Labor leaders fail with Mondale bid TRANSI

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Due to the year-end holldays the January Issue of Socialist Action will be 12 pages MONDALE Greyhound workers march for Mondale. Union of Operating Engineers, lamented, as he surveyed the many empty seats that greeted Kirkland in Cleveland's Laborers Hall. "There's apathy in the labor movement, a member of his union agreed.

Les Johnson, president of UAW Local 1714 at the Lordstown, Ohio, General Motors Fisher Body plant, was more to the point when he complained after one of Kirkland's meetings that union members were too involved in strike activities against GM to pay much attention to the presidential campaign.

Democratic Party mediators

Working people were not apathetic in 1984 when they were forced out on strike. Greyhound bus drivers, Las Vegas hotel workers, Arizona copper miners, Toledo auto parts workers, and thousands of other trade unionists battled goons, scabs, and cops in order to save their jobs and their unions. But the militancy of most of these workers was squandered in behind-doors compromises worked out by international and local union officials with the connivance of Democratic Party "mediators."

For years, labor leaders have consciously demobilized the union membership in order to safeguard their own DECEMBER 1984 power and privileges. One sure method of operation-in times past—was to obtain "favors" in return for union patronage of supposed friends in the Democratic Party. But these favors merely reflected the concessions that the organized strength of the workers was able to force from the employers.

Now that the economy is weaker, politicians are more openly inclined to grant "favors" to the capitalist class— with the full force of their courts, cops, and legislatures. Many workers see the annual political action campaigns as a waste of union funds. Union officials can no longer get out the vote for politicians that give nothing in return; they have themselves lost influence with the ranks because of their policy of reliance on the Democratic Party instead of their own membership.

Millions of dollars from trade union treasuries were lavished on electing the man who, along with Jimmy Carter, headed a government that organized the capitalist takeback campaign that laid the ground for Reagan. Working people remained uninspired by Mondale's lackluster commitment to "decency, justice, and compassion."

Many undoubtedly agreed with James Spivey, a Black auto worker from Detroit, who told the New York Times, "I haven't worked since Reagan's been in office, but I was laid off under Carter. Since then, my view has been that presidents come and presidents go. I'll vote for Mondale, but I don't see much reason to."

Reagan's "mandate"

Only about 53% of the voting age population bothered to vote at all. Reagan was elected by about 31% of the eligible electorate, up from 27% four years ago, but hardly an "historic mandate."

The day after Reagan's election hoopla, while celebrating supporters were long in bed and janitors swept up the confetti, the president's "historic mandate" seemed worth considerably less. The morning newspapers screamed war threats against Nicaragua, and analysts pointed out that the economic troubles of the United States had not disappeared in the night.

While Reagan tries to reassure us that "the people are in charge,, his administration is attempting to slash more social programs. Medicare and Medicaid, veterans' health benefits, civil service retirement benefits, and loans to small businesses and farmers are next on the cutting board. With very few exceptions, the Democratic Partywhich retained its majority in the House of Representatives—is offering only a whisper of protest to the impending cuts. The Democrats did not lose the election. Working people did.

Editor: ALAN BENJAMIN Assistant Editors: NANCY GRUBER Business Manager: GEORGE McCARRELL Circulation Manager: RALPH FORSYTH Editorial Board: Alan Benjamin, Les Evans, Dianne Feeley, Jeff Mackler, Nat Weinstein Staff: Paul Colvin, Larry Cooperman, May May Gong, Millie Gonzalez, Mark Harris, David Kirschner, Hayden Perry, Linda Ray, Phil Ruble, Joe Ryan, Kwame M.A. Somburu, Marion Syrek, Sylvia Weinstein Socialist Action (ISSN 0747-4237) is published monthly for $6 per year by Socialist Action Publishing Association, 3435 Army St., No. 308, San Francisco, CA 94110. Second-class postage is paid at San Francisco, Calif. POSTMASTER: Send address changes to Socialist Action, 3435 Army St., No. 308, San Francisco, CA 94110.

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"This is the captain speaking: Big banks and thrifts first! Everyone Canadian Trotskyists meet:

Alliance for Socialist Action founded SOCIALIST ACTION DECEMBER 1984 (The following is an abridged translation of an article which appeared in the September 1984 issue of Critique Communiste, the monthly theoretical journal of the Ligue Communiste Revolutionnaire, French section of the Fourth International.)

