Obama, the Great Dis-Equalizer
By Glen Ford | BAR | January 8, 2014
President Obama, the Grand Facilitator of the greatest consolidation of financial wealth in human history, began his sixth year in office declaring that income inequality is “the defining challenge of our time.” The Grand Bargainer who saved George Bush’s bank bailout and presided over the (ongoing) infusion of tens of trillions of dollars into Wall Street accounts, and who bragged less than two years ago that, “Since I’ve been president, federal spending has actually risen at the lowest pace in nearly 60 years,” now calls for government action to reverse the momentum of his own policies. The Great Pretender, who in 2008 called for an increase in the federal minimum wage to $9.50 an hour by 2011, and then did absolutely nothing to effectuate it when Democrats controlled both chambers of Congress, now proposes to raise the bar to $10 an hour in order to embarrass Republicans in an election year. The Daring Debt Buster who, on his own initiative, has frozen federal workers’ wages since 2010, and worked hand in glove with Republicans to gut social programs in the name of fiscal restraint, laments “growing inequality and lack of upward mobility” among the masses.
The chief executive who lifted not a finger to pass “card check,” the Employee Free Choice Act of 2009, that might have given organized labor a fighting chance to survive, now pretends to be a born again champion of collective bargaining and yearns for the days when “you knew that a blue-collar job would let you buy a home, and a car, maybe a vacation once in a while, health care, a reliable pension.”
Meanwhile, Obama’s Justice Department sided with the Republican-appointed Emergency Financial Manager of Detroit, who was seeking to impose bankruptcy on the mostly Black city and raid retiree’s pensions – revealing the administration’s true colors.
The nation’s First Black President admits that “African Americans, Latinos, Native Americans are far more likely to suffer from a lack of opportunity – higher unemployment, higher poverty rates,” and claims he’ll push for “targeted initiatives” to combat this “legacy of discrimination” (although all the proposed targeting is in the form of tax incentives for business). Yet, nearly five years ago, in a press conference marking his first hundred days in office, Obama categorically rejected targeted aid for Black communities, thus ensuring that the cascading effects of the Great Meltdown would plunge African Americans deeper into the abyss. Obama said:
“So my general approach is that if the economy is strong, that it will lift all boats as long as it is also supported by, for example, strategies around college affordability and job training, tax cuts for working families as opposed to the wealthiest that level the playing field and ensure bottom-up economic growth.
“And I’m confident that that will help the African-American community live out the American dream at the same time that it’s helping communities all across the country.”
By 2009, according to economist Pamela Brown, white household wealth was 19 times that of Black households, “and is probably even greater now” – compared to a ratio of 12 to 1 in 1984 and down to 7 to 1 in 1995. The collapse of Black economic fortunes has been catastrophic, yet Obama offers only tax cuts for corporations, streamlined business regulations, undoing of sequestration, more rhetoric about ending off-shoring of jobs, and stronger application of antidiscrimination laws.
The president wants us to forget that he was the one who proposed sequestration in the first place, in an effort to force a Grand Bargain with Republicans; that his economic advisors are secretly meeting with hundreds of corporate lobbyists to shape a jobs-destroying Trans Pacific Partnership that is “like NAFTA on steroids,” and then fast-track it through Congress; and that Obama has nominated two Republican prospective judges from Georgia to federal courts, one of whom fought to keep the Confederate banner in the state flag, while the other was the lead lawyer in defense of Georgia’s Voter ID law. The Obama administration has many priorities, but nondiscrimination is not one of them.
Whatever Obama means when he says “targeted assistance,” it seldom translates as actual money for non-corporate persons. Back in April of 2012, his administration was cited for failing to spend almost all of $7.6 billion that Congress set aside to help communities and homeowners hardest hit by the housing crisis – a cohort that is disproportionately Black and brown. Obama’s Treasury Department offered no explanation other than they had not put together a proper spending plan. However, it is obvious that Obama’s people wanted to avoid doing anything that might interfere with the banks’ foreclosure processes, so as not to disturb Wall Street’s manifold schemes to further rig the market.
The growing crisis of income and wealth inequality is a result of the internal logic of capitalism under the hegemony of Wall Street. Obama’s fix for the vast social carnage the banksters leave in their wake, is to forge a State that is even more dutiful in propping up “the markets” and stripping down the public sector. There is no room in that presidential mission for even modest amelioration of the public’s pain. The president’s rhetoric is nothing more than noise, totally disconnected from actual policy. The Lords of Capital – for whom Obama is a servant – have nothing to offer but more austerity and war.
They must be disempowered, root and branch, and society “reformed” in their absence.
Economist Devastates “War for Oil” Dogma
Aletho News
Professor Cyrus Bina relates the facts that the oil industry and markets have been globalized. The various theories that have been put forward from both the left and the right regarding war rationales that rely on demonisation of OPEC are essentially nothing more than outdated fear mongering. Cyrus Bina has been vindicated by more recent events.
Cyrus Bina:
The history of Middle Eastern oil, including its subsequent development into a modern industry, can be divided into three distinct stages: (1) the era of international cartels, 1901-1950; (2) the era of transition, 1950-1972; and (3) the era of globalization since the mid-1970s. A slightly different historical periodization can be provided for the U.S. domestic oil industry: (1) the era of classical cartelization and early oil trusts of 1870-1910; (2) the era of regulated neo-cartelization of 1911-1972; and (3) the era of globalization since the mid-1970s. A close examination of the entire 1870-1970 period would reveal that administrative pricing under the International Oil Cartel (known as Seven Sisters) were predominantly the rule in the oil business. The cartel, however, began to lose its grip during the 1950s and 1960s. Proliferating market forces, in con-junction with the development of capitalist social relations in the colonial and semi-colonial oil regions, had overcome the colonial concessions and worldwide administrative control of oil under the international oil cartel. The oil crisis of 1973-1974 was but the symptom of this transformation toward globalization. Moreover, the so-called “OPEC offensive”—which was misperceived by both the right and the left as the cause for re-control of oil market/prices —was but the catalyst of this de-cartelization and globalization of oil.
The war-for-oil scenario, as a popular myth, ignores the deeper understanding of the complex web of contradictions and regulating dynamics of today’s economy and polity. Yet, the very anachronism of this scenario is understandable in the view of the anachronistic U.S. behavior that is so dreadfully attempting to reverse the loss of American hegemony against the time and, more importantly, history. Therefore, parallel with the anachronistic reality of U.S. colonial conduct in Iraq, the anachronism of the “oil grab” becomes “reality” in the minds of those who chant “No Blood for Oil.” Yet, holding a parallel between the U.S. invasion of Iraq and the control of oil is a far fetched proposition, if not an outright illusion. For, since the mid 1970s, the material bases and dynamics of post-cartelization and globalization of oil render the physical access, prearranged inter-company allocation, and indeed administrative control and pricing of oil redundant. This rather counter intuitive reality also renders any connection between the war and oil—other than given disbursement to finance matters such as the establishment of a puppet government—superfluous.
Nevertheless, in an interview, James Schlesinger remarked: “The United States [Bush, 41st] has gone to war now, and the American people presume this will lead to a secure oil supply. As a society we have made a choice to secure access to oil by military means. The alternative is to become independent to a large degree of that secure access.” It is indeed surprising that a market worshipping Chicago School economist fails to see the formation of (spot) oil prices within interconnected and unified markets since the post-cartelization of oil in the 1970s. Schlesinger, on the one hand, stresses the phrase “secure access” and, on the other hand, underscores the alternative of “independence,” as if one can insulate the U.S. oil industry from the rest of transnational oil. This thesis provides a convenient cover for two separate strategic projects: justifying the war without exposing its real cause, and creating panic by playing the familiar scarcity card to extend the exploration of oil in the pristine U.S. regions of wildlife such as ANWAR. In this context this was also what the Bush administration and Cheney’s “Task Force on Energy” probably had in mind when they were referring to “secure oil.”
In a nutshell, the above thesis ignores (1) the mutuality of oil producers and oil consumer, the need of both sides in selling and purchasing in the competitive global oil market, (2) the interdependence of oil regions in the present interdependent world, (3) the formation of global prices based on the cost of highest cost (U.S.) producer, not the cost of individual oil regions, and (4) the formation of differential oil rents, given the existing differential (regional) costs, through competition. Here, the dramatized “oil dependency” is but an empty phrase in the view of the trans nationalization of oil since the 1970s.
On the opposite side, hardly anyone on the left fully recognized the implication of uncritical acceptance of the above tautological thesis. Thus, the left-wing liberals and the radical left adopted this theory and dressed it up in leftist garb before applying it to either the question of war or the problem of environment. Michael Klare is one of the remarkable defenders of this thesis on the left. He declares: “Two key concerns underlie the Administration’s [Bush, 43rd] thinking: First,the United States is becoming dangerously dependent on imported petroleum to meet its daily energy requirements, and second, Iraq possesses the world’s largest reserves of untapped petroleum after Saudi Arabia.” Klare, however, takes this thesis one step further to an improvised level of neo-Malthusian scarcity:
“Global demand for many key materials is growing at an unsustainable rate. As the human population grows, societies require more of everything (food, water, energy, timber, minerals, fibers, and so on) to satisfy the basic material requirements of their individual members…. Because the production and utilization of these products entails [sic.] the consumption of vast amount of energy, minerals, and other materials, the global requirement for many basic commodities has consistently exceeded the rate of population growth.”
This worn-out neo-Malthusian message has again been reiterated in Blood and Oil. Yet, Klare, who is perplexed by the gravity of U.S. involvement in Iraq is “compelled … to conclude that petroleum is unique among the world’s resources that it has more potential than any of the others to provoke major crises and conflicts in the years ahead.” Again for Klare (and for many on the left) the specificity of the cause-and-effect seems to have no bearing on this historically unique epochal conflict and his fascination with oil is so intensive that he fails to realize a need for a specific and independent analytical proof.
I contend that, at best, the war-for-oil scenario is a text with out a context. On a logical level, the oil scenario is a remarkable example of a post hoc, ergo propter hoc fallacy, misplacing the real cause of U.S. military intervention. Moreover, by neglecting the depth of the last two decades of global transformation, the protagonists on the left and the right both have adopted a very voluntaristic-functionalist view of the U.S. global role. The left tends to capitalize on a voluntaristic interpretation of the concept of hegemony and the functionalist pivot of U.S. military might. For Klare, though, the global conflict “is entirely the product of geology.” The right, on the other hand, tends to rely on the notion of a “unipolar” world and wishful arguments of the “bound to lead” variety, without adequate attention to the emerging new polarities associated with the loss of American hegemony and the forces of globalization.
Others on the left, who are obsessively fond of the war-for-oil scenario, argue that this war may not have been for oil in the interest of U.S. capitalism as a whole, but rather in the interest of “U.S. oil corporations.” Hence, they propose that the cost of war amounts to a huge subsidy by the entire society given to the oil industry. This is a fictitious argument derived from the blind assumption of “direct access” and physical control of oil, and absolute denial of the reality of global transformation of the oil industry in the early 1970s. It is also crude and arbitrary, given the reduction of the material interests of the entire (U.S.) capitalist class to the alleged interests of its tiny fraction. And, appealing to casual observation, such as watching news from the Iraqi oil fields and the arrival of oil service contractors for “rebuilding” Iraq, is not sufficient to turn away from serious analysis. The truth is that this adventurous undertaking is in the interest of neither.
