Monday, April 11, 2011

Get the $8 Trillion Bail-out Money Back, Stop Trying To Control The Planet : There is No Budget Crisis

Get the $8 Trillion Bail-out Money Back, Stop Trying To Control The Planet : There is No Budget Crisis

The recent "Budget Crisis" is such a sham. What was cut amounts to the type of chump change you find down in your car seat or behind the cushions on your living room sofa.

THE GOP wants to cut/gut the programs that serve the masses not those that demand accountability of their own and the military budget that permits our warfare state to continue uninterrupted worldwide genocide that feeds the coffers of our Corpocracy.

They have almost made a clean getaway, still looking over their shoulders but receding into the distance.  Question: how can we cut the debt and balance the budget without cutting a single program or hurting a single person except those who will have plenty left?  

The genius of the current robbery taking place in Washington as they prepare to slash entitlements as the "big ticket" items on which we are going to have to make "hard choices," is that there is another big ticket item which, along with Pentagon spending and wars, put us here in the first place.

Funny, I don't see anything on "Debt Clock" about this all-time greatest theft in world history, along with the "big three" which are responsible for most government spending which are right near the top: Social Security, Pentagon, and Medicare/Medicaide. 

If I can keep you worried about these three I can keep you busy and get away with all sorts of pillaging and plunder. (Ed.)

But Politico says:

"A series of bailouts, bank rescues and other economic lifelines could end up costing the federal government as much as $23 trillion, the U.S. government’s watchdog over the effort says – a staggering amount that is nearly double the nation’s entire economic output for a year.

If the feds end up spending that amount, it could be more than the federal government has spent on any single effort in American history..."

Beyond these projections, a more recent San Francisco Chronicle article reports that the actual cost of the bail-outs has already hit $8 trillion.

To put that into some kind of context, you can call what they call the three biggies, Social Security, Pentagon/wars, and medicare/Medicaid, at around 3/4 of a trillion a year, each.  

No, I don't see it on, nor do I hear any congressmen of either party talking about it in hushed somber tones about "sacrifices" for the "greater good", I don't hear the Tea Party talking about it, which strangely, is what they got started over.  That's before they got hijacked by the GOP which managed to fool enough of them into thinking their own SS benefits were the great evil.  Some trick that.

Two of the early Tea Party protests were February 27, 2009 to protest the Troubled Assets Relief Program (TARP) bailout bill signed by President George W. Bush in October 2008 and the ARRA stimulus bill signed by President Barack Obama ten days prior to the protest.

Are the corporate execs who are giving themselves outrageous perks going to sacrifice, like the one whose kid takes a private jet ride to school every day?  Please lean over, I have something to whisper into your ear: suckerrrr!

This is a short diary.  There is nothing to read about; you know what is going on.  It's time to slam them with WTF, who do you think you are kidding?  Talk about the bail-outs and getting that money back, not my retirement.  We might be stupid.  But we're not THAT stupid.


A year ago, in March 2010, Iceland’s economy was so small that it did not warrant much attention when 93% of its voters rejected the Social Democratic-Green government’s surrender to Gordon Brown and the Dutch, the European Union (EU) bureaucracy and IMF demands that it impose austerity as penance for believing the neoliberal fairy tales about how bank deregulation and “free markets” would make it the richest, happiest country in the world. Indeed it seemed to be, according to United Nations data. But the dream was dashed after the Icesave electronic Internet bank branches abroad were emptied out by their proprietors.

Britain and the Netherlands paid out more than $5 billion to some 340,000 of their own depositors whom their own bank oversight agencies had failed to warn the about looting going on. Iceland’s taxpayers were told to bear the cost, as virtual tribute.

The dream was the neoliberal promise that running to debt was the way to get rich. Nobody at the time anticipated that taking private (and indeed, fraudulent) bank losses onto the public balance sheet would become the theme dividing Europe over the coming year, dividing European politics and even threaten to break up the Eurozone.

Iceland could be facing a political and financial crisis after voters appeared to have rejected a referendum on a plan to repay debts to Britain and the Netherlands for a second time.

