WORKERS OCCUPY FACTORY POLITICIANS RUN TO BOSSES’ RESCUE

CHICAGO, IL December 6 – “We are not going anywhere!” That’s what one worker said, speaking for his brothers and sisters who are occupying the Republic Windows & Doors factory. He was speaking to more than 200 workers, youth, union activists and local union officials who rallied in support of the occupation that turned the bone- chilling cold, wind and snow into a breath of fresh air.

On December 2, Republic gave about 250 black and Latino workers, members of the United Electrical Workers union (UE), three days notice that it was closing for good. Bank of America (BOA), their main creditor, cut off a line of credit to Republic causing the plant closing and canceling workers’ health benefits. According to the federal WARN Act, workers must get 60 days notice, and in Illinois they must get 75 days notice. Workers are demanding their 75 days pay and health benefits, plus vacation pay owed to them.

The total bill of about $1.5 million is a drop in BoA’s $25 billion bailout bucket. Bank of America received $15 billion as part of the federal government’s Troubled Asset Relief Program (TARP), raised $9 billion in government guaranteed loans and will get another $10 billion in TARP funds in the next two weeks. (As we go to press Bank of America has tentatively agreed to loan Republic some funds. But it is not clear how much if any will eventually be given to workers.)

Workers picketed BoA on December 3, and the bankers agreed to meet with Republic and the UE on December 5. The meeting was arranged by Democratic Congressman Luis Gutierrez, but Republic failed to show up. They are busy trying to sneak away to a new plant in Iowa with a non-union workforce. Some workers think Republic is planning to move out of state because the union rejected major concessions in the last contract and “won” pay increases. But as we’ve seen in the auto industry, when the bosses are in crisis our contracts aren’t worth anything.

The Democratic Party has taken over the struggle of the Republic workers. Obama publicly supports them. Jesse Jackson delivered a truckload of turkeys. Congressman Gutierrez has become their main advocate, the City Council has called for an end to doing business with BoA, the Governor has called for the factory to stay open, and the Attorney General is investigating Republic’s closing and possible move to Iowa. Workers come and go on 8-hour shifts, about 50 to a shift, without a racist cop in sight.

The Democrats know what’s in store for workers with many more plant closings and layoffs, especially affecting black and Latino workers. These politicians who have bailed out the bankers and industry bosses, as well as sending us to war and building fascism, want to mis-lead the workers‘ struggle.  They are fearful that with massive layoffs looming there could be more plant takeovers. The opportunists, reformers and union full-timers who spoke at the rally are thrilled with the politicians trying to take over the strike and eager to be their foot soldiers.

By fighting back, Republic workers are setting an example to all workers facing layoffs and plant closures. PLP is mobilizing on our jobs and our campuses to collect food and money and to bring groups of people to the plant. Even more important, we will bring our revolutionary communist politics to show the Republic workers and those supporting them that the only way we can secure a future for the international working class is to build a mass PLP and fight for communist revolution.

One comrade went to the plant with coffee and donuts and ran into a friend and his wife coming out. His friend has worked there for about 10 years. They all went onto the occupied shop floor, where no guests are allowed, and the worker and his wife took our comrade on a tour of the plant. He dropped off the coffee and donuts at the lunch tables and got introduced to a group of Republic workers. He told the couple, “Fighting for what they owe you is good, but it won’t find you another job or give your son a secure future. It’s the whole system that’s no good and we have to get rid of it.” He showed the couple CHALLENGE and told them we wanted to do an article about their struggle.
As they toured the plant the comrade pointed out, “See all these windows piled up here? It doesn’t make sense. People need these windows to stay warm. The workers build them, but people can’t get them because the bosses can’t sell them.” He explained that we want a world where people get what we need because we need it, not because some factory owner or banker will profit off of it. We hope to have many more of these experiences in the coming days, and deepen the base of PLP among those fighting back, and those who support them.

