signs of international resistance to global capital are significant. US workers are flying to Europe to take on their Dutch supermarket owners. Striking immigrant McDonalds workers are returning to their homelands from the US determined to spread the campaign for a living wage. Bangladeshi survivors of the Tazreen factory fire and Nicaraguan victims of antiunion assaults are in New York to confront Walmart board members. And US unions are creating non-traditional ways to organize workers who have no recognized union at their workplace; the AFL-CIO affiliate, Working America, now claims 3.2 million members and is planning to establish chapters in every state in the USA.

I made this brief sketch of events in the years not covered by Ken Loach’s film to give some historical context to Thatcher’s administration, and to argue that the revival of a social-democratic perspective, necessarily limited to winning concessions from a nationally-based state, would not be productive. I believe that activists should focus on connecting with workers in the international supply chain feeding commodities into Western markets, which is corporate capital’s weakest point.

Nostalgia for the welfare state is understandable, but we need to learn from the creative solutions of the international labour movement in order to defend those reforms that remain from the past.

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Filed under BBC, credit creation, financiers, political analysis, poverty, riots in Britain, strikes, Thatcher, Walmart

Yes, Virginia, Arbitrage Capitalism Is Still Capital versus Labor


I’ve been mulling over a December op-ed by Paul Krugman, “Robots and Robber Barons,” in which he wonders why corporate profits are at a record high in today’s depressed economy while wages are down. My attention was drawn by his question: “The pie isn’t growing the way it should ­– but capital is doing fine by grabbing an ever-larger slice, at labor’s expense. Wait – are we really back to talking about capital versus labor? Isn’t that an old-fashioned, almost Marxist sort of discussion, out of date in our modern information economy?”

“As best as I can tell,” he goes on to say, “there are two plausible explanations, both of which could be true to some extent. One is that technology has taken a turn that places labor at a disadvantage; the other is that we’re looking at the effects of a sharp increase in monopoly power.“

In a response to Krugman’s column, Alternet writer William Lazonick holds that automation is not the problem. “As part of a process that could reconnect profits and prosperity, the US economy needs more, not less, corporate investment in automation. … Companies that invest in automation have to build organizations to ensure steady supplies of high-quality materials, improve and maintain machinery, and capture sufficiently large market shares to achieve economies of scale. These investments in the development and utilization of automated facilities create lots of high-value-added jobs,” he argues. Then he asks “why US corporations are failing to reinvest these profits in new products and processes that can create large numbers of new high value-added employment opportunities in the United States.”

The problem with both points of view is that they retain the conception that corporations are still large, vertically-integrated units that manufacture products and sell them to the retail channel via wholesalers. However, since the early 1990s, major structural changes have taken place that have drastically hollowed out the domestic economy.

Barry Lynn, in his 2005 book End of the Line: The Rise and Coming Fall of the Global Corporation, writes that the kind of self-contained organizations most of us think of when we hear the names Dell, GE, Cisco, IBM, Cargill and Boeing, for example, have been systematically taken apart and actual production outsourced to smaller entities, many of them offshore, leaving only the company name and marketing functions intact.

The recent issues with the Boeing Dreamliner’s batteries catching fire attest to some of the risks inherent in this outsourcing model. But these are being ignored in favor of high and immediate corporate profits. Lynn writes: “By placing erstwhile internal operations on the other end of a contract or series of contracts, these lead firms gain much greater overall leverage vis-à-vis the individual supplier, worker, and government. … Today’s arbitrage-oriented firms … are designed to focus much more on using their power over their production systems to wring out wealth immediately, rather than to devote resources to technologies that might create wealth years from now.”

The poster child of this arbitrage business model is Walmart, whose role in Bangladesh, as in other countries, was to strip value from producers to the point where basic safety was compromised and a disastrous fire took place. A more telling example, however, is Apple Computer.  In the early 1990s Apple had two major plants in the U.S. turning out desktops and Powerbooks. Demand was high, but mismanagement at Apple meant that profits were sagging. Even though their production plants were working efficiently, Apple sold them in 1996 to an outsourcing specialist called SCI Inc. who kept on producing Macintoshes for Apple.

In 1998, Steve Jobs, who had experience with outsourced production for his NeXt computer, moved manufacturing completely offshore. According to the Philadelphia Inquirer,  “The move to China came about quietly and was little noticed at the time because of the way Apple went about creating its offshore presence. Rather than build plants that proudly displayed the Apple name, as it did in California and Colorado, the company turned to outsourcing firms that partnered with the Chinese to establish plants where the products are made. Apple’s plants in mainland China bear the name of their Chinese contractor, but inside they are making Apple products.”

