Supercommittee fails, cuts coming anyway

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euro, is a prime example of the contradictory phenom­ ena inherently besetting the capitalist economic system. The EU was a product of the global unevenness of the post-World War II period, in which the leading European powers, having lost their global dominance to the Unit­ ed States, realized they had to combine forces. Yet they could only do so on the basis of political states reflecting the particular interests of individual ruling classes. And each of the latter was torn between the desire to outcom­ pete its European revivals and the need to collaborate with the latter against the U.S.

The EU was built on a continent with wildly divergent levels of productivity, technical development, and levels of social spending. In prosperous times marginal efforts at unity were begun. But rather than harmonizing all parts of the country upward to prosperity, the EU became a way for its stronger members to deepen the dependency and subordination of the weaker by forcing open their markets, and taking advantage of cheaper labor (by mi­ gration of labor in one direction and capital in another). Yet in a crisis it’s everyone for himself. So although today’s rhetoric from the stronger countries blames the poorest countries for their alleged wastefulness, this is just a dodge to cover the EU’s failure in good times to overcome the centripetal forces acting against crossnational economic unity—now exacerbated by shrinking markets and vanishing investment opportunities. The country that has benefited the most from imposi­ tion of a relatively common “free” market across Europe, Germany, is also the one least willing to yield its domi­ nance or risk its own fiscal health to help its crisis-ridden neighbors. Instead, Germany, at least until the waves of the crisis began lapping at its own feet in recent days, has been lecturing its neighbors about the need for massive spending cuts and greater fiscal restraint.

This mantra is echoed by the IMF and European Central Bank figures, who portray the crisis as one of “sovereign debt,” i.e., the increasing inability of countries to find in­ vestors to buy the bonds that finance their shortfalls, thus supposedly requiring spending cuts to shrink their budget deficits. Lower wages and benefits are also recommended to increase these countries’ competitiveness, thus shrink­ ing their trade imbalances. All of this, supposedly, will shrink their accumulated debt and make their bonds more investment-worthy.

But the alleged profligacy that put European govern­ ments in such situations, requiring them to take such re­ medial steps, is, when not an outright slander, merely a symptom—as was the supposed shortsightedness that led The austerity programs being forced by bankers and the IMF on European governments had their counter­ part in the U.S. in the Congressional “Supercommit­ tee,” the bipartisan effort at meeting demands by the ruling class to cut the country’s deficits by slashing the social safety net for workers. Since the Supercommit­ tee failed to reach consensus on a set of cuts and/or tax hikes, the legislatively mandated alternative of massive across-the-board cuts at arbitrarily set percentages will take place in 2013.

The Supercommittee’s failure occurs against the backdrop of a still-stagnant economy, one in which corporations are still reluctant to invest, yet not at all reluctant to spend on their own executives’ well-being. The New York Times reported on Nov. 21 that compa­ nies laying off thousands of workers were using huge piles of cash not to expand production, but instead to buy back their own stock—and in the process, given the hefty weight of stock bonuses in compensation pack­ ages, stuffing their executives’ pockets. After sliding since the outbreak of the financial crisis, buybacks have reached $445 billion already this year, the most since 2007, when repurchases peaked at $914 billion. Even financial institutions, which bought back huge amounts of stock over the last decade at share prices far higher than they are today—and by doing so earned the wrath of many mainstream economists who asked why they weren’t investing such sums—have reverted to buybacks. JPMorgan Chase, for example, spent $4.4 billion repurchasing shares in the third quarter even as its stock fell more than 25 percent.

And the retreat back to speculative capital fantasyland goes on: On Nov. 3, social media giant Groupon held an $805 million initial public offering. On its first trading day the company was valued at $16.7 billion. Soon thereafter its stock price began to slide. Meanwhile, back in the real world, several U.S. eco­ nomic indicators were stable or showed little change in October, but one key index—orders for core capital goods, “a good proxy for business investment spend­ ing,” said The Times—experienced its sharpest drop since January.