Finally, attaching significance to the switching of the currency, from dollar to euro, by OPEC oil producers is unjustified. As Paul Krugman pointed out in a short note, any possible shift from the dollar to the euro on the part of OPEC will result in a “small change,” for the U.S. economy, much smaller than the switching made already by the “Russian Mafia.” However, many on the left are not losing any opportunity to grasp this straw.
http://www.heterodoxnews.com/htnf/htn7/bina.pdf
Dutch pension fund divests from Israeli banks over illegal settlements
Al-Akhbar | January 8, 2014
Dutch pension asset manager PGGM, one of the largest in the country, said on Wednesday it was divesting from five Israeli banks because they finance illegal settlements.
The announcement comes a month after a major Dutch water supplier ended a partnership with an Israeli water company which supplies Israeli towns and settlements in the occupied West Bank.
“PGGM recently decided to no longer invest in five Israeli banks,” said the company, which manages about 153 billion euros in funds.
“The reason for this was their involvement in financing Israeli settlements in occupied Palestinian territories,” PGGM said in a statement.
PGGM said there was “a concern, as the settlements in the Palestinian territories are considered illegal under humanitarian law,” and regarded by international observers as an “important obstacle to a peaceful (two-state) solution of the Israel-Palestinian conflict.”
It said it would no longer do business with the Hapoalim and Leumi banks, the First National Bank of Israel, the Israel Discount Bank and the Mizrahi Tefahot Bank.
PGGM added it based its decision on a 2004 UN International Court of Justice ruling that the Jewish settlements were in breach of the Geneva Convention relating to occupying powers transferring their own citizens into occupied territories.
The group said it had been discussing the issue with the Israeli banks “for several years” but that the banks “have limited to no possibilities to end their involvement in the financing of settlements in the occupied Palestinian territories.”
“Therefore, it was concluded that engagement as a tool to bring about change will not be effective in this case,” PGGM said.
All investment in the banks ended on January 1 “as concerns remain and changes are not expected in the foreseeable future,” it added.
PGGM’s investments in Israeli banks amount to a few tens of millions of euros, Israeli newspaper Haaretz reported.
“But its decision is liable to damage the banks’ image, and could lead other business concerns in Europe to follow suit,” the paper said.
Palestinians welcomed the PGGM’s decision to divest from the banks, Wafa news agency reported.
Palestinian Authority Parliament Member Qais Abdul Karim, said in a statement that he hoped such action would inspire other members of the European Union to follow suit and force Israel to abide by international law.
“Israel should understand that it will pay a heavy price if it continues to occupy Palestinian land and ignore international resolutions,” Wafa quoted him as saying.
In September, Dutch engineering firm Royal HaskoningDHV withdrew from the construction of a sewage treatment plant in East Jerusalem, citing the Israeli’s project’s violation of international law.
Last month, Dutch water supplier Vitens ended a partnership with Israeli water company Mekorot due to the “political context.”
The decision came days after a visit to the Mekorot offices in Israel by Dutch trade minister Lilianne Ploumen was abruptly cancelled.
The visit was part of a larger tour of Israel by Prime Minister Mark Rutte that was marred by a dispute over a Dutch-made security scanner intended to check goods leaving Gaza for the West Bank.
Rutte was to have inaugurated the scanner on the isolated territory’s border with Occupied Palestine, but the ceremony was broken off after Israel said it did not want Gazan goods going to the West Bank.
Israel’s defense ministry wants to isolate the two Palestinian regions, while Dutch officials had hoped the scanner might boost commerce between them.
Israeli deputy Foreign minister Zeev Elkin last month said he was “blindsided” by Vitens’ pullout “and a few more European companies have made similar decisions in the past months, which have blindsided us exactly in parallel with the peace process.”
Zeev, speaking to Israeli military radio, said that peace initiatives should mean “that people don’t breathe down our neck”, but “unfortunately this doesn’t work.”
Since peace talks between Israeli and Palestinian officials began in July, Israel has announced the construction of thousands of settler homes in the West Bank and East Jerusalem, sparking tensions in already difficult negotiations.
(AFP, Al-Akhbar)
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James Hansen’s Policies Are Shafting The Poor
By Willis Eschenbach | Watts Up With That? | March 15, 2013
I was reading an interview with Adrian Bejan (worth taking a look at), and I got to musing about his comments regarding the relationship between energy use and per capita income. So I pulled up GapMinder, the world’s best online visualization software. Here’s a first cut at the relationship between energy and income.
Figure 1. Energy use per person (tons of oil equivalent, TOE) versus average income, by country. Colors show geographical regions. Size of the circle indicates population. The US is the large yellow circle at the top right. Canada is the overlapping yellow circle. China is the large red circle, India the large light blue circle. Here’s a link to the live Gapminder graph so you can experiment with it yourself.
Clearly, other than a few outliers, the relationship between energy use and income is quite straightforward. You can’t have one without the other. Well, that’s not quite true, you can have energy without income. You can have (relatively) high energy use without having the corresponding income, plenty of Africa is in that boat. But the reverse is not true—you can’t have high income without high energy use. You need the energy to make the income.
Now, James Hansen is the NASA guy who is leading the charge to stop all forms of cheap energy. Coal is bad, terrible stuff in his world. He calls trains of coal “death trains”. He wants to deny cheap energy to all of those folks in the bottom half of the graph above. Well, actually, he wants to deny access to cheap energy to everyone, but where it hurts is the bottom half of the graph. For example, the World Bank and other international funding agencies, at the urging of folks like Hansen, have been turning down loans for coal plants in developing countries.
But as you can see, if you deny energy to those folks, that is the same as denying them development. Because when there’s less energy, there’s less income. The two go hand in hand. So what James Hansen is advising is that we should take money from the poor … actually he wants to deny them cheap energy, but that means denying them income and the development that accompanies it.
A look at the history of some of the countries is instructive in that regard, to see how the income and the energy use have changed over time. Figure 2 shows the history of some selected countries.
Figure 2. A history of selected countries. Colors now show crude birth rate (births per thousand)
Now, this is showing something very interesting. It may reveal why Hansen thinks he’s doing good. Notice that for countries where people make below say $20,000 of annual income, the only way up is up and to the right … which means that the only way to increase income is to increase energy use. Look at India and China and Brazil and Spain and the Netherlands as examples. (Note also that crude birth rate is tied to increasing income, and that the crude birth rate in the US has dropped by about half since 1960.)
Above that annual income level of ~ $20,000, however something different happens. The countries start to substitute increased energy efficiency for increased energy use. This is reflected in the vertical movement of say the US, where the 2011 per capita energy use is exactly the same as the 1968 per capita energy use. And Canada is using the same energy per person as in 1977 … so let’s take a closer look at the upper right section of the chart. Figure 3 shows an enlargement of just the top right of the chart, displaying more countries.
Figure 3. A closeup of Figure 2, showing more countries. Start date is 1968 for clarity.
Now, this is interesting. Many, perhaps most of these countries show vertical or near vertical movement during the last twenty years or so. And the recent economic crash has caused people to be more conservative about energy use, squeezing more dollars out per ton of oil equivalent.
But that only happens up at the high end of the income spectrum, where people are making above about twenty or even twenty-five thousand dollars per year. You need to have really good technology to make that one work, to produce more income without using more energy. You need to be in what is called a “developed” nation.
When people think “development”, they often think “bulldozers”. But they should think “energy efficiency”, because that is the hallmark of each technological advance—it squeezes more stuff out of less energy. But you have to be in an industrialized, modern society to take advantage of that opportunity.
So this may be the reason for Hansen’s attitude toward energy use. He may not know that most of the world is not in the situation of the US. This may be the reason the he claims that we should curtail energy use by all means possible. He may not see that while the US and industrialized countries can get away with that, in part because we waste a lot of energy and have a lot of both money and technology, the poor and even the less well off of the world have little energy or money to waste.
For those poorer countries and individuals, which make up the overwhelming bulk of the world’s population, a reduction in energy use means a reduction in the standard of living. And the part Hansen and his adherents don’t seem to get is that for most of the world, the standard of living is “barely” … as in barely making ends meet.
As is usual in this world, the situation of the rich and the poor is different, and in this case the break line is high. Twenty grand of income per year is the line dividing those who can take advantage of technology to get more income with the same energy, and the rest, which is most of the world. Most of the world are still among those who must use more energy to increase their income. They don’t have the option the US and the developed nations have. They must increase energy use to increase income.
And when you start jacking up energy prices and discouraging the use of cheap energy sources around the planet, as Hansen and his adherents are doing, the poorest of the poor get shafted. James Hansen is making lots and lots of money. He’s comfortably in the top 1% of the world’s population by income, and he obviously doesn’t give much thought to the rest. We know this because if he thought about the poor he’d realize that while he is mouthing platitudes about how he’s doing his agitation and advocacy for his grandchildren’s world in fifty years, what he’s doing is shafting the poor today in the name of his grandchildren. Of course Hansen is not the first rich white guy to do that, so I suppose I really shouldn’t be surprised, but still …
Increased energy prices, often in the form of taxes and “cap-and-trade” and “renewable standards”, are THE WORLDS MOST REGRESSIVE TAX. Hansen proposes taxing the living daylights out of the poor, but he won’t feel the pain. He can stand a doubling of the gas prices, no problem. But when electricity and gas prices double around the planet, POOR PEOPLE DIE … and Hansen just keeps rolling, he has quarter-million-dollar awards from his friends and a fat government salary and a princely retirement pension you and I paid for, he could care less about increased energy prices. He’s one of the 1%, why should he pay attention to the poor?
Forgive the shouting, but the damn hypocrisy is infuriating, and I’m sick of being nice about it. James Hansen and Michael Mann and Gavin Schmidt and Phil Jones and Peter Gleick and the rest of the un-indicted co-conspirators are a bunch of rich arrogant 1%er jerkwagons who don’t care in the slightest about the poor. Not only that, but they’ve given the finger to the rest of the climate scientists and to the scientific establishment, most of whom have said nothing in protest, and far too many of whom have approved of their malfeasance.
Their patented combination of insolent arrogance and shabby science would be bad enough if that was all they were doing … but they are hurting poor people right now. Their policies are causing harder times for the poor today, as we speak … and they mouth platitudes about how they are saving the poor from some danger they won’t see for fifty years?
If you ask the poor whether they’d rather get shafted for sure today, or possibly get shafted in fifty years, I know what they’d tell you. To me, hurting the poor today under the rubric of saving them in half a century from an unsubstantiated and fanciful danger is moral dishonesty of the first order.
So let me say to all of you folks who claim the world is using too much energy, you have the stick by the wrong end. The world needs to use MORE energy, not less, because there is no other way to get the poor out of poverty. It can’t be done without cheap energy. We need to use more energy to lift people out of bone-crushing poverty, not use less and condemn them to brutal lives. And to do that, energy needs to be cheaper, not more expensive.
Let me be crystal clear, and speak directly to Hansen and other global warming alarmists. Any one of you who pushes for more expensive energy is hurting and impoverishing and killing the poor today. Whether through taxes or cap-and-trade or renewable subsidies or blocking drilling or any other way, increasing energy costs represent a highly regressive tax of the worst kind. And there is no escape at the bottom end, quite the opposite. The poorer you are, the harder it bites.
