Insurgents Take Over Apwu

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An insurgent caucus in the American Postal Workers Union (APWU), called the “Members First” slate, won union-wide leadership in a vote counted on Oct. 8. Workers were fed-up with inac­ tion in the face of massive attacks on their 2010 contract. Seven of the slate’s nine candidates boot­ ed out the old guard. Mark Dimondstein of Mem­ bers First was elected president, with 27,000 votes compared to incumbent Cliff Guffey’s 21,000. The APWU represents 196,000 postal workers.

The new leadership will take over on Nov. 7 and has pledged to organize resistance to privatization and plant closures.

In a heavily craft-divided workforce, the APWU represents maintenance workers, truck drivers, and clerks in functions like processing mail and selling stamps. The new leadership intends to mend fences with the National Alliance of Letter Carriers (NALC), a union of some 300,000 mem­ bers. Both unions have shown disunity and an un­ willingness to mobilize the ranks against attacks.

The Oct. 18 issue of Labor Notes magazine re­ ported, “Dimondstein had been lead organizer for the union’s private sector organizing, an effort to unionize subcontracted trucking and private mailsorting firms that was mandated by delegates at APWU conventions. That effort was shelved by the incumbents. Dimondstein also co-founded the Greensboro, North Carolina, Jobs with Justice chapter and helped initiate a local coalition, Postal Customers and Workers United to Save the Postal Service.”

“Two of the new officers were part of a 2012 hunger strike to save the post office, started by the grassroots network Communities and Postal Workers United (CPWU). Several have experienced firsthand the effects of plant shutdowns in their own locals. What they had in common was frustra­ tion with the national union’s failure to stem the attacks on postal jobs.”

Will the new APWU leadership usher in a new era of postal worker militancy? Will it break with the Democratic Party or remain bound to the 1%? Time will tell, but time is short. — M.G.

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10 SOCIALIST ACTION NOVEMBER 2013 (continued from page 1: “Budget ‘debate’ conceals cuts for retirees & poor”) room table! Paulson himself had left his position as chairman and chief execu­ tive officer of Goldman Sachs, the fifth largest bank in the country, to take the Treasury post.

The two high stakes players, Bernanke and Paulson, top guns at the pinnacle of the financial pyramid, took just a min­ ute or so to tell George Bush the bad news before they entered the awaiting corporate legislators. Bush’s few words spoke volumes regarding who really rules America. “Why didn’t they tell me?” he uttered pathetically, according to on-the-scene reporters.

A few days later, when it became clear that the money trough was wide open for the taking, Congress upped the bank bailout figure to $840 billion and called the new law, TARP, the Troubled Asset Relief Program—a device wherein the government bought near worthless mortgages at full value. In the months and years that followed, Obama’s new Treasury Secretary Timothy Geithner added $20-$25 trillion more to give to the same elite bankers to keep their failing system afloat. TARP did include $50 million (not billion!) to help work­ ing people avoid foreclosure. To date less than $5 million of this has been al­ located.

In the meantime, the Republican/ Tea Party sound and fury about cutting Obamacare came to nothing. Neither Democrats nor Republicans had any intention, rhetoric aside, of gutting this proposal, which in its essence granted private health insurance corporations, whose monopoly profits are among the highest in the nation, $2 trillion in ad­ ditional rip-offs. This was done with full knowledge that a simple single-payer system would have saved $1 trillion in taxpayers’ money while providing qual­ itatively better and cheaper coverage for everyone.

The $3 trillion differential in real dol­ lar savings between Obamacare and single payer was a vital concern to the twin parties of capital. They sought to avoid it at all costs! In this particular in­ stance, Obama’s plan was the preferred choice of the health insurance corpo­ rate elite, who contributed far greater sums to the president’s campaign cof­ fers than to his Republican “opponents.”

Indeed, Obama had already agreed in behind the scenes negotiations to amend his plan in several places to fur­ ther advance the financial interests of the rich. Very telling, in contrast, was the pathetic spectacle of the recent AFL-CIO national convention’s send­ ing its president, Richard Trumka, on a hurried mission to the White House to demand that Obama amend his plan to avoid drastic reductions in some of the comprehensive medical plans unions had negotiated over decades. Obama told Trumka that he didn’t play favorites and would not bend to “special interest groups”—that is, trade unions that rep­ resent millions of working people.