A landmark in this fight is to occur this Saturday, April 9. Icelanders will vote on whether to subject their economy to decades of poverty, bankruptcy and emigration of their work force. At least, that is the program supported by the existing Social Democratic-Green coalition government in urging a “Yes” vote on the Icesave bailout. Their financial surrender policy endorses the European Central Bank’s lobbying for the neoliberal deregulation that led to the real estate bubble and debt leveraging as if it were a success story rather than the road to national debt peonage. The reality was an enormous banking fraud and insider dealing as bank managers lent the money to themselves, leaving an empty shell – and then saying that this was all how “free markets” operate. 

Running into debt was promised to be the way to get rich. But the price to Iceland was for housing prices to plunge 70% (in a country where mortgage debtors are personally liable for their negative equity), a falling GDP, rising unemployment, defaults and foreclosures.

To put Saturday’s vote in perspective, it is helpful to see what has occurred in the past year along remarkably similar lines throughout Europe. For starters, the year has seen a new acronym: PIIGS, for Portugal, Ireland, Italy, Greece and Spain.

The eruption started in Greece. One legacy of the colonels’ regime was tax evasion by the rich. This led to budget deficits, and Wall Street banks helped the government conceal its public debt in “free enterprise” junk accounting. German and French creditors then made a fortune jacking up the interest rate that Greece had to pay for its increasing credit risk.

Greece was told to make up the tax shortfall by taxing labor and charging more for public services. This increases the cost of living and doing business, making the economy less competitive. That is the textbook neoliberal response: to turn the economy into a giant set of tollbooths. The idea is to slash government employment, lowering public-sector salaries to lead private-sector wages downward, while sharply cutting back social services and raising the cost of living with tollbooth charges on highways and other basic infrastructure.

The Baltic Tigers had led the way, and should have stood as a warning to the rest of Europe. Latvia set a record in 2008-09 by obeying EU Economics and Currency Commissioner Joaquin Almunia’s dictate and slashing its GDP by over 25% and public-sector wages by 30%. Latvia will not recover even its 2007 pre-crisis GDP peak until 2016 – an entire lost decade spent in financial penance for believing neoliberal promises that its real estate bubble was a success story.

In autumn 2009, Socialist premier George Papandreou promised an EU summit that Greece would not default on its €298bn debt, but warned: “We did not come to power to tear down the social state. Salaried workers will not pay for this situation: we will not proceed with wage freezes or cuts.”1 But that seems to be what socialist and social democratic parties are for these days: to tighten the screws to a degree that conservative parties cannot get away with. Wage deflation is to go hand in hand with debt deflation and tax increases to shrink the economy. 

The crimes these people are charged with are like child's play compared with what happened in the US during the great moderation. Which is precisely why no justice will ever be sought after our own former and current bank heads. At least no justice that can be dispensed in a court of law. 

Government reports would indicate that military spending in 2010 was 18 percent of the whole federal budget. But the $714 billion spent that year for war (Iraq and Afghanistan), weapons, bases (including more than 800 overseas) and soldiers' pay represented about 28 percent of our income taxes and 51 percent of the discretionary budget that Congress actually votes on. So I could right fully make the case that in 2010 our military ate up 51 + 18 % or 69% of Federal Dollars.

"The United States has increased its military spending by 81 percent since 2001. U.S. military spending in 2011 will exceed $700 billion - the most since World War II. That amounts to more than half of all government discretionary spending. It represents 35% of total military spending on the planet.

“After 13 consecutive years of growth, between 1998 and 2011, spending on the military has reached an all-time high," and for 2012 the Pentagon's Robert Gates "is asking Congress to authorize yet another increase, seeking $553 billion, plus an additional $118 billion for Iraq and Afghanistan, for a total of $671 billion."
The United States has spent nearly 1.2 trillion taxpayer dollars on its wars in Iraq and Afghanistan since 2001. 

The self assigned “Budget Expert”, Congressman Ryan also argues that unless the United States gets its fiscal house in order, “other nations with very different interests will rush in to fill” the U.S. role as “military superpower.”

But, in fact, as events in Libya and Egypt and Japan remind us, there is no one remotely ready, willing, or able to provide the global security guarantees that America does – not China, not India, not “Europe,” not the United Nations or any other international organization.

American decline would be marked by a squabbling among other powers; “multipolarity” is a recipe for international competition, not cooperation.