So please, don’t give us the holier-than-thou high moral ground stance. Spare us the “we’re noble because we are saving the world” BS. When a poor single mother of three living outside Las Vegas has her gas costs double, she has little choice other than to cut out some other essential item, food or doctor visits or whatever … because her budget doesn’t have any of the non-essential items that James Hansen’s budget contains, and she needs the gas to get to work, that’s not optional.
For her, all her money goes to essentials— so if gas costs go up, her kids get less of what they need. You’re not saving the world, far from it. You’re taking food out of kids’ mouths.
You are causing pain and suffering to the poor and acting like your excrement has no odor … but at least there is some good news. People are no longer buying your story. People are realizing that if someone argues for expensive energy, they are anti-human, anti-development, and most of all, without compassion for the poor. They are willing to put the most damaging, regressive, destructive tax imaginable on the poorest people of the planet.
Now those of you advocating for higher energy prices, after reading this, you might still fool the media about what you are doing to the poor. And it’s possible for you to not mention to your co-workers about the real results of your actions. And you could still deceive your friends about the question of the poor, or even your wife or husband.
But by god, you can no longer fool yourself about it. As of now, you know that agitating for more expensive energy for any reason hurts the poor. What you do with that information is up to you … but you can’t ignore it, it will haunt you at 3 AM, and hopefully, it will make you think about the less fortunate folk of our planet and seriously reconsider your actions. Because here’s the deal. Even if CO2 will damage the poor in 50 years, hurting the poor now only makes it worse. If you think there is a problem, then look for a no-regrets solution.
Because if you truly care about the poor, and you are afraid CO2 will increase the bad weather and harm the poor fifty years from now, you owe it to them to find a different response to your fears of CO2, a response that doesn’t hurt the poor today.
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Boeing Union Workers Forced Into Massive Concessions
By Jack Rasmus | January 5, 2014
This past weekend, more than 30,000 union workers at Boeing Corp. in Seattle, were forced to accept deep concessions in their union contract, gutting their pensions, future healthcare benefits, wages, and other benefits. Their contract with Boeing had not even expired but they were forced into concessions nonetheless. Nor was the company, Boeing, in any financial distress. It had registered record profits in consecutive years, and had in November 2013 bought back $10 billion in stock from its shareholders and paid another $2 billion in dividends to the same. Nevertheless Boeing demanded concessions, having received communication from Union (IAM) International leadership beforehand of their willingness to grant the same. The combination of Union International leadership pressure, countless Democratic Party politicians, and the Company’s new offensive, proved too much for local workers to resist. The new concessions will effectively end workers’ defined benefit pensions, cutting retirement benefits to the bone, and allow the company to end its healthcare insurance benefits by 2018 in accordance with the Obama new health care plan. Wages for new hired workers are projected to decline to levels of minimum wage or less over the next 11 years of the new contract term.
This kind of attack on pensions and healthcare–or what this writer calls the ‘social wage’ was predicted in this writer’s article, ‘Concession Bargaining at the Crossroads’ two years ago in 2011. That article is reproduced here in its original draft form once again.
CONCESSION BARGAINING AT THE CROSSROADS
“The history of collective bargaining since the Second World War has consisted of several stages or phases. The first phase was roughly from 1947 to 1979. During it collective bargaining was expanded both in terms of its ‘scope’ and its ‘magnitude’. Scope refers to new areas of bargaining, such as cost of living adjustments, supplemental unemployment benefits, pensions and health care benefits, union and worker rights, etc. Magnitude refers to increasing the dollar value of wages and benefits. Up to 1979 both expanded.
In contrast, from the mid-1970s to 2007, concession bargaining became the growing practice. But it was concession bargaining focused on giving back ‘magnitude’ gains of the previous decades, not necessarily the scope of bargaining. Workers in the private sector gave ground on wages and benefits in a decades-long attempt to protect their jobs.
First Stages of Concession Bargaining
Among the first to feel the effects were workers in the construction sector, starting in the 1970s. Employers formed early in the decade the ‘Construction Industry Users Roundtable’. Its strategy was to undermine the then powerful building trades unions by a new tactic: the ‘double breasted operation’. This simply put was a way to undermine the construction unions by setting up parallel, non-union companies. The unions ignored the threat more or less, since the double breasted operations were set up in the suburbs and outlying regions. The urban bastion of unionization in construction wasn’t immediately impacted. Employers progressively then moved jobs and work to the non-union operations. The loss of jobs in the unionized operations eventually forced workers and unions to start granting concessions in an attempt to prevent their work shifting to the non-union companies. Concessions soon expanded. Saving jobs in exchange for givebacks on wages and benefits eventually became the norm.
In the late 1970s the strategy of forcing workers to give up wage and benefit gains to keep their jobs leap-frogged into the manufacturing sector. The pilot and defining event was the Chrysler bailout of 1979. It worked so well the model was planned for application to manufacturing in general. By then the Construction Industry Users Roundtable’ had expanded into what is now known as perhaps the most formidable and effective Big Business organization today—the Business Roundtable. Big manufacturing and service companies joined with the Construction employers. The construction industry union-busting model was transported to other sectors of the economy.
The tactic of double breasted operations took on a new form. Alternative union-free operations were set up. But not across town, as in construction. It was now across borders. The manufacturing analog of the double breasted operation was the runaway shop, as manufacturers moved operations offshore.
In these they were aided by the most pro-business President since Coolidge—Ronald Reagan and a compliant Congress. Manufacturers were provided generous economic incentives to set up offshore. Tax incentives were generously granted. Deregulation was introduced. Then in 1988 and 1993 ‘free trade’ agreements were established with Canada and Mexico to facilitate the movement of US capital to those countries to set up operations. Free ‘trade’ is not just about export-import of goods and services; it is even more about negotiating favorable conditions for US foreign direct investment in those countries. Tax [breaks] for investing offshore plus free trade plus deregulation devastated jobs in the US beginning in the early 1980s, and continuing ever since. Under pressure of losing jobs, workers in manufacturing began the long, dead-end road toward concession bargaining in an attempt to save their jobs. But it didn’t. More than 10 million jobs have been off-shored ever since.
The pressure to grant wage concessions intensified in the 1990s. In addition to the threat of job loss, now escalating double-digit annual increases in health care costs provided a second hammer. That ushered in what was called ‘maintenance of benefits bargaining’. Now desperate to maintain their health care coverage, workers gave up more wages in exchange for keeping health benefits. But that too did not last long.
Health care cost shifting accelerated by 2000 and into the next decade. To assist in paying for rising health care premiums and costs, the federal government permitted companies to drag surplus funds from workers’ defined benefit pension plans to cover rising health costs. Up to 20% of health cost increases were subsidized in this manner. But that represented giving up wages—i.e. concessions—in order to maintain benefits as well. Only this time it was workers’ ‘deferred wages’ that went into their pension funds instead of their immediate paychecks. But a wage is a wage, whether immediate or deferred. And concessions on nominal (immediate) and deferred wages became the increasing rule by the late 1990s.
This evolving concession bargaining since the late 1970s into the last decade represents the second phase of the history of collective bargaining in the US. The first, as noted above, was the phase during which collective bargaining expanded both in terms of ‘scope’ and ‘magnitude’—that is, in terms of new areas of bargaining added to negotiations as well as in terms of advances in wages and benefits. The second phase of bargaining in the US, from the late 1970s to around 2000, represents the first stage of concession bargaining.
Stage Two: From ‘Magnitude’ to ‘Scope’ Concession Bargaining
This first stage of concession bargaining (1975-2000) began to change for the worse in the past decade, shifting to a new stage during which workers and their unions have been forced to grant concessions not only in terms of magnitude or levels of wages and benefits, but now in terms of scope and entire areas of bargaining as well. Defined benefit pensions were abandoned for 401k personal pension plans at an accelerating rate. Not only were pensions increasingly privatized, but the de-collectivization of health insurance plans also accelerated under George W. Bush with the introduction of what were called ‘health savings accounts’—the analog on the health benefits side to 401ks on the pensions side.
Employer provided health insurance benefits were now dropped in growing numbers altogether. Or they were dumped onto the union, as in the Auto Industry, in the form of VEBAs (voluntary employment benefit agreements). Employers removed in effect any negotiating over companies paying for health care for workers from union collective bargaining agreements. In a similar fashion, once widespread Cost of Living clauses in collective bargaining agreements were stripped from union contracts. Ditto for supplemental unemployment benefits (SUBs). More and more companies simply discontinued unilaterally retirees health care coverage from bargaining, aided now by court decisions that ruled such were not bona fide subjects of bargaining any longer. Union rights were increasingly circumscribed in agreements, as management rights clauses were expanded. In other words, concession bargaining was no longer simply about ‘magnitudes’—i.e. how much wages or benefits would be reduced in order to keep jobs or the companies from moving offshore or from being outsourced and reduced to mere skeleton crews. Not entire key areas of union contracts were being ‘conceded’ and thus wiped out, removed from the very subject of bargaining altogether.
Stage Three: Concession Bargaining Extends to the Public Sector
In the past two years this second phase of concession bargaining—i.e. cutting levels of wages and benefits and giving up entire areas of bargaining—is now being applied to public sector workers as well, in a vicious attack now unfolding throughout the country. Politicians of both political parties, public sector employers, and wealthy billionaires and millionaires who pay for the elections of these same politicians, are in the process of imposing concession bargaining on public workers.
Furthermore, concession bargaining is occurring in an especially compressed form. Both magnitude and scope are occurring simultaneously and in a matter of just a few years instead of the few decades in which it was deepened in the private sector of the economy. The entire process is effectively ‘telescoped’ and thus taking place is a particularly intense form. All across the country today, in state after state, politicians are declaring bargaining over pensions and health care no longer will be the practice. They are unilaterally discontinuing defined benefit pensions and replacing them with 401k plans. They are moving to eliminate union and agency shop agreements with the open shop, placing ‘caps’ on wage negotiations, and in general attempting to return to the days of ‘civil service’ rules and regulations in lieu of bona fide collective bargaining.
Stage Four: Concession Bargaining’s New Target: ‘Social Wage’ Reduction
Concession bargaining is morphing still further, however. It is now moving from the level of taking back money wages and benefits at the ‘shop-floor level’—both in the private and public sectors—to the level of ‘social wage’ concession bargaining.
The ‘social wage’ is money wages that workers give up in exchange for pay they will receive at a later date. Social wages are thus deferred wages. Social wages are most notably Social Security and Medicare taxes that workers pay in the form of payroll taxes, in order to receive the wage paid upon retirement in the form of social security pension and medicare health care benefits. The focus since the 2010 midterm elections in the US is now on austerity—a codeword for cutting so-called ‘entitlements’ like social security and medicare. But social security and medicare represent wages paid by workers in the past for claims in the future. Not content with concessions from current wage and benefits, Corporate America—the rulers behind the throne of Congress and the Presidency and Courts—now want reductions in the ‘social wage’ as well. Why? So they can maintain their historic tax cuts enacted over the past three decades and not have to pay the costs of the bailouts and economic crisis [as well as the wars for Israel – Aletho News] that they themselves caused.