In a 1997 paper which specifically examined the sale of Apple’s plants to SCI, MIT scholar Timothy Sturgeon wrote: “The evidence provided here suggests that American electronics firms are developing new ways of exerting substantial market power without the fixed costs of building and supporting a gigantic corporate organization. The strategy for brand-name systems firms is to outsource all of those functions that do not have direct relation to the establishment and maintenance of market power. Brand names, product definition and design, and marketing are being kept in-house, while manufacturing, logistics, distribution, and most support functions are being outsourced.”

Market power is the key to the lead system firm’s dominance over producer firms. By its control over design specifications, distribution and retail, the lead company can exert considerable pressure on its suppliers, who have no direct access to the consumer, to meet harsh production targets and price points. Cutbacks in orders can destroy the profitability of suppliers, who have already invested heavily in automated technology to manufacture components and need to keep production levels over a breakeven point. As a result of this unequal power relation, the lion’s share of surplus value in the commodity chain goes to the lead company. In the case of an iPhone or iPad, only about 2% of the value added (about $10) is retained by assembly companies in China, and 5-7% by Korean companies who supply display and memory chips, compared to between 30-60% going to Apple and its shareholders.

The push by the one percent for continued high share prices and profits means that corporate capital has been directed to the control of market share at all costs, and diverted away from investment in the development of automated facilities. Even if manufacturing were to return to the U.S., it would not create the kind of jobs that sustained a growing middle class after World War II. The answer to Krugman’s and Lazonick’s questions is that it is the way monopoly power has been able to reorganize the economy around globalized production that enables corporations to keep wages low, not as a separate factor from automation, but interacting dynamically with it. It’s still capital versus labor, but in a different configuration.

No amount of money thrown at the banks, or even bringing supplier companies back into the U.S., will undo this reality. While resistance has been quiet around the period of Obama’s reelection, discontent lies just below the surface and determined efforts by low-waged workers to organize are harbingers of major battles ahead. Rather than making workers in America or other countries unemployed, control of corporations must be taken out of the hands of the plutocracy and put in the hands of the people

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Filed under financiers, Neoliberalism, occupy wall street, OUR Walmart, Paul Krugman, strikes, Walmart

Occupy Sandy: Lessons in American Solidarity


Three weeks after Hurricane Sandy struck the eastern seaboard of the United States, government has been unable to restore normal living conditions to the worst-hit areas, all located a few miles from the financial center of Manhattan. It is incredible that a country which is spending untold billions to fight wars in Iraq and Afghanistan does not have the resources to get relief to people living in the nation’s symbolic center. Those who are suffering most are, as always, the poor and underprivileged.

Hurricane Sandy was just one of a series of extreme weather events this year, the kind of events which are likely to become much more frequent as a result of global warming. It hit the headlines primarily because it affected a highly populated area of the U.S., but its aftermath highlighted the fact that the municipal infrastructure in parts of New York City has for years been allowed to disintegrate. As a result, three weeks after the storm thousands living in the housing projects of Red Hook in Brooklyn, as well as the Rockaways in Queens and Staten Island (where many first responders also live) are still without electricity, heat, hot water, and medical support.

Photographer Matt Richter has been documenting relief efforts in the area’s public housing. He told Gothamist last week: “The sick and elderly are trapped on the top floors of high-rise buildings in cold, pitch-black apartments without anyone to check on them or anyone to talk to. Mothers cannot feed their children because all of the local storefronts have been destroyed by flooding and looted. Diabetics and asthmatics have run out of medicine. Residents are heating their homes using gas stovetops and poisoning themselves.”

Many have observed that FEMA and the Red Cross were slow and ineffective in getting relief to these communities, while members of the Occupy movement were able to mobilize and coordinate volunteers almost immediately. Individuals who had been active in the Zuccotti Park occupation acted the day after the storm to find out what people needed, then set up distribution centers at church premises in Brooklyn, from where volunteers have been taking supplies to Red Hook and the Rockaways. Occupy’s horizontal structure appears to have facilitated an inclusive and flexible response to the disaster.

In the Rockaways, according to Gothamist, “volunteer manpower—a precious resource in the Hurricane Sandy recovery—continues to be misdirected or squandered by those in charge of official relief efforts. ‘The city hasn’t reached out to us at all,’ said Matt Calender, a Rockaway resident who helps direct a bustling relief effort from a house on Beach 96th Street. ‘The Red Cross gave us 500 blankets the other day. FEMA talked to us. But that’s it. We station volunteers here, but we also send people downtown, where there is immense need’.”

