Nov. 1, 2008, Issue #140
HUDSON VALLEY ACTIVIST NEWSLETTER/CALENDAR
This newsletter/calendar, published in New Paltz, N.Y., appears once a month, supplemented by additional listings of new activist events, usually sent to Valley readers only. Editor, Jack A. Smith (who writes all the articles that appear without a byline or credit to other publications). Copy Editor, Donna Goodman. Calendar Editor, Rocco Rizzo. If you know someone who may benefit from this newsletter, ask them to subscribe at email@example.com. If you no longer wish to receive the newsletter, unsubscribe at the same address. Please send event listings to the above email address. The current and back issues of the newsletter/calendar are available at http://activistnewsletter.blogspot.com.
1. Our prediction about Nov. 4: Obama will win. We will express our views on the election in the first three articles below. If you're in the Mid-Hudson's 19th CD, don't forget to vote for Rep. Maurice Hinchey so he can win big. He opposes the war and voted both times against the $700 billion bailout, for the correct reasons. Hinchey is not without shortcomings, but he generally takes a progressive stance and deserves support.
2. Despite the recession and all the talk about the economy, the corporate media have been mute about the possibility of penalizing the devious financiers and stock market manipulators whose actions contributed to the financial fiasco. However, New York Times columnist Maureen Dowd made up for the lapse Oct. 19, and we nominate the following paragraph from her column as our Quote of the Month. Making reference to fictional French anti-aristocrat Thérèse Defarge in Tale of Two Cities by Charles Dickens, Dowd wrote: "I’m feeling as vengeful and bloodthirsty as Madame Defarge sharpening her knitting needles at the guillotine…. I can’t wait to see the tumbrels rumble up and down Wall Street picking up the heedless and greedy financial aristocracy…. Heads must roll."
3. Here's a modest proposal: The huge $700 billion financial bailout package for Wall St. and the banks — an amount that will be paid with interest by future generations of American workers — could be absorbed in full from the combined assets of just the 54 wealthiest citizens of the United States. Yes, we know, it would be unfair to demand that this handful pay the entire bill. Here's a workable compromise: Let's have Washington instruct the 400 wealthiest Americans to donate somewhat less than half their fortunes to cover the total cost of the bailout package. This would be a marvelous gesture on their part and they'd still have about $800 billion to share among themselves or save to donate again in the next recession five or 10 years from now.
Notes: 1. The activist Calendar was sent to Hudson Valley readers a few days ago. 2. Spam filters on mass mailings are getting more sophisticated. Add our email address, above, to your address book to avoid the chance having the newsletter blocked.
1. Editorial: OBAMA THE SOCIALIST! — The McCain/Palin red-baiting and ultra-nationalism is a last refuge for these two scoundrels. And Obama is no more a socialist than McCain.
2. Editorial: OBAMA AND THE ELECTION — Most of the progressive and left forces will vote for Obama but the are dreaming if they expect centrism to really address the problems besetting our society and the world.
3. Editorial: OUR CHOICE FOR PRESIDENT — Obama's obviously better than McCain and we hope he wins, but there are interesting alternatives on the left.
4. RECESSION AND CHANGE IN AMERICA — This article attempts to tell the whole story of the capitalist contretemps from a left perspective, and there's even a semi-hopeful conclusion.
5. THE NEWS IN BRIEF —Marijuana arrests; Many mammals face extinction; Inequality kills; Mumia's appeal is rejected; Combat force deployed back home for civil strife.
6. THE UN BACKS CUBA ONCE AGAIN — Imperial hubris gets trounced for the 17th time.
7. THE COST OF BOOTS ON THE GROUND — It takes half a million dollars per year to maintain each U.S. Army sergeant in combat in Iraq
8. CHECK IT OUT — Three short videos including Jackson Browne's new song about Cuba.
1. Editorial: OBAMA THE SOCIALIST!
In the last weeks of the election campaign Republicans Sen. John McCain and Gov. Sarah Palin have descended deeply into the sewer of scandalous innuendo against Democratic rival Sen. Barack Obama. This is a measure of their fear that Obama is going to trounce them on Nov. 4, as we believe he will, and an exposure of the depths to which the right wing will sink in order to retain power.
Of course we strongly object to their suggestions that Obama lacks patriotism, or that he associates with domestic terrorists at home and Islamic terrorists abroad, or ludicrously enough that he is pro-Palestinian despite his continual genuflection to Israel, among other such attacks. And this doesn't even mention the subterranean right wing efforts to exploit racist sentiment against the first African American to approach the White House.
One of the most absurd of the conservative allegations is that Obama is a socialist, about which we will make a few points:
1. When McCain declares that Obama's tax proposal sounds "a lot like socialism," and Palin calls the proposal an "experiment with socialism" — all with approval, of course, of the nation's leading Republican, Joe the Plumber — this is an indication of the extreme conservative political atmosphere pervading the United States at this juncture. The Democratic leadership long ago jettisoned the party's center-left wing and doesn't even acknowledge the lingering remnant of liberalism within its ranks — and yet Obama is supposed to be a socialist! The McCain/Palin red-baiting and ultra-nationalism is a last refuge for these two scoundrels — the one a neoconservative imperialist, the other a far right political and religious fanatic.
2. Obama is about as close to socialism as McCain and Palin are to truly supporting the economic and social interests of the majority of American workers. His views are identical to those of the center/center-right Democratic Party leadership, which is why the Democrats in this election are supported by a large sector of Wall St. and big wealth. According to media critic Jeff Cohen, speaking to a packed meeting at SUNY New Paltz Oct. 30 on the subject of Money in Politics, "the amount of money from Wall St. to Obama is record-breaking in this election."
The Democratic candidate is backed by the majority of the American people because his program — despite shortcomings from our perspective — is to the left of the Republican candidates and their continual mocking disparagement of "spreading the wealth," as though doing so was an expression of "un-Americanism," as the right wing used to call it, instead of the purest democracy. Without relative economic democracy, which would come from truly spreading the wealth far beyond Obama's dreams, the concept of political democracy is seriously compromised.
3. Socialism has been introduced in the campaign as a pejorative, similar to the derogatory intent of the reactionary forces behind the McCain/Palin odd-couple in emphasizing Obama's biracial background, middle name, or the fact that his father was a Muslim. It's an outright appeal to the most base instincts of sector of the electorate, and in these conservative times it seems acceptable to do so.
In our view, it would be much better for America if the leading presidential candidate indeed was a socialist, or at least a committed social-democrat, at this disastrous moment in U.S. economic and political affairs with our recession and poverty, wars, militarism, imperialism, gross inequality and our paltry program of social welfare.
In time, perhaps sooner than later, there will be a progressive backlash against all this, as there was a conservative backlash decades ago against the reforms and leftism of the Sixties, and it is still going on but evidently losing steam. We think the next progressive upsurge and era of reform — given America's mounting problems, which are only getting worse — will in part include a new respectability for certain socialist solutions, and for socialism itself.
2. Editorial: OBAMA AND THE ELECTION
We estimate that 90% of our readers will vote next week for Democratic Sen. Barack Obama to become president of the U.S. rather than Republican Sen. John McCain, and that 10%, (about 350 readers) will vote for a left third party candidate.
We want Obama and Sen. Joe Biden, his running mate, to win this election. They are head and shoulders above neoconservative McCain and his astonishing choice of a running mate, ultra-conservative Gov. Sarah Palin. It would also be good for the country for an African American to be elected president of the United States, given our country's long history of racism.