The dimensions of the Great American Tax Shift of the past three decades, still on-going and expanding under Obama and the Democrats (and about to expand further still) are the subject of another analysis. But briefly, a tip of the iceberg view is: In the 1960s corporations paid 30% of total federal tax revenues; today they contribute 6.6%. In the 1960s the top income brackets paid 45% of total federal tax revenues; today the effective top bracket tax paid by the wealthiest individuals is only 16%.
The latest phase of concession bargaining now emerging in the past year—concessions giving back the ‘social wage’—is historic. It represents concession bargaining over workers’ income that is shifting to the political level on a grand scale. It is ‘grande scale concession bargaining’. Not content with concessions in money and benefits at the shop level in the private sector, not even content with extending that in intensified form today to the public worker sector, corporate interests now demand concession bargaining over social wages at the political level.
What’s especially onerous about the new concession bargaining is that politicians are making the decisions. Workers don’t even have the option of voting on the concessions, or striking in opposition, as they might when undertaken in cases of earlier concession bargaining at the shop level. They now have virtually no say in the process short of taking to the streets to have their voices heard—which appears increasingly as the only alternative. Moreover, the dollar value of the concessions being, and about to be, offered are now also immensely greater. As the recent debt ceiling debate illustrates clearly, the coming attack on Medicare represents social wage concessions approaching half a trillion dollars. Concessions involving social security retirement that will soon follow in 2012 will amount to a like amount, at minimum, with even more Medicare cuts. In just a few short years, several times the value of total givebacks in concessions in wages and benefits at the shop level since 1979 may occur. It is a massive transfer and shift of income from working and middle class America to the wealthiest households and their corporations.
Behind the facade of Washington politics are the same corporate interests, however. Only now instead of directing their managers at the bargaining table, they now direct their political managers by means of their immense, and growing, campaign contributions and billion dollar lobbying efforts.
Occasionally an example slips through the veil of confusion about who’s behind it all. The veil drops revealing the ‘Wizards of Oz’ pulling the levers and the curtains. Witness the notorious relationship between Wisconsin governor, Walker, and the billionaire Koch brothers. But there are ‘Koch brothers’ lurking everywhere behind the veil, in Ohio, in New Jersey, Connecticut, Massachusetts, Georgia, and even California. They are driving the fundamental strategy, directing the elected politicians in exchange for campaign contributions and day to day lobbying largesse.
The Empty Legacy of Concession Bargaining
What concession bargaining has proven over the past three decades—whether at the political level or the shop floor level—is that concessions only result in demands for more concessions.
Concessions in the private sector over the past three decades haven’t saved jobs. What they have achieved is a stagnation and decline in the income for 100 million families that is choking off consumer spending and economic growth and therefore economic recovery. The second phase, concession bargaining in the public sector, will now add to this consumption decline. And the now emerging third phase, expanding concession bargaining to the level of social wages, about to begin with the direct attack on social security and medicare will not ‘save’ those programs any more than concession bargaining in the past ‘saved jobs’.
Concession bargaining will only result in a deepening crisis in those programs and lead, inevitably in turn, to more demands by corporate interests for still further cuts (i.e. concessions) in those programs. Calls by politicians for ‘shared sacrifices’ are really concession bargaining by another name: to reduce the social wage represented by social security and medicare.
Nothing positive whatsoever has come from concession bargaining the past three decades in the private sector. Good jobs have continued to disappear by the tens of millions. Wages and earnings for the 100 million non-supervisory workers in the US have stagnated and fallen. Giving up wages to ‘maintain health and retirement benefits’ have fared no better. Pensions have nearly disappeared and employer provided health care coverage has declined by the millions of companies, and will not last out the current decade. Nor will anything beneficial come from the intensification of concession bargaining now penetrating the public sector. Union leaders will give up wages and benefits, but that will not stop the millions that are slated for layoffs in the public sector over the next few years—at minimum 500,000 in the year ahead alone! The extension of concession bargaining to the public sector, now accelerating at a pace far worse than that which previously occurred in the private sector, will produce the same results—only now telescoped into a much shorter time period. Not least, nothing positive will come from granting concessions over social wages—i.e. agreeing to reduce social security and medicare benefits. Those programs will not be ‘saved’ by concessions. They will be destroyed by them.
The only way to stop concession bargaining in any of its forms, including the most virulent now attacking the ‘social wage’, is to refuse any and all concessions. ‘No cuts and No Concessions’ is the only effective bargaining demand.
And just as, at the shop floor, when union leaders cave in to employer demands for concessions, they should be thrown out and replaced with leaders who will refuse to do so and stand firm—so too should any politician who agrees to concessions from social security and medicare be thrown out. Indeed, any politician who fails to actively resist such concessions should be thrown out. Not in the next election. But by immediate recall.
Finally, any political party that allows its elected to members to agree to concessions in social security and medicare, or whose elected members stand by silently while the fight to defend the social wage takes place, should be replaced by another political party whose members consider the social wage ‘non-negotiable’.
Unfortunately, it appears the political party—the Democrats—who introduced and once championed social security and medicare are now becoming participants in its destruction. Not only President Obama, but Senate leader Harry Reid and House leader Nancy Pelosi, have all publicly indicated this past summer they are prepared to concede and to cut medicare before year end 2011 in some form. Next it will be social security retirement. And medicare again.
But once starting down that road of initial concessions, it will only lead to further concessions—as the history of concession bargaining at the shop floor over the last three decades sadly shows.
If that happens, and the leadership of the Democratic Party abandon social security and medicare to concession bargaining, as it appears they will, the only answer to stopping concession bargaining is to create a new party of labor, every member of which must solemnly pledge to expand the social wage, to defend and expand social security and medicare, to stand firm on the question of concession bargaining. There can be no ‘Bi-Partisan’ compromise. It is time to raise the flag, with the motto boldly proclaiming across it: ‘No Concessions! No Retreat!.
Jack Rasmus, August 7, 2011
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The Left after the Failure of Obamacare
By Shamus Cooke | Worker’s Compass | January 4, 2014
It’s satisfying to watch rats flee a sinking ship. This is because onlookers knew the ship was doomed long ago, and swimming rats signify that the drawn-out tragedy is nearing an end. A collective sense of relief is a natural response.
The rats who propped up the broken boat of Obamacare are a collection of liberal and labor groups who frittered away their group’s resources—and integrity— to sell a crappy product to the American people.
Those in the deepest denial went “all in” for Obamacare— such as some unions and groups like Moveon.org— while the more conniving groups and individuals—like Michael Moore— playacted “critical” of Obamacare, while nevertheless declaring it “progressive”, in effect adding crucial political support to a project that deserved none.
But of course Obamacare was always more barrier than progress: we’ve wasted the last several years planning, debating, and reconstructing the national health care system, all the while going in the wrong direction— into the pockets of the insurance mega corporations. A couple progressive patches on the sails won’t keep her afloat. It’s shipbuilding time.
It was painful to watch otherwise intelligent people lend support to something that’s such an obviously bad idea. So it’s with immense relief that liberals like Michael Moore, labor groups, and others are finally distancing themselves from Obamacare’s Titanic failure. Now these individuals and groups can stop living in denial and the rest of us can proceed towards a rational discussion about a real health care solution.
The inevitable failure of Obamacare is not due to a bad website, but deeper issues. The hammering of the nails in the coffin has begun: millions of young people are suddenly realizing that Obamacare does not offer affordable health care. It’s a lie, and they aren’t buying it, literally.
The system depends on sufficient young people to opt in and purchase plans, in order to offset the costs of the older, higher-needs population. Poor young people with zero disposable income are being asked to pay monthly premiums of $150 and more, and they’re opting out, inevitably sinking Obamacare in the process.
Those young people who actually do buy Obamacare plans—to avoid the “mandate” fine— will be further enraged when they attempt to actually use their “insurance”. Many of the cheapest plans—the obvious choice for most young people— have $5,000 deductibles before the insurance will pay for anything. For poor young people this is no insurance at all, but a form of extortion.
At the same time millions of union members are being punished under Obamacare: those with decent insurance plans will suffer the “Cadillac” tax, which will push up the cost of their healthcare plans, and employers are already demanding concessions from union members in the form of higher health care premiums, co-pays, deductibles, etc.
Lower paid union workers will suffer as well. Those who are part of the Taft Hartley insurance plans will be pressured to leave the plans and buy their own insurance, since they cannot keep their plans and get the subsidy that the lowest income workers get. This has the potential to bust the whole Taft Hartley health care system that millions of union members benefit from, which is one of the reasons that labor leaders suddenly became outraged at Obamacare, after having wasted millions of union member’s dollars propping it up.
Ultimately, the American working class will collectively cheer Obamacare’s demise. They just need labor and other lefties to cheer lead its destruction a little more fiercely.
Surprisingly, most of the rats are still clinging to Obama’s hopeless vessel, frantically bailing water. Sure they’ve put on their life preservers and are anxiously eyeing the lifeboats, but they’re also preaching about how to re-align the deckchairs.
For example, in his “critical” New York Times op-ed piece, Michael Moore called Obamacare “awful”, but also called it a “godsend”, singing his same tired tune. Part of Moore’s solution for Obamacare—which was cheered on in the Daily Kos— is equally ludicrous, and follows his consistently flawed logic that Obamacare is worth saving, since its “progress” that we can build on. Moore writes:
“Those who live in red [Republican dominated] states need the benefit of Medicaid expansion [a provision of Obamacare]…. In blue [Democrat dominated] states, let’s lobby for a public option on the insurance exchange — a health plan run by the state government, rather than a private insurer.”
This is Moore at his absolute worst. He’s neck deep in the flooded hull of the U.S.S Obamacare and giving us advice on how to tread water.
Of course Moore doesn’t criticize the heart of Obamacare, the individual mandate, the most hated component.
Moore also relies on the trump card argument of the pro-Obamacare liberals: there are progressive aspects to the scheme—such as the expansion of Medicaid— and therefore the whole system is worth saving.
Of course it’s untrue that we need Obamacare to expand Medicaid. In fact, the expansion of Medicaid acted more as a Trojan horse to introduce the pro-corporate heart of the system; a horse that Moore and other liberals nauseatingly continue to ride on.
But Moore’s sneakiest argument is his advice to blue states to “…lobby for a public option on the insurance exchange…”
Again, Moore implies that it’s ok if we are “mandated” to buy health insurance, so long is there is a public option. But that aside, the deeper scheme here is that Moore wants us to further waste our energy “reforming” Obamacare, rather than driving it to the bottom of the sea.
Moore surely knows that very few people are going to march in the streets demanding a public option at this point; he therefore knows that even this tiny reform of the system is unachievable. He’s wasting our time. Real change only happens in politics when there is a surge of energy among large sections of the population, and it’s extremely unlikely that more than a handful of people are going to be active towards “fixing” Obamacare— they want to drown it.
Moore’s attempt to funnel people’s outrage at Obamacare towards a “public option” falls laughably short, and this is likely his intention, since his ongoing piecemeal “criticisms” of the system have only served to salvage a sunken ship.
Instead of wasting energy trying to pry Obamacare out of the grip of the corporations, Moore would be better served to focus exclusive energy towards expanding the movement for Medicare For All, which he claims that he also supports, while maintaining that somehow Obamacare will evolve into Single Payer system.