Nor would international economic life be free from such competition. The fundamental fiscal and strategic fact is, flatlining defense does little to address the fiscal crisis we face but does jeopardize the very peace and stability needed to regain our economic footing.

In other words our government should cut and gut everything else so that we have more money available to wage more fucking wars.

That is the most perverted notion of resolving our debt crisis I have ever heard. That is not even smoke and mirrors. That is simply blowing smoke up a dead horses ass and we are all expected to be so damn stupid as to buy all this crap! 

The GOP seems to insist they captured the House because they promised to fix the "deficit crisis" and everyone else is still wondering why they think that. Everyone  that is except the apparently clueless Beltway press.

Even people that should know better are joining in on the hand wringing turned hair pulling over how much spending needs to be cut to solve the "deficit crisis." The place to start is, for some reason, in the smallest sector of the budget, programs on which the American people mostly like their tax dollars being spent.

This deficit socialist spending witch hunt is happening, even when more sober economists have repeatedly reassured the public that there is no deficit crisis, at least not one that needs solving right this very minute. We've incurred and retired debt before, and the only reason it seems we can't do that now is, well, not defined. It's not defined because the definition would include the fact that the rich don't want to pay in any part for retiring the debt, now or in the future. So the deficit and debt are to be settled on the backs of the unrich.

There is, instead of a "deficit crisis," an economic crisis. The unrich don't have jobs and those they get pay squat. So the unrich have no hope of retiring the debt without giving up every benefit they get from government and then some. Solving the "deficit crisis" by starving the working class has no hope of solving the economic crisis. It will make it worse. And since a worsening economic crisis will reduce revenues it will make the "deficit crisis" worse. Only solving the economic crisis will fix the deficit in the long run.

In the largest bait and switch of our political history, Republicans were elected in some precarious hope that they would create jobs and fix the economy, as it appeared the Democrats couldn't get that done. Instead of focusing on jobs and the economy, Republicans have tried to reframe what ails the economy as deficit spending. They have, despite the seeming illogic of the claim that deficit spending intended to boost the economy is hurting the economy, succeeded. As Paul Ryan, chair of the House Budget Committee, has recently had the temerity to put it, "We don't have a tax problem, we have a spending problem." This after renewing the fruitless Bush tax cuts in December.

There's no point in discussing why Republicans have engaged herculean amounts of money and spin doctoring to deceive the public -- you know why. Deficits are, quite cravenly, being exploited by Republicans to justify the shrinkage of government, in every state and on Capitol Hill. From union busting in Wisconsin, Ohio, Indiana and Michigan to the 2011 government shutdown theater and upcoming debt limit and 2012 budget fight, everything Republicans are doing is intended to give the appearance that government is useless to everyone. It may then be drowned in the David Koch's bathtub.

Economics doesn't change. Economic and tax policies change, and not always for the better with regard to the deficit or the economy. The deficit grew out of very easily understood choices made over the last 30 years and last 10 years in particular. The deficit will be be reduced and the debt retired if prudent long term choices are made and every economist knows what those choices are. They are to reign in health care profiteering, reduce the trade deficit, re-inflate the tax base with jobs, cut defense spending and tax the rich another 5%. There is no "deficit crisis." There is a crisis of spin, spin for which the network media is thanking their greedy yellow journalism god, William Randolph Hearst.

The open question is why, even in knowledge of these facts, Democrats and President Obama are validating the Republicans "deficit crisis" framing.

Recall that even when the Democrats held both Houses of Congress and the White House they could do little to nothing about the Great Recession. They were denied any true New Deal remedies by the Republicans and a handful of Blue Dog Senators. True, Obama did not lead, he mediated, as he does now. He is Mediator in Chief, to the disappointment and detriment of the country. But that's what he ran as, with an apparently unjustified dash of hope. Yes we can --- if they let us.

Now faced with a House of Representatives that will absolutely block any hint of progressive legislation, Obama and the Democrats have a different problem altogether. That problem is to keep the more far right than McCarthy/John Birch Tea Party Republicans from utterly destroying the nation, fiscally, economically and in international standing.

