Before any problem can be fixed it must first be acknowledged. The jobs crisis stays in the shadows, out of mind, and consequently unaddressed. This is allowed to happen because those in power – Republicans and Democrats – both have political reasons to remain silent.
When the jobs crisis is discussed, the word “crisis” is seldom used, and the conversation is conducted with hushed tones and minimizing vocabulary. Therefore, when the monthly national jobs report was announced for June, there was quiet grumbling instead of passionate oratory; passivity instead of mobilization and action.
In the last three months the country added an average of 75,000 jobs a month. But job creation per month must be over 100,000 to keep up with young workers entering the workforce; therefore the real number of unemployed has steadily increased, on top of the mountain of already long-term unemployed.
The ”real” unemployment rate – which includes those who gave up looking for work and those who want full-time work – rose to 14.9 percent in June, a total of 23 million people.
President Obama actually had the nerve to claim that the June jobs report was a “step in the right direction.” His election campaign chooses not to be interrupted by facts.
But the real story that the numbers tell in the jobs report is the trend that promises more unemployment. The economy has stalled, and threatens to slide backward again into recession. The “jobless recovery” that we have now is likely to evolve into a full-fledged depression.
Corporations already know this, which is why they refuse to hire more workers and are content sitting on their mountains of cash: why invest money in hiring or adding new machines if you think the economy may tank, spoiling the investment? Indeed, corporations have every right to believe the economy is headed downward. The New York Times explains:
“… ill [economic] winds are blowing in from both a contracting [recessionary] Europe [the biggest trading partner of the U.S.] and slowing growth in emerging markets [China, India]. Also, domestic lawmakers’ inaction on the upcoming ‘fiscal cliff’ creates uncertainty that is not conducive to hiring.”
What is this “fiscal cliff” that politicians and CEO’s talk about behind closed doors but rarely discuss on TV? The New York Times continues:
“…the end of 2012 [the fiscal cliff] will also bring a torrent of federal tax increases [reducing consumer spending]… The government is also scheduled to lop off a huge chunk of federal spending [$500 billion in annual cuts] because of measures set in motion [the infamous “trigger cuts”] by Congress’s inability last December to come up with plans for longer-term fiscal restructuring.”
The reason these cuts are not being discussed – and the reason they are referred to as the “fiscal cliff” – is because after these measures are implemented, the already-stammering economy will be pushed “over the cliff” into recession.
Both parties are not talking about the fiscal cliff because they share the exact same solution: austerity -cuts to social programs (education, health care, safety net), government layoffs, and other measures to make working people pay for the nation’s debt instead of the rich and corporations.
The real state of the economy is also revealed by Wall Street’s clamoring for the Federal Reserve to again start printing massive amounts of money, called quantitative easing. This desperate move would never be considered in times of “relative stability” of the economy and threatens to create massive inflation at home and abroad.
Both Democrats and Republicans are aligned with the free market model of job creation, which amounts to massive state intervention to provide banks and corporations with bailouts, ultra-cheap/printed money, subsides, tax breaks, etc., in the hopes that these corporations will hire people. These ideas have already been thoroughly disproved by events, yet nobody in power can put forth an alternative, since doing so would change the landscape of American politics.
What America needs is what was done during the last depression: a massive dose of state intervention against these corporations and the wealthy, by demanding that their taxes be dramatically increased to fund a federal jobs program.
Until labor and community groups detach themselves from Obama’s election campaign, they will remain mum on this issue and will be forced to support a so-called corporate jobs creation plan that promises more unemployment. The reason that labor organizations are not fighting for a real jobs campaign is because they have opted to tape their mouths shut and campaign for the Democrats instead, a fact that exposes them in front of their membership, who will in turn demand a new policy from their leaders. If the leaders fail to respond positively, their membership will demand a new policy and a new leadership.
Shamus Cooke is a social service worker and trade unionist. He can reached at shamuscooke@gmail.com
One of the more pathetically transparent and easily refuted lies told by committed Democratic tribalists is that the outcome of the 2000 election was all Ralph Nader’s fault. The more idiotic Democratic partisans will proclaim that, if only that rotten Ralph hadn’t selfishly and stupidly siphoned votes from the messianic Albert of Gore, Saint Al would have ascended to the White House on gossamer wings, the U.S. never would have gone to war in Iraq, American dependence on oil would have been swept away by the windmills of our minds, we would have rediscovered and recommitted ourselves to “true” American values (which have nothing to do with anything the U.S. has actually done, mind you, but are to be found in the record of the fantasy United States brewed in the shallower pools of the stagnant minds of these professional delusionists), the world would have been born anew — and every single one of us would have our own adorable puppy dog along with a fucking rainbow.
I’ve made the arguments set forth in the linked article many times myself over the years, too many times over too many years. I’m not going to make them any longer.
I am not going to be the only person who must spend half an hour cleaning vomit from his keyboard. So please accompany me on this brief tour of the tortured byways of what passes for Nader’s mind. He begins thusly:
If the Democrats in Congress were all drinking water from the same faucet, there might be a clue to their chronic fear of the craven and cruel corporatist Republicans who dominate them.
But they don’t, so we have to ask why their fear, defeatism, and cowering behavior continues in the face of the outrageous GOP actions as the November election approaches.
Keep in mind that the purpose of Nader’s column is to “save” the Democrats from what he perceives as self-immolation. One might wonder why he believes such a desultory group of gutless, fear-ridden maggots can be “saved” at all. The only reason that he offers is that they still call themselves “Democrats.” How marvelously subtle and unexpected.
Nader’s next paragraph might erroneously lead you to believe that he intends to get to the real problem:
The explanations go back some years. The Democrats have long receded from the Harry Truman days of “give ‘em hell, Harry”. But their political castration occurred in the late seventies when the Democrats were persuaded by one of their own, Congressman Tony Coelho (D-Calif.), to start aggressively bidding for corporate campaign cash.