Most developed nations have achieved universal health care through a single payer system, which in the United States can be easily achieved by expanding Medicare to everybody. Once the realities of Obamacare directly affect the majority of the population and exacerbates the crisis of U.S. healthcare, people will inevitably choose to support the movement of Medicare for All, the only real option for a sane health care system.
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British MPs raise alarm over drug trials, say only half data published
RT | January 5, 2014
British MPs have voiced concern that doctors and researchers are being denied access to around half the results from all clinical trials. An influential parliamentary committee has condemned the selectiveness as damaging medicine as a whole.
This apparently standard practice of withholding critical medical test information impairs decision-making by professionals, worsens patients’ treatment and prevents independent assessment of medicines, the MPs wrote. And the practice, they say, dates back all the way to the 1980s.
In the report, the MPs write that they are “surprised and concerned to discover that information is routinely withheld from doctors and researchers about the methods and results of clinical trials on treatments currently prescribed in the United Kingdom. This problem has been noted for many years in the professional academic literature, with many promises given, but without adequate action being taken by government, industry or professional bodies.”
“This has ramifications for the whole of medicine. The ability of doctors, researchers and patients to make informed decisions about treatments is being undermined,” said Richard Bacon, a senior member on the committee that published the report.
The MPs argue that this is a great problem also because the issue of access to clinical trials from previous years is absent from all new proposals. And test results on humans provide researchers with key evidence to support or oppose the use of a given medicine. There are unprecedented dangers when this framework is not operating as intended, they said.
Compounding the problem further, MPs say, is that aside from the non-publication of all clinical trial tests, for some reason positive results started popping up twice as much as negative ones. This is bad when all trial results on all uses of all chemicals should be provided, the report argues.
As a result, the committee’s MPs have given strong recommendations to the government and the country’s health bodies – among them, firstly, that the full results of clinical trials from now on be disseminated to all doctors and researchers in the UK, with full audits carried out regularly to check for transgressions; and secondly, that the Department of Health and the Medicines and Healthcare products Regulatory Agency (MHRA) ensure that all past and future trial results and the methods used to achieve them be published in a unified register for further use.
Bacon expressed alarm that the absence of past results invariably impact doctors’ decisions on treatment. “Regulators and the industry have made proposals to open up access, but these do not cover the issue of access to the results of trials in the past which bear on the efficacy and safety of medicines in use today,” he said.
The worrying implication here is that so much medicine has been tested and approved over the past few decades, but only half of it we know the full truth about, it turns out.
One particular medicine that became a focus for alarm was Tamiflu – the popular flu medicine that gained popularity in 2009-10 during the great flu pandemic. Apparently, the UK Department of Health, without having access to exhaustive information on the medicine, had made a 424-million-pound decision to stockpile it between the years 2006-7 and 2012-13.
That kind of attitude, the MPs argue, is predicated on judgment, rather than real science. There is still no agreement on how the popular medicine works and disagreement on whether full information was provided to regulators by the MHRA during the licensing process. As it turns out from studies conducted by the non-profit NGO, Cochrane Collaboration, Tamiflu “did not reduce influenza-related lower respiratory tract complications.”
The organization is now in talks with Roche to receive the full details of Tamiflu’s testing, which will be included in a thorough upcoming review on its effectiveness. Both the government and the medical bodies will take part, as MPs share the think tank’s concern when it wrote that “we find it perplexing that the regulators continue to state that they had all the available evidence.”
Regarding Tamiflu and the wider practice as a whole, Bacon recommended that “before spending money in future to maintain the stockpile, the department needs to review what level of coverage is appropriate. It should look at the level of stockpiling in other countries, bearing in mind that the patent for the medicine runs out in 2016.”
The Case of the Missing Recovery
By Paul Craig Roberts | Dissident Voice | January 4, 2014
Have you seen the economic recovery? I haven’t either. But it is bound to be around here somewhere, because the National Bureau of Economic Research spotted it in June 2009, four and one-half years ago.
It is a shy and reclusive recovery, like the “New Economy” and all those promised new economy jobs. I haven’t seen them either, but we know they are here, somewhere, because the economists said so.
Congress must have seen all those jobs before they went home for Christmas, because our representatives let extended unemployment benefits expire for 1.3 million unemployed Americans, who have not yet met up with those new economy jobs, or even with an old economy job for that matter.
By letting extended unemployment benefits expire, Congress figures that they saved 1.3 million Americans from becoming lifelong bums of the nanny state and living off the public purse. After all, who do those unemployed Americans think they are? A bank too big to fail? The military-security complex? Israel?
What the unemployed need to do is to form a lobby organization and make campaign contributions.
Just as economists don’t recognize facts that are inconsistent with corporate grants, career ambitions, and being on the speaking circuit, our representatives don’t recognize facts inconsistent with campaign contributions.
For example, our representative in the White House tells us that ObamaCare is a worthy program even though those who are supposed to be helped by it aren’t because of large deductibles, copays, and Medicaid estate recovery. The cost of this non-help is a doubling of the policy premiums on those insured Americans who did not need ObamaCare and the reclassification by employers of workers’ jobs from full-time to part-time in order to avoid medical insurance costs. All it took was campaign contributions from the insurance industry to turn a policy that hurts most and helps none into a worthy program. Worthy, of course, for the insurance companies.
Keep in mind that it is the people who could not afford medical insurance who have to come up with their part of the premium or pay a penalty. How do people who have no discretionary income come up with what are to them large sums of money? Are they going to eat less, drive less, dress less? If so, what happens to people employed in those industries when demand falls? Apparently, this was too big a thought for the White House occupant, his economists, and our representatives in Congress.
According to the official wage statistics for 2012, forty percent of the US work force earned less than $20,000, fifty-three percent earned less than $30,000, and seventy-three percent earned less than $50,000. The median wage or salary was $27,519. The amounts are in current dollars and they are compensation amounts subject to state and federal income taxes and to Social Security and Medicare payroll taxes. In other words, the take home pay is less.
To put these incomes into some perspective, the poverty threshold for a family of four in 2013 was $23,550.
In recent years, the only incomes that have been growing in real terms are those few at the top of the income distribution. Those at the top have benefitted from “performance bonuses,” often acquired by laying off workers or by replacing US workers with cheaper foreign labor, and from the rise in stock and bond prices caused by the Federal Reserve’s policy of quantitative easing. Everyone else has experienced a decline in real income and wealth.
As only slightly more than one percent of Americans make more than $200,000 annually and less than four-tenths of one percent make $1,000,000 or more annually, there are not enough people with discretionary income to drive the economy with consumer spending. When real median family income and real per capita income ceased to grow and began falling, Federal Reserve chairman Alan Greenspan substituted a credit expansion to take the place of the missing growth in income. However, as consumers became loaded with debt, it was no longer possible to expand consumer spending with credit expansion.
World War II left the US economy the only undamaged industrial and manufacturing center. Prosperity ensued. But by the 1970s the Keynesian demand management economic policy had produced stagflation. Reagan’s supply-side policy was able to give the US economy another 20 years. But the collapse of the Soviet Union brought an era of jobs offshoring to large Asian economies that formerly were closed to Western capital. Once corporate executives realized that they could earn multi-million dollar performance bonuses by moving US jobs abroad and once they were threatened by Wall Street and shareholder advocates with takeovers if they did not, American capitalism began giving the US economy to other countries, mainly located in Asia. As high productivity manufacturing and professional service jobs (such as software engineering) moved offshore, US incomes stagnated and fell.
As real income growth stagnated, wives entered the work force to compensate. Children were educated by refinancing the home mortgage and using the equity in the family home or with student loans that they do not earn enough to repay. Since the December 2007 downturn, Americans have used up their coping mechanisms. Homes have been refinanced. IRAs raided. Savings drawn down. Grown children, now adults, are back home with parents. The falling labor force participation rate signals that the economy can no longer provide jobs for the workforce. In such a situation, economic recovery is impossible.
What the Treasury and Federal Reserve have done, with the complicity of the White House, Congress, economists, and the media, is to focus on rescuing a half dozen banks “too big to fail.” The consequence of focusing economic policy on saving the banks is rigged financial markets and massive stock and bond market bubbles. To protect the dollar’s exchange value from quantitative easing, the price of gold has been forced down in the paper futures market, with the consequence that physical gold is shipped to Asia where it is unavailable as a refuge for Americans faced with currency depreciation.
At a time when most Americans are running out of coping mechanisms, the US faces a possible financial collapse and a high rate of inflation from dollar depreciation as the Fed pours out newly created money in an effort to support the rigged financial markets.
It remains to be seen whether the chickens can be kept from coming home to roost for another year.
~
Paul Craig Roberts is an American economist, author, columnist, former Assistant Secretary of the Treasury, and former editor and columnist for corporate media publications. He is the author of The Failure of Laissez Faire Capitalism.
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How the Washington Post Distorts Colombia
What Dana Priest Left Out
By JACK L. LAUN | CounterPunch | January 2, 2014
On December 21, 2013 the Washington Post published an article titled “Covert action in Colombia” by reporter Dana Priest. Ms. Priest is a veteran reporter who has over the course of her career produced significant reports on important topics. However, in her report on the role of the United States government in supporting the Colombian state’s war on the FARC guerrillas she has overlooked or ignored some very basic aspects of this relationship.
The most significant of these is that she ignores the nature and history of the paramilitary forces’ activities and the link of these to the United States government. As Father Javier Giraldo, S.J., correctly observed years ago, the paramilitaries in Colombia are a strategy of the Colombian state. Furthermore, this strategy was suggested to the Colombian government by a United States military mission to Colombia in February 1962, in response to fear of the spread of influence of the Castro Revolution in Cuba. The mission was led by Lieutenant General William Yarborough, the Commander of the U.S. Army Special Warfare Center. A Wikipedia entry cites a secret report to the Joint Chiefs of Staff quoting Yarborough as recommending “development of a civilian and military structure…to pressure for reforms known to be needed, perform counter-agent and counter-propaganda functions and as necessary execute paramilitary, sabotage and/or terrorist activities against known Communist proponents. It should be backed by the United States.” (See this citation and more information at Wikipedia.org/wiki/William_P_Yarborough.) The basic idea behind the reliance upon paramilitaries has been to keep the Colombian military from being involved directly in the Colombian government’s dirty war against the guerrillas and rural noncombatants and thus avoid having “dirty hands”. As Father Giraldo observed back in 1996, “Paramilitarism becomes, then, the keystone of a strategy of “Dirty War”, where the “dirty” actions cannot be attributed to persons on behalf of the State because they have been delegated, passed along or projected upon confused bodies of armed civilians.” (Colombia: The Genocidal Democracy, Common Courage Press, 1996, p. 81). There are many examples of the paramilitary death squad actions. One of these was a terrible slaughter by machetes and chainsaws of an estimated 30 civilians in the town of Mapiripan in Meta Department on July 15-20, 1997, in which paramilitary forces under the command of Carlos Castano in northern Colombia were allowed to travel by airplane with Colombian military acquiescence to reach their target community in southeast Colombia. A second example of the vicious attacks of paramilitary forces upon civilians was the slaughter on February 21, 2005 of 8 persons of the Peace Community of San Jose de Apartado in Antioquia Department, including a founder and leader of that Community, Luis Eduardo Guerra. The latter massacre was carried out with the assistance of Colombian Army soldiers from the Seventeenth and Eleventh Brigades.