There are many things to like about Barack Obama, the most important politically being the fact that he is not George W. Bush or Bush's clones disguised in maverick's motley, McCain and Palin.
Obama is obviously intelligent, extremely disciplined and deliberative, organized and evidently in possession of management and legal skills, ambitious, energetic, a good speaker and charming. His experience as a community organizer in Chicago will serve him in good stead because this has given him some feel for the problems of the people, particularly the poor, the working class and lower middle class majority in our country.
That said, our own views are to the left of the center/center-right politics of Obama and the Democratic Party, and we will raise a few issues that we hope our readers will kept in mind when, and if, they vote for the junior senator from Illinois.
Centrism is completely inadequate to the task of resolving the multitude of complex economic, political and social problems confronting our people, our country and — considering that the U.S. is the dominant global power — our world. America needs a political leadership equal to the immense changes that must be brought about in our society, even as it remains capitalist, such as:
Adjusting economic policy to eliminate the grave gap between great wealth and the rest of the people; imposing sharp regulations and continual oversight over the banks, Wall Street and the giant corporations; creating jobs with adequate pay and benefits for every worker; removing anti-labor laws and encouraging the growth of unions; providing housing for all; vastly improving our system of public education; removing the barriers to equality that hamper most African Americans, Latinos and Native Americans; guaranteeing single-payer medical care; rebuilding our nation's infrastructure; launching a massive program to halt environmental degradation — and so much else.
Can a centrist Obama government and the Democratic Party as it now stands take on a domestic program such as this? Will it really significantly reduce the Pentagon budget and hike taxes on the corporations and the wealthy to obtain the funding required for such a program?
And how will a Democratic government and Congress deal with international affairs? Will they quickly terminate the endless wars in Iraq and Afghanistan, while also making sure they won't spread to Iran, Syria and Pakistan? Will they see to it, since the U.S. has the power to do so, that the interests and needs of the Palestinian people, as well as the Israeli people, are satisfied? Will such a government put the U.S. in compliance with the Non-Proliferation Treaty by sharply reducing its nuclear stockpile? Will Obama make certain that Washington will henceforth participate in a multipolar world leadership as opposed to an America-only unipolar arrangement as now exists. Will Obama sharply cut back the number of U.S. military bases abroad? Will the U.S. join the rest of the world in adding its significant weight to ending global warming? And much else.
Accomplishing such difficult tasks is entirely possible. But a centrist government that tilts to the right, and constantly compromises with its conservative opposition, as Bill Clinton did and Barack Obama will do, is not capable of making any of these necessary changes.
"Change" is Obama's constant mantra. He recently brought down the house with these emotionally stirring words: "Our time has come, our movement is real, and change is coming to America." His principal slogan is "Change we can believe in." What disturbs us about these absolute centerpieces of the Democratic campaign is that the change being offered is quite intentionally and deviously concealed. The only ones who can "believe in" this kind of change are multimillions of Americans so desperate for a different kind of society that they will follow the Democratic Pied Piper without knowing where he is taking them, if in fact he is taking them anywhere. It's such an effective ploy that McCain latched onto it almost immediately.
As far as we can see the biggest change will be that the extraordinary unpopular present occupant of the White House will vacate the premises in a couple of months. Yes, there are lots of programmatic promises in Obama's platform but by far the most will be discarded as were those of President Clinton. Actually, Obama and Clinton are quite alike in terms of program, their aversion to their party's remnant center-left, and willingness to triangulate the middle way and compromise with the right wing opposition. The big difference between the two is that Clinton was comfortably situated upon a huge economic bubble for most of his eight years, and Obama will enter the White House with the task of cleaning up the enormous damage after the bursting of the Bush administration housing bubble.
For us, one of the tip-offs to trouble ahead was another Obama slogan that seems to inspire multitudes of voters, which is truly alarming: "There is not a liberal America, or a conservative America, but a United States of America." What does that mean? That there is no need for political struggle? That lion and lamb are about to bed down together, solving the problems of the country and world with some pillow talk among all us Americans finally freed from the stressful complications of politics? This is preposterous, of course.
But Obama is better than McCain, and most progressives and even much of the left will vote for him as the lesser evil, which unfortunately seems to be a permanent feature of American style democracy, contrived as it is to eliminate the left from political influence.
As we said in the beginning, about 10% of this newsletter's readers will vote for one progressive third party or another. It could be more. Given that most of us reside in New York State, where an Obama victory is certain, we think that progressive and left voters with qualms about the center/center-right orientation of Obama and the Democratic Party should explore third-party options, as shall we discuss below.
3. Editorial: OUR CHOICE FOR PRESIDENT
Progressive voters agree that Democrat Barack Obama would be a much better president than Republican John McCain, a "maverick" clone of the failed Bush Administration. They are correct in the sense that the center trumps the right as far as the left is concerned.
Some on the left, however, question whether the political centrism and timidity of the national Democratic Party and presidential ticket is an adequate response to the extraordinary problems confronting our country today — from the recession to the widening war in Afghanistan, from the impending environmental crisis to the need for a rational, peaceful foreign policy.
New York is a safe state for Obama. So those progressives with serious qualms about the efficacy of a centrist solution for a deeply troubled America can cast a vote for a left program and solution without fearing McCain will take our state.
There are good third-party candidates, including Cynthia McKinney or Ralph Nader. But to make a stronger statement, progressives might consider a socialist candidate for president — West Coast union leader and left activist Gloria La Riva of the Party for Socialism and Liberation (PSL) — and her running mate, Eugene Puryear. They are on the ballot in 12 states including New York, where their ticket secured 30,000 signatures to qualify.
La Riva and Puryear say: "End the rule of the billionaires, bankers and militarists — fight for real democracy for working people." They demand an immediate moratorium on foreclosures, evictions and rent hikes; single-payer healthcare for all; a jobs creation program for full employment and a $15 minimum wage; extended and increased jobless benefits; an end to the unjust wars and cutting the Pentagon budget, investing instead to fully fund human needs at home; higher taxes on the rich and greater government supervision of the corporate and banking systems and the financial and stock markets.
The United States is the only advanced industrialized democracy in the world where the political possibilities are limited to centrism or the right wing by the nature of the two-party system. Every other such country has a viable "third" alternative, either a mass socialist or social-democratic party. That's one reason virtually all of them are miles ahead of our country in terms of benefits for working people — from lower levels of poverty to more years of life, from universal healthcare to longer vacations.
You want change? Think of voting for the socialists for a change. They won't come even close to winning, but they will come close to what the country needs.
— Information about the La Riva/Puryear campaign: http://www.pslweb.org/site/PageServer?pagename=votepsl_home.
4. RECESSION AND CHANGE IN AMERICA
The United States economy has entered into a recession, though not yet officially acknowledged. It is said to be the worst financial breakdown in the last 25 to 40 years if not longer, and may last about 24 months. But "if confidence and credit dry up," wrote The Economist in an editorial Oct. 18, "a near-certain recession will become a depression."
The recession will cause hardship, to one extent or another, for billions of people around the world because it is a capitalist phenomenon, and capitalism rules the global economy. It will adversely impact the great majority of the American people. Many U.S. businesses are in a tailspin as consumers — who account for nearly 70% of the GDP — sharply reduce spending. It's been estimated such spending may drop by $300 billion within the next two years.
The main immediate causes are the collapse of the U.S. housing market leading to crises in banking and finance, a crash in stock prices, and the freezing of credits and loans. This development, while hardly alien to capitalism, was exacerbated by decades of Washington's indulgence in extreme laissez faire economic policies, especially the deregulation of banking and the financial markets. There is a possibility, as we shall discuss later, that this crisis may provoke a progressive backlash leading to certain economic reforms.
