Capitalists get bailed out, workers get sold out

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Eight years into the world capitalist crisis— the Great Depression of the modern era—no nation on earth can boast anything resembling a recovery. Stagnation and continued decline are the norm the world over, with the broad im­ position of austerity measures taking an ever-increasing toll on the working masses and op­ pressed, while imperialist wars for domination and plunder proceed seemingly with no end.

There are no Keynesian “solutions” by which means the ruling class might seek to mitigate capitalism’s inherent contradictions by invest­ ing in even the most modest public works and related programs to create jobs for the ever-increasing numbers of unemployed and underemployed workers.

In contrast to the 1929 Great Depression, when the Roosevelt administration sought to implement public works programs—none of which came close to mitigating the unprec­ edented employment, desperation, and misery inflicted on workers—today’s ruling classes the world over reject (or better, are incapable of) implementing even token measures.

In the U.S. during the late 1930s it was only the mas­ sive conversion of vast sections of the economy to war production that eventually provided a modicum of relief. In contrast, with U.S. war spending today in all its manifestations at an all-time high at $1 trillion annually, the economy remains stagnant. Government bails out big corporations Today’s “pump-priming” or “stimulus programs” are squarely aimed at massive government bailouts, nearly interest-free loans, and related monetary mea­ sures that go directly to capitalist banks and related financial institutions, which in turn invest trillions of dollars in ever-multiplying forms of stock-market and other speculative instruments that bring addi­ tional trillions in “profits” for the super-rich and only misery to the vast majority.

This financialization of capital has taken on un­ precedented and almost unbelievable forms. While the U.S. Federal Reserve “loans” the major banks and financial institutions funds at nearly zero-interest rates, the European Central Bank has “loaned” its own flagging banks and corporations $7 trillion in negative interest rate schemes. Germany’s negative rate loans today exceed $1.5 trillion; Japan’s are $4.5 trillion! And now China has announced that it too en­ gages, U.S.-style, in multi-billion-dollar bailouts of its own corporate elite.

Negative interest rate loans, believe it or not, mean that the world’s major central banks give its associ­ ated banks and financial institutions free money. For example, if a central bank “loans” a corporation $1 billion at a negative interest rate of 10 percent, the recipient corporation or bank is “obligated” to replay the lender only $900 million.

In the U.S., the “near-zero interest rate” loans of the Federal Reserve are called “quantitative easing” or “economic stimuli.” Until recently, they amounted to some $89 billion monthly—on top of the $32 tril­ lion in direct bailouts since the onset of the 2008 depression. These loans are supposedly designed to stimulate the economy by encouraging banks and corporations to invest in job-creating endeavors like infrastructure improvements, new factories, or some sort of commodity-producing industries.

However, this near-free money was instead virtu­ ally gifted to the banks and related financial institu­ tions, which in turn poured it into the stock market and other speculative ventures.

Increasingly, “casino” or “Ponzi-like” bubble capi­ talism has been the result, wherein the qualitative increase in the percentage of capitalist profits are invested in banks and speculative instruments as compared to investments in commodity-producing industries. We attribute this shift to the constant de­ cline in the average profit rates in the manufacturing and related industries.

These never-ending and diverse forms of bailouts of an ever-flagging world capitalism have taken grotesque forms, including corporate utilization of “loopholes,” purposely imbedded in the U.S. tax code, which allow major corporations to avoid hundreds of billions of dollars in taxes by setting up shop in other countries.

The recent exposure of the Charles Pfizer pharma­ ceutical giant’s attempted use of these “loopholes” to “renounce its U.S. citizenship” by buying a foreign corporation to avoid billions in taxes (known as in­ version) was foiled in early April 2016, at least for the moment. But Pfizer’s totally legal but embarrassing maneuver had zero effect on at least 40 other major corporations that previously and successfully had employed the same “renunciation of corporate citi­ zenship” loopholes.

Similarly, the recent “Panama Papers” revelations that big-time capitalists around the world use vari­ ous offshore hideouts to avoid taxes was trumped when top U.S. tax experts demonstrated that the same kind of tax avoidance havens, but based on U.S. soil, are routinely employed by the super-rich and their corporations.

Even more recently, in mid-April 2016, the anti-pov­ erty organization Oxfam International revealed that U.S. corporate giants such as Apple, Walmart, General Electric, and Bank of America had stashed $1.4 tril­ lion in secret tax havens. Oxfam’s research demon­ strated that for every dollar these corporations had paid in taxes, they received $27 back in the form of government subsidies and bailouts!