Ah, so perhaps the Democrats began to pursue an agenda that was notably friendly to corporate interests? But Nader immediately abandons this line of inquiry, to return to the reliable theme of irredeemably loathsome Republicans who “torture” Democrats. No wonder the poor Democrats are dominated by fear and weakness: they’re “tortured daily”!
And then we read a paragraph that reduced me to open-mouthed astonishment. Nader intends the following as an indictment of “the unpopular agendas pitched by these Wall Street puppets” — by which he means “Republican leaders.” This is the paragraph:
One would think that politicians who side with big corporations would be politically vulnerable for endangering both America and the American people. These corrupt politicians promote corporate tax loopholes and side with insurance and drug companies on costly health care proposals. They defend the corporate polluters on their unsafe workplaces, dirty air, water and contaminated food, push for more deficit spending in the Iraq and Afghanistan wars, neglect Main Street based public works-repair-America-jobs programs, support high-interest student loans, cover for oil industry greed at the pump, and are hell-bent on taking the federal cops off the corporate crime beats.
There is one slight problem with this analysis: it perfectly describes the Democrats’ program. The abominable — and now constitutional! — health “care” bill was championed not by Boehner or Cantor, but by Barack Obama. The wars in Afghanistan, Pakistan, Yemen, Somalia, Libya, and on and on are prosecuted by the Obama administration. The same is true of every item in Nader’s list.
Moreover, the program of systematic assassination by secret decree is not the invention of George W. Bush, but of Barack Obama. As I have noted many times before, this program represents the assertion of absolute power. Absolute power has been claimed and is fervently supported by Democrats. For any semi-decent human being, this should kill the Democratic Party until such time as it renounces the murder program fully and repeatedly, and then acts over a period of years to demonstrate that its renunciation is genuine.
I consider it impossible that Nader just happens to miss these points. I am forced to conclude that either he is now willing to lie across the board, including on every matter of the gravest significance, or he has become the victim of his chosen self-delusions to a degree that renders his brain non-functional in any meaningful sense. See my recent post on self-made stupidity and blindness for more on the latter point.
The column is remarkably and childishly confused. Strewn among the formulaic denunciations of “extremist” Republicans is this admission: “Unfortunately, on military and foreign policy there isn’t much of a difference [between the parties]. So the bright line will have to be on domestic issues.”
But a few paragraphs later, Nader writes:
There are plenty of bright-line issues for the Democrats. Get tough on Wall Street and corporate crime, protect pensions, end the wars, tax the corporate and wealthy tax-escapees, launch community-based public works programs, provide full Medicare for all, expand health and safety programs, to name a few.
Given his own admission, why in the world does Nader include “end the wars” on this list? But it is equally delusional to believe the Democrats will adopt any of the programs he identifies. To the contrary: the Democrats have provided voluminous evidence demonstrating that they feverishly oppose all such programs.
In brief, and as I have also said many times before, the Democrats act as they do because they are pursuing the programs and goals they want to pursue. The evidence is all around us, in the mangled, bleeding bodies of countless victims abroad, and in the increasingly desperate lives of more and more Americans at home. All a person has to do is open his eyes and look at it.
This is precisely what Nader and all those who have similar beliefs refuse to do. Once again, from five goddamn years ago:
[The explanation] is very simple, and it goes to the progressives’ central articles of religious faith: The Democrats aren’t really like this, not in their heart of hearts. The Democrats don’t actually favor a repressive, authoritarian state. The Democrats are good, and they want liberty and peace for everyone, everywhere, for eternity, hallelujah and amen.
People who continue to believe this have evicted themselves from serious political debate, and they have willingly made themselves slaves to their enthusiastically embraced self-delusions. They confess a comprehensive ignorance of history, a stunning inability to understand the political developments of the last century, and a desire to place the story they have chosen, primarily because it flatters their own false sense of vanity and self-worth, above every relevant fact.
So you know what I think, Ralph? Not only do I now think it’s your fault that Gore lost the 2000 election, I think that every terrible thing that has happened in the last half century is your fault!
I also know that it’s your fault I can’t lose 20 pounds. You bastard.
From now on, when idiot Democrats blame you for what are manifestly their own failures, you can defend yourself if you choose to. Good luck with that. You’ll need it.
In case you missed it, earlier this week Canada and Israel signed a new energy cooperation agreement, according to YnetNews. The deal was inked during Canadian Natural Resources Minister Joe Oliver’s visit to Israel last week, the site reported.
“The World Energy Council believes that the recent oil and gas deposits found in Israel’s coastal plains is one of the largest in the world. If estimates of the basin containing up to 250 billion barrels of shale oil prove accurate, Israel will become one of the world’s top-three countries in shale oil resources, behind just the United States and China, the report said.”
Russia has taken a keen interest in Israel lately, and with these discoveries it is likely Russia would offer its help. This would have larger geopolitical ramifications in the region as Turkey’s efforts to block gas production in the region could be rebuffed by Russia, a long time strategic partner. […]
“Gazprom and other Russian companies are also likely to do well in any gas exploration deals developed with the strongly pro-Moscow (and very cash hungry) Greek Cypriot government.
“The stakes are not small: the offshore Levantine Basin (which Syria, Lebanon, Turkey, Greece, Cyprus, Israel and even Gaza will all have some claim to) is believed to have 120 trillion cubic feet of natural gas and ‘considerable’ oil. Drillers working in Israeli waters have already identified what look to be 5 billion barrels of recoverable oil in addition to over a trillion cubic feet of gas. (US firms were involved in these finds.) Israel’s undersea gas reserves are currently estimated at about 16 trillion cubic feet and new fields continue to be rapidly found.