A key factor in the collapse was a high rate of default on subprime mortgages which are offered at higher interest rates to low income buyers. But an even larger number of prime and adjustable rate mortgages for buyers with higher credit ratings went into default. Homeowners from low to middle income found it difficult to finance monthly mortgage payments at a time of higher commodity prices, zooming medical expenses, increasing unemployment, and stagnant wages and salaries. As foreclosures mount while incomes weaken, housing prices will continue to fall, wiping out trillions of dollars in homeowner assets.
There were other important causes as well, not least being the Bush Administration's willingness to encourage the expansion of an $8 trillion housing bubble in order to create the impression of economic well being in the United States. An economic bubble occurs when stock market speculators and traders in quest of ever-greater profits drive up the price of a particular commodity far beyond its actual value. This was reflected in higher housing prices and a building boom, until the bust. Bubbles such as this frequently terminate with a stock crash.
Writing in Financial Times Oct. 28, columnist Martin Wolf described the elements that compose the "near-disintegration of the Western world’s banking system," as "the flight to safe assets, the tightening of credit to the real economy, collapsing equity prices, turmoil on currency markets, continued steep declines in house prices, rapid withdrawal of funds from hedge funds and ongoing collapses of the so-called shadow banking system." He earlier said that "America's economy risks the mother of all meltdowns.
In a statement Oct. 10, the Center for Economic and Policy Research declared: "The current economic crisis is the result of an extraordinary period of extreme economic mismanagement. The world's central banks, most importantly the Federal Reserve Board in the United States, made the decision to ignore, if not actively cultivate, the growth of asset bubbles. This was the case with stock market bubbles in the '90s and housing bubbles in the current decade. They compounded this mistake by ignoring the explosive growth of credit and new complex derivative instruments. They allowed financial institutions to become hugely over-leveraged [indebted], ensuring that the collapse of the bubble would lead to major financial disruptions."
Although a crash had been predicted for the last few years, the Bush Administration and Congress waited far too long to intervene. New York University Professor Nouriel Roubini, who forecast the collapse over two years ago, suggested this past February that the coming economic meltdown would be "catastrophic." When the government finally moved decisively seven months later in September, it was too little, too late, despite the sky-is-falling urgency portrayed by President Bush and Treasury Secretary Henry Paulson.
So far, the advanced industrialized economies of the world have been infected the most by the U.S. downturn, but the quickly spreading contagion may result in a worldwide recession or worse. The developing countries of Asia, Africa and Latin America are beginning to experience considerable hardship as investments, credits and exports shrivel.
Periods of economic crisis, or "corrections" as they are termed in financial circles, have been recurrent and endemic to capitalism throughout its over 500-year history beginning in Europe. The first general capitalist collapses began in the early 1800s at the dawning of the Industrial Revolution. They usually result from overproduction, assisted by stock market manipulation and government deregulation of financial operations, among other causes.
During the century just past, the American economy experienced recessions or depressions for 28 years out of 100. In recent times there was the 1987 Wall Street crash, followed a couple of years later by the Savings and Loan collapse, and then the disintegration of the "dot.com" technology bubble in 2001. The impact of the fairly mild recession at the beginning of the 21st Century lasted almost two years, but the recovery was unusually weak. The present malaise, which had been brewing at least two years, will be considerably more severe, paving the way for future recessions at various levels of magnitude every five or 10 years as long as the capitalism exists.
The main casualties from these episodic crises are not those responsible for bringing them about — the financiers, investors, big business owners, corporate officials and key politicians and bureaucrats in government. In the U.S., the main victims comprise about 80% of the population and are largely situated in the working class — with its lowest income component suffering the most — and in large sectors of the middle class. The upper middle and the wealthiest classes take hits, but usually have economic cushions to fall back upon until their investment portfolios and businesses revive or their golden parachutes make a soft landing in one playground or another.
Unemployment in America totaled 6.1% in October, signifying that 800,000 workers have lost their jobs so far this year. About 10 million workers who seek jobs are "officially" unemployed. This does not include millions of "discouraged" jobless workers not counted in government statistics. There are also, at minimum, about 8 million part-time workers searching for full-time jobs but unable to find them. This situation will further deteriorate until the economy bottoms out. Before that happens, the jobless rate may reach 9%.
Some 3.2 million American families — consisting of at least 10 million people and probably more — will lose their homes to foreclosure in 2008-9 as a result of the bursting housing bubble. The rate is about 10,000 lost homes a day. This painful process accelerated in 2006 when foreclosure filings jumped to 1.2 million, 42% higher than 2005. Last year, new foreclosure filings climbed to 2.2 million, 75% above 2006. Foreclosure of homes and dispossession from rental units are among the most traumatic events that can befall a family, causing disruption and worse for many years.
In addition, the wages of the U.S. working class and lower middle class have been stagnant since the mid-1970s, while new government social programs to benefit working people virtually ended around the same time. According to recent data from MetLife, 44% of American workers live from paycheck to paycheck with negligible, if any, savings, and most often with mounting debts. The recession will sharply increase the number of the nearly 40 million Americans already condemned to poverty, the additional 90 million or more people living in low-income households, and the nearly 50 million without medical insurance.
For African Americans the official jobless total is now 11.4%, and it's going up. "As is often the case in a recession," the Economic Policy Institute commented Oct. 3, "black joblessness is rising more quickly than that of the overall work force." From unemployment to median income status and family assets, most black families are far behind whites — a tragic legacy of racism that has been assiduously ignored in this year's presidential contest.
Meanwhile, the top 5% of wealthy families in the U.S. now possess 58.9% of all assets and wealth, while the bottom 80% possess of 15.3% — a reminder that gross economic inequality is another endemic feature of capitalism. In terms of "net worth" (assets minus debts), according to New York University economist Edward Wolff, the “top” 1% of the American people enjoy 34.4% of the nation’s assets, which is more than that possessed by the "bottom" 90% of the people, who share 28.7%. The remaining "top" 9% have harvested the rest.
The U.S. still remains the world's strongest economy, but it is sinking ever deeper into national indebtedness. In recent years this is mainly a consequence of the enormous expenditures for the Bush Administration's two unnecessary wars in Iraq and Afghanistan, the bloated militarist budget, the millionaire tax cuts, and now allocations to avoid a total economic collapse.
The annual deficit attained a record high this year of $437 billion, and it doubtless will be higher in 2009 no matter who is president. At this writing the national debt is roughly $10.5 trillion — about $34,500 for every citizen of the United States. This debt has continued to increase an average of $3.45 billion per day during the last year. In mid-October Congress raised the debt limit to $11.315 trillion. (A thousand million is a billion; a thousand billion is a trillion.) Foreign nations have been loaning Uncle Sam the money to keep the U.S. going, principally China and Japan.
What's behind the current U.S. economic crisis? First it must be recognized that there are two economies, and they interact. One is the real economy with its production of goods and services which are exchanged for money and other value. Then there is the financial shadow economy based on paper value exchanged in the gambling casino known as the stock market. In recent years, the casino introduced a new and complex gaming opportunity — derivatives — that few investors understood but avariciously partook, and it nearly broke the bank, not in Monte Carlo but Washington, London, Paris, Rome, Madrid, Bonn and other advanced industrialized capitals.
The bursting of the housing bubble and rampant foreclosures leading to the credit crises was serious enough. But it became far worse and spread throughout world financial system because these mortgage debts had been sold and resold around the world as debt-backed securities, often converted into speculative bets on derivatives such as "collateralized debt obligations," "credit default swaps," and "structured finance products."
