They got bailed out, we got sold out!
La Voz- Bay Area*:
*This newsletter is put out by La Voz and other Bay Area socialists.
The world economic meltdown that started in 2008 has cost the American working class a lot of money: a total of $9.2 trillions of public money through the bailouts, of which $4.79 trillion went directly to Wall Street corporations.
In the meantime, more than 25 million Americans are unemployed (or cannot find a full time job), 11 million homeowners have been foreclosed and there are still 20 million with under water mortgages, while the government is implementing $4 trillions more in cuts for the 99% and tax breaks for the rich.
The massive bailouts to the financial corporations have left public institutions on the edge of bankruptcy (like it is the case of Greece), as they have generated a massive increase of the public debt of the Federal Reserve and Treasury.
In order to be able to have money to bailout the corporations, the government needed to “borrow” money from somewhere and also to cut expenses (so they are able to “pay back” to the banks the money that they borrowed).
But the current rhetoric of the “austerity plans” is an hypocrisy: the 1% has recuperated and is making profits, while the 99%, i.e. working people, is suffering the consequences of the crisis and of those political choices, that are presented as a “necessity”.
Who benefited from the bailouts?
We can surely call the bailouts “The Big Robbery” of working people, as they constitute the biggest transfer of wealth in history from a public institution to private corporations.
Even though Obama tried to make us believe that the bailout will “save America” from a total collapse, it only “saved” a tiny minority of Americans at the expense of the majority.
Working America, the 99% who generates the wealth and profits of the US corporations, was forced to rescue without consultation the “Corporate America”, the 1% who does not work, but owns the corporations and banks and keeps the profits.
The secondary effects of the bailouts are triggered now: they opened the door for a necessary debt crisis and therefore for a second assault: a new round of “justified” cuts to public social services, which the State cannot “afford” anymore.
The Budget Control Act of 2011, implemented on August 2nd 2011, besides immediately raising the debt ceiling by an additional $400 million and potentially by $1.4 trillion more to avoid bankruptcy, had a strong deficit reduction component aimed at cutting public expenses and social services.
Who is paying for the crisis?
The Obama government and the two big parties share a common understanding on who is supposed to pay for this crisis: working people in the US and abroad, that is to say the 99%. This is why they present the bailouts and the austerity measures as the only and necessary solutions for this crisis.
But the price working people are paying is not limited to the bailouts. We have been the ones who are being directly impacted by the economic crisis itself: through massive foreclosures, debt increases, rising unemployment and pay and benefits cuts.
And now, on top of that, we are facing an additional blow: the attack to public services and public sector workers, the most highly unionized sector of the working class that has been able to maintain living wages for its members and a relatively high unionization rate (35%) compared with the private sector (8%), which has seen a corresponding decrease in wages and benefits .
|The New Austerity Measures of the Obama Administration: $4 trillion cuts
2011: $900 billions in cuts, of which:
– $946 million cuts from construction and repairs of federal buildings
– $1 billion cuts from prevention of AIDS, tuberculosis and other diseases
– $1.6 billion cuts from Environmental Protection Agency for clean and safe drinking water projects
– $1.5 billion cuts from the high-speed rail grants
– $350 million cuts from the Labor Department programs
– $500 millions cuts from food aid to poor mothers and their infants
– $600 million from community health centers
2011-2021: $ 2.8 trillions of additional cuts
Here in California, the Brown administration has announced a new round of cuts (on top of the ones that have been yearly implemented since 2008). The last cuts announced by the Brown administration are going to achieve, among other things, the continued dismantling of public education system (Pre-K – 16) while simultaneously degrading a health care system and social safety net that is already one of the worst in the country. We must stop them now!
|The Bipartisan cuts to social services in California 2008-2012
· $18.4 billions in cuts to public education
· $4.6 billions in cuts to SSI/SSP programs (for assistance to seniors and people with disabilities)
· $3.5 billions in cuts to CALWORKS (assistance to low-income families with children)
· $2.7 billions cuts to Medi-Cal
· $1.6 billions cuts to subsidized childcare
The “Arguments” and Strategy of the 1%
Who controls the Obama administration and the bipartisan system?