“The new Israeli-Russian agreement is part of a conscious strategy by the Israeli government to use its nascent energy wealth to improve its embattled political position. With Italy reeling under the impact of big wrong-way bets on Iran, Rome may also begin to appreciate the value of good ties with a closer and more dependable [sic] neighbor. Another sensible target for Israeli energy diplomacy would be India: the two countries are already close in a number of ways, including trade and military technology, and India is eager to diversify its energy sources.
“Gas is one thing, but potential for huge shale oil reserves under Israel itself, however, is a new twist. According to the World Energy Council, a leading global energy forum with organizations and affiliates in some 93 countries, Israel may have the third largest shale oil reserves in the world: something like 250 billion barrels. (The US and China are both believed to have larger shale oil reserves, with the US believed to have the equivalent of well over 1 trillion barrels of potentially recoverable shale and China having perhaps one third of that amount. Canada’s Athabaskan oil sands reserves may contain the equivalent of 2 trillion of barrels conventional oil, or more than all the conventional oil known to exist in Saudi Arabia, Iraq and Iran combined.) If the estimates of Israeli shale oil are correct, Israel’s gas and shale reserves put its total energy reserves in the Saudi class, though Israel’s energy costs more to extract.”
One of our longstanding arguments about the folly of American policy on Iran-related sanctions is that it is incentivizing rising powers like China and the other BRICS countries (Brazil, Russia, India, and South Africa, along with China) to develop alternatives to U.S.-controlled mechanisms for conducting, financing, and settling the international exchange of goods, services, and capital. As the latest sets of U.S. and European Union sanctions against the Islamic Republic were going into effect, Neelam Deo (a former Indian diplomat who now directs Gateway House, the Indian Council on Global Relations) and Akshay Mathur (head of research and geoeconomics fellow at Gateway House) published a brilliant opinion piece in The Financial Times outlining precisely how such alternative mechanisms are likely to emerge, see here.
Deo and Mathur note at the outset of their article that “two recent developments—the $75 billion bailout contribution from the BRICS countries to the IMF, and the Western push for sanctions against Iran—show how exposed the BRICS economies are to Western financial policies. For decades, they have been successfully co-opted to submit to Western-dominated institutions, leaving them with little motivation to build their own.”
Now, however, “the BRICS must urgently organize to build institutions of mutual economic benefit”; the newest round of Iran-related sanctions from the United States “highlights the urgency of the issue.” The BRICS are “hostage to Western sanctions because the conduits of international finance, trade and transportation use[d] for crude oil trade are controlled by the West. The entire pricing framework is U.S. dollar based. The New York Mercantile Exchange (NYMEX) and London’s International Commodities Exchange (ICE) conduct the largest trade for crude oil futures contracts… There is SWIFT, the global code for electronic banking transactions. In March, SWIFT banned Iran’s banks from conducting business, leaving oil importers like India lurching for payment mechanisms. Ditto with transportation [and insurance] options.”
Deo and Mathur note that “the BRICS are finding creative ways to pay Iran” and to provide insurance coverage for shipments of Iranian crude. But rising powers nonetheless face a daunting structural challenge. Deo and Mathur warn that “the sanctions are an issue for energy exporters like Brazil and Russia too. The Western-dominated system that is strangling Iran, can do the same to others should their geopolitics be deemed inconvenient. Iran today, could be Russia or Brazil tomorrow.”
So what, then, can the BRICS do to rectify these structural imbalances that the United States and its European partners seem all too ready to leverage as a way of keeping rising powers subordinated to Western preferences? Deo and Mathur offer some genuinely creative answers:
“Apart from the already proposed multilateral BRICS Bank, should be a clearing union and insurance club to facilitate international trade, finance and transporation. For instance, though China and India have a deficit with Iran, Brazil and Russia do not. If a new trade settlement system is created—like the Asian Clearing Union establishied in Tehran in 1974 or the International Clearing Union proposed at Bretton Woods in 1944—but with BRICS currencies, Iran can use the Rupees or Renminbi [it earns from exporting oil to India and China] to pay Brazil, and not amass rice and toys. Brazil can use the same system to pay India for its bilateral trade, thereby facilitating multilateral local currency swaps for intra- and inter-BRICS trade. New commodity exchanges can be promoted to enable alternate means of price discovery and benchmarking in currencies.”
Deo and Mathur acknowledge that “activating these regimes will require adjustments. China’s reserves are in dollars; it will have to balance preserving that value with internationalizing the Renminbi—a stated Chinese goal achievable under a new system. External partners like Iran will have to make an effort to increase trade with BRICS to avail of the new system’s benefits. Net importer India will have to offer more competitive products and services within BRICS. In return, net exporters China and Russia may have to patiently hold weaker currencies like the Rupee until a balanced equation is achieved.
Deo and Mathur also acknowledge that “there will be resistance from the U.S. and Europe,” out to preserve “the almighty dollar” and their ability to leverage non-Western powers through hegemonic extraterritorial sanctions—in our assessment, clearly illegal, see here. More broadly, Deo and Mathur admit that “the West has dismissed the workability” of BRICS-led international economic institutions. “But,” they conclude, “if 28 countries in NATO could unite to contain Russia, surely the five nations of BRICS can come together to ensure their geo-economic future.”
Read their article and get a glimpse at what is likely to be an important part of the future.
One of the most striking socio-economic features of the past two decades is the reversal of the previous half-century of welfare legislation in Europe and North America. Unprecedented cuts in social services, severance pay, public employment, pensions, health programs, educational stipends, vacation time, and job security are matched by increases in tuition, regressive taxation, and the age of retirement as well as increased inequalities, job insecurity and workplace speed-up.