Republic workers need your support. Send checks to UE Local 1110 Solidarity Fund, 37 S. Ashland, Chicago, IL 60607.  Send messages of support to leahfried@gmail.com

NATIONAL SERVICE: OBAMA’S SCHEME TO DRAFT YOUTH FOR BOSSES’ WARS

Last June at Columbia University, President-Elect Barack Obama said  that he would make plans for the American people to recognize an “obligation” for military service. “If we are going into war, then all of us go, not just some.” The ruling class has never forgiven the Bush administration’s failure to successfully use the 9/11 attacks to recruit more young workers, especially black and Latin, to be patriotic Americans willing to fight in its military.

The Obama administration has promised not to make the same mistake. With wars in Afghanistan and Iraq burning, the economic meltdown and rising unemployment and the rise of new imperialist rivals, time is running out for the U.S. ruling class to try to maintain its position as top imperialist power. As future White House Chief of Staff, Rahm Emmanuel has stated: “Rule one: Never allow a crisis to go to waste . . . They are opportunities to do big things.” (Boston Globe, 11.30.08)

One “big thing” they’re attempting is to recruit young workers and students to National Service. This includes plans to expand AmeriCorps to 250,000 and double the size of the Peace Corps. These programs under the guise of promoting community service domestically and internationally have been used as a way to stop rebellions and support U.S. imperialist attacks on workers around the world.

They are also proposing that all middle and high school students do at least 50 hours of community service a year, giving a tax incentive of up $4,000 a year in “exchange for 100 hours of public service.” College students would do 100 hours of public service in exchange for tuition decreases,  making “a college education affordable.” (Obama’s website).

This service would help meet dire needs of the ruling class:
In order to rebuild a rapidly disintegrating infrastructure, it will create low-wage jobs –– many of them non-union –– thereby lowering the wages of the entire working class

1. More bodies in military uniform. (See CHALLENGE, 12/10)
2. Win workers and youth to U.S. nationalism
3. Clean up the image of the U.S. around the world as the country that spreads “democracy.”

RULERS TURN WORKERS’ COLLECTIVITY ON ITS HEAD FOR THEIR NEEDS

In the absence of a mass communist movement capable of winning thousands of workers to revolutionary ideas, the bosses can twist working-class collectivity into support for capitalism. Many people volunteered during events like 9/11, the Asian tsunami and Hurricane Katrina, proving that workers have a willingness to help others and oppose, at some level, the “everyone-for-themselves” mentality of capitalism. A 2006 UCLA study found that 86% of incoming college freshmen — most of whom are now presumably college juniors thinking about post-college employment –– volunteered at least occasionally during high school and 70% did so at least once a week (Washington Post, 11/24/08). The communist PLP aims to take this collective feeling and use it as part of organizing a society based on production for the good of the whole of society.

On the other hand, the bosses’ intentions with community and national service is similar to the Nazis’ call for National Socialism by recruiting young and old to “do what they can” for the sake of the country (i.e., the ruling class). The Obama administration wants to acclimate the U.S. population to the idea of “service” and “sacrifice.” These ideas will be used to convince workers and students to make the deadly error of allying with their class enemies and fighting for U.S. imperialism.

Work Within, Not on the Outside

We can turn Obama and the Democrats’ idea of community and national service on its head by buildng communist ideas within their various “Corps.” That means distributing CHALLENGE and always fighting for service for the working class — organizing against the bosses and for the real interests of the workers. We need to fight against workers getting laid off from their jobs, getting their pensions and homes ripped away from them by the greed of capitalism. We need to fight every attack against immigrant workers, like the murder of Marcelo Lucero in Long Island, by capitalist-inspired racism. We need to fight for communism to get rid of racism, sexism, nationalism and imperialist war. These are our working-class’ calls to service.

The mass unemployment hitting the U.S. and the world will draw many workers to the option of national service. Sooner rather than later this option will become mandatory as inter-imperialist rivalry sharpens and the eventuality of war is clearer. Members and friends of the communist Progressive Labor Party must organize with workers to build class struggle against the bosses — taking the lead in strikes, marches and rallies. We need to build a base of rank-and-file workers to recruit for communist revolution.