The financial crisis of the world economy is upon us. All the analysts, from The Economist of London to Expansion [France], are frightened. The Economist recently produced an editorial in which it described the dramatic consequences of a financial crash: increased unemployment, successive bankruptcies, and destruction comparable to that of a war. In short, a vision of the end of the world.

It was the imminent failure of Continental Illinois (the seventh largest U.S. bank) that brought the crisis to the fore. The process that led to its near-failure is worth taking note of because it can be repeated.

Continental's dealings in Latin America are limited, but it has interests in the sagging U.S. petroleum industry. Some of Continental's largest depositors are in the venture of "floating capital,' i.e. speculative capital seeking the highest rate of return. These are the kind of depositors who, if they sensed that Continental might have difficulties collecting on its loans, would withdraw their capital.

Now, everyone knows that a bank does not keep the money it borrows in its coffers. Its goal is to make a profit by lending money out at a higher rate than that at which it was borrowed. Because of this, Continental, like any bank in its position, cannot repay the sums that have been deposited with it. This is all the more true since it is often a question of long-term loans for which the bank cannot demand immediate repayment.

If the bank were to do so, it would provoke the bankruptcy of its debtor. The risk can be easily seen. And the American authorities have also seen it. In order to avoid a string of bankruptcies, they have flown to the aid of Continental to prevent it from going under. They have lent it-the term "given" would no doubt be more accurate—$7.5 billion. It is the largest amount ever lent to a bank. This shows how close the financial system was to collapsing.

It is important to stress the fact that the rate of bank failures in the United States is greater today than at any time in this nation's history. And although up until now "only" the small banks By BARRY WEISLEDER WINNIPEG, Canada-The socialist movement in English Canada took a major step toward its revitalization with the formation of the Alliance for Socialist Action (ASA) at a conference held in Winnipeg, Manitoba, on Nov. 911, 1984. The ASA was formed on the basis of the program of the Fourth International, the world Trotskyist Participants from 11 cities, spanning six provinces and the Northwest Territories converged on the western capital. Unaffiliated individual activists came together with representatives of the groups that sponsored the conferencethe Socialist Workers Collection of Toronto; Socialist Action Collective of Winnipeg, Manitoba; Socialist Challenge Organization of Edmonton, Alberta; and the Socialist Action Collective of Vancouver, British Columbia. Each collective will retain its public identity within the framework of the Alliance.

Also in attendance were observers from the Quebec-based Gauche Socialiste and two U.S. fraternal else will join in a chorus of 'Nearer, my God. to thee have gone bankrupt, it is evident that the closing of the seventh largest U.S. bank would have had important international consequences, provoking a snowball effect. The U.S. government has preferred to "socialize" the losses. According to the July 21, 1984, issue of Liberation, the U.S. government even considered nationalizing this bank in order to provide the funds necessary for its survival..

And today there are many events that can provoke a financial panic. This is all the more likely since "floating capital" is very sensitive to conjunctural changes, with millions of dollars being withdrawn rapidly and all at once. The problem of the debt has become the number one problem for the leaders of the capitalist world....

One aspect of the present financial crisis is the severe tension on the world's money markets provoked by the rising organizations, Socialist Action and the Fourth Internationalist Tendency.

A gathering of activists The conference brought together militants, young and old, women and men, who are local leaders in today's movements for social change across English Canada. It was a gathering of active trade unionists, feminists, gays, students, youth, antiwar activists, left-wing New Democrats, and members of Central America and Eastern Europe solidarity committees.

Conference participants recognized the need for an unhurried and thorough discussion of the political situation in Canada and the tasks facing socialists today. A public bulletin will be published to serve as a forum for discussion-as well as a vehicle for ASA campaigns.

Within six months the newly elected National Steering Committee will meet to evaluate the progress of the internal discussion and to consider the scheduling of a convention both to vote on resolutions and to found a united, democratic-centralist, revolutionary socialist organization. Central to the ASA's perspective is the construction of such an U.S. interest rates. These rates have risen on account of three factors:

• The "uncertainty about future."