The demise of the ‘welfare state’ demolishes the idea put forth by orthodox economists, who argued that the ‘maturation’ of capitalism, its ‘advanced state’, high technology and sophisticated services, would be accompanied by greater welfare and higher income/standard of living. While it is true that ‘services and technology’ have multiplied, the economic sector has become even more polarized, between low paid retail clerks and super rich stock brokers and financiers. The computerization of the economy has led to electronic bookkeeping, cost controls and the rapid movements of speculative funds in search of maximum profit while at the same time ushering in brutal budgetary reductions for social programs.
The ‘Great Reversal’ appears to be a long-term, large-scale process centered in the dominant capitalist countries of Western Europe and North America and in the former Communist states of Eastern Europe. It behooves us to examine the systemic causes that transcend the particular idiosyncrasies of each nation.
The Origins of the Great Reversal
There are two lines of inquiry which need to be elucidated in order to come to terms with the demise of the welfare state and the massive decline of living standards. One line of analysis examines the profound change in the international environment: We have moved from a competitive bi-polar system, based on a rivalry between the collectivist – welfare states of the Eastern bloc and the capitalist states of Europe and North America to an international system monopolized by competing capitalist states.
A second line of inquiry directs us to examine the changes in the internal social relations of the capitalist states: namely the shift from intense class struggles to long-term class collaboration, as the organizing principle in the relation between labor and capital.
The main proposition informing this essay is that the emergence of the welfare state was a historical outcome of a period when there were high levels of competition between collectivist welfarism and capitalism and when class-struggle oriented trade unions and social movements had ascendancy over class-collaborationist organizations.
Clearly the two processes are inter-related: As the collectivist states implemented greater welfare provisions for their citizens, trade unions and social movements in the West had social incentives and positive examples to motivate their members and challenge capitalists to match the welfare legislation in the collectivist bloc.
The Origins and Development of the Western Welfare State
Immediately following the defeat of fascist-capitalist regimes with the defeat of Nazi Germany, the Soviet Union and its political allies in Eastern Europe embarked on a massive program of reconstruction, recovery, economic growth and the consolidation of power, based on far-reaching socio-economic welfare reforms. The great fear among Western capitalist regimes was that the working class in the West would “follow” the Soviet example or, at a minimum, support parties and actions which would undermine capitalist recovery. Given the political discredit of many Western capitalists because of their collaboration with the Nazis or their belated, weak opposition to the fascist version of capitalism, they could not resort to the highly repressive methods of the past. Instead, the Western capitalist classes applied a two-fold strategy to counter the Soviet collectivist-welfare reforms: Selective repression of the domestic Communist and radical Left and welfare concessions to secure the loyalty of the Social and Christian Democratic trade unions and parties.
With economic recovery and post-war growth, the political, ideological and economic competition intensified: The Soviet bloc introduced wide-ranging reforms, including full employment, guaranteed job security, universal health care, free higher education, one month paid vacation leave, full pay pensions, free summer camps and vacation resorts for worker families and prolonged paid maternity leave. They emphasized the importance of social welfare over individual consumption. The capitalist West was under pressure to approximate the welfare offerings from the East, while expanding individual consumption based on cheap credit and installment payments made possible by their more advanced economies. From the mid 1940’s to the mid 1970’s the West competed with the Soviet bloc with two goals in mind: To retain workers loyalties in the West while isolating the militant sectors of the trade unions and to entice the workers of the East with promises of comparable welfare programs and greater individual consumption.
Despite the advances in social welfare programs, East and West, there were major worker protests in East Europe: These focused on national independence, authoritarian paternalistic tutelage of trade unions and insufficient access to private consumer goods. In the West, there were major worker-student upheavals in France and Italy demanding an end of capitalist dominance in the workplace and social life. Popular opposition to imperialist wars (Indo-China, Algeria, etc.), the authoritarian features of the capitalist state (racism) and the concentration of wealth was widespread.
In other words, the new struggles in the East and West were premised on the consolidation of the welfare state and the expansion of popular political and social power over the state and productive process.
The continuing competition between collectivist and capitalist welfare systems ensured that there would be no roll-back of the reforms thus far achieved. However, the defeats of the popular rebellions of the sixties and seventies ensured that no further advances in social welfare would take place. More importantly a social ‘deadlock’ developed between the ruling classes and the workers in both blocs leading to stagnation of the economies, bureaucratization of the trade unions and demands by the capitalist classes for a dynamic, new leadership, capable of challenging the collectivist bloc and systematically dismantling the welfare state.
The Process of Reversal: From Reagan-Thatcher to Gorbachev
The great illusion, which gripped the masses of the collectivist-welfare bloc, was the notion that the Western promise of mass consumerism could be combined with the advanced welfare programs that they had long taken for granted. The political signals from the West however were moving in the opposite direction. With the ascendancy of President Ronald Reagan in the US and Prime Minister Margaret Thatcher in Great Britain, the capitalists regained full control over the social agenda, dealing mortal blows to what remained of trade union militancy and launching a full scale arms race with the Soviet Union in order to bankrupt its economy. In addition, ‘welfarism’ in the East was thoroughly undermined by an emerging class of upwardly mobile, educated elites who teamed up with kleptocrats, neo-liberals, budding gangsters and anyone else who professed ‘Western values’. They received political and material support from Western foundations, Western intelligence agencies, the Vatican (especially in Poland), European Social Democratic parties and the US AFL-CIO while, on the fringes, an ideological veneer was provided by the self-described ‘anti-Stalinist’ leftists in the West.