Derivatives "derive" from a particular stock but become abstract instruments of massive unregulated trading, far more costly by many trillions of dollars than the defaulted mortgages. "The derivatives market," reported the New York Times Oct. 9, "is $531 trillion, up from $106 trillion in 2002 and a relative pittance just two decades ago. Theoretically intended to limit risk and ward off financial problems, the contracts instead have stoked uncertainty and actually spread risk amid doubts about how companies value them."
Warren Buffet, the second richest man in the world with a net worth of $50 billion and one of America's top capitalists, who also happens to be fairly liberal, wrote in his diversified Berkshire Hathaway Inc. annual report six years ago that "I view derivatives as time bombs, both for the parties that deal in them and the economic system…. In my view, derivatives are financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal." And so they became, thanks in good part to former Federal Reserve chair Alan Greenspan, who championed derivatives and forbade their regulation.
In addition to the collapse of housing and credit, other causes of the recession include deregulation, legal and illegal fast-buck practices that might profit some individuals but cause havoc in the real economy, and as always in capitalism's periodic setbacks, overproduction — of housing in this case.
Housing and its directly associated commodities amount to more than 17% of America's gross domestic product of some $14 trillion, so this market is of great importance to the nation's economy. A few years ago, in order to sell a burgeoning supply of new houses to a thinning number of new buyers with sufficient resources, millions of Americans were induced to assume a huge housing debt burden, ultimately above their ability to pay, in order to absorb surplus production and increase profits for construction-related businesses, realtors and investors.
Many subprime home buyers were convinced to purchase beyond their means by the waiving of down payments, low "teaser" monthly mortgage obligations for the first two years, and assurances from mortgage lenders that in hard times they could always refinance at a profit "since housing values always increase."
But when monthly payments jumped after two years, the value of those homes had decreased. Homeowners couldn’t any longer pay the mortgage. They were evicted, as are renters, without recompense by the banks and other mortgage lenders for past repairs and upgrading, although some made substantial improvements in what they thought was their "American Dream," their God's Little Acre gone horribly wrong.
Millions of Americans have doubled up with relatives or friends or ended up in emergency shelters. Some families are living in their cars or in tent cities. In Florida, for example, according to an article in the July 26, 2008, USA Today, after losing their homes, 29% moved in with family or friends, 25% went to emergency shelters, 12% entered a transitional shelter, 13% obtained a rental home and 16% ended up homeless on the streets.
How is it possible for housing to be "overproduced" in a country where tens of millions of people live in dilapidated homes or overpriced apartments. How is it possible that in any given year millions of Americans are homeless for a few days, weeks, months or the entire period when there are several million vacant homes or apartments? This is because decent housing in our society, along with healthcare, is simply not a human right but a commodity sold to the highest bidders.
Some of the roots of today's recession go back over three decades to when powerful financial and business leaders made two strategic decisions.
One was to introduce a neoliberal economic regime based on gradually eliminating government regulations on finance and banking, some of which went back to the Great Depression, so the "magic of the marketplace" could work its profitable wonders without Washington's interference. Here are two relatively recent examples:
In 1999 President Bill Clinton signed legislation greatly modifying the Depression-era Glass-Steagall legislation that sought to regulate an out-of-control banking industry. A key proviso of the bill — which prohibited banks from offering combined commercial banking, investment, and insurance services — was overturned. This permitted big banks to set up investment and insurance departments, greatly enhancing the power of these institutions to act as they pleased — a factor in the current recession.
Another deregulation, this time in 2004 during the Bush Administration, gravely aggravated the subprime fiasco a couple of years later. It was granted by the Security and Exchange Administration after five of America's major investment banks — Goldman Sachs, Merrill Lynch, Lehman Brothers, Morgan Stanley and Bear Stearns — argued for exemption from a regulation limiting the amount of debt such banks could accumulate. By the beginning of this year, four of the firms were in debt for about $31 for every $1 of stockholder investment. The fifth company, Goldman Sachs, had a ratio — or leverage , as it is called — of about $24 to 1$. The bailout was engineered by Treasury Secretary Paulson who in 2004, as chairman and CEO of Goldman Sachs, argued for lifting the debt ceiling.
The second strategic decision was intended to destroy three decades of a post-war social compact between capital and labor engineered at the end of the liberal Roosevelt Administration’s New Deal. In the thinking of America's leading capitalists and their minions in the political system, the labor movement had gained too much power, and working people had become, in effect, fat and sassy.
The upshot was that the corporations, banks and other business sectors came to an informal understanding about the need for a new social reality vis-à-vis working people. This meant, in effect, trade unions were to be crippled by additional anti-labor laws, business was to cut job benefits and wages (severing the correlation between compensation and rising productivity in the process), and Congress was to avoid passing important new social programs benefiting the people.
This program has been quite successful, assisted by the atrophy of the center-left in the Democratic Party, leaving a lopsided political spectrum in the U.S. that extends from center to right, without an influential left to challenge the anti-worker social compact and runaway businesses.
The labor movement was hit hard by these circumstances, declining in size and clout, and now playing little role on the national level except as a liberal support vehicle for the Democrats. Until the unions regain their strength and show willingness to flex muscle in the struggle with capital it will remain difficult to wage a serious fightback on behalf of the nation's working people or to take political advantage of the contradictions presently besetting the economy and society.
Since lower wages mean less consumer spending, the business and financial class encouraged the accumulation of consumer debt, facilitating spending through the proliferation of credit cards, additional family wage earners, and other measures. In the early 1990s, American household debt was a quite high 80% of disposable income. Today it is more than 130% — another reason why the American people are so vulnerable to the painful vicissitudes of the system's inevitable periodic "corrections."
And "now comes the credit card crisis," reported the New York Times in a front page article Oct. 29. "After years of flooding Americans with credit card offers and sky-high credit lines, lenders are sharply curtailing both, just as an eroding economy squeezes consumers. The pullback … threatens an already beleaguered banking industry with another wave of heavy losses after an era in which it reaped near record gains from the business of easy credit that it helped create." The reason? "Lenders wrote off an estimated $21 billion in bad credit card loans in the first half of 2008… [and] the industry stands to lose at least another $55 billion over the next year and a half."
The recession will worsen, perhaps significantly so, and it probably will take years for the U.S. to recover, during which time Washington and the 50 state governments will impose severe budget cutbacks in all programs that service the needs of the people.
New York Democratic Gov. David Paterson said Oct. 28 that the state budget deficit will reach $47 billion over three years. Big program cuts are coming, and significant cutbacks are expected. Testifying before the House Ways and Means Committee in Washington the next day, Paterson asked for state aid in these terms: "Just like the financial services industry, we need a partner in the federal government in order to help stave off an impending financial calamity and stabilize our fiscal condition."
Unemployment throughout the country will increase markedly. New York State will lose 160,000 private sector jobs in the next 14 months. The nation's pensions will further degrade ($2 trillion in pension savings has been lost in the past 15 months), poverty will rise, and spreading hunger will haunt the poor.
According to an Oct. 28 speech in Augusta, Maine, by Maura Daly, a vice president of the nonprofit Feeding America (formally Second Harvest), "poverty is a disease and hunger is a chronic symptom. One in eight Americans are at risk for going hungry." The demand upon the nation's system of food banks recently increased by 15%, she said, "and 80% of them are not able to adequately serve their communities."