Slate reported: “Unlike other shelters that had stopped collecting donations or were looking for volunteers with special skills such as medical training, Occupy Sandy was ready to take anyone willing to help. … Ethan Murphy, who was helping organize the food at St. Jacobi’s and had been cooking for the occupy movement over the past year, explained there wasn’t any kind of official decision or declaration that occupiers would now try to help with the hurricane aftermath.  ‘This is what we do already,’ he explained: Build community, help neighbors, and create a world without the help of finance.”

John Knefel writes in Truthout: “One of Occupy’s defining features is horizontalism, or non-hierarchical organization, which replaces traditional methods of control with, in theory, mutual affinity and respect. The media often refers to this as “leaderlessness” and calls it a weakness, and when trying to interpret Occupy through the narrow lens of corporate-captured electoral politics that may be a fair criticism. But the premise is completely incorrect. … The fact that volunteers can be trained and assigned to tasks quickly – tasks they aren’t compelled by any strict authority to do and so therefore take ownership of almost immediately – is a virtue rather than a fatal flaw.”

The Red Cross and FEMA are hamstrung by bureaucracy and turf issues. FEMA field official Katherine Ordway told Time magazine: “It’s dark in those apartments and people are cold …They’re coming here wanting us to fix the problem in their homes, but we can’t. Restoring power and heat is not a FEMA issue. And that’s very frustrating.”

Occupy Wall Street framed their actions as the community self-adjusting to the crisis. What it also shows is that when communities are faced with rebuilding after a disaster, the philosophy of Occupy coincides with their modes of recreating social order. People who are protesting the control of banks and corrupt politicians over their lives can relate to those who have lost it all. One of the organizers of the relief effort, PhD student Pamela Brown, told Democracy Now: “organically, Occupy was able to organize very quickly on the ground and provide real relief to people, provide food and clothing. People were donating all of these things. And the Red Cross wasn’t really able to reach out to people in the way that was necessary to distribute those goods. … One of the things that Occupy has been amazing at with Sandy has been actually going to people, talking to them and saying, ‘What is it that you actually need?’ and providing that.”

While Occupy could not move large quantities of equipment and materiel to large areas, it can mobilize volunteers and concerned citizens in a way that the government cannot. A Time article considered: “Being among the first to move made Occupy a vital part of the city’s hurricane relief infrastructure. As a result, this radical nonstate movement finds itself in the unlikely position of coordinating with government institutions it might otherwise be in conflict with. … Ultimately, Occupy Sandy is an ethos, a grassroots, on-the-fly approach to disaster relief that, in certain areas of the city, has filled a void left by overwhelmed bureaucracies. It’s an approach adopted by numerous local groups and individuals throughout the city, and Occupy is in large part an attempt to link volunteers and donations to those efforts.”

The New York Times ran a story that contrasted the middle-class values of the volunteers with those of the working poor who are the recipients of aid. Naturally, any social interactions will not be free of class antagonisms. However, the fact that these interactions are taking place at all is a step to finding solutions to the daily struggles that project-dwellers face. What is needed is the inclusive and pluralistic ideology of the Occupy movement to facilitate equality and mutual respect.

As in New Orleans after Katrina, relations of power get rebuilt after disasters. But with Occupy Sandy, there is an opening for them to be challenged. The Occupiers are right to prepare for resistance against the opportunist interventions of financiers who seek to capitalize on crises by encouraging debt dependency, like the 2-year disaster loans small businesses are being advised to take or people’s borrowing against their retirement savings. Against the faceless world of finance capital and a government that serves it, Occupy Sandy is mobilizing the power of human and American solidarity—the recognition that, as Lincoln put it, united we stand.

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Filed under bank foreclosures, credit creation, financiers, Occupy Sandy, occupy wall street, poverty, We are the 99 percent

Waking Up and Smelling the Coffee: Americans Organize Collectively to Defend Themselves against the Plutocratic 1%


While pundits may debate Obama’s lackluster performance and Romney’s zingers, when it comes down to it, the presidential debate will not change people’s minds. What will decide the election will be demographics:  Latino voters have increased their support for Obama to 70%. Women perceive Romney as dismissive of their issues. And a Reuters poll finds Obama to be better representative of America by 48 to 39 percent – despite the billions spent by Republicans trying to portray him as alien.