What will stop the far right conservatives from wreaking more ideological havoc on the country is to get them out of office. Nothing else will make a difference, no argument, no influence and not even public outcry. They pursue a trickle down ideology that has been proven invalid in real application, twice. Now they want to try it again, as if an even more severe incarnation of their impoverished Ayn Randian thought on economies will make it work this time.

To the end of defeating the Tea Party conservatives, it now seems the Democrats and Obama have accepted the GOP framing of the "deficit crisis" because they think they can win with it in 2012. Issue polling is on the Democrat's side. It is a wild horse to chose to ride.

While the polls show support for cutting the deficit as a generic issue, on specifics the public strongly supports progressive positions. To cut spending is one thing and what to cut is altogether different. It literally pits corporate lobbyists against the public in a high profile network media covered debate, Social Security and Medicare against oil subsidies, the DOD, free trade and CEO bonuses. The Democrats have said, "Alright then, let's talk about cutting spending." There's no principle involved -- it's pure unadulterated politics. That politics is bred on the certainty that the public must be led to water before they realize they are thirsty.

When you hear the President and congressmen acknowledge a deficit problem, it's in order to give the GOP enough rope to hang themselves. Paul Ryan's Path to Prosperity is exhibit A. It's a plan that takes every dime of deficit reduction out of the pockets of working people, seniors and children, and then doesn't even reduce the deficit by that much. It takes cost cuts for government and gives them to the rich in tax cuts. It's trickle down on steroids that Ryan somehow supposes will reduce unemployment to 2.5% in spite of the fact that no tax cut for the already wealthy has ever created jobs.

So too, the exhibit of the GOP House going to the mat in a fight to destroy Planned Parenthood, the EPA and NPR paints a bright crimson line of ideological demarcation. When Democrats then say lets be reasonable, it does sound really reasonable.

The press, bless their little sensationalist hearts, are playing right into the soap opera, giving the right wing drama queens like Bachmann, Palin, Pence, Paul and Ryan all the air time they want in which to expound their vitriol against the poor and working class. Against this as a backdrop, even Blue Dog Democrats look like heroes of the working class.

The dangers in this acquiescence to the GOP deficit framing are many. If the confrontation goes on too long the public, already sick to death of seemingly pointless government bickering, may just stay home in 2012 and not vote. The public might begin to buy into the idea that there is a "deficit crisis" and that it is somehow causing the economic crisis. Progressives may mount a third party or primary challenges to moderate Democrats and the President., diluting the left wing vote. Most serious is that Obama might implement the entire GOP agenda himself in a miscalculated effort to appear reasonable. The content of his upcoming deficit reduction plan will tell that tale. These are all serious consequences, but none as serious as letting the GOP get away with a fourth trickle down decade.

Why progressives need to think beyond the mantra of creating a "middle class America." : April 9, 2011