Imperialists’ Wars Worsen Rulers’ Financial Woes

Imperialist war takes a serious toll on the domestic economy. In fact, as U.S. imperialism enters a period of “persistent” and escalating conflict a chief task of the next president will be forcing economic sacrifices from workers (as usual) but also from capitalists.

Bad “subprime” loans based on the bursting housing bubble only partly explain the current U.S. economic crisis (see CHALLENGE, 2/13). True, the unfolding mortgage fiasco drastically curtails lending and spending. But even while a handful of corporations like Haliburton grab enormous profits, the skyrocketing costs of U.S. rulers’ ever-widening wars act as a brake on profits. Government bonds to pay for the war machine — production for destruction — draw investors away from investing in production for consumption since the government bonds are more secure. That makes it harder for consumer-goods capitalists to find money to invest in their industries, out of which they reap profits from their workers’ labor. Thus, it limits their ability to increase, or even maintain, profits.

The New York Times (2/4/08) reported that the Pentagon’s proposed 2009 budget of $515.4 billion “when adjusted for inflation, will have reached its highest level since World War II….Yet those demands for money do not even include the price of refocusing the military’s attention beyond the current wars to prepare for other challenges.” Nor does it include the $200+ billion spent in Iraq and Afghanistan.

Not a penny of this colossal waste finances productive investment. The rulers’ war spending only destroys. U.S. bosses, meanwhile, seek to make workers pay for both recession and war through massive cuts in jobs, wages, health, education and other vital services.

Rivals Took Advantage of A U.S. Weakened by the Vietnam War

While U.S. capitalists were devoting 9% of gross domestic product (GDP) to genocide in Vietnam in the 1960s and 1970s, their Asian and European rivals were modernizing factories and consolidating financial structures, putting the U.S. at a competitive disadvantage. U.S. bosses lost global dominance in auto, electronics and other key sectors and began a permanent, one-way trend of mass destruction of manufacturing jobs. German and Japanese banks became the world’s largest.

Trade and war-related budget deficits ballooned. This, combined with pressure in the early 1970s from French banks that demanded payment in gold rather than paper money (which was losing its value because of war-caused inflation), officially ended the dollar’s “good-as-gold” status. The U.S. had to abandon gold payments because of insufficient stockpiles, so French capitalists and others demanded even more paper money payments to compensate for devalued dollars. This further weakened U.S. economic prestige.

“Stagflation” (negligible growth combined with inflation) took hold. Working families’ incomes, which had more than doubled between 1946 and 1973, now grew less than one percent per year against inflation. Today, the income of a young man in his thirties is 12% below what it was for a worker at that same age 30 years ago, working two weeks more annually and “putting in 350 more hours per year than the average European.” (Robt. Reich, Financial Times, 1/29)

Democrat Carter Began U.S.Build-Up For Mid-East Wars

The military component in today’s money crunch stems directly from the U.S. defeat in Vietnam. Emboldened by the 1975 fall of Saigon, foreign rivals started assailing the cornerstone of U.S. imperialism’s economic empire, its Middle East oil racket. When Islamists (who later befriended Russia and China) seized Iran in 1979, Democrat Jimmy Carter threatened war against any nation with designs on United States’ “vital interests.” Having lost both a major source of crude and a military ally in Iran, Carter vowed that the U.S. would deploy its own armed forces in the region.

Carter launched the Rapid Deployment Force which soon expanded into the Pentagon’s Central Command that has now invaded Iraq twice at enormous expense. The U.S. effort to oust the Soviets from strategic Afghanistan in the 1980s has backfired into an open-ended, cash-burning war against the U.S.’s former Taliban allies and their al Qaeda protégés. Even with only 55,000 troops in Iraq by 2013, U.S. rulers admit they will have thrown away $3.5 trillion in Iraq and Afghanistan by 2017. (“War at Any Price?” a Congressional Democrats’ report, November 2007)

For the foreseeable future, U.S. rulers’ need to control the Mid-East will saddle them with costly, protracted, Iraq-style wars of occupation. The Army’s newly-revised operations manual “describes the United States as facing an era of ‘persistent conflict’ in which the American military will often operate among civilians in countries where local institutions are fragile and efforts to win over a wary population are vital.” (NY Times, 2/8/08) The report on the manual is filled with phrases such as “long, grueling struggles”; “blueprint to operate over the next 10 or 15 years”; “how to prepare for future conflicts.”