While Ms. Priest approvingly suggests that Colombia “with its vibrant economy and swanky Bogota social scene” is far removed from Afghanistan, she fails to recognize that most of Bogota’s nearly 8 million residents are very poor, while a great majority of the country’s rural residents are impoverished. To be accurate in her portrayal of present-day Colombia, Ms. Priest should recognize and acknowledge that the distribution of land among Colombia’s population is the second worst in South America, after Paraguay, and the 11th worst in the world. (Oxfam Research Reports, “Divide and Purchase: How land ownership is being concentrated in Colombia”, 2013, p.7. See http://www.oxfam.org.) In rural areas paramilitary forces, supposedly demobilized in a sham proceeding during Alvaro Uribe’s Presidency, continue to threaten and murder campesinos (small-scale farmers) and force them and their families off their lands, so they can be taken over by large landowners or multinational corporations with mining and petroleum plans encouraged by the government of President Juan Manuel Santos. Paramilitary activity also continues to account for murders of labor union leaders and organizers, more of whom are killed in Colombia year after year than in any other country in the world.
It is also disappointing that Ms. Priest makes no mention of the fact that there are some 6 million internally-displaced persons in Colombia, more than any other country in the world. In his December 27-29 article in Counterpunch, titled “Mythmaking in the Washington Post: Washington’s Real Aims in Colombia”, Nick Alexandrov correctly calls attention to Ms. Priest’s failure to take into account these displaced persons. And he also properly focuses criticism upon Ms. Priest’s failure correctly to acknowledge one of the most important links of the United State to Colombia and one of the most damaging: the drug trade and the effects of coca crop spraying (fumigation) upon Colombia’s rural population. Here again the responsibility of the United States government is clear and direct. As Mr. Alexandrov points out, tens of thousands of Colombia’s campesinos have been decimated economically as their legal food crops are destroyed through fumigation under direct control of the United States government. As a Colombia Support Network delegation was told by U. S. Embassy personnel while Anne Patterson was Ambassador there, the crop-spraying campaign using Round-Up Ultra has been controlled from the Embassy itself. Indeed, mayors of towns in Putumayo Department (province) told us they are not informed in advance and have no control over when fumigation of farm fields in their municipalities occurs.
Furthermore, the assertion that the FARC are principally responsible for Colombia’s production of illicit drugs is questionable. Right-wing paramilitaries, protected by the Colombian Army and linked to many Colombian political figures, have been involved in the drug trade for decades, and continue to benefit from this trade, as do their benefactors in the private sector, such as owners of large cattle ranches, merchants, and banana plantation owners. And the United States government has supported and even idealized one of the persons most responsible for corruption of the political process in Colombia, Alvaro Uribe Velez. Before his election as President in 2002, Alvaro Uribe had been identified by the United States government as linked to drug-trafficking. As Virginia Vallejo, a Colombian television journalist and sometime love interest of Pablo Escobar, suggested to me in a telephone conversation and mentioned in her book, Amando a Pablo, Odiando a Escobar (Random House Mondadori, September 2007), Alvaro Uribe was favored by Escobar. He allegedly approved the opening of drug-transit airstrips as Director of Civil Aeronautics. Later, as Governor of Antioquia Department, Uribe promoted the formation of so-called “self-defense” forces, which morphed into cut-throat, illegal paramilitaries who ravaged the countryside. His cousin Mario Uribe, with whom he has been particularly close, was convicted of corrupt actions and spent time in prison, while his brother Santiago Uribe Velez is about to be prosecuted for organizing and training illegal paramilitary forces on a Uribe family ranch. When Alvaro Uribe ran for re-election in 2004, his agents bribed Congresswoman Yidis Medina to get her to change her vote in committee so that Uribe could be re-elected (not permitted at that time by the Colombian Constitution). Yidis Medina went to prison for having received the bribe, but neither Alvaro Uribe nor his staff members who offered the bribe have been convicted and sentenced for the offenses they committed.
What was the reaction of the United States government to President Uribe’s alleged promotion of illegal activities? He was awarded the Presidential Medal of Freedom by President George W. Bush, the highest honor a President can convey upon any person! (For a detailed account of Alvaro Uribe’s purported misdeeds, see the Master’s thesis of Francisco Simon Conejos at the University of Valencia, Spain, of December 2012, titled, in English translation, “Crimes Against Humanity in Colombia: Elements to Implicate Ex-President Alvaro Uribe Velez before Universal Justice and the International Criminal Court”.)
No analysis of the United States’ role in Colombia can properly ignore the relationships and responsibilities outlined above. But even beyond these points if one is to consider whether the United States’ actions toward and in Colombia have been beneficial for that country and its people, one must look at the effect of the United States government’s support for corporate interests of companies from this country and their actions in Colombia. The policies of Presidents Clinton, Bush and Obama in the past two decades have advanced the agendas of mining and petroleum companies— such as Exxon Mobil, Occidental Petroleum, and Drummond— and food companies— such as Chiquita Banana and, most recently, Cargill— while these companies’ activities in rural Colombia have caused environmental damage, massive displacement of residents of these areas and destruction of the campesino economy. One wishes that Ms. Priest had treated the Colombian context much more broadly to provide a much more complete and honest view of how United States government actions and policies have affected the population of this important country, with Latin America’s third largest population (after Brazil and Mexico).
John I. Laun is president of the Colombia Support Network.
After 20 Years, It’s Clear NAFTA Has Failed To Deliver Promised Benefits; So Why Trust TPP, TTIP Will Be Better?
By Glyn Moody | Techdirt | January 2, 2014
Both TPP and TAFTA/TTIP are based on the premise that by boosting trade and investment, general prosperity will increase too. And yet, despite the huge scale of the plans, and their major potential knock-on effects on the lives of billions of people, precious little evidence has been offered to justify that basic assumption. To its credit, the European Commission has at least produced a report (pdf) on the possible gains. But as I’ve analyzed elsewhere, the most optimistic outcome is only tangentially about increased trade, and requires a harmonization of two fundamentally incompatible regulatory systems through massive deregulation on both sides of the Atlantic. In any case, the much-quoted figures are simply the output of econometric models, which may or may not be valid, and require extrapolation to the rather distant 2027, by which time the world could be a very different place.
Given the difficulty of saying anything definite about the future, it makes sense to look back at how past trade agreements have actually worked out for those involved. One of the most important, the North American Free Trade Agreement (NAFTA), has been operational for 20 years, and so offers us a wealth of hard facts. Public Citizen has just released an excellent analysis of what happened (pdf). As it points out:
NAFTA was fundamentally different than past trade agreements in that it was only partially about trade. Indeed, it shattered the boundaries of past U.S. trade pacts, which had focused narrowly on cutting tariffs and easing quotas. In contrast, NAFTA created new privileges and protections for foreign investors that incentivized the offshoring of investment and jobs by eliminating many of the risks normally associated with moving production to low-wage countries. NAFTA allowed foreign investors to directly challenge before foreign tribunals domestic policies and actions, demanding government compensation for policies that they claimed undermined their expected future profits. NAFTA also contained chapters that required the three countries to limit regulation of services, such as trucking and banking; extend medicine patent monopolies; limit food and product safety standards and border inspection; and waive domestic procurement preferences, such as Buy American.
This makes NAFTA the clear model for TPP and TAFTA, both of which hand enormous power to corporates, at the expense of the public and governments.
In 1993, NAFTA was sold to the U.S. public with grand promises. NAFTA would create hundreds of thousands of good jobs here — 170,000 per year according the Peterson Institute for International Economics. U.S. farmers would export their way to wealth. NAFTA would bring Mexico to a first-world level of economic prosperity and stability, providing new economic opportunities there that would reduce immigration to the United States. Environmental standards would improve.
Techdirt has already discussed how NAFTA has proved disastrous for the US in basic financial terms; here we’ll look at some of the other effects, not just in the US, but for Mexico too.
NAFTA has contributed to downward pressure on U.S. wages and growing income inequality. According to the U.S. Bureau of Labor Statistics, two out of every three displaced manufacturing workers who were rehired in 2012 experienced a wage reduction, most of them taking a pay cut of greater than 20 percent.
…
Despite a 188 percent rise in food imports from Canada and Mexico under NAFTA, the average nominal price of food in the United States has jumped 65 percent since the deal went into effect.
…
The reductions in consumer goods prices that have materialized have not been sufficient to offset the losses to wages under NAFTA. U.S. workers without college degrees (63 percent of the workforce) have likely lost an amount equal to 12.2 percent of their wages under NAFTA-style trade even after accounting for the benefits of cheaper goods.
Taken together, these facts represent the reality for much of the US public: wages have fallen, the cost of food has risen, and even though consumer good prices have dropped, overall US workers are worse off than they were before NAFTA came into force. People have lost out in non-monetary ways, too:
Scores of NAFTA countries’ environmental and health laws have been challenged in foreign tribunals through the controversial investor-state system. More than $360 million in compensation to investors has been extracted from NAFTA governments via “investor-state” tribunal challenges against toxics bans, land-use rules, water and forestry policies and more. More than $12.4 billion are currently pending in such claims.
NAFTA has been the test-bed for corporations to use investor-state dispute settlement (ISDS) to resist or even undo improvements in health and environmental laws that reduce their profits. Even the European Commission, a big fan of corporate sovereignty, has been forced to recognize that ISDS is a danger to the public for this reason. In many ways, Mexico has fared even worse than the US under NAFTA:
The export of subsidized U.S. corn did increase under NAFTA, destroying the livelihoods of more than one million Mexican campesino farmers and about 1.4 million additional Mexican workers whose livelihoods depended on agriculture.
The desperate migration of those displaced from Mexico’s rural economy pushed down wages in Mexico’s border maquiladora factory zone and contributed to a doubling of Mexican immigration to the United States following NAFTA’s implementation.
That last point is important: one of the selling points of NAFTA was that it would help stem the flood of Mexican migrants into the US. As the Public Citizen document reports:
Then-Mexican President Carlos Salinas de Gortari claimed NAFTA would reduce the flow of migrants from Mexico into the United States, saying: “Mexico prefers to export its products rather than its people.” Salinas infamously added that the U.S. decision over NAFTA was a choice between “accepting Mexican tomatoes or Mexican migrants that will harvest them in the United States.”
As in the US, overall, Mexicans have lost out under NAFTA:
Real wages in Mexico have fallen significantly below pre-NAFTA levels as price increases for basic consumer goods have exceeded wage increases. A minimum wage earner in Mexico today can buy 38 percent fewer consumer goods as on the day that NAFTA took effect.
Public Citizen has performed an invaluable service by pulling together the figures for NAFTA in this rigorous, fully-referenced document. That’s not least because the TPP negotiations are at a critical point, with President Obama desperate to obtain Fast Track trade authority that will allow him and his negotiators to push through TPP (and TAFTA/TTIP) with no real Congressional scrutiny and a simple yes/no vote at the end. As Public Citizen points out:
the administration and corporate proponents of the TPP will have difficulty getting the controversial deal through Congress. Twenty years of NAFTA’s damage has contributed to a groundswell of TPP opposition among the U.S. public and policymakers. In November 2013, a bipartisan group of 178 members of the U.S. House of Representatives stated their early opposition to any attempt to Fast Track the TPP through Congress, while other members expressed similar concerns about the TPP and the Fast Track trade authority scheme.