In an era of insecurity, we all want security.
We want a decent home to call our own, healthcare to heal us when we are sick or old, education to improve our minds and job prospects, healthy food and clean water to nourish us, income to provide for all our needs and even some affordable luxuries, a career to give us social status and a sense of self-worth, and a pension for our golden years.
These seemingly universal desires define the post-WWII American Dream, and are still the reference point for both left and right. The “Golden Age of American Capitalism” from the mid-1940s to the early 1970s is commonly seen as the triumph of the middle class, a time when the fruits of a robust capitalist economy extended to tens of millions.
But today we are trapped in the fault lines of a violent global economy, and these dreams seem as archaic as waking up at dawn with the grandparents, children and cousins to milk cows, bake pies and plow fields.
However outdated the American Dream, organized labor and liberals desperately cling to it as they retreat in the face of the Republican and corporate blitzkrieg. In this war, the battlefield is social spending and the public sector, and for the losing side the situation is dire. (The critique that follows is not of the rank and file or all unions, but rather the dominant tendencies among many labor leaders and large national unions.)
For Mother Jones, it’s an “Attack on the middle class. Jim Hightower describes it as “the corporate-GOP attack on the middle class.” AFL-CIO President Richard Trumka says, “It is our job to channel this Midwest uprising, this populist outcry into the large-scale creation of good jobs that can resuscitate America’s middle class, America’s people and our economy.”AFSCME President Gerald McEntee, referring to Ohio legislation that strips public workers of collective bargaining rights, called it “a reprehensible attack on the middle class.” According to 9to5, the National Association of Working Women, Gov. Scott Walker is trying to “deny the American Dream to the vast majority of Wisconsinites.”
Really? The contention that the middle class is suddenly under attack – and by implication should be defended – is thoroughly flawed. For one, this trend goes back more than 30 years to the savaging of private-sector unionism and the social welfare state combined with deregulation, reloaded militarism and tax breaks for the rich. The current attack on public-sector unions and the remnants of welfare is just the latest stage.
Additionally, the attack on the public sector is by not an attack on the middle class as a whole. After all, the Tea Party movement, the right’s shock troops, is solidly middle class.
In their mind, we live in a capitalist meritocracy where everyone should be subject to the same chaotic, contingent and uncertain market forces. Its ideals are captured in the saying “Equality of opportunity does not guarantee equality of outcome.” The right rejects public-sector jobs that guarantee incomes, benefits, tenure and pensions because they violate the market, the wellspring of freedom and liberty.
No doubt this right-wing ideology is warmed-over Social Darwinism, hypocritical and would lead right back to the savage boom-and-bust cycles of the Robber Baron era and Dickensian England. (The Tea Party is generally quiet on the subject of the mortgage-interest deduction for homeowners that will cost the government an estimated $131 billion in 2012.)
Nonetheless, the tens of millions of Americans embrace individualism are a very real force that is flexing its political muscle right now. Additionally, in terms of analyzing who is the middle class, it is much more those entrepreneurs, supervisors, managers, realtors, small-business owners and self-employed plumbers, carpenters, cooks, doctors, lawyers, accountants, financial planners and myriad other professions found in the Tea Party and the Republican Party than blue-collar workers and public-sector employees who lack control over their work.
The post-World War II ideal makes liberals like Paul Krugman mush-brained. He writes in The Conscience of a Liberal: “The political and economic environment of my youth stands revealed as a paradise lost, an exceptional episode in our nation’s history.” Krugman gets downright loopy when reminiscing about postwar America: “It was a society without extremes of wealth or poverty, a society of broadly shared prosperity.” Apparently there were no Rockefellers or Mississippi sharecroppers in his day.
It’s only time and a decayed vision that makes 1950s America seem like paradise. To be sure, the working class benefited from rising productivity with rising wages, incomes rose across the board, many African-Americans landed good-paying factory jobs and social welfare expanded under Lyndon Johnson’s Great Society.
Yet the 1960s youth and counterculture rebellions were precisely in reaction to the banality of the middle class. The New Left critiqued a society where basic material needs seem to have been satisfied by American capitalism, European social democracy and the Soviet’s “bureaucratic collectivism,” but work was alienating, racism institutionalized, community nonexistent, sexual mores repressive, and daily life atomizing, meaningless and suffocating.
Youth also revolted against the foundation of the middle-class lifestyle: the warfare state that spawned the terror of imminent nuclear war and U.S.-backed assassinations, coups, dictators and wars in the developing world that forced down the cost of commodities – copper from Chile, bananas from Guatemala, sugar from Cuba, oil from Iran, rubber from Indonesia and tin from Bolivia – so as to subsidize American businesses and the middle class. (Or to use a blunt term often employed in colonial studies, the United States was engaged in plunder.)
Liberals conveniently forget that the unions which gave birth to middle class were a full partner in the Cold War. The AFL-CIO worked with the CIA through the American Institute for Free Labor Development to destroy independent labor movements in the Third World.
Organized labor has mostly left behind this sordid past, though it did play a role in the 2002 coup against Hugo Chavez’s government in Venezuela. Plus, it remains reluctant to confront the military-security state that consumes about $1 trillion in public spending even as public sector unions scrap for a few more pennies.
Perhaps U.S. labor leaders realize the Pentagon, with its thousand-odd overseas bases, still serves a useful role in ordering the world. After all, today’s middle class benefits as much as ever from depressed wages and commodity prices in the developing world that keep low-cost consumer goods streaming from factory to port to big box to McMansion.