In capitalist terms what this means is that the "profitability" of new investments is uncertain.

The demand for dollars is greater than the supply. This results from the huge dollar debt owed to the United States by multinational corporations and nation states. It also results from the internal U.S. debt-primarily the budget deficit estimated at $190 billion.

The limit on the supply of dollars reinforced by the restrictive policies of the Federal Reserve Board-even though, since 1982, the restrictions have eased up a bit.

Indeed, capital from around the 'orld has been funneled into the United tates, attracted by the rising U.S. interorganization on a Pan-Canadian scale in conjunction with the members of Gauche Socialiste.

The Winnipeg conference adopted as a political priority the building of a mass-action-oriented movement to oppose U.S. military intervention and Canadian complicity in Central America and the Caribbean. In collaboration with our American co-thinkers, Alliance members will be working to build an international day of protest in April against the war policies of Washington and Ottawa.

The conference hailed the Toronto jury acquittal of Doctors Morgenthaler, Smoling, and Scott, who were charged with "conspiracy to procure an abortion."

The now-strengthened fight for free-standing abortion clinics and repeal of the restrictive federal abortion law will be a major preoccupation of socialists and feminists in preparation for International Women's Day.

The gathering ended on a note of celebration. Following the third ballot selection of the name for the new organization-the Alliance for Socialist Action-the meeting burst into applause. est rates and the fact that the United States represents a haven of sorts. This has permitted the U.S. government to finance its budget deficit. As the July 14 issue of The Economist notes, the boom in the U.S. economy is strongly linked to the influx of foreign capital. At the same time, this increased demand for dollars is at the root of the increased value of the U.S. dollar on the foreignexchange markets....

Looming financial collapse

The United States, the citadel of imperialism, is also experiencing an increase in its level of indebtedness. And it is the rising debt which has "doped" the recovery of the U.S. economy. But paradoxically, it is in this country that the risks of a financial crash are the most real. In the United States, the private corporations, like the government, are heavily in debt.

The reason for the U.S. budget deficit is the enormous increase in military spending, which has reached the level of $300 billion, while spending for social programs has been drastically cut back These military expenditures have permitted the creation of substitute markets for all the large U.S. corporations.

It must be stressed that this recovery [1983-1984] does not resemble that of 1976. In fact, the renewed growth in the economy has been accompanied by an increase in industrial and bank failures. The creation of jobs should not deceive us: It is a question of temporary employment, or of workers rehired at lower salaries than they had previously earned. It must also be emphasized that for the U.S. working class purchasing power has decreased and the rate of exploitation has increased. This explains why the capitalists prefer to invest in the United States.

The hike in interest rates indicates that the demand for credit inside the United States is very great and that a lowering of the rates is inconceivable in the short term. In fact, a continued increase in the interest rates is the most probable scenario. The U.S. banks have already raised their "prime rates, i.e. the rates reserved to their preferred clients. And this is so because the recovery has been rooted in an unparalleled growth of indebtedness.

This 1983-84 recovery has amassed new contradictions which can transform the next recession-predicted for 1985—into a depression. Such a situation would result from the convergence of a recession with the financial crisis.

The financial crisis is unavoidable. It is written into the growth of the "debt economy."

And it will occur even though temporary solutions-all of which will only mean an increased socialization of the debt-may delay the day of reckoning. And it is not the least of the paradoxes to see the current U.S. administration— so proud of its "free market" imageconsidering nationalizing the Continental Illinois bank....

The financial crisis is indeed the final solution for capitalism because the destruction of capital, by bank and industrial failures, would provide a solution to the problem of the debt. But the barbarous risks inherent in this "solution" are enormous. They are already present in the underdeveloped countries. And it is precisely the risks of capitalism's ultimate solution to its crisis—barbarismwhich underlines the necessity, for all of humanity, to break with the crazy logic of capitalism.

Distributors of Socialist Action in Canada:

Socialist Workers Collectiv 412A College Si.

Toronto, Ontario MST IT3 Gauche Socialiste C. P. 152, succ. N Montreal H2X 3N4 Socialist Challenge P.O. Box 69756 Station "K"

Vancouver, B.C.

Socialist Challenge Box 12082 Edmonton, Alta.