Congressional rejection of the TPP stands to intensify as the 20th anniversary of NAFTA provides a fresh reminder of the damage that such past pacts have wrought. It was the initial outcomes of NAFTA that sank previous attempts at massive NAFTA expansions, such as the Free Trade Areas of the Americas and the Asia-Pacific Economic Cooperation (APEC) FTA.
NAFTA’s two-decade legacy of tumult and hardship for millions of people in North America could similarly hasten the downfall of the attempt to expand the NAFTA model via Fast Track and the TPP. If so, it would constitute a unique benefit of an otherwise damaging deal.
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U.S. Population Growth Slows to Lowest Rate Since 1937
By Noel Brinkerhoff | AllGov | January 1, 2014
The United States is barely growing in terms of population, falling to its lowest growth rate since the Great Depression.
In 2013, the nation expanded by less than a percentage point (0.72%), according to figures released by the U.S. Census Bureau.
That translated into a population increase of less than three million people nationwide, from 313,873,685 in 2012 to 316,128,839 this year.
The tepid growth was the lowest since 1937, with even slower expansion still to come.
“The census projections to 2060 have us going down to half a percent because we’re an older population, and aging populations don’t grow so much,” William Frey, a demographer at the Brookings Institution, told The New York Times.
He added that a slow-growing population could cause a drag on economic growth.
“If we have very sharp declines in growth, that takes a bite out of the economy,” Frey said.
Regionally, the South and the West experienced the strongest population increases, but even there the rates were just under 1%. Things were worse in the Midwest and the Northwest, which saw less than half a percent of growth.
The largest numerical increases in populations took place in California, Texas, Florida, Arizona, Colorado, Utah and Washington.
Percentage-wise, the biggest gainer was North Dakota, where a thriving oil and gas industry helped boost the population by 3.14%. It was followed by the District of Columbia (2.06%), Utah (1.61%) Colorado (1.52%) and Texas (1.49%).
Behind these statistics is, of course, the frequency of births and deaths, which fuels the rate of population growth. In that regard, the Census Bureau offered a projection: this month in the U.S. there will be one birth every eight seconds and one death every 12 seconds.
Oligarchs, Demagogues, and Mass Revolts against Democracy
By James Petras | The People’s Voice | December 28, 2013
In ancient Rome, especially during the late Republic, oligarchs resorted to mob violence to block, intimidate, assassinate or drive from power the dominant faction in the Senate. While neither the ruling or opposing factions represented the interests of the plebeians, wage workers, small farmers or slaves, the use of the ‘mob’ against the elected Senate, the principle of representative government and the republican form of government laid the groundwork for the rise of authoritarian “Caesars” (military rulers) and the transformation of the Roman republic into an imperial state.
Demagogues, in the pay of aspiring emperors, aroused the passions of a motley array of disaffected slum dwellers, loafers and petty thieves (ladrones) with promises, pay-offs and positions in a New Order. Professional mob organizers cultivated their ties with the oligarchs ‘above’ and with professional demonstrators ‘below’. They voiced ‘popular grievances’ and articulated demands questioning the legitimacy of the incumbent rulers, while laying the groundwork for the rule by the few. Usually, when the pay-master oligarchs came to power on a wave of demagogue-led mob violence, they quickly suppressed the demonstrations, paid off the demagogues with patronage jobs in the new regime or resorted to a discrete assassination for ‘street leaders’ unwilling to recognize the new order’. The new rulers purged the old Senators into exile, expulsion and dispossession, rigged new elections and proclaimed themselves ‘saviors of the republic’. They proceeded to drive peasants from their land, renounce social obligations and stop food subsidies for poor urban families and funds for public works.
The use of mob violence and “mass revolts” to serve the interests of oligarchical and imperial powers against democratically-elected governments has been a common strategy in recent times.
Throughout the ages, the choreographed “mass revolt” played many roles: (1) it served to destabilize an electoral regime; (2) it provided a platform for its oligarch funders to depose an incumbent regime; (3) it disguised the fact that the oligarchic opposition had lost democratic elections; (4) it provided a political minority with a ‘fig-leaf of legitimacy’ when it was otherwise incapable of acting within a constitutional framework and (5) it allowed for the illegitimate seizure of power in the name of a pseudo ‘majority’, namely the “crowds in the central plaza”.
Some leftist commentators have argued two contradictory positions: On the one hand, some simply reduce the oligarchy’s power grab to an ‘inter-elite struggle’ which has nothing to do with the ‘interests of the working class’, while others maintain the ‘masses’ in the street are protesting against an “elitist regime”. A few even argue that with popular, democratic demands, these revolts are progressive, should be supported as “terrain for class struggle”. In other words, the ‘left’ should join the uprising and contest the oligarchs for leadership within the stage-managed revolts!
What progressives are unwilling to recognize is that the oligarchs orchestrating the mass revolt are authoritarians who completely reject democratic procedures and electoral processes. Their aim is to establish a ‘junta’, which will eliminate all democratic political and social institutions and freedoms and impose harsher, more repressive and regressive policies and institutions than those they replace. Some leftists support the ‘masses in revolt’ simply because of their ‘militancy’, their numbers and street courage, without examining the underlying leaders, their interests and links to the elite beneficiaries of a ‘regime change’.
All the color-coded “mass revolts” in Eastern Europe and the ex-USSR featured popular leaders who exhorted the masses in the name of ‘independence and democracy’ but were pro-NATO, pro-(Western) imperialists and linked to neo-liberal elites. Upon the fall of communism, the new oligarchs privatized and sold off the most lucrative sectors of the economy throwing millions out of work, dismantled the welfare state and handed over their military bases to NATO for the stationing of foreign troops and the placement of missiles aimed at Russia.
The entire ‘anti-Stalinist’ left in the US and Western Europe, with a few notable exceptions, celebrated these oligarch-controlled revolts in Eastern Europe and some even participated as minor accomplices in the post-revolt neo-liberal regimes. One clear reason for the demise of “Western Marxism” arose from its inability to distinguish a genuine popular democratic revolt from a mass uprising funded and stage-managed by rival oligarchs!
One of the clearest recent examples of a manipulated ‘people’s power’ revolution in the streets to replace an elected representative of one sector of the elite with an even more brutal, authoritarian ‘president’ occurred in early 2001 in the Philippines. The more popular and independent (but notoriously corrupt) President Joseph Estrada, who had challenged sectors of the Philippine elite and current US foreign policy (infuriating Washington by embracing Venezuela’s Hugo Chavez), was replaced through street demonstrations of middle-class matrons with soldiers in civvies by Gloria Makapagal-Arroyo. Mrs. Makapagal-Arroyo, who had close links to the US and the Philippine military, unleashed a horrific wave of brutality dubbed the ‘death-squad democracy’. The overthrow of Estrada was actively supported by the left, including sectors of the revolutionary left, who quickly found themselves the target of an unprecedented campaign of assassinations, disappearances, torture and imprisonment by their newly empowered ‘Madame President’.
Past and Present Mass Revolts Against Democracy: Guatemala, Iran, and Chile
The use of mobs and mass uprisings by oligarchs and empire builders has a long and notorious history. Three of the bloodiest cases, which scarred their societies for decades, took place in Guatemala in 1954, Iran in 1953, and Chile in 1973.
Democratically-elected Jacobo Árbenz was the first Guatemalan President to initiate agrarian reform and legalize trade unions, especially among landless farm workers. Árbenz’s reforms included the expropriation of unused, fallow land owned by the United Fruit Company, a giant US agro-business conglomerate. The CIA used its ties to local oligarchs and right-wing generals and colonels to instigate and finance mass-protests against a phony ‘communist-takeover’ of Guatemala under President Arbenz. The military used the manipulated mob violence and the ‘threat’ of Guatemala becoming a “Soviet satellite”, to stage a bloody coup. The coup leaders received air support from the CIA and slaughtered thousands of Arbenz supporters and turned the countryside into ‘killing fields’. For the next 50 years political parties, trade unions and peasant organizations were banned, an estimated 200,000 Guatemalans were murdered and millions were displaced.
In 1952 Mohammed Mossadegh was elected president of Iran on a moderate nationalist platform, after the overthrow of the brutal monarch. Mossadegh announced the nationalization of the petroleum industry. The CIA, with the collaboration of the local oligarchs, monarchists and demagogues organized ‘anti-communist’ street mobs to stage violent demonstrations providing the pretext for a monarchist- military coup. The CIA-control Iranian generals brought Shah Reza Pahlavi back from Switzerland and for the next 26 years Iran was a monarchist-military dictatorship, whose population was terrorized by the Savak, the murderous secret police.
The US oil companies received the richest oil concessions; the Shah joined Israel and the US in an unholy alliance against progressive nationalist dissidents and worked hand-in-hand to undermine independent Arab states. Tens of thousands of Iranians were killed, tortured and driven into exile. In 1979, a mass popular uprising led by Islamic movements, nationalist and socialist parties and trade unions drove out the Shah-Savak dictatorship. The Islamists installed a radical nationalist clerical regime, which retains power to this day despite decades of a US-CIA-funded destabilization campaign which has funded both terrorist groups and dissident liberal movements.
Chile is the best-known case of CIA-financed mob violence leading to a military coup. In 1970, the democratic socialist Dr. Salvador Allende was elected president of Chile. Despite CIA efforts to buy votes to block Congressional approval of the electoral results and its manipulation of violent demonstrations and an assassination campaign to precipitate a military coup, Allende took office.
During Allende’s tenure as president the CIA financed a variety of “direct actions” –from paying the corrupt leaders of a copper workers union to stage strikes and the truck owners associations to refuse to transport goods to the cities, to manipulating right-wing terrorist groups like the Patria y Libertad (Fatherland and Liberty) in their assassination campaigns. The CIA’s destabilization program was specifically designed to provoke economic instability through artificial shortages and rationing, in order to incite middle class discontent. This was made notorious by the street demonstrations of pot-banging housewives. The CIA sought to incite a military coup through economic chaos. Thousands of truck owners were paid not to drive their trucks leading to shortages in the cities, while right-wing terrorists blew up power stations plunging neighborhoods into darkness and shop owners who refused to join the ‘strike’ against Allende were vandalized. On September 11, 1973, to the chants of ‘Jakarta’ (in celebration of a 1964 CIA coup in Indonesia), a junta of US-backed Chilean generals grabbed power from an elected government. Tens of thousands of activists and government supporters were arrested, tortured, forced into exile or killed. The dictatorship denationalized and privatized its mining, banking and manufacturing sectors, following the free market dictates of Milton Friedman-trained economists (the so-call “Chicago Boys”). The dictatorship overturned 40 years of welfare, labor and land-reform legislation which had made Chile the most socially advanced country in Latin America. With the generals in power, Chile became the ‘neo-liberal model’ for Latin America. Mob violence and the so-called “middle class revolt”, led to the consolidation of oligarchic and imperial rule and a 17-year reign of terror under General Augusto Pinochet dictatorship. The whole society was brutalized and with the return of electoral politics, even former ‘leftist’ parties retained the dictatorship’s neo-liberal economic policies, its authoritarian constitution and the military high command. The ‘revolt of the middle class’ in Chile resulted in the greatest concentration of wealth in the hands of the oligarchs in Latin America to this day!