Confronted with this crisis, the first order of business for the White House, Congress and the political structure — which primarily function as an executive committee overseeing the good health and success of the economic apparatus and its main beneficiaries — is to rescue the capitalist system, and to bail out the bankers, financial gamblers and corporate giants.
That's where the Bush Administration and Congress is investing the $700 billion it has just extracted from the pockets of American working families, who will get very little if anything in return — proof extraordinaire of the inherent inequality of the U.S. socio-economic system.
Paulson and Ben Bernanke, chairman of the Federal Reserve, went public with the bailout plan in late September, based on using most of the $700 billion to buy nearly worthless mortgage-backed securities — a faulty scheme that has been largely dropped after the money was appropriated. The original three-page proposal contained few details to support their contention that, in effect, the U.S. was simply going to keel over unless funds were immediately injected into the credit market to alleviate what is now called "Wall Street’s biggest crisis since the Great Depression." The plan quickly gained the approval of House Speaker Nancy Pelosi, and presidential candidates Sens. Barack Obama and John McCain.
The House voted against the measure the first time, partly because it violated the laissez faire ethos so dear to a certain sector of the congressional right wing (they called it "socialism"), but principally because of massive constituent opposition to bailing out greedy banks and investors. Congress insisted on changing the measure to mollify public antipathy, ultimately adding another 400-plus pages with several big modifications but leaving intact the $700 billion to repair the damage caused by the very system that was being saved. The proposal was approved by the Senate 74-25 Oct. 1, and by the House 263-171 two days later. Commenting on the fact that the appropriation was intended to benefit the bankers and financiers to the exclusion of those who will suffer most — the working class and middle class — Rep. Dennis Kucinich (D-Ohio), a consistent center-leftist, excoriated the measure as "the largest single act of class warfare in the modern history of this country."
Announcing his second vote against this historic subsidy for big business, et al, on Oct. 3, Hudson Valley liberal Rep. Maurice Hinchey (D-NY) declared: "The $700 billion plan brought to the House floor for a vote today is far too big and ignores the pressing need to directly help working and middle class Americans make ends meet and survive these tumultuous times. The measure also fails to reinstate any real regulatory authority over the financial markets to prevent Wall Street from abusing the system again and creating a similar crisis in the future."
Instead of an immediate turnaround upon passage of this huge bailout, share prices on the domestic and international stock markets continued to fall after a nanosecond-brief rise. In a concerted action Oct. 8, six central banks, including the Federal Reserve, reduced interest rates by a half point — but the markets continued to fall, as they are still doing at this writing.
In an important step Oct. 13, Paulson and Bernanke executed a significant course correction by putting aside the plan to purchase toxic mortgages. Instead, they decided to follow the example of British and other European governments by investing the first bailout allotment of $250 billion directly into the banking industry to encourage bankers to resume providing credit, mainly to other banks — a necessity for the smooth running of American business. Half the investment went to the nation's nine largest banks, in return for preferred stock; the rest will be directed where necessary among a number of smaller banks.
Actually, a number of these banks already had sufficient cash to resume major lending, but were disinclined to service other banks, fearing they would lie about their ability to repay the loan. They evidently didn't trust their own banking system. The infusion of government money was supposed to provide banks with the confidence to lend to other banks. So far the lending has been extremely slow, and it is suspected that many banks had other uses for the money.
The financial press suggests that another, unexpressed, reason the Treasury invested in the banks was to encourage some of them to merge and to acquire other healthy banks to consolidate the entire banking system in fewer hands. "The bailout was sold as a way to spur loans," an angry N.Y. Times editorial noted Oct. 29. "If that never was — or no longer is — the primary aim, Congress and the public need to know that. Lawmakers should not release the second installment — $350 billion — until they have answers and guarantees that the bailout money will be spent in ways that put the public interest first."
While strengthening the banks received general support from politicians and the mass media since it contains an eventual payback from the equities, it contains important shortcomings, the main one being that the government will not have a seat on the board of directors and will hold only non-voting shares in the banks. According to an editorial in the Oct. 14 N.Y. Times, "This means the banks' current boards and current management — the same people who got the country into this mess — will still be making all the decisions. The Treasury also seems far too sympathetic to the banks' pleas for leniency when it comes to restrictions on the pay of bonuses of executives at banks that are bailed out…. The Treasury should also insist on stepped up government supervision to ensure that sound lending resumes and that reckless lending does not."
Another major failing is that the government, in making its investment, did not instruct the banking sector and all mortgage lenders to take steps to reduce foreclosures by modifying loan payback terms, including the reduction in interest rates. Nor did Paulson insist, as he could have, that the banks not use bailout money to pay dividends to stockholders, among the largest of whom are bank officials. At this stage, about 20% of the cash infusion may go for this purpose.
Allegations from sectors of the right wing that Washington's so-called "nationalizations" amount to "socialism" are absurd. As Otto Spengler wrote in Asia Times Sept. 23, " If America is to adopt socialism, why not have socialism for the poor, rather than for the rich? Why should American households that earn $50,000 a year subsidize Goldman Sachs partners who earn $5 million a year?"
John Bellamy Forster, the Marxist editor of Monthly Review, also dismissed the nationalization-equals-socialism argument. In an article Oct. 15 in MRZine.com he described the Treasury Department's investment in banks as "just another desperate stop-gap measure aimed at preventing a full-scale debt deflation. But as a sign of the total collapse of the 'U.S. model' of 'free market' finance capitalism, the moral and political consequences are vast."
In an article in Znet the same day, left intellectual Noam Chomsky argued that the roots of the present crisis go far deeper than to the collapse of the housing bubble. "In part," he said, "they lie in the triumph of financial liberalization [deregulation and so on] in the past 30 years — that is, freeing the markets as much as possible from government regulation…. Financial liberalization has effects well beyond the economy. It has long been understood that it is a powerful weapon against democracy. Free capital movement creates what some have called a 'virtual parliament' of investors and lenders, who closely monitor government programs and 'vote' against them if they are considered irrational: [i.e.] for the benefit of people, rather than concentrated private power. Investors and lenders can 'vote' by capital flight, attacks on currencies and other devices offered by financial liberalization."
The New York Times noted that representatives of the nine banks were at first dubious about Paulson's proposal, but "as they heard more, some of the bankers began to realize how attractive the program was for them."
Paulson has come under considerable criticism from a number of influential bankers and investors for his initial handling of the crisis. His decision to bail out some investment firms but to allow the global giant Lehman Brothers to go bankrupt was condemned by many because the fall of Lehman was a factor in triggering the crash. He also came under fire for wasting valuable time by first proposing to buy out the bad mortgage debts — a measure that did nothing to regain Wall Street's lost confidence — before deciding to invest directly into the banking system.
Despite the Bush Administration's infusion of money into the economy, the stock market remains volatile and very cautious. As a New York Times economic analyst wrote recently: "The malaise on Wall Street simply will not lift."
President Bush will host what is termed an emergency summit meeting with a score of foreign leaders in Washington Nov. 15 to discuss means of coping with present and future economic downturns. Also attending will be the heads of the International Monetary Fund, World Bank and other international institutions. The ANSWER Coalition and other groups will mount a protest outside the White House the evening of Friday, Nov. 14, during a posh presidential dinner for the delegates, and throughout Saturday, Nov. 15, near the meeting venue, which is to be announced.
So far in all the government's calculations, the needs of the masses of people are distinctly secondary to those of the banks, the stock market and business. The people in their many millions are suffering as a result of the economic crisis, from losing homes or jobs, to going without healthcare or medicine, to sinking into deeper poverty, to foregoing a higher education or cutting back on food and other needs. It's rumored an administration program is on the way to meet some of these needs. The Democrats are reportedly putting together a second economic stimulus package following Bush's initiative earlier this year. The Fed's Bernanke said Oct. 20 that he supports a second stimulus effort.
