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One day in late September 2008, the top
representatives of the tiny hereditary U.S. ruling class, the
trillionaires who really run the country and own and control its banks,
insurance companies and major corporations, cloistered in a very
private locale to figure out how to deal with what everyone today
understands is the most catastrophic financial meltdown since the Great
Depression of 1929.
No one knows who was present. There will be
no official transcript released, and accounts of the meeting will likely
wait for historians to dig it out in coming decades from deceased
participants’ archives. When decisions are taken concerning the robbing
of American workers to an extent unprecedented in the nation’s history,
mum’s the word.
But everyone knows who was not present. No
member of the Senate or House, even of their finance committees, was
there. Nor was Bush, Obama, or McCain. Indeed, none of these
"representatives" of "our" government were
consulted. This was a ruling-class affair.
The stakes were too high to allow mere
hirelings to decide anything of substance. And the substance concerned
nothing less than the future of American, if not world, capitalism.
When the decisions had been made, the
Congress and president were properly briefed and duly instructed to set
about the task of engineering a spectacular Potemkin village public
debate designed to convince a wary public that the two-and-half page
proposal they received to grant at least $700 billion to their
ruling-class masters was best for the country.
With the stage dramatically set for the show,
Democrats and Republicans, both accepting the fundamental premises of
the bailout, stammered and stuttered about how or whether to grant
working people a dime’s worth of relief and/or to slap the wrists of bankers
who gave themselves millions and billions in bonuses. They appeared
before microphones to tell the world that agreement had been reached,
adding without specification that provisions were made to help some
foreclosure victims and limit future CEO compensation.
Treasury Secretary Henry Paulson was to be
granted unprecedented power to purchase virtually worthless securities,
bonds, and other financial instruments. Whatever junk the ruling rich
had for sale would be purchased by Czar Paulson at a price that would
only bring smiles to the corporate elite, who couldn’t sell it to
anyone at any price.
It has now became clear that $700 billion was
an initial figure only. Perhaps the final amount this time around will
be $1.2 trillion. Indeed, the fake nationalizations the week before of
Fannie and Freddie to the tune of $200 billion, the bailout/purchase of
Bear Stearns, and the $75 billion to AIG, the nation’s largest and
failed insurer, will add hundreds of billions to the package.
The congressional plebes who are to approve
the final package, protests duly registered and "compromises"
made on both sides of the aisle, always do as they are told, as they
did when they twice granted the ruling elite trillion-dollar tax breaks
under the first Bush regime and an equal amount under Clinton.
It was Clinton, remember, who The New York
Times called "the best friend corporate America ever had."
His last tax break/bailout amounted to $1.3 trillion, while his social
service and welfare cuts exceeded the combined totals of the previous
three Republican administrations. There is only bipartisanship when it
comes to figures of this magnitude, squabbles aside.
It is critical to repeat here what has been
systematically denied by the ruling rich and their corporate media. The
source of the present crisis does not lie in the failure of bad
mortgages, or bad banking practices, or hyper-speculation, sheer
stupidity, or even capitalist greed. It lies in the undeniable fact
that American capitalism is no longer king in the world market place.
In the face of a merciless competition in
which the most sophisticated and technologically advanced corporations
are pitted against each other for ever-shrinking markets, average profit
rates have been on the decline for decades everywhere. The world’s
once-greatest corporations, like GM, now stand in line at Washington’s
"socialism for the rich" trough for their own bailouts. GM,
Ford, Chrysler, and virtually every other major corporation cannot
effectively compete on the world marketplace.
Three or four decades ago, investment in the
sector of the U.S. economy that produces commodities for the U.S. and
world marketplaces, was some 85 percent of available capital. Today it
has fallen to less than 50 percent. The laws of the system compel
today’s robber barons to seek the most profitable investments—which are
less and less available in U.S. industry.
Last year the ongoing "financialization
of capital" process reached a peak, with more than half of GDP
resulting from speculative investments in the stock market, real
estate, and a myriad of bank-driven pyramid-type schemes that created
the fictitious values that are now evaporating.
Nor are the problems of the U.S. economy due
to "bad" decisions by U.S. automakers or other companies.