Focus groups found that blue-collar voters lowered their opinion of Romney in response to quotes from his campaign, but were more forgiving of quotes from Obama; many suggested that Obama needed more time to fix the economy given the extent of the 2008 collapse.  “And while Obama didn’t seem to get too much credit from any group for his individual jobs policies or for his health care law, voters were bullish on the auto bailout — not only in auto-heavy Ohio, but northern Virginia as well. … In another disturbing trend for Romney, women’s health issues cut against him hard among the Virginia groups, especially college educated women, for whom they generated as much attention as the economy.”

Romney’s clandestinely videoed remarks describing half the population as parasitic have had a discernible effect on the electorate, strengthening the perception of him as the candidate for the plutocracy. This attests to the persistence of the Occupy theme of the 99 percent, a form of populist class awareness. A further social change is the turn to unionization among the low-waged. The threat of unemployment has become a two-edged sword: while employers have used the fear of joblessness to drive down wages and conditions, a point has been reached where workers’ backs are against the wall and they have nothing to lose by fighting back.

In the Midwest, two important strikes are currently taking place that bear this out. Warehouse workers at a giant Walmart warehouse outside of Chicago are on strike over illegal retaliation against workers who filed a lawsuit over wage theft, supported by Warehouse Workers For Justice, an organization launched by the United Electrical Workers union to raise standards for the industry. Although Walmart owns the warehouse, which handles 70% of all the goods it imports into the U.S., it has a pyramid organization of companies that contracts and subcontracts out its labor supply, in order to avoid responsibility for workers’ welfare.

In These Times reports that the dispute began after a small group of workers walked out of the facility when management first fired, then backtracked and suspended, some key workers’ leaders, including one of the four named plaintiffs in the lawsuit. Following this, another group of workers took a petition to management complaining about unsafe equipment, extreme heat, and a reduction in breaks during long shifts. Managers again fired the petitioners, then changed their minds and suspended them. The number of workers now on strike over unfair labor practices has reached 38.

Despite the high turnover rate in the warehouse, which makes it difficult to organize, a group of workers who had managed to endure the conditions for a number of months began the protest action. “What we have in common is we’re pretty marginalized and desperate,” plaintiff Philip Bailey told David Moberg of In These Times. “The prospect of working these low-paying jobs for long hours became scarier than risking losing the job to improve it. People realized we won’t get anything until we stand together.”

On Monday, several hundred supporters converged on the warehouse, effectively shutting it down. Riot police equipped with a Humvee-mounted sonic weapon were on hand to arrest 15 protesters who had nonviolently sat down outside the main gate. Support came from groups like Chicago Jobs With Justice and Chicago teachers, who have a common enemy in the privatization-crazed Walton family. Also joining the picket were workers from Sensata Technologies Inc., a company owned by Bain Capital and now in the final stages of moving its production to China.

The strike movement has now spread to Walmart stores in Los Angeles, whose “associates” staged a one-day protest on Thursday. Like the warehouse workers, the retail store employees are responding to escalating cases of retaliation by managers against workers who speak out against low pay, inadequate health insurance, short or unpredictable work weeks, understaffing, and lack of appreciation and respect.

In Detroit, as in the Chicago teachers strike, union members are striking against privatization, which they know will result in the loss of jobs and the rapid erosion of their control over conditions of work. Detroit’s wastewater treatment plant workers came out against a plan to cut 81% of their jobs under a $46 million no-bid contract signed with the EMA Group.  The suburban-dominated Detroit Water Board approved the contract in early September with the aim of replacing most of the unionized workforce. According to the union, the EMA Group was responsible for massive flooding in Toronto after revamping the city’s sewage system and laying off the majority of the workers.

Declaring they were fighting for the future of Detroit, 34 workers walked out in a wildcat action early Sunday, in order to preempt an order barring a strike. They were joined by the rest of the 450-strong workforce the following day, when, as anticipated, U.S. District Judge Sean Cox issued a no-strike order on the union. Defying the order, the strike continued, and on Tuesday water department officials suspended the original 34 strikers. At the picket line, Tanya Glover told the Detroit Free Press she was concerned about wage cuts and outsourcing: “I’m out here because I need to feed my family,” she said. “They’re telling me I don’t have a job in five years anyway. It’s either fight, or let them give my job away.”

Workers from other unions came out to support the water workers as word of the walk-out spread. “This strike is happening in the wake of the victory of the Chicago Teachers Union,” said Martha Grevatt, of UAW Local 869. “It’s another example of workers standing up, not only for their jobs, but against the banks and corporations. Whether you work for a private company or in the public sector, your bosses are part of the 1 percent.”