Presidential candidates Obama and McCain have both put forward proposals for dealing with the foreclosure crisis that are more extensive than the Bush Administration has offered. Obama's plan is better than McCain's, as is his entire domestic program, but that will have to await his entry into the White House in January. However, neither center/center-right Democrat Obama nor neoconservative rightist Republican McCain has evidenced the slightest inclination to seriously bail out not only the immediate victims of this growing recession but the majority of the American people who have seen their living standards erode for decades while a privileged minority with great wealth and political power rules the land.
"American workers need a financial bailout" is the title of an article in New York's daily Newsday Oct. 7 by leftist economics Professor Michael Zweig at Stony Brook University on Long Island. He wrote: "It's time to turn immediate attention to the expanding crisis on Main Street by adopting an economic stimulus package that will help to reverse the recession we are slipping into and restore the jobs we have lost through most of this year. Congress should take $220 billion of the $700 billion it has set aside for the current crisis and apply it to those who need it most: the millions of economically distressed workers across the country who have gotten absolutely nothing from the 'rescue package' so far….
"Economic stimulus should also come from infrastructure projects. New and repaired bridges, roads, ports and rail lines will provide long-term support for private-sector economic growth once they've been completed, as well as offer short-term stimulus from the jobs and income they generate as they are built. But infrastructure projects take a year or more to begin, so other stimulus measures must come first."
There undoubtedly will be efforts in the coming year to ameliorate some of the unsavory and obviously failed aspects of the free-market, neoliberal economic project, as happened in response to the Great Depression and earlier crises. New regulations in the banking and financial systems will be forthcoming, particularly now that right wing libertarian Alan Greenspan finally acknowledged one of his main mistakes during questioning before the House Committee on Oversight and Government Reform Oct. 23. He declared:
“Those of us who have looked to the self-interest of lending institutions to protect shareholders’ equity, myself included, are in a state of shocked disbelief…. I made a mistake in presuming that the self-interests of organizations, specifically banks and others, were such as that they were best capable of protecting their own shareholders and their equity in the firms." In other words the notion of self-regulating financial markets is a myth.
As chairman of the Federal Reserve for 18 years under Presidents Bush I, Bill Clinton, and Bush II, retiring in 2006, Greenspan fought consistently for deregulation and opposed any effort by Congress to put restraints on derivatives, arguing that "derivatives markets … have been a major contributor to our economy's ability to respond to the stresses and challenges of the last two years. This [congressional] proposal would limit this contribution, thereby increasing the vulnerability of our economy to potential future stresses."
New and tougher regulations are desirable, of course. The problem, as in the past, is that as soon as a recession or depression is over, free-market conservatives start chipping away at them and the deregulation cycle starts anew because there is no strong left political force to block therm.
When he took office in 1981, far-rightist President Ronald Reagan — a firm believer in the "magic of the marketplace" who often spoke of the "invisible hand of the market" as though it was attached to the wrist of God — famously declared that "government is not the solution to our problem; government is the problem."
This conservative mantra continues to echo in the gated mansions of wealth, corporate boardrooms, marbled banks, gilded markets, the White House and much of Congress, but with an interesting variation during times of trouble: As the bailout demonstrates, government miraculously becomes their "solution" when the inevitable contradictions of capital begin to sharply cut profit margins and threaten the goose that produces their golden egg.
Now the automotive industry, and insurance as well, are clamoring for part of the bailout money, and they probably will get it. Both Chrysler and General Motors face great losses, have opened merger talks, and seek government aid. In a statement Oct. 27, G.M. spokesman Greg Martin declared: "We believe the federal government should consider using all the tools available to it, including some recently enacted, to support industries that are in distress and that are essential to the U.S. economy." Ford, too, is losing money. The motor industry has been set back by the recession, but its unwillingness over the years to produce smaller, more fuel-efficient models to compete against foreign carmakers in the American market was a major factor as well.
In an Oct. 26 article in MRZine, University of Massachusetts at Amherst economics Professor Rick Wolff wrote that "The next president will arrive at an historic moment when most of the business leadership will be looking to (if not also begging) Washington for massive intervention to save the private capitalist economy. These conditions may then ripen a major realignment within U.S. politics."
In our view — accepting Reagan's cadence but changing his words — we think that the current economic disaster shows that "capitalism is not the solution to our problem; capitalism is the problem." And we suspect that many more people these days in the U.S. and around the world are beginning to contemplate this particular heresy, whether as progressive reformists, social-democrats or socialists of one kind or another.
Real change is in the air, and we don't mean the basically empty rhetoric of "change" so prominent this election season. The dreadful, failed Bush era is ending with a bang — the recession — after eight years that seemed to last as long as the hundreds of years it took the Roman Empire to decline and finally fall.
People want change for many reasons, not just because of the recession and the subsequent discrediting of conservative economic nostrums. For many it's also about the continual unjust wars for hegemony, and the preposterous military budget; for others it may be stagnant wages and the ever widening gap between rich and poor, or the pitiful response from our ruling parties to the impending environmental catastrophe, and the government's indifference to America's crumbling infrastructure. For yet others it's regressive taxation, the end of welfare "as we know it," the paucity of programs benefiting working people, the anti-labor laws, the weakening of affirmative action, and the absence of a mass left party to contest with the two parties of the right and center.
According to University of Massachusetts economics Professor Robert Pollin during an interview by journalist Mike Whitney in CounterPunch Oct. 16, "Whether or not this crisis will mean the end of the neoliberal era will depend on political mobilization — specifically, how successful the left will be in building coalitions behind an agenda that combines egalitarianism with a stable financial system…. Wall Street has now been discredited to a degree unprecedented since the 1930s. That should give the left serious political leverage….. [W]e are in the midst of a major historic turning point, equivalent to the 1930s New Deal, or the emergence in 1979/80 of full-tilt neoliberalism under Thatcher in the UK and Reagan in the U.S."
One of the main disputes between conservative capitalism and socialism is the concept of national economic planning. The right wing shuns such planning, leaving to the free market, and the left considers it an imperative for the rational organization of the economy. But liberal capitalist economist James K. Galbraith, writing in the November Harper's, easily crossed over and seems to suggest others should as well: "Planning has been a dirty word in America for decades…. But without public planning, who is in charge? Lobbyists who represent the private planning of the great corporations. The public interest ceases to exist, and the public sector becomes nothing more than a trough at which private interests come to feed."
The positive aspect of these distressing and conservative times is that objective conditions — i.e., the situation in our country based on a realistic assessment of economic, social and political factors — appear favorable for a new period of significant social reform. Today's iniquities and excesses of capital bring to mind the conditions that led to the reforms of the Gilded Age (late 1800s), the Progressive Era (early 1900s) and the New Deal reforms of the Great Depression (1930s).
However, subjective conditions for the needed change — i.e., the status of the progressive and left movements (including the unions) and their collective level of consciousness and willingness to unify and struggle — are not yet sufficiently mature to take maximum advantage of the objective opportunities for social transformation in the near future. This could improve if currently powerless center-left progressives either mount a sharp showdown struggle within their centrist Democratic Party or decamp to a third political entity of the left, and if the fractured left were to unify around certain specific interim reforms while simultaneously pursuing their longer range goals.