All of the above and innumerable other “legal” de­ vices are available for the exclusive use of the ruling rich because they control the state power—or better, they are the state power. These “perks,” coupled with the “illegal” corruption that is endlessly coming to light, are employed with impunity by the ruling rich in the U.S. and worldwide. Although these methods are routinely practiced when the corporate foxes le­ gally inhabit the governmental henhouse, the intensi­ ty with which they are employed is the reflection of a crisis-ridden world system that knows no way to es­ cape from the bounds of its inherent contradictions. Austerity for the working class and poor The same ruling elite that employs the levers of state power to try to resolve their crises is today im­ posing unprecedented and across-the-board auster­ ity measures on the working class everywhere:

• By all indices, the gap between rich and poor has reached unprecedented proportions, with more than 90 percent of all new wealth since 2008 going to the wealthiest 1 percent or less. There is no shortage of official statistics demonstrating the ever-increasing gap between the rich and poor.

• In the context of ongoing worldwide capitalist globalization, the world labor market is undergoing dramatic and accelerating changes, with millions of once “living-wage” jobs in the major imperialist na­ tions now outsourced to the “periphery,” that is, to poor and relatively underdeveloped low-wage or near slave-wage nations. The fact that many of these new workers, in order to survive, must continue to farm or carry on other income-earning activities out­ side of “work” is but another example of capitalism’s compulsion toward the super-exploitation of labor— a super-exploitation that falls disproportionally on women—to resolve their inherent contradictions.

Stigtryggur Johannsson / Reuters (Above) April protest in Iceland against Prime Minister Sigmundur Gunnlaugsson, after the Panama Papers revealed that his wife owned a company with funds in an off-shore tax haven.

This vast proletarianization process has transferred hundreds of millions of previously rural workers to major cities and employed them in modern factories. We have yet to see a qualitative increase in the or­ ganization and unionization of these future working-class fighters, but such a dramatic shift is inevitable.

In China and Russia, while there has been a sig­ nificant increase in the number and frequency of strikes—over 2000 in China in 2015—most are lim­ ited to immediate critical demands, especially de­ mands to be paid for work performed. That is, the new breed of capitalist exploiters in these countries, and almost all others where labor can be had for be­ low-poverty-level wages, operate under conditions of extreme repression and highly regimented working conditions. Unions are largely banned or government controlled. Wages are often not paid for long periods of time, if they are paid at all, and capitalist bosses often close their obsolete or unprofitable plants and “disappear” without penalty.

Another example is the Apple Corporation, the rich­ est in the world, employing over a million workers under the most horrific working conditions, using its Taiwan-based Foxconn corporation’s modern fac­ tories in mainland China. It is only a matter of time and leadership until this proletarianization process results in the crystallization of new forms of demo­ cratic trade unions that win the confidence of work­ ers and fight to defend their interests.

In the United States, although industry has been dispersed in recent decades to new areas of the coun­ try, including many districts that are still non-union, the concentration of workers in key hubs for manu­ facturing and distribution reinforces the strength of the working class. These new plants include at least a dozen assembly plants in the Southeast United States built by “foreign” or “international” corporations.

In due time, these bastions of ruling-class power will be challenged by a new and re-invigorated labor movement, perhaps not qualitatively different from the mass upsurge in the 1930s that saw capitalism’s non-union mass production industries bow to a rap­ idly emerging union power, led in significant part by conscious revolutionary or radical forces. n Going to the Left Forum? Don’t miss the two panels sponsored by Socialist Action Newspaper • South Africa: Liberation or Economic Apartheid? Patrick Bond, professor at U. of KwaZulu-Natal, South Africa; Glen Ford, Black Agenda Report; Marty Goodman, Socialist Action • Greece & Syriza: What happened? Manos Soufoglo, Or­ ganization of Communist Internationalists-Spartacus (Greece);

Eric Poulos, member, AK-NY, a Greek-American solidarity group The Left Forum will take place on the May 20-22 week­ end at the John Jay Law Center in Manhattan.

SOCIALIST ACTION MAY 2016 3

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Chicago Tribune print for what we’re going to deal with.”

On April 30, the Rev. Jesse Jackson con­ demned Rauner for ignoring the needs of Chicago’s Black and minority communities: “We were deceived in thinking that we at least had breathing room until the fall. We were betrayed,” he said. “Given the number of Black and Brown people involved, it has heavy, heavy racial and sensitivity implica­ tions.” Jackson was accompanied by CSU students and community members at Chi­ cago’s South Side headquarters of Opera­ tion Push.

Two days earlier, a CSU graduating class of 850 students heard Rev. Jackson at com­ mencement ceremonies. A gathering well attended by the local media, it took the form of a large protest rally for CSU fund­ ing. Nearly every speaker paid tribute to the CSU students, faculty, and staff who stand united in the fight against education cut­ backs. Despite the widespread uncertainty they faced over the last year, they mobilized together, making their voices heard in nu­ merous protests, rallies, and demonstra­ tions on campus and around the city.

Clearly, the $20 million “emergency” aid