The Wall Street Journal warned that the failure of the tors were wringing their hands over the European cri­ sis, they had to turn anguished gazes across the ocean. Standard & Poor’s, which had already carried out an unprecedented cut in its U.S. rating on Aug. 5, warned that “downward pressure on the ratings could build” due to the Supercommittee’s failure, and Moody’s warned of a rating cut should Congress try to soften the mandated 2013 cuts.

In the same malevolent spirit, an economist at a French bank told The Journal that those cuts are “the only thing standing between us and a [rating] down­ grade.” And French bankers have good reason to be concerned about the fiscal health of the United States. The high marks France has gotten until now from rat­ ings agencies for its fiscal rectitude is slipping as it tries to keep Italy from going under. Fears of being pulled down by sinking swimmers, as France is now, is why Germany held out so long against providing assistance, and instead sternly demanded austerity from Greece and the weaker countries. But France borrows heavily in the United States to finance its own debt—and now U.S. banks fear coming losses from overexposure to France’s problems.

U.S. banks’ connections to European banks are paral­ leled by close ties of U.S. manufacturers: Automakers depend on sales in Europe for 30% of their output. The equivalent figures for household products is 17.5%, and for pharmaceuticals and biotechnology 15.5%. And, of course, U.S. manufacturers are just as tightly dependent on Asian producers and consumers—dangerous con­ nections given the decreasing ability of the latter to sell to Europe.

Unions, organizations of the oppressed, antiwar groups, and the Occupy movement are all trying to grapple with how to resist the attacks on workers stem­ ming from the above-described phenomena. One place to start is with the demand for opening the account books of the banks and corporations, and on that ba­ sis proving the justness of demands to cancel the debts of workers, students, and consumers (and of the pub­ lic agencies that provide their social safety net, but are now being strangled by the banks). Certainly, the Oc­ cupy movement and its allies in labor and other move­ ments are well positioned to take up these demands. n SOCIALIST ACTION DECEMBER 2011 3

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... Occupations unleash critical debate on capitalist crisis (continued from page 1: “Occupations unleash critical debate on capitalist crisis”) the need to create jobs by repairing the nation’s crumbling infrastructure. • On Nov. 15, some 5000 students, faculty, and unionized campus workers were joined by a long march from Oc­ cupy Oakland for a General Assembly at Sproul Plaza at the University of California at Berkeley. Earlier in the day campus police used force and violence and scores of ar­ rests to prevent students from setting up a handful of tents. Two California State Universities were shut down tight as almost all of the 600 scheduled classes were cancelled. • Thousands in Portland, Ore., demonstrated a courage and discipline that forced the retreat of cops intent on breaking up their encampment. And a thousand more at the University of California at Davis, following the blatant pepper spraying of a few rows of peacefully demonstrat­ ing students sitting across a campus roadway, systemati­ cally humiliated and “escorted” a cordon of retreating clubwielding police off the campus.

Associated protests and occupations across the country in 1000 towns and cities gave testimony that this movement is here to stay. Placards and banners everywhere display the incredibly unifying and affirming credo, “We are the 99 percent.” The movement rings out with declarations of confidence and clarity of purpose: We are the vast majority. We are the victims of the rule of capital, they all but state! Whatever differences there might be among us are nil as compared to ours with the one percent, with the corporate owners of everything, with the politicians and parties who represent them—with the ruling class!

However much one might quibble with the 99 percent figure, it stands in sharp contrast to the pathetic labor bu­ reaucracy’s often stated, “We are the middle class,” or their complaints that “We are being driven from the middle class.” The bureaucracy’s allusion to the “middle class,” now being shattered by the reality of life in capitalist America, implies that labor is no longer the broad work­ ing class, the poor, the unemployed, the oppressed nation­ alities—that is, the vast majority—but rather a more privi­ leged layer defined by relatively higher wages. Occupy is a movement that roars with contempt of the constituted authorities. It is not daunted by court orders demanding that its tent encampments be taken down or by the constant and often brutal application of police vio­ lence and repression. Given today’s widespread use of cellphone cameras and video recording devices, this is increas­ ingly displayed worldwide in the form of peaceful Occupy crowds blinded and gasping from gas attacks, or stunned by deafening sound weapons and other modern day crowdcontrol devices aimed at dispersing and sometimes maim­ ing or even killing the innocents who participate to express their just grievances.