The union district-level Michigan AFSCME Council told union members on Tuesday to return to work and comply with the judicial order. The confusion this created meant that many of Wednesday’s afternoon shift followed this directive, after being informed that the department had promised not to discipline them. However, the leaders of the water workers’ Local 207 rejected the order, voting late on Wednesday to continue the strike until all suspended workers were given amnesty. It issued a statement that said: “The power of our strike is based on the support of Detroit’s Black community and the surrounding communities of Michigan, including unions and churches, and is being expressed more and more each day. … Unless our members are all returned to work, there is no deal, and the strike is still on.”

The strike ended Thursday in victory. Management agreed to reinstate all the fired workers and to continue discussions on union rights and job security. Michael Mulholland, Local 207 Secretary Treasurer, said, “This victory is a measure of the strength of Detroit as a whole. If Judge Cox had not feared what the public response would have been if he had taken action against our union, this victory would never have been possible.” Union attorney Shanta Driver added: “If the people of Detroit draw the correct conclusion that we have the power to control the destiny of our City and its resources even when just a few of us stand up and fight to win, this struggle will have achieved a great deal. … we are building a new movement that can change the balance of power in this city forever.”

The power of the community was also realized in the Chicago teachers’ strike, and the Occupy movement. As different groups of workers’ struggles begin to converge, this movement poses a challenge to bureaucracy within the unions. A new form of leadership is being created, close to the grassroots, which is turning outwards to unorganized low-waged workers and is building alliances within the community across ethnic and class divides – to paraphrase the leaders of Local 207, launching a new civil rights movement and era of mass struggle.

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Filed under 2012 Election, African Americans, chicago teachers, financiers, occupy wall street, police presence, political analysis, poverty, strikes

Even if Obama Wins, There’s Homework: The Teachers Remind Us That Only the Public Education of the People Can Preserve Liberty


Washington Post columnist E.J. Dionne asks if November’s election will decide anything? He frames his question in terms of a continued Congressional stalemate if Obama regains the presidency. However, Republican legislative obstructionism and Romney’s disastrous candidacy is losing the party support among independent voters and some sections of the corporate and financial elites. It seems that now even Wall Street bankers are abandoning Romney.

What the billionaires who support Obama share with him is a sense that change must be initiated and controlled from above, rhetorically to alleviate the plight of the working poor but without disturbing the relations of power that made them poor in the first place. As Paul Street points out: “The problem has not been that ‘the economy’ has been broken by the supposed ‘invisible hand of the market’ or other forces allegedly beyond human control. The real difficulty is that the ‘human-made’ U.S. economic system has been working precisely as designed to distribute wealth and power upward.”

If the relations of power are unchanged, does this mean that the election results are unimportant? No. An Obama electoral victory, even with no change in the House or Senate, will confirm the social fact of a multiracial America, where women have a major voice. It will also call into question the effectiveness of the Republican strategy of splitting the working class on racist grounds.  And most crucially, it will give more time for ordinary Americans to organize resistance against the transfer of wealth from the middle class to the rich independently of the two-party political straitjacket.

Education is one of the battlegrounds where the power of community in solidarity has reasserted the principles of popular sovereignty—government of the people by the people—and significantly checked the power and seemingly unstoppable influence of the American plutocracy.  Corporate billionaires like Bill Gates, the Walton family, and Wall Street hedge fund managers have decided that schools should be remodeled on corporate lines and that teachers’ unions are obstructing their plans. Steve Jobs reportedly told Obama that the American education system was “crippled” by teachers’ unions that had to be broken.The objectives of this oligarchy are facilitated by Obama’s Race to the Top program which, like Bush’s No Child Left Behind, is a top-down, technocratic solution to the problems of education, to be imposed on state education systems over the voices of the teachers and parents who deal with the problems daily.

The key elements of the program, summarized by NYU professor Diane Ravitch, were drawn from the strategy of the Chicago school board:  “Teachers will be evaluated in relation to their students’ test scores. Schools that continue to get low test scores will be closed or turned into charter schools or handed over to private management. In low-performing schools, principals will be fired, and all or half of the staff will be fired. States are encouraged to create many more privately managed charter schools.”

The consequences of school closings in practice were pointed out by Chicago teachers’ leader Karen Lewis. “[When they closed a school] children were not going to other schools, especially in high school.  They were choosing not to go to school…. [The school board] had never thought about the ramifications of what a school closing means. So if I close a school here, now this means that my children have to walk through gang territory…. There was just no understanding of community.”