The entire Soviet bloc welfare program had been built from the top-down and, as a result, did not have a class-conscious, politicized, independent and militant class organization to defend it from the full-scale assault launched by the gangster-kleptocratic-clerical-neo-liberal-‘anti-Stalinist’ bloc. Likewise in the West, the entire social welfare program was tied to European Social Democratic parties, the US Democratic Party and a trade union hierarchy lacking both class consciousness and any interest in class struggle. Their main concern, as union bureaucrats was reduced to collecting members’ dues, maintaining internal organizational power over their fiefdoms and their own personal enrichment.
The collapse of the Soviet bloc was precipitated by the Gorbachev regime’s unprecedented handover of the allied states of the Warsaw Pact to the NATO powers. The local communist officials were quickly recycled as neo-liberal proxies and pro-western surrogates. They quickly proceeded to launch a full-scale assault on public ownership of property and dismantling the basic protective labor legislation and job security, which had been an inherent part of collectivist management-labor relations.
With a few noteworthy exceptions, the entire formal framework of collectivist-welfarism was crushed. Soon after came mass disillusion among the Eastern bloc workers as their ‘anti-Stalinist’ western-oriented trade unions presented them with massive lay-offs. The vast majority of the militant Gdansk shipyard workers, affiliated to Poland’s ‘Solidarity’ Movement were fired and reduced to chasing odd jobs, while their wildly feted ‘leaders’, long-time recipients of material support from Western intelligence agencies and trade unions, moved on to become prosperous politicians, editors and businesspeople.
The Western trade unions and the ‘anti-Stalinist’ Left (Social Democrats, Trotskyists and every sect and intellectual current in between), did yeoman service in not only ending the collectivist system (under the slogan: ‘Anything is better than Stalinism’) but of ending the welfare state for scores of millions of workers, pensioners and their families.
Once the collectivist-welfare state was destroyed, the Western capitalist class no longer needed to compete in matching social welfare concessions. The Great Rollback moved into full gear.
For the next two decades, Western regimes, Liberal, Conservative and Social Democratic, each in their turn, sliced off welfare legislation: Pensions were cut and retirement age was extended as they instituted the doctrine of ‘work ‘til you drop’. Job security disappeared, work place protections were eliminated, severance pay was cut and the firing of workers was simplified, while capital mobility flourished.
Neo-liberal globalization exploited the vast reservoirs of qualified low-paid labor from the former collectivist countries. The ‘anti-Stalinist’ workers inherited the worst of all worlds: They lost the social welfare net of the East and failed to secure the individual consumption levels and prosperity of the West. German capital exploited cheaper Polish and Czech labor, while Czech politicos privatized highly sophisticated state industries and social services, increasing the costs and restricting access to what services remained.
In the name of ‘competitiveness’ Western capital de-industrialized and relocated vast industries successfully with virtual no resistance from the bureaucratized ‘anti-Stalinist’ trade unions. No longer competing with the collectivists over who has the better welfare system, Western capitalists now competed among themselves over who had the lowest labor costs and social expenditures, the most lax environmental and workplace protection and the easiest and cheapest laws for firing employees and hiring contingent workers.
The entire army of impotent ‘anti-Stalinist’ leftists, comfortably established in the universities, brayed till they were hoarse against the ‘neo-liberal offensive’ and the ‘need for an anti-capitalist strategy’, without the tiniest reflection over how they had contributed to undermining the very welfare state that had educated, fed and employed the workers.
Labor Militancy: North and South
Welfare programs in Western Europe and North America were especially hit by the loss of a competing social system in the East, by the influx and impact of cheap labor from the East and because their own trade unions had become adjuncts of the neo-liberal Socialist, Labor and Democratic Parties.
In contrast, in the South, in particular in Latin America and, to a lesser degree, in Asia, anti-welfare neo-liberalism lasted only for a decade. In Latin America neo-liberalism soon came under intensive pressure, as a new wave of class militancy erupted and regained some of the lost ground. By the end of the first decade of the new century – labor in Latin America was increasing its share of national income, social expenditures were increasing and the welfare state was in the process of re-gaining momentum in direct contrast to what was occurring in Western Europe and North America.
Social revolts and powerful popular movements led to left and center-left regimes and policies in Latin America. A powerful series of national struggles overthrew neo-liberal regimes. A growing wave of worker and peasant protests in China led to 10% to 30% wage increases in the industrial belts and moves to restore the health and public education systems. Facing a new grassroots, worker-based socio-cultural revolt, the Chinese state and business elite hastily promoted social welfare legislation at a time when Southern European nations like Greece, Spain, Portugal and Italy were in the process of firing workers and slashing salaries, reducing minimum wages, increasing retirement age and cutting social expenditures.
The capitalist regimes of the West no longer faced competition from the rival welfare systems of the Eastern bloc since all have embraced the ethos of ‘the less the better’: Lower social expenditures meant bigger subsidies for business, greater budgets to launch imperial wars and to establish the massive ‘homeland security’ police state apparatus. Lower taxes on capital led to greater profits.
Western Left and Liberal intellectuals played a vital role in obfuscating the important positive role which Soviet welfarism had in pressuring the capitalist regimes of the West to follow their lead. Instead, during the decades following the death of Stalin and as Soviet society evolved toward a hybrid system of authoritarian welfarism, these intellectuals continued to refer to these regimes as ‘Stalinist’, obscuring the principle source of legitimacy among their citizens – their advanced welfare system. The same intellectuals would claim that the ‘Stalinist system’ was an obstacle to socialism and turned the workers against its positive aspects as a welfare state, by their exclusive focus on the past ‘Gulag’. They argued that the ‘demise of Stalinism’ would provide a great opening for ‘democratic revolutionary socialism’. In reality, the fall of collectivist-welfarism led to the catastrophic destruction of the welfare state in both the East and West and the ascendancy of the most virulent forms of primitive neo-liberal capitalism. This, in turn, led to the further shrinking of the trade union movement and spurred the ‘right-turn’ of the Social-Democratic and Labor Parties via the ‘New Labor’ and ‘Third Way” ideologies.
