Week In Review
A Weekly Column by Bill Onasch
September 28, 2008
The Latest Deal
Many of this morning’s papers carried a photo of grinning Democrat congressional leaders–with a pleased looking Henry Paulson, former CEO of Goldman Sachs, now Secretary of the Treasury of the United States, looking on. Their upbeat appearance signals that they–again–believe they have a deal to save us all from imminent financial peril. (Of course, there may be unexpected flies in this ointment by the time you read this.)
The same cast of characters had earlier smiles wiped off their faces when a similar package was torpedoed by a former Navy pilot–Senator John McCain, who “suspended” his presidential campaign to rush back to Washington to help. After he hectored the GOP congressional caucus, the Blue Dog Republicans, whose base is mainly strip mall capitalists, mutinied and declared they would oppose the deal urgently sought by the lame duck–some say dead duck–President.
The Democrats, already feeling some heat from their labor and social movement constituencies, immediately made clear they weren’t going to take the rap alone for what was essentially a Republican demanded deal. After the two party’s standard bearers headed for their debate, the movers and shakers resumed bargaining. As of this writing, details of the new deal, that supposedly will win bipartisan consensus, have not been released. Purportedly it includes gestures of transparency along with offering some kind of insurance alternative as part of the mix. There may even be some guidelines restricting golden parachutes for failed CEOs.
The transparency was an easy fix. Paulson was undoubtedly surprised when the “opposition” didn’t immediately declare his bargaining chip of unlimited freedom and immunity for spending hundreds of billions a deal breaker. There will be some sort of oversight. The ill-conceived Blue Dog insurance scheme will be a non-starter in the real world. And, I don’t see any fallen titans of finance winding up as barristas at Starbucks.
Actually, I believe the whole scam is pretty transparent to millions of workers who correctly see it as a massive transfer of wealth from their pockets to the needy rich. Even sectors of the labor movement took time from walking the neighborhoods for Obama to organize emergency protests against the Wall Street bailout.
The magnitude of the crisis has led to an unprecedented examination of the state of American–and global–capitalism today. From a left perspective, Andy Pollack has presented perhaps the most comprehensive analysis I’ve seen. That was to be expected. More surprising is what some veteran defenders of Free Enterprise are now saying.
Peter L. Bernstein, a financial consultant and economic historian, and editor of the Economics & Portfolio Strategy newsletter, writes in yesterday’s New York Times,
“Faith in free markets made icons of Ronald Reagan and Margaret Thatcher, who made deregulation a policy cornerstone. An echo in our own time was the 1999 repeal of the Glass-Steagall Act, legislated in 1933 to separate investment banking and commercial banks. Its repeal was a key contributor to the calamities now gripping the banking system.
“Today’s crisis thus emerged from a combination of disasters operating in free markets, but wreaking ruin as they developed. The subprime mortgage mess, the huge leverage throughout the system, the insidious impact of new kinds of derivatives and other financial paper, and, at the roots, the vast underestimation of risk could not have happened in a planned economy. A superjumbo bailout is the inescapable result, but at some point we must confront its more profound implications.
“As we move into the future, and as the crisis finally passes into history, how will we deal with this earth-shaking blow to the most basic principle of our economic system? I do not know how to answer that question. But we need to ask it.”
The question needs asking, to be sure–not only by economists but more importantly by trade unionists, environmentalists, those organizing society’s marginalized in the abandoned urban cores, the family farmers struggling to survive. Once the taboo forbidding asking such questions is cast off, the answers become apparent.
As I argued in a Friday blog posting, A Three Alarm Crisis, we are facing not just one but at least three inter-connected crises requiring urgent action. In addition to the financial/credit crisis dominating the scene is the fuel crisis and–most important of all–the climate crisis. It is no exaggeration to say relying on market mechanisms will lead to doom. Economic planning is essential.
Canadian workers are, like us south and west of their border, also being subjected to a national election campaign. As we cited in our blog, Ian Angus, editor of Climate and Capitalism, produced an excellent article, Canada's Election and the Climate Crisis: Five Parties, No Solutions. Ian writes,
“A government that really wanted to deal with climate change would declare a Climate Emergency. It would learn from the experience of World War II, when Ottawa forced through a radical transformation of the entire economy in a few months, with no lost jobs or pay cuts.”
A great example, even more valid for the USA–with two caveats, which Angus also deals with.
* Far from mobilizing for war, we should shut down the Iraq and Afghanistan wars, and other threats of intervention solely in the interest of global capital, and redirect those resources to the real crisis.
* Instead of the cost/plus enrichment of the bosses that marked World War II, we should nationalize the entire financial, energy, and transportation sectors–not just their failed components--and bring labor, scientific, and environmental representatives in to the crisis planning and day to day management.
I would emphasize an additional crucial point–all this reorganization should be governed by the principle of Just Transition, as spelled out in the Labor Party program, guaranteeing “middle class” living standards to those workers who will need retraining, and placement in different jobs, in a green, peaceful economy.
To be realistic, we need to recognize two overriding challenges:
* Every day of delay in resolving these crises will bring increased hardship to the working class and, in the case of the climate crisis, irreversible damage to our planet.
* Neither the working class of Canada or the USA is today anywhere near being up to mounting the unavoidable fight with the corporate/political Establishment needed to solve these crises in the interests of the majority.
So what do we do? Unless you are content to wish your kids well in dealing with this crisis heritage we failed to address, I repeat the suggestions I made in my Friday blog,
“I don’t offer any blueprint for change. I propose opening discussion to formulate an action plan. A logical place to begin is among those already engaged in trying to transform the labor movement–such as the Labor Notes network and Center for Labor Renewal.”
If these activist forces, who have their differences, can pull together around an Emergency Crisis Response we would have a fighting chance to move the mass organizations that have a track record–at least in the distant pass–of winning social changes in short order.
I would like very much to hear your ideas, suggestions, or criticisms of this approach. Contact me directly at: billonasch [at] kclabor.org.
¶ The San Mateo Daily News reported, “Thousands of health care workers from around the state gathered Friday in San Mateo to protest what they said was a hostile takeover by their parent union.” Steve Early earlier wrote a thorough, perceptive new article on this effort by SEIU tops to place United Healthcare Workers West (UHW) in trusteeship. It promises to be a protracted, bitter battle. Meanwhile, the Los Angeles Times, who recently broke stories about corruption in a pro-Stern SEIU local in California, published some embarrassing details about how large amounts of international union funds were channeled to companies of spouses of top SEIU officials. (Last week we incorrectly spelled the name of SEIU secretary-treasurer Anna Burger. Our apologies to both the Bergers and Burgers.)
¶ A Reuters report said, “ Al Gore urged young people on Wednesday to engage in civil disobedience to stop the construction of coal plants without the ability to store carbon.” Coal burning is the single biggest source of greenhouse carbon dioxide emissions. 28 coal-fired power plants are under construction in the United States. Another 20 projects have permits or are near the start of construction. The Guardian told readers the same day, “Barack Obama's campaign yesterday rushed to proclaim his support for ‘clean coal’ technology after remarks by running mate Joe Biden cast doubts on Democratic friendliness to the coal industry.”
¶ More than a thousand California Nurses Association members took a break in their Staff Nurse Assembly to rally on the Golden Gate Bridge in favor of Guaranteed Healthcare for All.
Running out of space,
That’s all for this week.
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