Eyeing a laundry list of potential hot spots, the liberal Brookings Institution calls for vast expansion of U.S. armed forces. “Even greater increases in the size of the ground forces [than the 65,000 added soldiers and Marines already approved] may be prudent. Highly plausible scenarios involving Iraq, Afghanistan, Iran, Korea, Pakistan, Saudi Arabia, and other large countries (such as Indonesia, Congo, and Nigeria) illustrate the need to provide the next President with the capacity to muster large new forces without delay” (Brookings, Independent Ideas for Our Next President).

Growing threats to U.S. rulers from China and Russia, however, stand to push Pentagon expenditures way beyond their current 4% of GDP levels. During the budget debate, phony “anti-war” Congressman John Murtha declared, “We [need]… a military that can deploy to stop China or Russia or any other country that challenges us. I want to be prepared in case there’s a confrontation about energy.” (Reuters, 2/5/08) Such a clash would eat up trillions.

Clinton, Obama, McCain:All War Hawks

Make no mistake. Clinton and Obama aren’t calling for higher taxes on the rich to pay for social programs. Both promise to expand U.S. ground forces, Obama by 92,000 troops. Staunch defenders of the profit system, Clinton and Obama are every bit as militaristic as war-hawk McCain. Voting for any one of them will only select the next warmaker. While we have focused on the dollars wiped out by the war machine that all the candidates serve, the cost in workers’ lives has been horrific and will intensify.

Capitalism, which ceaselessly creates economic panics and imperialist wars, will always squeeze and destroy workers’ lives. Don’t vote. Join and build the Progressive Labor Party to achieve the long-term goal of communist revolution, the only answer to the horrors of the profit system.

JOBLESS: 7.65 MILLION OR 20 MILLION?

While the U.S. government announced a 17,000 job-loss for January, the Bureau of Labor Statistics also said the unemployment rate has actually declined to 4.9% based on 7.65 million jobless. What fraud! The government’s definition of an unemployed worker is one who has looked for a job in the last four weeks. This, of course, does not include:

• 4.8 million working part-time who want full-time jobs;

• 5.0 million who haven’t sought employment in the last four weeks or longer, including “discouraged” workers, those who’ve stopped looking for non-existent jobs (above figures from NY Times, 2/2/08);

• 1.6 million in prison (of the total 2.4 million) for non-violent crimes, mostly on drug possession charges — who are not imprisoned in rehabilitation-oriented Western Europe — and being among the least skilled would probably add to the jobless figures.

Add those to the government unemployment figure and the total becomes 19 million, or approximately 2½ times the reported 7.65 million! This still does not include unemployed youth who seek “jobs” as part of the 1.4 million in the military, nor several million still on welfare who would want to work if child-care were available. (Welfare recipients forced into Workfare in New York City replaced 20,000 unionized workers on the municipal workforce, according to a March 2001 report from the Federation of Protestant Welfare Agencies.)

So the number of U.S. workers denied full-time civilian jobs has certainly passed 20 million. Because of racist discrimination, the jobless percentage for black workers (9.2%) is more than double that of whites (4.4%). But even those figures are under-estimates since that 9.2% figure excludes the greater percentage of black workers trapped into prison and onto welfare.

There never has been full employment under capitalism, nor can there be. As bosses compete against each other for maximum profits, especially globally, their first cost-cutting measure is laying off workers, constantly searching for the lowest wage-rates. Now, especially during economic crisis, mass layoffs are the order of the day, as the bosses try to shift the burden of that crisis onto the backs of the working class.