Instead they can be traced to the inevitable functioning of an economic
system with cyclical booms and busts, and the constant rise and fall of
companies and nations subject to the interactions of a falling rate of
profit, overproduction, and underconsumption.
The titans of industry and their government
have not been asleep at the wheel. They made every effort to remain
profitable. They cut wages, eliminated pensions and health care for
millions, transferred a million jobs a year to low-wage countries, and
employed immigrant workers to work for starvation wages in order to
drive down the wage levels of the entire working class.
The result has been a yearly trillion-dollar
transfer of wealth from us to them, from workers to the
"struggling" ruling-class elite who can’t beat the ever
present, ever threatening international competition. Of course,
capitalists in every other nation face the same dilemma. They subject
their working classes to the same horrors for the same reasons.
There is no way out for the ruling class
other than on our backs. The U.S. is the world’s largest debtor. The
official debt is almost $10 trillion. Add in unsecured obligations to
Social Security, Medicare, and related mandated programs, already
looted to the extreme, and the figure rises to $55 trillion, perhaps
$65 trillion of debt—growing another trillion each year.
A huge proportion of U.S. debt is held by
banks in Europe and Asia. They lend money to the United States in
return for access to the U.S. market. But foreign banks and nations
find themselves holding increasing amounts of ever declining U.S.
dollars.
The U.S. bailout architects asked their
"friends" abroad to help fund the most recent bailout.
Several of their chief spokespersons responded publicly with a
resounding "no!" on Sept. 25 in speeches to the UN General
Assembly. They are caught between two equally catastrophic choices:
bail out the U.S. with additional purchases of bonds whose value falls
in proportion to their confidence in the U.S. economy, or suffer the
consequences of the collapse of what is still the world’s largest
market.
American workers have no interest in
supporting bailouts for their bosses. To turn an old phrase,
"What’s good for GM is bad for American workers." The same is
true for Wall Street trillionaires.
To begin to reverse the crisis, we must
demand the nationalization of the entire banking system under workers’
control. Open the capitalists’ account books so we can determine what
has been stolen, hidden, or squandered at our expense!
Action Program to Fight the Crisis
The liberals propose to tweak the Wall Street
bailout on behalf of "taxpayers" living on "Main
Street." Socialist Action starts instead from the needs of workers
and their power as a class to win their demands.
For that reason our Action Program for this
crisis begins with a call to the existing organizations of the working
class: the trade unions and allied organizations. We call on the
leaders of the AFL-CIO and Change to Win federations, and of
independent unions, to call an Emergency Congress of Labor to draw up a
set of demands and vote on a strategy to win them.
Such a Congress should make sure there is representation
from the most embattled segments of the class: immigrant workers,
oppressed nationalities, women, retirees, the disabled, youth, etc. The
Congress should be open to representatives of immigrant workers'
centers, the NAACP, NOW, and similar organizations.
As contributory steps toward convening a
Congress of Labor, Socialist Action suggests a series of regional and
local public meetings to discuss a platform and activities to counter
the crisis. The organizers of these meetings should encourage
participation by a broad spectrum of groups and individuals
representing labor and their communities.
At these meetings and at a Congress of Labor,
Socialist Action would push for adoption of the following demands:
No to the bailouts!
Not a cent to bail out the bankers!
Nationalize all the banks, and open their account books to workers'
inspection! Make the banks, corporations, and the ruling class pay the
full price of the crisis!
No foreclosures! No forced evictions! Cancel
usurious debt payments! Reduce mortgage payments in proportion to the
capitalist-caused decline in value!
Full employment at union wages!
The crisis is an intertwined catastrophe of
financial and production collapse, as well as soaring inflation and
catastrophic climate change. We therefore call for an emergency public
works program to provide jobs at union wages for all unemployed workers
and for youth entering the job market. Employ people to build the
projects that this country needs: low-cost quality housing for all,
rebuilding the inner cities, efficient mass transportation, cheap and
renewable sources of power, schools, parks, and health-care facilities.