By the 1960s the promise of prosperity for all, which defenders of the middle class today harken back to, seemed within reach. Yet the consciousness of workers as workers was being sapped by consumption. No longer was the goal to transform social relations and bring forth the “New Man” (and Woman), it was to get a new Pontiac, an in-ground pool, a bigger house, a color television. When we identify as consumers, it leaves little space for workplace solidarity or worker identity. Today, it is almost impossible to find working-class culture or life beyond the market and corporate media.
Ultimately, the concept of the middle class is inherently anti-political. It is defined by consumption: a mortgage, multiple cars, stylish clothes, furniture and electronics, and affordable luxuries. We can’t have a yacht, but we can go on an annual cruise. We can’t buy a villa in Tuscany, but we can holiday in one. We can’t afford a private chef, but we can visit Le Bernadin on a special occasion. Many luxury goods makers – from Prada and LVMH to Mercedes Benz and Tiffany – have even aggressively expanded their businesses by creating lines of downscale luxuries for the middle class.
When we struggle for better wages and benefits and more social welfare, what is the goal?
The changed landscape – politically, economically, socially, ecologically – should be enough evidence that we can’t recreate a moment from 80 years in the past. If it’s for a growing middle class, we’ve been there, done that and failed miserably. What do we say to the more than 2 billion Chinese and Indians who want a middle-class lifestyle? In a time of runaway global warming, fighting for the middle class is like fighting for global ecocide.
When liberals, labor leaders and even some leftists issue a call to the barricades to defend the middle class, they romanticize the postwar boom in other ways.
The social compact between labor and capital was premised on McCarthyism: purging communists socialists and anarchists by the thousands from unions. Labor’s Faustian bargain increased wages and benefits, but it sowed the seeds of its destruction. Without a mass-based anti-capitalist left, labor became the junior partner to capital. Once the social compact outlived its usefulness by the 1970s, capital ditched it, but organized labor is still unable to construct a real alternative. Capital was then free to exploit the low wages and lack of regulation in the Third World that the AFL-CIO had helped maintain. 
Starting with the New Deal, the prevailing political order was corporatist – government brought together major bodies such as labor and business to help them strike mutually beneficial agreements. After World War II, as long as the Bretton Woods financial order prevailed (which put some limits on the flow of finance capital), U.S. corporations were tied to the domestic market and other nation states could not compete with American business, organized labor had the power to extract concessions from corporations.
What changed since then is industrial and merchant capitalists (and foremost financial capital) have largely escaped geography. Sure they need factories, roads, electricity, docks, airports, warehouses and perhaps stores, but their ability to jump from one low-cost region to another means American unions, in their current form, have little leverage over capital.
Yet corporatism was uncritically, and unconsciously, embraced by gooey-eyed liberals and lefties who backed Obama in 2008. A “New” New Deal was based on the fallacy that we could re-create a national capitalism by spending trillions on green jobs and energy. Obama would bring together capital and labor to fund and build the factories that would manufacture electric cars, solar panels, green homes, wind farms, hi-speed rail and a nationwide smart electrical grid.
We would all drive a Prius into the sunrise of a new middle-class prosperity based on hi-tech manufacturing jobs, generous social welfare, skilled and educated workers, and strong unions.
The UAW fell into the corporatist trap after the government took over GM and Chrysler in 2009. With a White House proclaiming, “Fuck the UAW,” it hammered labor in the interest of capital. The result was a contract forced down the throat of autoworkers that cut wages by 50 percent for many new hires and even some existing workers, putting them on par with non-unionized workers in foreign auto plants in the United States. Meanwhile, Obama’s “pay czar,” whose job is to ensure that executives of bailed-out corporations are not excessively rewarded, approved GM CEO Dan Akerson’s $9 million compensation package for 2011.
Moreover, in an age when finance circles the globe continuously seeking any comparative advantage, trying to return to an age of national capital is folly. Just look at GM; its top market is now China, having surpassed sales in the United States in 2010, and these vehicles tend to be built in union-free plants right in China. So much for saving jobs by accepting 50 percent pay cuts.
Similarly, proponents of green jobs say the Obama administration should have used the stimulus along with influence over bailed-out banks to retool defunct auto factories to manufacture windmills, solar arrays, electric batteries, hybrid cars, hi-speed trains and tracks, and electrical infrastructure. Except firms in Spain, Germany, South Korea and most of all China are far more advanced in manufacturing such goods.
Subsidizing U.S. firms that generally lack the technical, manufacturing and skill base to produce these goods would have probably sparked an international trade war because it would have meant blocking sales from foreign firms that are building better products at lower prices.
The free-market ideology is a cover for the Republican and corporate goal of destroying unions so as to destroy the infrastructure of dissent. That is, they want to eliminate organized labor’s ability to organize any sort of resistance or alternative. Yet labor leaders seem unable to grasp the implications of this.
For three decades, labor leaders have accepted market logic of givebacks: the pie is shrinking, we all have to share the pain, givebacks save jobs and help make American business more competitive. But concessions don’t save jobs they only increase profits. Unions have known this for decades, but are unable to formulate an alternative. In 1989 one labor leader told the New York Times, “The whole history of wage concessions since 1979 pretty much proves that they don't preserve jobs.” In a world with capital unbound, many regions have lower wages, fewer benefits, less regulation and higher profits, meaning one round of givebacks leads inexorably to the next.