One day, in the name of “law and order,” in the name of “sanitation concerns” or other “legal” pretexts offered up by compliant judges, the encampments are declared ille­ gal and destroyed. The next, they are often re-taken by the peaceful, planned, and massive exertion of a counterforce wherein protesters armed with a political cause supported by millions compel club-yielding SWAT teams to retreat or pay what remains an unacceptable political price—the likening of America, “the land of the free,” to the repres­ sive regimes that the U.S. promotes and protects the world over. Better to retreat, the cops are on occasion instructed, than to fully apply the repressive force on hand and risk the next wave of solidarity coming back in 10-fold or 20-fold numbers.

We should note here that New York City has been among the most repressive in the United States regarding the simple right to march down the street. Tedious and highly restrictive permit processes coupled with police barricades forcing demonstrators to walk miles to participate, the ban­ ning of sound systems, the denial of city parks to assemble, were the rule in this city—that is, until Occupy Wall Street. Today in New York no activists ask permission to exercise 4 SOCIALIST ACTION DECEMBER 2011 Tony Savino / Socialist Action their constitutional rights. Whatever restrictive efforts have been attempted by the police have not been able to stop or deter protests by virtue of the massive and determined na­ ture of the anti-government mobilizations. The ruling class understands that OWS has won support from millions who increasingly understand that this new movement is theirs. The occupations have opened an unprecedented and long-awaited national debate while condemning the on­ going failures of the system itself. Students demand free education and the cancellation of their debts. Thousands march over bridges to mark the nation’s deteriorating in­ frastructure and the need for jobs to repair or replace them. Hundreds in city after city re-occupy foreclosed housing in solidarity with the evicted poor. And the occupiers even strive, with deep compassion, to provide food and shelter for the homeless and destitute, while noting with contempt that the world’s richest nation can’t do what they are doing. Students and faculty demand affirmative action for in­ creasingly segregated universities, the resignation of uni­ versity officials and student/worker control of the universi­ ties. Teachers demand a reversal of the massive layoffs that have taken the jobs of hundreds of thousands, reinstate­ ment of cancelled classes, and quality education for all. Public employees of every category and from virtually every trade union demand the reversal of the layoffs, salary cuts, enforced non-paid “furloughs,” and the deterioration of public services. Millions demand that the rich be taxed to pay for all the above, that the bank bailouts be reversed, that the corporations be placed under public control or un­ der workers’ control. These demands and literally hundreds of others are the subject of General Assembly debates and in workplaces in every city.

All this is taking place while the ruling capitalist par­ ties stand mute, offering no solutions other than further incursions on the quality of life of everyone but the rich. The OWS assemblies overwhelmingly reject the notion— which is cautiously, but steadily, promoted by trade-union misleaders, Democratic Party front groups like MoveOn. org, and NGOs dependent on corporate funding—that the “lesser evil” Democrats are the only alternative. However, in the absence of a mass independent working-class political alternative, based on a rejuvenated and fight­ ing trade-union movement, there is no doubt that lesserevilism still finds receptive ears. The U.S. political system is in fact meticulously designed to achieve public support in the electoral arena by constantly counterposing one evil to another—today by purposefully enlisting as candidates a gang of right-wing Republican fanatics in order to facilitate the Democrats and Obama moving as far to the right as the ruling class demands.

In truth, however, it matters not which of the twin parties are in power. Obama has far exceeded his predecessors in the scope and magnitude of cuts in social programs and re­ actionary policies, not to mention wars and attacks on civil liberties at home. The name of the game is to provide legiti­ macy to whichever party wins the rigged game, in which the pre-selected multi-billion-dollar-funded candidates of the rich “battle” for the title. As in any serious high-profit gambling casino, the house is always rigged against the people.