If it is true that the financial corporations generated a speculation bubble that burst into the current crisis, we must not forget that the real crisis- the one the workers are facing- was created by the government in collaboration with the corporations. The Obama administration chose to bailout the banks and the big industrial corporations. Both Democrats and Republicans are allied in the austerity plans to cut social services at the state and federal level.
The actions of the government and the different state legislatures since the beginning of the crisis show big contradictions between what our elected representatives say (that they represent the “American people” and “Main Street”, in the case of the Democrats) and what they do when they are in office.
The class character of the bailouts and the austerity measures is evident to many working people. Unfortunately, the majority of workers still believe that this is not the real program of the Obama government. Though it becomes increasingly evident in their actions, the majority still believes the Democratic Party is not the party of Wall Street and the big corporations.
Why? It’s because the two main parties (i.e. Democratic and Republican), the corporate media, many non-profit organizations, and union leaders want people to believe that Obama or the Democrats have been “cornered” by the “greedy corporations”. Furthermore, they push the reasoning that “their hands are tied” by the Republican Party. Their reasoning – that is the Democratic Party’s- is that Obama (and/or the Democrats) would like to raise taxes and really fight unemployment but “the Republicans do not let them”.
The truth is that Wall Street corporations heavily financed the electoral campaigns of both parties, as the rest of the corporate sectors did: there is no doubt therefore that they will control the newly elected government. The Republican rhetoric on taxation and union busting is based on lies, but at least it is very open about the class interests it represents. The Democratic Party has always had an opportunist (i.e. scheming) position on political economy: they tail and benefit from the Republicans’ public political offensive, to end up implementing the same policies. Indeed, for the last 30 years both parties have championed the application of deregulation policies to the financial system and tax breaks to the rich, as the Obama extension of Bush’s tax cuts shows.
The corporations’ threat of outsourcing abroad
Both the Republican and Democratic parties say that if more taxes are put on corporations, and if wages and benefits are kept the same or increase, corporations will go bankrupt or be forced to leave the country and tens of thousands of jobs will be lost.
This is only true if one accepts that corporations have the right to make profits without being subject to the control of working people and society at large. It is not a fatality- it is a political choice. Corporations must be forced to pay to ensure public and adequate social services and living wages for all. If not, we will not let them make profit.
The truth is that corporations have been constantly increasing their profits through the deregulation measures implemented in the last 30 years of neoliberalism by the bipartisan system. They have also been benefiting by not paying the taxes they owe to the State: “Between 2008-2010, 12 major corporations paid an effective tax rate ofnegative 1.5 percent, actually making billions of dollars off of the government through tax subsidies on top of their $171 billion in profits.”
Furthermore: “In 2010, U.S. corporations avoided approximately $60 billion in U.S. corporate income taxes by using a variety of devices and gimmicks to shift profits to foreign subsidiaries, while the Fortune 100 companies received some $89.6 billion in federal contracts .”
A government that really represents working people will force the corporations to pay or nationalize them and prosecute their CEOs, as the IRS prosecutes working people.
The myth of trickle-down economics
The bipartisan system wants us to believe that if we don’t tax rich people, their wealth will “trickle down” to working people through their active participation in the economy. This has been proven factually wrong. Rich people have indeed accumulated an unprecedented wealth in the last neoliberal period: today, the top .001% of the U.S. population owns 976 times more than the entire bottom 90% . They have chosen to invest their accumulated capital not in the productive sectors of the economy, but in the riskier sectors of the financial system, mostly buying collateral debt of subprime loans and causing the financial meltdowns.
What next for the Occupy Movement?
Let’s build the Occupy movement with a working class perspective!