The ‘anti-Stalinist’ Left intellectuals have never engaged in any serious reflection regarding their own role in bringing down the collective welfare state nor have they assumed any responsibility for the devastating socio-economic consequences in both the East and West. Furthermore the same intellectuals have had no reservations in this ‘post-Soviet era’ in supporting (‘critically’ of course) the British Labor Party, the French Socialist Party, the Clinton-Obama Democratic Party and other ‘lesser evils’ which practice neo-liberalism. They supported the utter destruction of Yugoslavia and US-led colonial wars in the Middle East, North Africa and South Asia. Not a few ‘anti-Stalinist’ intellectuals in England and France will have clinked champagne glasses with the generals, bankers and oil elites over NATO’s bloody invasion and devastation of Libya – Africa’s only welfare state.
The ‘anti-Stalinist’ left intellectuals, now well-ensconced in privileged university positions in London, Paris, New York and Los Angeles have not been personally affected by the roll-back of the Western welfare programs. They adamantly refuse to recognize the constructive role that the competing Soviet welfare programs played in forcing the West to ‘keep up’ in a kind of ‘social welfare race’ by providing benefits for its working class. Instead, they argue (in their academic forums) that greater ‘workers militancy’ (hardly possible with a bureaucratized and shrinking trade union membership) and bigger and more frequent ‘socialist scholars’ forums’ (where they can present their own radical analyses … to each other) will eventually restore the welfare system. In fact, historic levels of regression, insofar as welfare legislation is concerned, continue unabated. There is an inverse (and perverse) relation between the academic prominence of the ‘anti-Stalinist’ Left and the demise of welfare state policies. And still the ‘anti-Stalinist’ intellectuals wonder about the shift to far-right demagogic populism among the hard-pressed working class!
If we examine and compare the relative influence of the ‘anti-Stalinist’ intellectuals in the making of the welfare state to the impact of the competing collectivist welfare system of the Eastern bloc, the evidence is overwhelmingly clear: Western welfare systems were far more influenced by their systemic competitors than by the pious critiques of the marginal ‘anti-Stalinist’ academics. ‘Anti-Stalinist’ metaphysics have blinded a whole generation of intellectuals to the complex interplay and advantages of a competitive international system where rivals bid up welfare measures to legitimate their own rule and undermine their adversaries. The reality of world power politics led the ‘anti-Stalinist’ Left to become a pawn in the struggle of Western capitalists to contain welfare costs and establish the launch pad for a neo-liberal counter-revolution. The deep structures of capitalism were the primary beneficiaries of anti-Stalinism.
The demise of the legal order of the collectivist states has led to the most egregious forms of predator-gangster capitalism in the former USSR and Warsaw Pact nations. Contrary to the delusions of the ‘anti-Stalinist’ Left, no ‘post-Stalinist’ socialist democracy has emerged anywhere. The key operatives in overthrowing the collectivist-welfare state and benefiting from the power vacuum have been the billionaire oligarchs, who pillaged Russia and the East, the multi-billion dollar drug and white slave cartel kingpins, who turned hundreds of thousands of jobless factory workers and their children in the Ukraine, Moldova, Poland, Hungary, Kosovo, Romania and elsewhere into alcoholics, prostitutes and drug addicts.
Demographically, the biggest losers from the overthrow of the collectivist-welfare system have been woman workers: They lost their jobs, their maternity leave, child care and legal protections. They suffered from an epidemic of domestic violence under the fists of their unemployed and drunken spouses. The rates of maternal and infant deaths soared from a faltering public health system. The working class women of the East suffered an unprecedented loss of material status and legal rights. This has led to the greatest demographic decline in post-war history – plummeting birth rates, soaring death rates and generalized hopelessness. In the West, the feminist ‘anti-Stalinists’ have ignored their own complicity in the enslavement and degradation of their ‘sisters’ in the East. (They were too busy feting the likes of Vaclav Havel).
Of course, the ‘anti-Stalinist’ intellectuals will claim that the outcomes that they had envisioned are a far cry from what evolved and they will refuse to assume any responsibility for the real consequences of their actions, complicity and the illusions they created. Their outrageous claim ‘that anything is better than Stalinism’ rings hollow in the great chasm containing a lost generation of Eastern bloc workers and families. They need to start counting up the multi-million strong army of unemployed throughout the East, the millions of TB and HIV-ravaged victims in Russia and Eastern Europe (where neither TB nor HIV posed a threat before the ‘break-up’), the mangled lives of millions of young women trapped in the brothels of Tel Aviv, Pristina, Bucharest, Hamburg, Barcelona, Amman, Tangiers, and Brooklyn …..
Conclusion
The single biggest blow to the welfare programs as we knew them, which were developed during the four decades from 1940’s to the 1980’s, was the end of the rivalry between the Soviet bloc and Western Europe and North America. Despite the authoritarian nature of the Eastern bloc and the imperial character of the West, both sought legitimacy and political advantage by securing the loyalty of the mass of workers via tangible social-economic concessions.
Today, in the face of the neo-liberal ‘roll back’, the major labor struggles revolve around defending the remnants of the welfare state, the skeletal remains of an earlier period. At present there are very few prospects of any return to competing international welfare systems, unless one were to look at a few progressive countries, like Venezuela, which have instituted a series of health, educational and labor reforms financed by their nationalized petroleum sector.
One of the paradoxes of the history of welfarism in Eastern Europe can be found in the fact that the major ongoing labor struggles (in the Czech Republic, Poland, Hungary and other countries, which had overthrown their collectivist regimes, involve a defense of the pension, retirement, public health, employment, educational and other welfare policies – the ‘Stalinist’ leftovers. In other words, while Western intellectuals still boast of their triumphs over Stalinism, the real existing workers in the East are engaged in day-to-day militant struggles to retain and regain the positive welfare features of those maligned states. Nowhere is this more evident than in China and Russia, where privatizations have meant a loss of employment and, in the case of China, the brutal loss of public health benefits. Today workers’ families with serious illnesses are ruined by the costs of privatized medical care.