Thus, the well-orchestrated charade over Obamacare was nothing less than the smokescreen behind which the rul­ ing elite negotiated how much to steal from working people. Obama’s 2014 budget proposal already includes pro­ posed cuts in Social Security and Medi­ care to the tune of $630 billion. This is the starting point on the sum to be cut.

To be sure, the final figure, as “both sides” of these “reasonable” negotiators reach agreement, will no doubt be in the trillions! The agreed upon amount will, of course, be transferred to the pockets of the billionaire and trillionaire few, qualitatively more to help save their stagnating and declining system than to satisfy the inherent qualities of greed and avarice that are sometimes alleged to be their prime motivating factors.

An October Wall Street Journal article had Tea Party presidential candidate Paul Ryan more truthfully stating, “let’s focus more on general spending and entitlement cuts,” as opposed to Obam­ acare. Similarly, Tea Party billionaires like the Koch brothers explained that Obamacare was subordinate to entitle­ ment spending and corporate tax cuts. Tennessee Republican Senator Bob Corker told Bloomberg News that “for the past two months we’ve been fo­ cused on the wrong subject.” His real priority was entitlement cuts.

Catastrophic rise in U.S. debt None of this is to say that there were not immediate consequences to work­ ing people during the government shut­ down. While the furloughed federal workers and all the others will likely receive back pay, local small businesses undoubtedly suffered, and millions who relied on a variety of public services and facilities suffered from the disruption.

But the single and most critical issue during the phony budget debates was never seriously addressed. The evermounting U.S. debt, currently standing at a historic high of $16.8 trillion, a fig­ ure that now exceeds the entire Gross Domestic Product (GDP) of the United States, was absent from virtually all the flame wars.

Since the beginning of the present recession in 2008, when the U.S. debt stood at $10 trillion, the debt has in­ creased, on average, by an astounding yearly sum exceeding $1 trillion. In order to “balance” every year’s budget shortfall to have sufficient funds to pay its bills, including the interest owed to U.S. and foreign creditors, Congress is required to pass legislation to increase the debt ceiling, that is, to approve leg­ islation adding yet another trillion dol­ lars to the debt. The $16.8 trillion owed will now be increased to $17.5 trillion, give or take a few billion.

This increase was essentially approved in the final bipartisan agreements just concluded; or more accurately, an agreement was reached to fund the def­ icit for at least three months, with the expectation that the full trillions of dol­ lars that are required would flow from continued negotiations over how much to cut from entitlements and to reduce corporate taxes.

The Bush era tax cuts alone, continued by the Obama administration, gifted the ruling rich some $2 trillion annually, an amount sufficient to more than balance the budget and to therefore avoid and need to raise ceiling. Similarly, the mas­ sive military expenditures, annually ex­ ceeding another trillion dollars, if elimi­ nated, would have more than balanced any budget on record.

But these sacred cows of capital are central to the functioning of the system. In short, what Congress annually steals from the income side of the budget, whose largest component is the taxes paid by working people, they seek to compensate for by austerity measures imposed at the expense of the general population.

This direct transfer of trillions from us to them is today the iron law of a failing capitalism. Literally, 99 percent of all new income generated since 2009 goes to the top 10 percent of the population, an undeniable statement that working people are suffering an attack of greater proportion than in any time of the mod­ ern era. This scenario is generally re­ peated throughout the world. In the U.S. the total present debt, $16.8 trillion, represents roughly 100 percent of the GDP, in Japan the figure is 192 percent; in Italy, the ratio of the debt to the GDP is 240 percent!

Everywhere in the world, capitalist budgets are “balanced” either at the direct expense of the working class or by “borrowing” money from other na­ tions or banks. I use the term “borrow­ ing” in quotation marks because in the U.S. what this really means is that the government effectively prints money or sells bonds to pay its bills. Since 2008 this has amounted to some trillion dol­ lars annually.