The strength and limitations of the 99% rhetoric
The Occupy movement has helped shift the political discussion and reminded us all that there are actually 2 Americas: one for the top 1% of our society, who makes all the decisions and accrues all the benefits, and the other 99% (the rest of us) who pay the price of their largess in the form of low wages, cuts to social services and health care. Many working people believe in the myth of the “middle class”, that is to say, those that are able to miraculously escape class struggle and the conditions of exploitation. The current crisis shows that the middle class shares its fate with the rest of the working class.
The 99% rhetoric has been successful in potentially uniting the vast working class that is divided across racial and gender lines, but also across different professions- with different salaries, levels of organization, and of course, different levels of consciousness. If we are the 99% (and we are!) does that 99% include immigrants who do not have documentation? Does the 99% include Muslims and Arabs? Does the 99% include the LGBT community? Does the 99% include our working class brothers and sisters locked away in America’s vast prison system? The Marxists’ answer is an unequivocal “Yes!” and unless the Occupy movement is clear on these questions, the 1% we oppose will always be able to divide us and keep us from building a movement united to defend our interests.
The Occupy movement has the potential to go beyond the traditional liberal rhetoric that focuses only on “the negative effects of Prop. 13” and on inequality of income and distribution of wealth (i.e. spreading the rhetoric of “fair share”). It can address the real core issue: how value gets generated under capitalism and who keeps it. This is not just a crisis of “bad management” or “irresponsible businessmen and politicians”, nor is it a crisis confined to the financial sphere and the banks.
Capitalism is not a “zero-sum” game. There is not a fix amount of wealth out there to be distributed, there is a relation of production, that under capitalism, condemns the working class to sell its labor power for an hourly rate to survive, and allows the capitalist class to keep the wealth created by the work of the 99%.
The liberal rhetoric does everything to avoid getting at the core class contradictions inherent to capitalism– that is to say to mention exploitation and oppression as evils of the system we need to eradicate.
In fact, the system cannot be simply “fixed”, because it is not just about reshuffling the wealth around, it is about challenging the relations of production and of political power. Capitalism is a system of production for profit, it is a system that puts profit before people. This is the real engine of the system and there lies its major contradiction.
The Occupy movement will soon be confronted with that same contradiction: the fact that the 99% creates the wealth the 1% has. The reality is that some who belong to the 99% represent the interest of the 1% (like the police, the judges, the senior managers etc), so the class interest of the 99% needs to be clarified and made public as soon as possible- for example, through clear demands that challenge the profits and power of the 1% and the politicians that rule for them.
Capitalism and its crises cannot be fixed. On the one hand, economic crises are not an accident; they are embedded in the functioning of the capitalist system in the race of the 1% for increased profits. On the other hand, “fixing” the problems means different things for different sectors of society as long as the current class contradictions continue to be reproduced. The only way of “fixing” the system for the 99% is to dismantle capitalism and overcome it with another system of production- one to fit our needs, that is not for profit, and that will have new social relations among human beings: a new and democratic form of socialism!
Our solutions to fight back the crisis:
- Nationalization under public oversight of all banks and corporations that received public money
- Expropriation of all foreclosed homes that now belong to the banks for public housing use
- Prohibition of making layoffs for the companies earning profits,
- A real federal plan of public works to combat unemployment and rebuild infrastructure
- A Free and universal single-payer health-care system for all
- End to all wars abroad to refund and expand public services
- Equal rights for all the oppressed sectors of the 99%: full citizenship for immigrant workers, equal rights for the LGBTQ community
The Growth of the Occupy Movement in California
The Occupy movement has swept across the country over the last month and has been a “shot in the arm” to activists looking to find an alternative to budget cuts and fiscal austerity. This summer the discussion was dominated by Democrats and Republicans arguing over whether the Federal budget should be cut by $43 billion or by $39 billion. The idea of no cuts at all or that taxes should be raised on the rich and corporations was nowhere to be found in either political party.
The Occupy movement has helped shift the political discussion and reminded us all that there are actually two Americas (1%-99%) with opposed interests. It has also been an important rallying point for revitalizing the left and resuscitating the fight against austerity both in the student movement and within labor.