Mid-November marked an important challenge to the Oc­ cupy movement when several encampments in major cities were dismembered by mass police force on orders from compliant judges or city officials. These attacks have given further drive to the tactical discussions and debates among Occupy activists, who were already considering measures to deal with the onset of the cold winter months. One question remains sharply posed to the movement’s ranks and the emerging, but still vaguely defined, leader­ ship: Are the encampments—the physical occupation of public or private space—envisioned as symbolic of the exercise of people’s power, or are they conceived as the ac­ tual embodiment of such power, as mini-communes, and as a conquest that must be physically defended lest the move­ Tony Savino / Socialist Action ment suffer a major defeat?

Many Occupy activists believe that the government’s obliteration of various occupation sites, as in New York and Oakland, represents a serious setback. Others, more realis­ tically, believe that however important the occupied sites might be, the value of this new movement lies qualitatively more in the unprecedented national political dialogue it has provoked, its emerging radical and anti-capitalist program, and the massive mobilizations that it has engendered. The movement’s power, it is now clear, lies in its bold ideas and actions and in the reverberation of these in the general population. Tens of thousands of trade unionists, working people, youth, and a broad layer of the oppressed communities flocked to the occupation sites less to con­ front the police and more to express their solidarity with the bold challenge to the status quo that had been posed. It must be stated, however, that the physical power, the sheer numbers, of these mass actions in most cases served as an effective deterrent to police interference. It is one thing to remove a small group of occupiers and their tents in the early morning hours but quite another to take on an angry and determined mass of working people—and espe­ cially so when they are backed by the formal declarations of support of the nation’s major trade unions, including the national AFL-CIO.

Even the hide-bound trade-union bureaucracy sensed that lending formal support and encouraging, however meekly, the mobilization of its ranks was far preferable to giving credence to the forces of “law and order,” including the Democratic Party. They judged properly that turning their backs on the Occupy movement entirely could lead to a repudiation of their leadership and the emergence of an internal opposition with a mass following and a mind of its own. Better to join now, they calculated, and ride the wave, only to lead it down the line into the Democratic Party “graveyard of social movements.”

The Occupy movement has set an example for the entire labor movement far exceeding its enthusiastic and wel­ come support for ongoing union struggles, including mo­ bilizing OWS protests at Verizon stores organized by the Communication Workers of America, where workers are fighting against employer efforts to impose a new crippling national contract, or solidarity actions supporting Team­ sters at Sotheby’s Auction house who face similar assaults. However important these and similar labor support activ­ ities are, they pale in comparison with the example in mi­ crocosm that Occupy has set in reminding working people that factory occupations, such as those in Toledo, Ohio, in 1934, and Flint, Mich., in 1937, pioneered a union-organiz­ ing drive that at one point in U.S. history had the potential power to challenge the capitalist system itself. Occupations of the giant General Motors and Ford Motor Company fac­ tories, and shutting down entire industries until the workers won union recognition and substantial contract-enforced gains, were among labor’s most profound contributions to securing gains that endured for decades.

Today, labor’s misleaders usually limit strike actions, if there are strikes at all, to essentially token one-day pro­ tests. And even these are met by the bosses with punishing lockouts, as when Kaiser Hospital responded to a one-day strike of 12,000 California nurses with a four-day lockout. The growth in political consciousness stemming from the Occupy Wall Street example has sparked a long-awaited discussion among working people and their still potentially powerful unions. If young people and loosely associated workers can occupy a city park, why can’t we occupy and close down the nation’s factories, transportation systems— planes, railroads, trucking lines, power plants and all the rest? We have the power. Why don’t we use it? For now, the Occupy movement is the proud and cou­ rageous tail that is wagging the giant slumbering dog of American labor and other social movements that have sub­ ordinated class mobilizations to alliances or “partnerships” with the class enemy. But it is only a matter of time until the example set by a relative few becomes the norm for the broad working masses. Occupations of city parks will give way to a far more massive movement. We will see gi­ ant, united strike waves and new forms of political action and solidarity that can fundamentally change the present relationship of forces and launch a struggle that can change the world. n