The question of questions is therefore: How long can the government print money or sell bonds to pay its debts un­ til a limit is reached? Most of capitalist economic history was based on the pre­ viously indisputable assumption that money, in paper or coinage form, had real value—that is, it was based on gold or on real commodities manufactured by working people in the course of cap­ italist production. The expression that “the dollar is as good as gold” rang with a certain truth. Gold itself is a commod­ ity whose value, like all others, is based on the amount of human labor power needed to extract it from the earth.

Nations printed money to facilitate the purchase and exchange of real com­ modities—to aid in the normal circula­ tion process. One could practically go to a bank to exchange cash for gold. In 1944 the U.S. held gold reserves that covered 75 percent of the cash in circu­ lation, although by 1971 the figure had been reduced to 18 percent due to the printing of excessive dollars.

Those nations that violated this fun­ damental economic principle and print­ ed paper money without regard to its representing real commodities suffered the consequences—massive inflation wherein what cost x amount in a currency one day, cost 100x or 1000x shortly after.

The fact that the U.S. inflation rate has been relatively low in recent years is due to the fact that the paper money printed has not been circulated to the general population, therefore in­ creasing demand for new prod­ ucts. Instead, the printed paper money circulates among the elite few—the banks and other spec­ ulators who play the capitalist casino game.

The U.S. formally abandoned the gold standard under the Nixon administration in 1971, when the first serious signs of the weakening of the economy appeared as U.S. hegemony was increasingly challenged by com­ peting international rivals. The price of gold has since risen from about $35 per ounce in 1971 to today’s levels, when the dol­ lar’s price madly fluctuates from close to $2000 per ounce to its present value of $1450—an approximate increase of fifty times its original value. Put anoth­ er way, the value of the U.S. dollar today is one-fiftieth of what it was in 1971.

In time, printing billions and trillions of dollars, none of which are based on real commodities, i.e., real produc­ tion in basic manufacturing industries, must eventually end in a catastrophic meltdown that will shake the economic foundations of the entire world.

The present stock market boom, with the Dow Jones index reaching an all time high in 2013 while the overall economy is stagnant or in decline, is nothing less than the product of today’s casino capitalism. The government or Federal Reserve prints what amounts to fake money and loans it at near zero interest rates to banks and other specu­ lative investors, who in turn invest in all varieties of new financial instruments at rates of return far greater than the government’s zero percent loan rates.

With average manufacturing profit rates in the real economy on the de­ cline in the U.S. and around the world for decades due to ever-intensifying in­ ternational competition, the corporate elite much prefer gambling in specula­ tive instruments than investing in new technologies to beat their rivals. This “financialization” of capital—the shift from producing real commodities for sale in ever stressed and increasingly glutted world markets to speculative investments—has resulted in the pres­ ent worldwide crisis of the capitalist system itself, wherein pain and suffer­ ing must be inflicted on the vast major­ ity everywhere to pay for the system’s inherent contradictions.

Since World War II, when the U.S. emerged as the preeminent world eco­ nomic power, with its enemies and al­ lies alike destroyed in a cataclysmic war that killed 60 million people, the U.S. has been the leading and unchallenged world power. Even today 60-70 percent of world trade is conducted in dollars, and a similar figure holds for the debt in dollars held by the rest of the world. But today, as the U.S. is increasingly chal­ lenged by the European Union, China, and elsewhere, its domination of the world economy is on the decline, with China, for example, now the leading manufacturing nation.

In time, the endless printing of dollars, not backed by anything other than the “good faith and credit of the U.S.” cannot but lead to an inflation that reduces the value of the dollar much closer to its real value. China, for example, the world’s leading holder of U.S. debt (treasury certificates, bonds and cash)—to the tune of $1.3 trillion—can only wonder if its holdings will evaporate due to in­ flation.

Indeed, China has begun to dump (continued on page 11, in “Bay Area Rapid Transit workers settle strike”)

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The transfer of $ trillions from working people to the bosses is the iron law of failing capitalism today.