The important thing for those who seek a better, more equal society and a world at peace — which is probably the perspective of almost all of our readers — is to keep up the struggle for positive, far-reaching social change, even when it appears little progress is being made, as now. History has a way of taking a long time to change, then doing so with seeming abruptness when objective and subjective conditions are aligned. And a good part of the change is because many disparate and unnoticed people and movements were constantly at work the entire time, each contributing to what ultimately becomes social transformation in a matter of years or generations.
5. THE NEWS IN BRIEF
[Editor's Note: Nathan Rosenblum will be writing this column of short news items in future issues of the Activist Newsletter. He is a senior at Mount St. Mary College in Newburgh.]
MARIJUANA ARRESTS UP: The FBI’s Uniform Crime Report indicated 872,721 people were arrested last year on charges related to marijuana, almost 90% of which were for nothing more than possession. According to Paul Armentano, deputy director of the National Organization to Reform Marijuana Laws (NORML), this is the largest annual number of arrests for marijuana in history. Arrests have doubled since 1993. There are currently over 40,000 people in state or federal prison in the United States for offenses relating to marijuana. In mid-October, the number of marijuana arrests in U.S. history reached 20 million. A NORML study three years ago determined that nearly 75% of those arrested were under 30 years of age. Some 25% were 18 or younger. The organization notes that marijuana — unlike alcohol and tobacco — is comparatively safe and that component compounds such as cannabinol have been found to have numerous beneficial properties in treating illnesses including cancer, Alzheimer’s disease, Parkinson disease, and diabetes. The racist nature of the government's “anti-drug” campaign is well known with African Americans being among the most targeted sector of the population.
MAMMALS FACE DANGER OF EXTINCTION: A new report recently released from the International Union for Conservation of Nature indicates that one in four mammals may be at risk of extinction, predominantly due to hunting and destruction of habitat, although global warming and collisions with ships and fishing nets have a substantial effect as well . Of the 4,651 known species of mammals, 1,139 are under threat. Since the beginning of the 16th century, it is estimated that 76 species of mammal have become extinct demonstrating the dangerous rate at which this current crisis is progressing. New mammals have been discovered in increasing numbers in recent years and there is a major concern among scientists that it may not be possible to study these in great detail should they begin to decline rapidly. Only about 5% of mammals are believed to be increasing in number.
INEQUALITY KILLS: A recent report from the World Health Organization (WHO) states that social injustice and income inequality lead to health inequality that "really is a matter of life and death." This applies, according to the report, to inequality between countries and within the same country. In the United States, for example, the report concluded that "886,202 deaths would have been averted between 1991 and 2000 if mortality rates between white and African Americans were equalized." Only a few poor countries and regions were noted as providing good and equitable care for their populations, including Cuba with its renowned, and free, medical care, and in the Indian southwest state of state of Kerala, with a population of about 32 million, which has for decades been governed by the Indian Communist Party (Marxist). The vast majority of the world's poor, which includes billions of people, live without adequate shelter and clean drinking water, according to the report, and this leads to early deaths. The report and background material is located at http://www.who.int/social_determinants/final_report/en/index.html.
MUMIA'S APPEAL IS REJECTED: The U.S. Supreme Court this month rejected a petition for a new trial for Mumia Abu-Jamal, 53, perhaps America's best known political prisoner. The former journalist, once a youthful member of the Black Panther Party in Philadelphia, has long been a voice for social justice from his death row cell in Pennsylvania. Mumia, as he is known to many millions of supporters in the U.S. and around the world (Parisians even named a street after him), was sentenced to death 27 years ago, after being convicted of killing police officer Daniel Faulkner. He steadfastly denies participation in the crime, and some witnesses have recanted their original testimony — a factor behind the 2001 reversal of his death sentence, but he remains on death row awaiting a new state resentencing hearing. The courts could reimpose the death penalty or keep Mumia behind bars for life. The Philadelphia police department has a long history of racism, and the judge at his first trial made overtly racist remarks. While in prison, Mumia has written books, created his own radio program, and has published many articles on domestic and world affairs for left and progressive publications. Mumia's radio broadcasts are available at http://www.prisonradio.org/mumia.htm. Other websites with background are at http://www.freemumia.com/, and http://www.freemumia.org/.
COMBAT FORCE DEPLOYED BACK HOME.: Beginning in October, and for the first time, a U.S. Army combat unit is being stationed within the U.S. to prevent “civil unrest” as part of "homeland defense." While it is being touted that these soldiers will be used to respond to disasters and assist in search and rescue, inside sources paint a more ominous picture. According to an article in Army Times, a Brigade Combat Team of the Army's Third Division “may be called to help with civil unrest and crowd control.” The Army claims the soldiers are being supplied with non-lethal weapons. They are, however, equipped with electric stun guns called tasers, which are extremely painful and have caused deaths. Deploying active duty soldiers for action in the United States violates the Posse Comitatus Act, passed in 1778.
6. THE UN BACKS CUBA ONCE AGAIN
The word "hubris," according to Webster's New World Dictionary, means "wanton insolence or arrogance resulting from excessive pride." In other references it means "an act of transgression evidently based on overbearing pride."
What word, especially if it's imperial hubris, could more aptly define a country that repeatedly — for 17 consecutive years — refused to heed the criticism of virtually the entire rest of the world? This criticism was hurled at Washington once again Oct. 29 by 98.4% of the member nations in United Nations General Assembly.
The U.S. was one of three countries that voted "No" against 185 countries that voted "yes" on a measure demanding that America discontinue its nearly half-century economic embargo of Cuba.
Joining the U.S. was Israel, which has voted against Cuba every year since the first UN vote on the matter in 1993, and Palau, a 177-square mile island in the Pacific that's a virtual U.S. dependency. The combined population of the three allies is about 310 million people, thumbing their collective nose at the remaining world population of more than 6.3 billion people.
To us this seems the very definition of hubris, particularly since the small country on the receiving end of Washington's antagonism never threatened or harmed the U.S. or other countries in any way. Havana's armed forces are relatively small and purely defensive. Cuba doesn't reveal its annual military budget but the highest estimate we've seen from U.S. sources (and its likely too high) is about what the U.S. spends in just two days in Iraq — $1.4 billion. The White House calls Cuba a "terrorist" country, but we know of no act of terrorism committed by the Havana government.
It's the other way around. Since the victory of the Cuban Revolution on Jan. 1, 1959, the U.S. has organized a failed invasion of the island, hundreds of assassination attempts against Cuban government leaders, and subversion of all kinds including crop destruction. Washington also winked at the 1976 terror bombing of a Cuban civilian airliner in which all 73 people on board were killed, and gave protection in America to some of those responsible.
Perhaps the worst harm done Cuba by the neighboring colossus to the north has been the political and economic embargo initiated in 1960 by Republican President Dwight D. Eisenhower, and broadened in 1962 by Democratic President John F. Kennedy. In 1992, Congress passed the "Cuban Democracy Act," introduced by New Jersey Democrat Robert Torricelli, that extended the blockade to bar subsidies of U.S. firms abroad from trading with Cuba. In 1996, Democratic President Bill Clinton signed into law the vindictive "Cuban Liberty and Democratic Solidarity Act," otherwise known as the Helms-Burton bill, which in effect bars foreign companies from trading with Cuba.
According to Cuban Foreign Minister Felipe Perez Roque, the embargo has cost Cuba over the years about $224 billion in today's dollars, a huge amount for a developing country with a population of 11.4 million people. Pope John Paul strongly backed ending the embargo when he visited Cuba in 1998, encouraging the people of the world to "take practical steps to bring about changes."
