Week In Review

A Weekly Column by Bill Onasch
October 25, 2010

‘Forgive us our debts, as we also have forgiven our debtors’
This appeal by Matthew in the Pater Noster is being subordinated in the Christian Free Enterprise nations to an edict in the Old Testament Proverbs, “The rich ruleth over the poor, and the borrower is servant to the lender.”

Acceptance of this divine right of the ruling class first asserted by King Solomon varies a lot from one side of the Atlantic to the other. There is also, of course, a difference between private and public debt everywhere. In the U.S. there’s a lot of both kinds.

There are always a few people even in the most prosperous times who are compulsive spenders and run up debts they can’t pay. But their numbers are insignificant drops in the deep pool of personal debt in the USA. The main factors in private debt are:

* The housing bubble, that made new homes look affordable to low income renters and old homes tempting as a source of refinancing–until the bubble burst. Millions then became saddled with debts that likely cannot be repaid and many have already been evicted or forced to walk away from their homes as well.

* Student debt. now bigger than total credit card debt, as the cost of higher education–increasingly necessary to get a decent job–has soared outrageously

* Job losses have devoured personal savings and retirement accounts in an often vain attempt to avoid bankruptcy.

This private debt greatly impacts public. When the housing swindles unraveled, threatening the biggest financial institutions with imminent collapse, trillions of tax-payer dollars were immediately committed to bailing them out. Sarah Palin’s running mate, John McCain, cut short his election campaigning to convince fiscal hawk Republicans not to stand in the way of this rescue.

The collapse of real estate values, and the loss of payroll and sales tax revenue as the Great Recession unfolded, left budgets at all levels of government in shreds.

Just as it wasn’t spendthrift behavior that created the personal debt crisis fiscal instability wasn’t created by generous spending on socially useful projects. The welfare rolls were decimated by the Clinton administration. Many public services were privatized. And we certainly didn’t see even maintenance of our collapsing infrastructure that sometimes produces deadly disasters such as the 35-W Bridge collapse in Minneapolis, the failure of New Orleans flood walls, and the recent gas pipeline explosion in California.

Even before the Great Recession, enormous amounts were being spent to fight two ongoing wars, and maintain a vast nuclear weapons arsenal–with solid bipartisan support. The deficit was further expanded by the “temporary” Bush tax cuts for the wealthy–and, regardless of the outcome of next week’s election, you can bet these will be renewed with blessing from the White House.

Is debt really the number one issue? On a personal level it may well be. On a fiscal level hardly. In addition to the loss of seventy million lives, and the destruction of the economies of Europe and Japan, there was never more deficit spending in real dollars than by the USA in World War II. But as Robert H Frank pointed out in a New York Times article Income Inequality: Too Big to Ignore,

“During the three decades after World War II, for example, incomes in the United States rose rapidly and at about the same rate — almost 3 percent a year — for people at all income levels. America had an economically vibrant middle class. Roads and bridges were well maintained, and impressive new infrastructure was being built. People were optimistic.

“By contrast, during the last three decades the economy has grown much more slowly, and our infrastructure has fallen into grave disrepair. Most troubling, all significant income growth has been concentrated at the top of the scale. The share of total income going to the top 1 percent of earners, which stood at 8.9 percent in 1976, rose to 23.5 percent by 2007, but during the same period, the average inflation-adjusted hourly wage declined by more than 7 percent.”

To that super-rich one percent, nothing is more important than collecting debts they are owed–certainly not our schools, health care, jobs, or Social Security.

The elections don’t look promising for President Obama as an AP story notes,

“Almost 60 percent of likely voters now say cutting the yearly budget shortfall is the priority, even if that means the government can't spend on new education programs, develop alternative energy sources or enact his health care overhaul or alternative energy policies, an Associated Press-GfK poll found.”

Of course, the President and his party are nothing if not flexible. The same article says,

“The President has signaled that at the start of the new year, he will speak more directly to the country about the financial choices ahead. ‘If we're going to get serious about the deficit, then we're going to have to look at everything: entitlements, defense spending, revenues. ... And that's going to be a tough conversation,’ he said. It's one that will be framed by a bipartisan debt commission, whose ideas this December will give Obama political cover on where to suggest unpopular cuts.”

Last Friday, the New York Times ran an article entitled Democrats Look to Clout of Unions as Vote Nears. Today they carried a story about Democrat and labor-endorsed candidate for Governor of New York, Andrew Cuomo, headlined Cuomo Vows Offensive Against Labor Unions. Should he defeat the bigoted bully owner of most of Buffalo’s strip malls running on the Republican line with Tea Party Express endorsement, Cuomo wants to create a better business climate in New York Though short on specifics, his platform is consistent with the kind of attacks on public sector workers and social programs being implemented by the Governor of neighboring New Jersey.