The Contemporary Use and Abuse of “Mass Revolts”: Egypt, Ukraine, Venezuela, Thailand, and Argentina
In recent years “mass revolt” has become the instrument of choice when oligarchs, generals and other empire builders seek ‘regime change’. By enlisting an assortment of nationalist demagogues and imperial-funded NGO ‘leaders’, they set the conditions for the overthrow of democratically elected governments and stage-manage the installment of their own “free market” regimes with dubious “democratic” credentials.
Not all the elected regimes under siege are progressive. Many ‘democracies’, like the Ukraine, are ruled by one set of oligarchs. In the Ukraine, the elite supporting President Viktor Yanukovich, decided that entering into a deep client-state relationship with the European Union was not in their interests, and sought to diversify their international trade partners while maintaining lucrative ties with Russia. Their opponents, who are currently behind the street demonstrations in Kiev, advocate a client relationship with the EU, stationing of NATO troops, and cutting ties with Russia. In Thailand, the democratically-elected Prime Minister, Yingluck Shinawatra, represents a section of the economic elite with ties and support in the rural areas, especially the North-East, as well as deep trade relations with China. The opponents are urban-based, closer to the military-monarchists and favor a straight neo-liberal agenda linked to the US against the rural patronage-populist agenda of Ms. Shinawatra.
Egypt’s democratically-elected Mohamed Morsi government pursued a moderate Islamist policy with some constraints on the military and a loosening of ties with Israel in support of the Palestinians in Gaza. In terms of the IMF, Morsi sought compromise. The Morsi regime was in flux when it was overthrown: not Islamist nor secular, not pro-worker but also not pro-military. Despite all of its different pressure groups and contradictions, the Morsi regime permitted labor strikes, demonstrations, opposition parties, freedom of the press and assembly. All of these democratic freedoms have disappeared after waves of ‘mass street revolts’, choreographed by the military, set the conditions for the generals to take power and establish their brutal dictatorship – jailing and torturing tens of thousands and outlawing all opposition parties.
Mass demonstrations and demagogue-led direct actions also actively target democratically elected progressive governments, like Venezuela and Argentina, in addition to the actions against conservative democracies cited above. Venezuela, under Presidents Hugo Chavez and Vicente Maduro advances an anti-imperialist, pro-socialist program. ‘Mob revolts’ are combined with waves of assassinations, sabotage of public utilities, artificial shortages of essential commodities, vicious media slander and opposition election campaigns funded from the outside. In 2002, Washington teamed up with its collaborator politicians, Miami and Caracas-based oligarchs and local armed gangs, to mount a “protest movement” as the pretext for a planned business-military coup. The generals and members of the elite seized power and deposed and arrested the democratically-elected President Chavez. All avenues of democratic expression and representation were closed and the constitution annulled. In response to the kidnapping of ‘their president’, over a million Venezuelans spontaneously mobilized and marched upon the Presidential palace to demand the restoration of democracy and Hugo Chavez to the presidency. Backed by the large pro-democracy and pro-constitution sectors of the Venezuelan armed forces, the mass protests led to the coup’s defeat and the return of Chavez and democracy. All democratic governments facing manipulated imperial-oligarchic financed mob revolts should study the example of Venezuela’s defeat of the US-oligarch-generals’ coup. The best defense for democracy is found in the organization, mobilization and political education of the electoral majority. It is not enough to participate in free elections; an educated and politicized majority must also know how to defend their democracy in the streets as well as at the ballot box.
The lessons of the 2002 coup-debacle were very slowly absorbed by the Venezuelan oligarchy and their US patrons who continued to destabilize the economy in an attempt to undermine democracy and seize power. Between December 2002 and February 2003, corrupt senior oil executives of the nominally ‘public’ oil company PDVSA (Petróleos de Venezuela) organized a ‘bosses’ lockout stopping production, export and local distribution of oil and refined petroleum products. Corrupt trade union officials, linked to the US National Endowment for Democracy, mobilized oil workers and other employees to support the lock-out, in their attempt to paralyze the economy. The government responded by mobilizing the other half of the oil workers who, together with a significant minority of middle management, engineers and technologists, called on the entire Venezuelan working class to take the oil fields and installations from the ‘bosses’. To counter the acute shortage of gasoline, President Chavez secured supplies from neighboring countries and overseas allies. The lockout was defeated. Several thousand supporters of the executive power grab were fired and replaced by pro-democracy managers and workers.
Having failed to overthrow the democratic government via “mass revolts”, the oligarchs turned toward a plebiscite on Chavez’ rule and later called for a nation-wide electoral boycott, both of which were defeated. These defeats served to strengthen Venezuela’s democratic institutions and decreased the presence of opposition legislators in the Congress. The repeated failures of the elite to grab power led to a new multi-pronged strategy using: (1) US-funded NGO’s to exploit local grievances and mobilize residents around community issues; (2) clandestine thugs to sabotage utilities, especially power, assassinate peasant recipients of land reform titles, as well as prominent officials and activists; (3) mass electoral campaign marches, and (4) economic destabilization via financial speculation, illegal foreign exchange trading, price gouging and hoarding of basic consumer commodities. The purpose of these measures is to incite mass discontent, using their control of the mass media to provoke another ‘mass revolt’ to set the stage for another US-backed ‘power grab’. Violent street protests by middle class students from the elite Central University were organized by oligarch-financed demagogues. ‘Demonstrations’ included sectors of the middle class and urban poor angered by the artificial shortages and power outages. The sources of popular discontent were rapidly and effectively addressed at the top by energetic government measures: business owners engaged in hoarding and price gouging were jailed; prices of essential staples were reduced; hoarded goods were seized from warehouses and distributed to the poor; the import of essential goods was increased and saboteurs were pursued. The Government’s effective intervention resonated with the mass of the working class, the lower-middle class and the rural and urban poor and restored their support. Government supporters took to the streets and lined up at the ballot box to defeat the campaign of destabilization. The government won a resounding electoral mandate allowing it to move decisively against the oligarchs and their backers in Washington.
The Venezuelan experience shows how energetic government counter-measures can restore support and deepen progressive social changes for the majority. This is because forceful progressive government intervention against anti-democratic oligarchs, combined with the organization, political education and mobilization of the majority of voters can decisively defeat these stage-managed mass revolts.
Argentina is an example of a weakened democratic regime trying to straddle the fence between the oligarchs and the workers, between the combined force of the agro-business and mining elites and working and middle class constituencies dependent on social policies. The elected-Kirchner-Fernandez government has faced “mass revolts” in the a series of street demonstrations whipped up by conservative agricultural exporters over taxes; the Buenos Aires upper-middle class angered at ‘crime, disorder and insecurity’, a nationwide strike by police officials over ‘salaries’ who ‘looked the other way’ while gangs of ‘lumpen’ street thugs pillaged and destroyed stores. Taken altogether, these waves of mob action in Argentina appear to be part of a politically-directed destabilization campaign by the authoritarian Right who have instigated or, at least, exploited these events. Apart from calling on the military to restore order and conceding to the ‘salary’ demands of the striking police, the Fernandez government has been unable or unwilling to mobilize the democratic electorate in defense of democracy. The democratic regime remains in power but it is under siege and vulnerable to attack by domestic and imperial opponents.
Conclusion
Mass revolts are two-edged swords: they can be a positive force when they occur against military dictatorships like Pinochet or Mubarak, against authoritarian absolutist monarchies like Saudi Arabia, a colonial-racist state like Israel, and imperial occupations like against the US in Afghanistan. But they have to be directed and controlled by popular local leaders seeking to restore democratic majority rule.
History, from ancient times to the present, teaches us that not all ‘mass revolts’ achieve, or are even motivated by, democratic objectives. Many have served oligarchs seeking to overthrow democratic governments, totalitarian leaders seeking to install fascist and pro-imperial regimes, demagogues and authoritarians seeking to weaken shaky democratic regimes and militarists seeking to start wars for imperial ambitions.
Today, “mass revolts” against democracy have become standard operational procedure for Western European and US rulers who seek to circumvent democratic procedures and install pro-imperial clients. The practice of democracy is denigrated while the mob is extolled in the imperial Western media. This is why armed Islamist terrorists and mercenaries are called “rebels” in Syria and the mobs in the streets of Kiev (Ukraine) attempting to forcibly depose a democratically-elected government are labeled “pro-Western democrats”.
The ideology informing the “mass revolts” varies from “anti-communist” and “anti-authoritarian” in democratic Venezuela, to “pro-democracy” in Libya (even as tribal bands and mercenaries slaughter whole communities), Egypt and the Ukraine.
Imperial strategists have systematized, codified and made operational “mass revolts” in favor of oligarchic rule. International experts, consultants, demagogues and NGO officials have carved out lucrative careers as they travel to ‘hot spots’ and organize ‘mass revolts’ dragging the target countries into deeper ‘colonization’ via European or US-centered ‘integration’. Most local leaders and demagogues accept the double agenda: ‘protest today and submit to new masters tomorrow’. The masses in the street are fooled and then sacrificed. They believe in a ‘New Dawn’ of Western consumerism, higher paid jobs and greater personal freedom … only to be disillusioned when their new rulers fill the jails with opponents and many former protestors, raise prices, cut salaries, privatize state companies, sell off the most lucrative firms to foreigners and double the unemployment rate.
When the oligarchs ‘stage-manage’ mass revolts and takeover the regime, the big losers include the democratic electorate and most of the protestors. Leftists and progressives, in the West or in exile, who had mindlessly supported the ‘mass revolts’ will publish their scholarly essays on ‘the revolution (sic) betrayed” without admitting to their own betrayal of democratic principles.
If and when the Ukraine enters into the European Union, the exuberant street demonstrators will join the millions of jobless workers in Greece, Portugal, and Spain, as well as millions of pensioners brutalized by “austerity programs” imposed by their new rulers, the ‘Troika’ in Brussels. If these former demonstrators take to the streets once more, in disillusionment at their leaders’ “betrayal”, they can enjoy their ‘victory’ under the batons of “NATO and European Union-trained police” while the Western mass media will have moved elsewhere in support of ‘democracy’.
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The Crusades – colliding narratives
Ashes of Pompeii | June 13, 2026
They say history is written by the victors, but the Crusades offer an interesting historical contrast: a two-century collision that produced not one history, but two parallel, irreconcilable realities. The dates and the battles are identical in both accounts, but the moral axis is entirely flipped.
In the traditional Western narrative, the Crusades are framed as a heroic, if tragic, epic. The First Crusade is a pious pilgrimage; the knights are romanticized figures of chivalry in shining armor, bravely holding the line in a hostile, exotic land. The eventual loss of the Holy Land is mourned as the “fall of Outremer,” a tragic retreat of European civilization. In this telling, the East is often reduced to a passive backdrop, its inhabitants viewed through a lens of mystique or backwardness, mere obstacles to a divine mandate.
But cross the Mediterranean, and the exact same timeline reads like a chronicle of foreign invasion and eventual, hard-won restoration against the barbarous northerners. The dates do not change, but the adjectives do. Here is the history as it is remembered in the Levant… continue
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