Finally, the Occupy movement has been fiercely attacked and raided these past two months. In the East Bay Area, the Occupy Oakland encampment was raided on October 25th and later on Nov 8th; Occupy Cal was raided on Nov 9th. Occupy WallSt was raided on Nov 14th and now occupations at UCLA and UC Davis have been raided and students have been beaten and pepper sprayed. In general, city and campus administrations have ordered the encampments to be destroyed and have brutalized the occupiers along with their allies.
The news have highlighted the many who have been hit by rubber bullets, sprayed with tear gas, or beaten with police batons. This repression has shown that -in fact- the state or the campus administrations are not institutions for the 99%, but for the interests of the 1%.
These attacks on our free speech come after some of the biggest Occupy mobilizations of the year. First, the November 2nd “General Strike”, that brought out more than 30,000 youth and workers and paralyzed the Oakland City Port. Second, the OccupyCal Nov 9th protest of 3000 students and workers and encampment, and the Nov 17th mass mobilization to shut down the New York Stock Exchange.
For the moment, the repression has mostly helped galvanize the movement (and the Bay Area) in defense of both occupations. The work action at the ports of Oakland on November 2nd and the UC Berkeley Walkout of November 9th (with many classes cancelled) highlight the willingness of a growing section of the working class to utilize more militant tools in opposition to the capitalist class (the 1%): the withholding of our labor and the paralysis of our work sites and campuses.
OccupyCal adopts demands and a call for Action
OccupyCal (UC Berkeley) made a huge step forward on Nov. 15th, when a historical General Assembly of more than 2000 people adopted a set of clear demands and a call for action if the demands are not met:
● Stop cuts to public education. Reverse the fee hikes, layoffs, and cuts in all levels of public education to at least their 2009 levels.
● Refund education and public services by taxing the rich and the corporations.
● Fully implement affirmative action to stop the re-segregation of public education. Overturn Proposition 209.
● Respect free speech and free assembly. No use of force against protesters on school sites.
As the occupations extend from days to weeks and now months, the need for clear demands has become evident for the occupation movement. It is necessary to articulate what we stand for in order to have a chance of surviving as a political force beyond the holidays and, most importantly, to last through the elections of November 2012.
While political repression may have provided an organizing focus to the Occupy movement in defense of Occupy sites, it has also had the effect of isolating the movement from its 99% base and moving the focus of Occupy away from the greed and excess of the 1% and into maintaining Occupy sites. This is a political challenge that cannot be overcome without Occupy beginning to take up concrete demands. The OccupyCal assembly has started the effort to synthesize demands that unite the Occupy movement and the campus constituents of the public education institutions. Let’s expand and publicize it!
The process of coming up with demands at OccupyCal has shown that the Occupy movement is able to go beyond the rhetorical affirmation of our majority and can become an open space for political discussions on the issues that affect the working class and the oppressed communities. Demands, far from being a limitation to the political force or shape of the movement, help organize and mobilize our movement around concrete goals.
Furthermore, as people’s attention increasingly gets drawn to the elections in November 2012, forces involved in the occupations will become more vulnerable to the 2012 election messaging- that is unless we can begin to articulate a set of demands that fuel the occupations and prevent their co-optation.
For instance, Occupy could demand an increase in the tax rate on the top 1% wage earners, adopt demands regarding the nationalization of banks, and the expropriation of foreclosed homes to mobilize the entire community in action, like it did for the Nov. 2nd “General Strike” and other actions. Similarly, if Jerry Brown’s trigger cuts impose additional furlough days on public education workers, educators, parents and students could occupy the School Boards and demand that they do not impose the furlough days. These sorts of actions that are linked to concrete demands will help deepen the Occupy movement’s base among workers and students.
The Occupy movement can become a social force that can give a concrete expression to the general idea of “we will not pay for their crisis”. This can polarize and make increasingly clear the opposite interests of the 99% and the 1% and can pressure union leaderships to stop accepting concessions and to rely on the social power of the vast majority, the 99%, to fight back the attacks.