The same logic is now being applied to the public sector. Wisconsin labor leaders capitulated on all wage and benefit cuts, begging only to save collective bargaining that was then eliminated in short order. If you accept market relations as the natural order and that the role of workers is to make firms more competitive or produce value for them – as we shall see some unions explicitly do – then there are no limits to givebacks.
Indeed, the whole war is based on a simple, brutal principle: capital wants to put the entire cost of social reproduction back on to workers. You should be entirely responsible for housing, food, healthcare, retirement, education, and don’t expect anything from the rest of society. It’s the ownership society, a matter of personal responsibility and if you end up homeless, jobless, penniless, sick, it’s because you were lazy, immoral and failed to take advantage of the opportunities afforded you. And while the plight of the poor may tug at our heartstrings, to redistribute the rightful earnings of disciplined hard-working Americans is to encourage sloth and sin (this is strikingly similar to Thomas Malthus’ argument against giving aid to the poor).
In agreeing to the next round of givebacks, labor accepts and reinforces this logic. Unless unions counter with a powerful idea – such as “labor creates all wealth” – they will remain stuck in a downward spiral. (Not that this idea, the labor theory of value, is unproblematic, but it does possess tremendous ideological, rhetorical and political force in the war with capital.)
The protests from Cairo to Madison have been inspiring, even beautiful. In a revolutionary moment, we realize our desires to be better people, for an ideal community and for a just world. Our utopian ideas take form in new social relations. In Tahrir Square, Egyptian women experienced themselves as human beings with full agency and free from sexual harassment. In Madison, protesters in the Capitol building occupation lauded the camaraderie, peacefulness and collective labor on display there.
In Madison, however, the intoxicating talk of “general strike” has been replaced by recall elections to oust eight Republican state senators. A general strike requires months of education, debate, organizing, community outreach, building internal solidarity, rallies, protests, smaller-scale job actions, producing art and media, forging links with other sectors. Organized labor has the resources in terms of money, staff and infrastructure. There is no guarantee of victory, but it would be a glorious display of the chaos and creativity of democracy, and it would build a larger and more militant labor movement.
A recall election, on the other hand, is authoritarian politics run by Democratic Party honchos, wealthy donors and liberal elite (such as with their hired guns: lawyers, consultants and pollsters, They need unions, but only as a cash machine and for battalions of obedient foot soldiers to gather signatures, attend campaign rallies, phone bank, get out the vote and spread messaging decreed from above.
Already the energy of a general strike has been overshadowed by a topsy-turvy race for the Wisconsin Supreme Court. Instead of spending months debating ideas and strategy, building consciousness and power, Wisconsin’s labor movement will be sidelined as opposing lawyers tangle over legal technicalities before robed judges. Even if all eight Republican State Senators are recalled next year, that only means labor’s fortunes rest once again on a Democratic Party that has betrayed labor more times than Charlie Sheen hits the crack pipe during a three-day orgy.
This is symptomatic of labor’s deeper malaise in which it can’t see beyond the market, the middle class and electoral politics. By some estimates, in the last two election cycles, organized labor poured more than half-a-billion dollars into the Democratic Party with disastrous results.
What if organized labor had poured one or two hundred million dollars into organizing the unemployed? This could have created a mass popular force on the left, but its politics might have been more radical than middle-class conformism. That’s because we have entered the jobless future. The market cannot provide for the 25-30 million Americans who are unemployed or underemployed. The high level of unemployment is not an effect of the crisis, but a goal because it allows capital to force down wages and slash any and all benefits.
And that has been the goal for decades. Alan Budd, an economic advisor to Margaret Thatcher, once explained that “in Marxist terms” higher unemployment was “an extremely desirable way of reducing the strength of the working classes … which re-created a reserve army of labor and has allowed the capitalists to make high profits ever since.”
This crisis of capitalism requires a radically different solution than labor serving as an abused underling to capital. For labor leaders, perhaps the real stumbling block to organizing the unemployed is they don’t pay dues, which provides the leaders with their salaries and power.
The exchange of dues for services raises a profound contradiction at the heart of organized labor. It is perhaps no surprise that a movement which tries to accommodate itself to capital – by serving as a compliant junior partner, by adopting a middle-class mentality, by subsuming its interests to those of a party ruled by Wall Street – has taken on the shape and relations of a capitalist enterprise.
In a thought-provoking paper from 1990, labor educator Frank Annunziato argues that the problem is unions are like corporations insofar as they produce commodities, which he terms “commodity unionism”:
“Contemporary American unions … have evolved into producers and distributors of a peculiar commodity which is called “union representation.” This commodity is produced by paid staff members and elected or appointed union officials. The use-value of the commodity “union representation” is marketed and sold to potential and actual union members. If workers decide to purchase, they do so in the form of union dues, fees, and assessments, which represent the commodity’s exchange-value. Through the act of becoming union members, workers, at the same time, continue their societal roles as consumers of commodities produced by others.”