Contrast this pathetic state of affairs to Old Europe.

Millions continued to strike and demonstrate across France all this past week against forcing workers to labor longer before retirement–for deficit reduction. Youth as young as ten were arrested by the gendarmes and hauled in to youth court for demonstrating when they should have been in school. More of a challenge for the armored, well armed riot police was the clearing of strikers blockading every French oil refinery. By midweek a quarter of French filling stations had no fuel. French truck drivers launched Operation Escargot (snail). Airports were thrown in to chaos. Trains and buses were few and far between. Even the school “dinner ladies” swung in to action as reported from Marseille in the Guardian,

“For weeks a mass rebellion by the city's dinner ladies, affectionately known as tatas, has forced more than half of the city's nursery and primary school canteens to close. These women in white overalls and slip-on plastic shoes, joined by their pink-clad counterparts in the city's creches, have downed soup ladles and cheese knives and taken to the streets in protest at Nicolas Sarkozy's pension reforms.”

Sarkozy’s forces utilized a rarely used rule to cut off a Socialist-led filibuster and got the retirement take-backs approved by the Senate–now just one step away from becoming law. But that doesn’t mean that things will return to normal any time soon. Unions and students are planning further actions even after the law is finalized. Sarkozy’s approval rating has dropped below thirty percent. And French bosses are claiming they collectively lose a half-billion Euros every day that the strikes continue.

Disgusted by New Labor’s abandonment of working class issues for three terms, British voters elected a parliament earlier this year that produced a majority for no party. The Tories formed a coalition government with the Liberals. Of course, they had all along talked about the need to reduce the government debt. But the budget they have submitted makes Lady Thatcher look like a tax-and-spend do-gooder. It includes slashing nearly a half-million public sector jobs, drastic cuts in the dole paid to the jobless, raising the retirement age, and an average budget cut of nineteen percent in every department over the next four years.

While British labor culture is different than French even the most stolid unions are preparing a fight against these draconian attacks. A BBC report, Thousands attend UK-wide union protests over cuts, opened,

“Union activists have taken part in a series of protests across the UK as part of a campaign against the government's spending cuts. Rail, Maritime and Transport (RMT) union general secretary Bob Crow told a London rally collective action was needed to fight the cuts. It comes after the TUC said a national demonstration will be held on 26 March next year in London's Hyde Park.”

Here ‘Friends’ Are Rewarded
Of course, stolid would be a wildly exaggerated description of the mainstream U.S. union leadership. They are showing little spending restraint in currying favor with the budget-cutting donkeys in fear of going back to the budget-cutting elephants.

Straining for something positive to say about the current White House and Congress they hail–health care reform. Many of the Democrats for whom they hustle votes have taken to calling this great “reform” by the name used by Republicans–ObamaCare. A recent AP story was spot on when they said,

“Health insurers flirted with Democrats, supported them with money and got what they wanted: a federal mandate that most Americans carry health care coverage. Now they're backing Republicans, hoping a GOP Congress will mean friendlier regulations.”

You’ll hear no talk from our labor statespersons about single-payer–or even their “public option.” EFCA won’t be mentioned by them–though some Republicans still rail against denying workers the right to vote. Most say nary a word about Iraq and Afghanistan though most will call for an expanded military budget. And talk of climate change must be cloaked as green jobs in discreet meetings with those environmentalists who share their unswerving loyalty to those in power. Topping it all off, Andy Stern is busy working on the debt reduction commission to gut our Social Security. Sarkozy is probably wondering, “how can I import some of those guys?”

Getting Together In KC
The Kansas City Labor Notes Discussion Group, after taking a few months off, will be meeting Sunday, November 7, at 2113 Erie in North Kansas City. We’ll begin with a hot lunch at Noon and then discuss what impact the election may have on various local projects such as the Labor Party, KC Labor Against the War, and the Alliance for Class and Climate Justice. If you’re interested in attending please give me a call at 816-753-1672.

There were a number of important stories this past week but we have to stop at a reasonable length. We’ll come back to some next time. You can see all the stories I review and much more by visiting the Daily Labor News Digest, posted Monday-Friday by 9AM Central. We also archive a couple of weeks worth of articles on our Recent Stories From the Daily Digest page.

That’s all for this week.

Alliance for Class & Climate Justice

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