In the current world ‘anti-Stalinism’ is a metaphor for a failed generation on the margins of mass politics. They have been overtaken by a virulent neo-liberalism, which borrowed their pejorative language (Blair and Bush also were ‘anti-Stalinists’) in the course of demolishing the welfare state. Today the mass impetus for the reconstruction of a welfare state is found in those countries, which have lost or are in the process of losing their entire social safety net – like Greece, Portugal, Spain and Italy – and in those Latin American countries, where popular upheavals, based on class struggles linked to national liberation movements, are on the rise.
The new mass struggles for welfarism make few direct references to the earlier collectivist experiences and even less to the empty discourse of the ‘anti-Stalinist’ Left. The latter are stuck in a stale and irrelevant time warp. What is abundantly clear, however, is that the welfare, labor and social programs, which were gained and then lost in the aftermath of the demise of the Soviet bloc, have returned as strategic objectives motivating present and future workers struggles.
What needs to be further explored is the relation between the rise of the vast police state apparatuses in the West and the decline and dismantling of their respective welfare states: The growth of ‘Homeland Security’ and the ‘War on Terror’ parallels the decline of Social Security, public health programs and the great drop in living standards for hundreds of millions.
The Department of Energy wants to give the Southern Company a nuclear power loan guarantee at better interest rates than you can get on a student loan. And unlike a home mortgage, there may be no down payment.
SACE has challenged the $8.33 billion loan guarantee package announced by President Obama in 2010.
The documents show the DOE has intended to charge the Southern a credit subsidy fee of one to 1.5%, far below the rates you would be required to pay for buying a house or financing an education.
On a package 15 times bigger than what the federal government gave the failed solar company Solyndra, Southern would be required to pay somewhere between $17 million and $52 million. Advocates argue the fee is so low that it fails to adequately take into account the financial risks of the project. Numerous financial experts have estimated the likely fail rate for new nuclear construction to be at 50% or greater.
Furthermore, since a primary lender would be the Federal Financing Bank, the taxpayer is directly on the hook. Guaranteed borrowings are not supposed to exceed 70% of the project’s projected costs, but it’s unclear what those costs will actually turn out to be, as the public has been given no firm price tag on the project.
There is apparently no cash down payment being required of Southern as it seems the loan is designed to be secured with the value of the reactors themselves, whatever that turns out to be. In the unlikely event they are finished, liability from any catastrophe will revert to the public once a small private fund is exhausted.
Southern wanted the terms of the DOE offer kept secret, and we still don’t know everything about it. But in March, a federal circuit court judge ordered that the public had a right to know at least some of the details.
Apparently no final documents have actually been signed between Southern and the DOE. The Office of Management & Budget has reportedly balked at offering the nuke builder such generous terms. Southern has reportedly balked at paying even a tiny credit fee.
Construction at the Vogtle site has already brought on delays focused on the use of sub-standard concrete and rebar steel. The projected price tag—whatever it may be—has risen as much as $900 million in less than a year.
Southern and its Vogtle partners are in dispute with Westinghouse and the Shaw Company, two of the reactors’ primary contractors. Georgia ratepayers have already been stuck with $1.4 billion in advance payments being charged to their electric bills. Far more overruns are on their way.
The Vogtle project is running somewhat parallel with two reactors being built at V.C. Summer in South Carolina, where $1.4 billion was already spent by the end of 2011. Delays are mounting and cost overruns are also apparently in the hundreds of millions.
Southern and Summer’s builders both claim they can finance these projects without federal guarantees. But exactly how they would do that remains unclear.
Two older reactors now licensed at the Vogtle site were originally promised to cost $150 million each, but came in at $8.9 billion for the pair. The project’s environmental permits are being challenged in court over claims the Nuclear Regulatory Commission failed to account for safety lessons from the Fukushima disaster.
The terms of the guarantees are now apparently being scrutinized by the Office of Management & Budget, which reports to a White House that may be gun-shy over new construction guarantees due to bad publicity from the Solyndra fiasco.
You might ask: why should the builders of nuclear power reactors get better terms than students struggling to pay for college or working families trying to buy a home?
At least the home buyers can get private liability insurance, which the nuke builders can’t.
If mounting grassroots opposition can stop this package, it’s possible no new reactors will ever be built in the US.
So send the OMB and DOE a copy of your mortgage or student loan statement.
Demand that before they finance any more nukes, they drop your own payment to 1%, just like they’re offering the reactor pushers. Also demand the right to buy a home without a down payment.
See how far you get, and then make sure Vogtle goes no farther.
Harvey Wasserman, a co-founder of Musicians United for Safe Energy, is editing the nukefree.org web site. He can be reached at: Windhw@aol.com
Peter Mertens, leader of the Workers’ Party of Belgium, believes the Eurozone debt crisis is pushing member states towards “a very large number of social conflicts.” Mertens told RT that Europe faces three alternatives – saving the euro with “authoritarian measures by taking national sovereignty overnight to the European level”, breaking up into “two, three or four Europes”, or adopting a socialist model, “where banking system is public, where energy system is public, where there is democracy.” He believes Europe needs radical changes to its financial sector.
The South American trade bloc Mercosur has announced that Venezuela will become a full member of the group on July 31.
On Friday, at a summit meeting in Mendoza, a small city in western Argentina, Mercosur leaders also agreed to extend Paraguay’s suspension over the dismissal of President Fernando Lugo until constitutional order is restored, Reuters reported.