The “commodity” of union representation is made up of services like negotiating for better wages, healthcare, retirement plans and grievances. Because the legal and economic structure of unions is to deliver services in exchange for dues, workers expect the best possible commodity for their money, contends Annunziato. In this way, workers become consumers not just in society but within the union. Consciousness as a social agent in opposition to capital is considered superfluous or even counter-productive by union leaders and staff who appropriate the dues.
One result is that over decades, many unions have shrank or eliminated internal education and downsized the number and role of shop stewards, who are on the front line fighting against arbitrary management practices, conducting political education among the rank and file, and mobilizing them for various campaigns from elections to strikes.
One union that critics say has adopted the form and function of a corporate enterprise is the 2.2-million-member Service Employees International Union, for which the notion of a working class appears passé. In 2007, then SEIU President Andy Stern told the Wall Street Journal “we try to be partners with our employers … and understand their competitive issues and try to add value, not create problems.”And, “We want to find a 21st century new model … that is less focused on individual grievances, more focused on industry needs. 
A few years ago, SEIU embarked on an expensive and so far disastrous effort to use call centers where “grievance representatives” replaced much of the work of stewards. It is part of SEIU’s strategy of creating huge centralized locals that can pool resources and cut costs, but which is also aimed at suppressing rank-and-file democracy. Combined with its tendency to cooperate with employers, SEIU has become hard to distinguish from a corporation. (An excellent account of the SEIU strategy, turmoil within the labor movement and other paths for organizing is Steve Early’s book, The Civil Wars in U.S. Labor.)
One final note. Labor long ago abandoned the poor. In today’s political discourse the poor are largely invisible. If labor is not acting out of real solidarity by fighting vigorously for everyone who is dispossessed, then different social groups will be demonized and pushed into low-wage work that can supplant union jobs. This happened with “welfare reform” under President Bill Clinton, with thousands of welfare recipients forced to take low-wage jobs that were previously decent-paying union jobs with benefits. And this is a major factor behind the vanishing private and now public sector unionism, particularly the betrayal of international solidarity starting with the Cold War.
In Wisconsin, many labor leaders framed the struggle as about collective bargaining for public servants – the path to the middle class – rather than trying to build an alliance of single mothers, the poor, immigrants, the elderly and the wide range of groups on the chopping block.
After decades of being battered, it’s tempting to say our options are limited by historical forces. Except the electrifying revolutions and uprisings in the Middle East, North Africa, Wisconsin and elsewhere shows that we have historical agency. That means making carefully thought-out political choices, and a good place to start is by rejecting the middle-class opiate of consumption for the human ideal of liberation.

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