These public works can be paid for by
eliminating all spending on war and military appropriations. No money
for war! Bring all the troops home now from Iraq and any other country
where they're stationed! Take the profit out of warmaking: a 100% tax
on the profits of war industries! Convert the war industries to
manufacturing products for people’s needs; we need more passenger
trains and buses, not tanks! For a 100 % tax on incomes over one
million dollars!
Jobs for all at top union wages! Reduce the
workweek to 30 hours with no cut in pay, and cut the retirement age to
55! Unemployment insurance at the level of union wages and benefits!
Restore and guarantee all pensions! For a real Social Security system
that pays pensions at union wage levels, with free quality health care!
Eliminate private health insurers and
providers; merge Medicare and Medicaid into a free, universal, and
public health system that covers all needed services!
To combat inflation, we call for a sliding
scale of wages and pensions that fully matches the Consumer Price Index
(including food and energy, left out of the official CPI). It must be
monitored by workers' and consumers' committees, which could inspect
and if need be take over companies claiming they can't survive under
the new wage schedule.
Full pay and benefits for workers on
maternity leave! Immediate citizenship for all undocumented workers!
Workers' committees must mobilize in their defense, as the bosses will
try to use immigrants' legal status to divide us to divert attention
from the crisis.
Workers’ control of basic industries
We demand workers’ control of the corporations
in manufacturing and mining, energy, and transportation. We call for
election of committees of workers to run these industries.
The agribusiness and energy monopolies must
be nationalized as a first step to dealing with inflation. The transportation
industry—including auto, bus, and rail manufacturers, as well as
railroad and subway lines—must be nationalized to begin reorganizing
the economy in a way that can reduce carbon emissions sufficiently to
save the planet.
Workers must declare a Climate Emergency,
which justifies our inspection and control over the financial, food,
energy, and transportation industries!
Working-class action committees
To mobilize support for the demands it
adopts, the Congress should organize committees in every workplace
threatened by the crisis, and in every neighborhood threatened by
foreclosures and evictions—as well as in the Gulf Coast and urban areas
destroyed by
"natural" disasters and decades of discrimination.
These committees can draw up more concrete demands to supplement the
above.
Workers searching for information on the fate
of their mortgages, pension funds, 401ks, health benefits, education
debt, etc.—indeed their very paychecks—will respond eagerly to an
opportunity to meet and share information and to demand the right to
see the books of all companies holding direct stakes in the funds
affecting the above, as well as institutions holding the financial
instruments based on them.
Committees can be formed in neighborhoods
facing high rates of foreclosure and eviction to demand access to the
books of banks and real estate companies causing their misery. These
committees could also organize mass action to stop evictions and
foreclosures.
Replace the Federal Reserve with a workers’
and consumers’ council to oversee the merged and nationalized banks.
Rehire laid-off bank workers, who can expose to the workers' and
neighborhood committees the secret records of their banks. Abolish
markets for mortgage-based securities, credit-swaps, and other derivatives.
The workers' committees will know how to use
the funds seized from these markets to ensure the safety of
individuals' deposits and to use their surpluses to fund production and
services.
These workplace and neighborhood committees
can unite to support each others' struggle to open the account books of
their exploiters, and can together discuss the demands adopted at the
Congress and concretize them further based on their own needs. If
bankers refuse credit or loans to businesses—which as a result seek to
shut down production or cut jobs, wages, or benefits—workers should
demand the nationalization of these companies.
We call for the nationalized banks to be
merged into one public institution under the supervision of workers'
committees. The committees could then decide how that public bank's
funds could be used to rebuild society, based on the needs expressed in
the plan of the Congress of Labor and supplemented by demands of local
workplace and neighborhood committees.
For a labor party
The bipartisan support for bailing out the
ruling class shows once again that workers need their own political
organ: Break with the twin parties of capital! For a labor party based
on a fighting union movement and all the oppressed and exploited! For a
workers’ government!
While organizing around these demands,
revolutionaries need to step up our education about the nature of the
system causing this crisis, and the need to replace it by socialism.
We encourage our readers to send us their own
suggestions for demands to meet this crisis, or refinements of the
above demands as they apply to your workplace or neighborhood.
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