The seven appointed members of Chicago’s Board of Education have little knowledge of the school system.  The Occupied Chicago Tribune reported: “As anyone who has ever witnessed a board hearing knows, members like Hyatt heiress Penny Pritzker and former Northwestern President Henry Bienen, when they bother to show up at all, nod indifferently to public testimony, toy with their smart phones, and reliably vote in the interests of their boss. This past winter, after the board voted unanimously to close or turnaround 17 schools, frustrated parents burst into tears, and community members chanted ‘Rubber Stamp’ until CPS security escorted them out of the room.”

The board is responsible only to mayor Rahm Emanuel, not to the public. But the solidarity of Chicago teachers and their supporters in the communities succeeded in establishing limits on its plans for privatization. The strike also challenged ideological supporters of the system, who created a narrative that the conflict between teachers and the board was disrupting the welfare of the students. In the guise of impartiality, they implicitly blame teachers for putting their own interests above that of the children.

Writing in The Nation, Obama apologist Melissa Harris-Perry relates the story of Rolisa, whose younger children attend a small public school on the South Side. “Her kids are pretty happy there. Or at least they were, until the standoff between the Chicago Teachers Union and Mayor Rahm Emanuel transformed them into students of Rolisa’s makeshift kitchen table school. …This generation of children may become hard-working, courageous adults who nonetheless are relegated to life sentences of poverty and underachievement. They are stuck because they were born in a time of war—not just the wars in Afghanistan and Iraq, not just the heavily armed wars in their own streets, but the wars between the leaders and teachers who are supposed to have their best interests at heart but who seem willing to allow this generation to be lost.”

Evoking the images of war, in which innocents suffer more than armies, she misreads the strike as a selfish act by teachers willing to make victims of children, when in reality it was a struggle of the whole community against high-handed school closings in working-class areas and for better conditions for pupils to learn in the classroom.

Michelle Rhee, the former head of D.C.’s schools and now advocate for charter schools through her misnamed StudentsFirst organization, adopts the same argument in order to attack teachers’ unions. The Washington Post published an opinion piece in which she writes: “Chicago’s children lost roughly  18 million collective hours of learning time; moms and dads across the city lost wages, and possibly risked jobs, so they could care for their kids; and some children went without the hot meals they reliably get at school. It was frustrating to hear Chicago Teachers Union President Karen Lewis say toward the end of the dispute that the strike would continue to see whether there is ‘anything else they can get.’ But at least that was clear evidence that, for union leaders, this strike was never about what was best for kids….”

Rhee claims the support of corporate Democrats when she characterizes the teachers’ union as a self-serving group not interested in improving children’s education. But what was it that teachers wanted more of? A broader, well-rounded curriculum – and, above all, to be given the support they needed as professionals in the field and not be dictated to by someone in an air-conditioned office working off a spreadsheet, while their students wilted in the Chicago heat. The union mobilized teachers, custodians, parents, and pupils themselves in defense of their right to a proper education, which in fact continued an ongoing struggle by communities against school closings and so-called “turnarounds,” in which teachers and principals are completely replaced.

The Occupied Chicago Tribune reports on some of these earlier battles: two years ago parents occupied an elementary school building that officials decided would be demolished in order to build a soccer field for a neighboring private school. The sit-in lasted for more than a month before it was agreed to keep the building open as a community space. And when, this year, the school board designated Piccolo Elementary for turnaround, “parents and students decided to draw from the lessons of the Occupy movement. Surrounded by police, Occupy Chicago demonstrators complete with tents, and other allies, about a dozen parents and supporters stayed in the building overnight and won a meeting with Chicago Public Schools CEO Jean-Claude Brizard. But in the end, the board voted to close the school anyway.”

The relations of power are not fixed and immutable, but are fought out daily on the organizational level and the ideological. The Chicago teachers have achieved a victory that has encouraged low-waged workers throughout the city – from car wash workers who are organizing against wage abuses, to the musicians of the Chicago Symphony. The teachers’ strike gave the best lesson of all: solidarity in struggle will push back the billionaires and trillionaires who want to overturn democracy in America.

If Obama wins the election, let’s use the time gained to spread this lesson around. And there are many willing to learn.

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Filed under 2012 Election, chicago teachers, financiers, Hedge Fund managers, Michelle Rhee, Neoliberalism, Obama, occupy wall street, poverty, public schools, strikes