The U. S. has long barred most American citizens from traveling to Cuba. President Bush has toughened the restrictions by preventing some two million Cuban-Americans from traveling to Cuba for visits to family more than once every three years. Bush has also increased funding to anti-Cuban groups in the U.S. and to anti-government elements within Cuba.
At this stage, White House policy remains fixated on regime-change in Cuba, replacing the communist government with an administration subordinate to Yankee domination, as existed some 60 years from 1898 when the U.S. seized Cuba from Spain until popular forces led by Fidel Castro ousted the Washington-backed dictator Fulgencio Batista and liberated the island from America's embrace.
The U.S. election won't bring much change in Washington's Cuba policy, which is also known as the South Florida policy because of the way national politicians cater to the desires of the Cuban-American community quartered there. A victory by Republican John McCain will be a continuation of the Bush Administration's subversion and enmity. A victory for Democrat Barack Obama will essentially be a continuation of the Clinton policy of somewhat less heavy-handed subversion and enmity. Obama is slightly more forthcoming than McCain, but he pledges to keep the embargo and travel restrictions on American citizens until the Cuban government, in effect, renounces socialism.
One of Obama's sharpest and continually repeated criticisms of the Havana government is the plight of Cuba's political prisoners. "The road to freedom for all Cubans," Obama says, "must begin with justice for Cuba's political prisoners." A couple of months ago he said he would maintain sanctions against Cuba until it makes substantial changes, "beginning with the freeing of all political prisoners."
After nearly 50 years of anti-Cuban propaganda, the American people probably believe Cuba is one huge prison. Obama must know better, since he is sure to have heard of Amnesty International. According to Amnesty, which is no friend of the Havana government, there are approximately 58 prisoners of conscience in Cuba today, and thirteen others who are serving their sentences outside prison because of health concerns.
Much of what the U.S. government reports about Cuba is gravely distorted, from allegations about "terrorism" to the implication that the island is sinking under the weight of its prisoners of conscience. Most of the rest of the world sees through this, and is also aware of Washington's imperial hubris, which is why it never misses the opportunity to tweak the nose of Uncle Sam in the annual lopsided UN sanctions vote.
Note that Jackson Browne has just recorded an unusual new song about Cuba. Go to the "Check It Out" column below to access the music.
7. THE COST OF 'BOOTS ON THE GROUND'
By Jon Basil Utley
Foreign Policy in Focus (Oct. 9)
It takes half a million dollars per year to maintain each sergeant in combat in Iraq. Thanks to a Senate committee inquiry, an authoritative government study finally details the costs of keeping boots on the ground. The Congressional Budget Office (CBO), in its report Contractors' Support of U.S. Operations in Iraq, compared the costs of maintaining a Blackwater professional armed guard versus the U.S. military providing such services itself. Both came in at about $500,000 per person per year.
News reports of the study have largely focused on the total cost of U.S. contractors. The 190,000 contractors in Iraq and neighboring countries, from cooks to truck drivers, have cost U.S. taxpayers $100 billion from the start of the war through the end of 2008. Overlooked in this media coverage has been the sheer cost per soldier of keeping the army in Iraq. This per-soldier cost is more comprehensible and alarming than the rather abstract aggregate figure.
Whether in maintaining U.S. soldiers or private-sector contractors, the costs of occupation are enormous. With no end in sight, unending foreign wars do have one clear consequence: the eventual bankruptcy of the United States.
The cost of a sergeant is complicated to calculate. His or her actual cash pay is $51,000-$69,000 per year, which puts sergeant pay in the middle of the pay grade, according to another CBO report, Evaluating Military Compensation. Non-cash benefits – pensions, medical care, child care, housing, commissaries – likely double this amount, even during peacetime. Pensions are the biggest ticket item. The average retirement benefit for a soldier or sailor who stays in for 20 years equals $2.6 million, if he or she lives to the age of 77 (though most soldiers don't stay in the service long enough to get this benefit).
A major portion of the $500,000 figure comes from the "support staff" and rotation system that allows for recuperation, training, and accumulated vacations after each year in combat. It's allocated on the basis of one or two sergeants in the United States backing up each one overseas. The CBO report does not, however, factor in bonuses for re-enlistment, which offers tens of thousands of dollars for soldiers with special skills. Nor does the report calculate operating or equipment costs per soldier. The $500,000 figure applies to personnel costs alone.
"Support staff" refers to headquarters management and specialized skills supervising the enlisted men. To make the comparison the CBO identified a hypothetical Army unit that could deliver roughly the same caliber of men as the Blackwater guards. This "would require about one-third of an Army light infantry battalion – a rifle company plus one-third of the battalion's headquarters company." This support staff would "include not only command elements, but also medics, scouts, snipers, and others who functionally correspond to some of Blackwater's supervisory and specialized personnel."
Contractors, meanwhile, are increasingly filling the roles once played by U.S. Army personnel. In terms of total costs, the CBO points out that there are about an equal number of contractors as soldiers, the highest proportion for any war in American history. However, only 20% are U.S. citizens. And most contractors, for example kitchen personnel, are paid much less than the guards who earn $1,222 per day. The report also notes that their contracts allow for much more flexibility and shorter assignments than what regular Army soldiers cost the government.
The studies are only for personnel. They don't include the long-term costs of care for disabled and handicapped veterans. They don't include the costs of replacing or maintaining equipment. Nor do they factor in the costs for allies' supplies and training or the cost of interest on all the borrowed billions used to fight the war. That's how Joseph Stiglitz and Linda Bilmes reached the astronomical cost estimate approaching $3 trillion for Iraq and Afghanistan. That study estimated actual yearly cost per soldier in the field at $400,000, a number comparable to the CBO estimate for sergeants.
Perhaps the accountants who did the CBO study were themselves surprised at the costs of fielding an American army. Their objective was only to analyze the costs of hiring guards at $500,000 a year, compared to fielding soldiers. The study only incidentally shows the individual costs of American occupation forces facing resistance.
Given these costs, which are only part of a military budget and other defense expenditures that approach a trillion dollars, it's easy to see how the wars are bankrupting America. Washington has borrowed the money, and the impact can already be felt in the dollar's declining value and America's deteriorating infrastructure. The national debt, since the war started, has increased from six to nine trillion dollars. Ancient Rome simply taxed its citizens into ruin and clipped the coinage to pay for its armies. Higher taxes, a lower standard of living, and unending wars will drive us to the same end.
8. CHECK IT OUT
GOING DOWN TO CUBA: Here's a fine new song on video by Jackson Browne expressing opposition to the U.S.. economic blockade of Cuba, entitled "Going Down to Cuba" and first performed about a month ago: http://www.youtube.com/watch?v=-72fOcOwKc4.
SEVEN DEADLY PLASTICS: Goods made of plastic are a daily part of human life, but plastic can also be a danger to human life. Have you ever wondered about those little numbers from 1 through 7 on the bottoms of your plastic food and drink containers? Here is your chance to find out what they stand for through a quite entertaining but disturbing four-minute music video featuring The Princes of Serendip, a Mid-Hudson singing group including T.G. Vinini who wrote the song "Seven Deadly Plastics." It's at http://www.youtube.com/watch?v=IP-oC-0hOC0, and at the group's website, http://www.princesofserendip.info/.
McCAIN'S RAGE: We've always known the Republican candidate was a hothead, but this four minute video, titled "McCain's Rage is a National Security Concern," depicts him as an individual with an extreme anger problem who shouldn't be allowed near the nuclear trigger: http://www.youtube.com/watch?v=fAyK-enrF1g.