The lower house of the Paraguayan Congress impeached Lugo on June 21, and the Senate opened his trial on June 22 and quickly reached a guilty verdict, ousting Lugo.
Mercosur leaders did not impose economic sanctions on Paraguay but banned Paraguayan officials from participating in Mercosur meetings.
Paraguay’s suspension created an opportunity for Venezuela to be incorporated into the bloc since opposition in the Paraguayan Congress was the only obstruction after a six-year wait.
Although the governments of Argentina, Brazil, Paraguay, and Uruguay approved Venezuela’s admission into the bloc in 2006, its status remained in limbo as the agreement depended on ratification by the Paraguayan Congress.
“We’re calling on the entire region to recognize the need to expand our union so we can confront this crisis… caused by rich countries, but which will affect our economies regardless,” Argentine President Cristina Fernandez said at the summit.
“(We need to) develop the incredible potential that South America has in terms of food and agriculture, minerals, energy, and science and technology,” she added.
Mercosur is an economic union and political agreement between Argentina, Brazil, Paraguay, and Uruguay founded in 1991. Its purpose is to promote free trade and the fluid movement of goods, people, and currency.
The bloc’s combined market encompasses more than 250 million people and accounts for more than three-quarters of the economic activity on the continent, or a combined GDP of $1.1 trillion.
South American foreign ministers have suspended Paraguay from the regional trade bloc, Mercosur, over last week’s ouster of former President Fernando Lugo.
However, the bloc stopped short of imposing economic sanctions on Paraguay, which is one of the four founding members of the Mercosur bloc, along with Brazil, Argentina and Uruguay.
Paraguay was banned from this week’s summit held in Mendoza, Argenita, as the regional leaders considered the removal of the country’s first left-wing president as a parliamentary coup.
“Through a unanimous decision by Mercosur’s permanent and associate members, it has been decided– because of the events that occurred last Friday– to suspend Paraguay’s participation in this presidential summit,” Argentine Foreign Minister Hector Timerman said on Friday at a news conference.
Last week Paraguay’s Senate removed Lugo from office after a five-hour impeachment trial. He was accused of mishandling an armed clash over a land dispute in which seven police officers and ten landless farmers were killed on June 15.
Lugo was immediately replaced by his pro-US deputy, Federico Franco. The move has prompted harsh criticism inside the country and among its neighboring nations.
South American officials said that the suspension of Paraguay will stand until “democracy is fully restored” to the country.
Bolivian President Evo Morales voiced his concerns over what happened in Paraguay, saying that his country will not “recognize a dictatorship in paraguay.”
Several South American nations have recalled their ambassadors from Paraguay’s capital Asuncion, permanently or for consultation, in a bid to show their opposition to the dismissal of a democratically elected president.
China and Singapore will receive exemptions from U.S. sanctions scheduled to go into effect Thursday that would have cut off banks in those countries from the U.S. financial system for handling Iranian oil transactions, a source in the office of Sen. Robert Menendez, D-New Jersey, a source in the office of Sen. Robert Menendez (D-N.J.) tells Security Clearance.
Secretary of State Clinton called Senator Menendez earlier today to inform him.
Under legislation signed by President Barack Obama In December, the United States will take action against countries that continue buying large volumes of Iranian oil through Iran’s Central Bank by cutting off financial institutions engaged in those transactions from the U.S. banking system.
– State Department released a statement from Secretary of State Hillary Clinton:
Today I have made the determination that two additional countries, China and Singapore, have significantly reduced their volume of crude oil purchases from Iran. As a result, I will report to the Congress that sanctions pursuant to Section 1245(d)(1) of the National Defense Authorization Act (NDAA) for Fiscal Year 2012 will not apply to their financial institutions for a potentially renewable period of 180 days.
A total of 20 world economies have now qualified for such an exception. Their cumulative actions are a clear demonstration to Iran’s government that Iran’s continued violation of its international nuclear obligations carries an enormous economic cost. According to the International Energy Agency (IEA), Iran’s crude oil exports in 2011 were approximately 2.5 million barrels per day, and have dropped to roughly 1.5 million barrels per day, which in real terms means almost $8 billion in lost revenues every quarter. When the European Union oil embargo goes into effect July 1, Iran’s leaders will understand even more fully the urgency of the choice they face and the unity of the international community.
Today marks an important milestone in the implementation of the NDAA and U.S. sanctions toward Iran. Following the President’s determinations on March 30 and June 11 on the availability of non-Iranian supplies of oil, as of today, any foreign financial institution based in a country that has not received an NDAA exception is subject to U.S. sanctions if it knowingly conducts a significant transaction with the Central Bank of Iran for the sale or purchase of petroleum or petroleum products to or from Iran.
We have been clear all along that there is a path for Iran to fully re-join the global economy. Iran’s leaders have the opportunity to address international concerns by engaging seriously and substantively in negotiations with the P5+1. I urge Iran to demonstrate its willingness to take concrete steps toward resolving the nuclear issue during the expert-level talks scheduled in Istanbul on July 3. Failure to do so will result in continuing pressure and isolation from the international community.
On the 1st of July Europe will cease importing oil from Iran and new US sanctions will also come into place. To talk about how this will affect the energy market RT is joined by prize-winning author and energy specialist Daniel Yergin.
By James W. Carden | The Realist Review | June 14, 2026
Joe Biden’s presidency may ultimately come to be seen as a cautionary tale. Here was a president who showed little interest in entertaining arguments that might have contradicted his most deeply held assumptions.[1] And there were precious few within the upper ranks of the administration who might have attempted to do so, after all, only policy hands and political operatives who had come up through the ranks of the Clinton and Obama administrations or had longstanding ties to the citadels of the foreign policy community were invited into the fold. … continue
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