Some will say that there is a danger in raising demands because they fear that the movement will demobilize once they are met. Nevertheless, we say, if our demands are met, we will bring new ones until all our needs are met. For socialists that means continuing this fight well beyond taxing the rich or stopping the budget cuts and until we end the system that is at the root of all these problems: capitalism.
Let’s spread and organize for a strike and day of action early in the Spring of 2012
While Nov. 2nd did not rise to the level of an organized General Strike by workers in Oakland, the fact that the term was given such broad use in the media and among activists helped resuscitate strikes as a viable and necessary tool for the working class to fight back.
Now, we need to publicize and organize around the OccupyCal call for a statewide day of action and strikes in the Spring (possibly February 1st or March 1st). This is our chance to use an action to unite all the Occupy Assemblies in California and the public education sectors that have been increasingly active against the cuts. Mobilizing around these actions and demands is a way to maintain and strengthen our bases of power- the different Occupy Assemblies (Cal, Oakland, SF, etc) – and to form base committees in all schools and workplaces to discuss our current problems and demands, and bring them to the Occupy general assemblies.
Build a political alternative to overcome the crisis
This brings us to the second challenge the Occupy movement must contend with, the Democratic Party, the institutions which support it (trade unions, NGOs, liberal organizations) and the bi-partisan system of domination.. While to date Occupy has been explicit in not supporting any candidate running for office, it is clear that the Democratic Party and its broad progressive network of supporters (groups like MoveOn.org and Progressive Democrats of America) see the Occupy movement as a chance to revitalize their political base in the run up to the 2012 election. Democratic officials have been explicit in conceiving of the Occupy movement as the Democratic Party’s version of the Tea Party. Despite activists’ effort to keep Occupy outside the realm of both political parties, unless Occupy poses itself as both a political and organizational alternative to the Democrats, it will see its forces and impact dwindling as the election approaches and as the pressure to vote for the “lesser evil” re-emerges.
Occupy can try to ignore the elections, but its audience will not. Occupy will need to pose an alternative in this year’s election and take political positions in opposition to BOTH Republicans and Democrats (the parties of the 1%) if it is to maintain an independent life over the coming year. Concretely, this means Occupy will have to deal with the question of building a third party (Labor party, The 99% party) in the coming months.
The struggle of the Occupy movement is not only an economic struggle for increased taxation or funding, it is a political struggle to remove the representatives of the 1% from power and replace them with real democratic control from below. As socialists, we see the decisions being made within the General Assemblies of Occupy sites across the country as far more representative of the real interests of students and workers than any government run for the 1%. The Occupy movement offers the promise of not just economic alternatives, but also of political alternatives to the way society is run. Today, the ruling class holds the political strings of the system and controls the State, but if “We are the 99%”, why should we let the 1% control our lives and destroy our future?
For socialists, the promise of Occupy goes beyond the 100s of thousands who have participated in it or the 100s of millions who support its message of outrage at the unfairness of a system that works only for the wealthy and the connected.
For socialists, the Occupy movement provides the basis for building a truly independent and democratic working class movement, a movement that is not dependent on the Democratic Party for deciding what its aims should be or what is possible. The very fact that this movement poses the interests of the 99% of this country against the narrow interests of the top 1% is another opportunity to put forward the simple Marxist principle that the interests of the majority class (the working class) are fundamentally opposite to the interests of the minority class (the capitalist class).
In a nutshell, the Occupy movement provides a clear basis to revive Marxism as the political touchstone for thousands of workers and students across the country. Rebuilding a strong revolutionary socialist current in the United States is not just good for the Occupy movement, but essential for the possibility of overturning the profit system (capitalism) and replacing it with a society based on human need.
 Corporate America Untaxed, The Greenlight Institute, March 2011
 Corporate America Untaxed, The Greenlight Institute, March 2011
 The Nation, June 30, 2008