But basing profits on non-productive sources only worsens the crisis. Schemes like subprime mortgage fiascos and hedge funds do not produce new value; only manufacturing workers can do that, and U.S. manufacturing is constantly declining. The trillions in credit and trade debts, and the borrowing to pay the $1.7 trillion cost of their imperialist wars in Iraq and Afghanistan, will deepen the economic crisis still further.

So no matter who becomes the next President, Hillary, Obama or McCain, the bosses will need more of a fascist police state, to make workers pay even more for their wars and crisis and to try to stop any working-class rebellions against this squeeze on their jobs and wages. And this is why workers need a system that is free of all bosses and profits and the stealing of the value we workers produce — a system in which all this value is shared according to need — and need a party, PLP, which fights for that system: communism.J

Rulers’ Subprime Fiasco Slams Workers, Spurs Fascist Solution

The subprime mortgage fiasco has highlighted a huge problem for the U.S. ruling class, even as it comes down like a sledgehammer on the working class. Since January 1, in the firestorm roaring through stock markets worldwide, capitalists have destroyed $5 trillion worth of value created by workers’ labor power. As the subprime cancer spreads, workers in the U.S., where it began, face mass foreclosures, layoffs and wage and service cuts, with black and Latino workers hardest hit because of racist discrimination.

U.S. rulers, on the other hand, while trying to make workers at home pay for the crisis, have fears going far beyond the domestic lending and spending crunch. The Council on Foreign Relations (CFR), the rulers’ leading think-tank, worries about “the geopolitical and geoeconomic effects a U.S. downturn might bring, particularly at a time that finds other powers [ruling classes — Ed.] on the rise, the price of vital commodities spiking and U.S. prestige in question.” (CFR website, 1/18/08) The threatened recession makes U.S. imperialism and its war machine all the more desperate for cash.

“War at Any Price?” — a report released by Congressional Democrats in November — shows that Iraq and Afghanistan will have cost $1.6 trillion by the end of 2008. It says that even with a drawdown to 55,000 troops in Iraq by 2013 (indicating a long-term occupation) the price tag will reach $3.5 trillion by 2017.

The rulers’ huge problem stems from the fact that they have nowhere near prepared the U.S. for all-out imperialist war. During World War II, the Roosevelt-led capitalist class mounted such an all-out mobilization by: (1) drafting 14 million youth into the armed forces (in a population barely one-third of the present 300 million); (2) instituted rationing of gas and food (each family had to present coupons at the store to buy meat — limited to 4 oz. per person daily — sugar, butter, etc.;  (3) decreed a government-imposed wage freeze and price controls; and (4) banned all strikes. Not one new car, washing machine or radio was manufactured in the U.S. for four years — all the factories were producing tanks, bombers and weapons of war. Tax rates topped out at 94%! (It’s 35% now.)

Compare this to Bush’s “war on terror.” His advice: “go shopping; don’t let the terrorists win.”
U.S. rulers approached the war against Nazi Germany and fascist Japan with total reality. While the Democrats decry the Iraq-Afghanistan price tags mentioned above, they don’t mention the fantastic sums a Middle-East re-invasion or war with China would require.

To prepare for World War III and endless imperialist wars against rising rivals in the European Union, China and Russia, U.S. rulers must exercise all-out control not only over the working class — fascism — but also over those members of their own class who guard  their own short-term profits at the expense of the long-range survival of their system as a whole, as they did in World War II.

While Obama’s camp has been slow in divulging its fiscal program, it can’t be far removed from Hillary Clinton’s who claims to have the solution. She intends to use the state apparatus to force reluctant capitalists to give up some of their profits to meet the main bosses’ war needs — the “sacrifice” of “treasure” called for in her husband’s Hart-Rudman Commission reports. Clinton told the New York Times (1/21/08) she would immediately raise the top income tax rate from 35% to 39.6%.

She also seeks to slash exorbitant executive pay, which would steer more profit to the ruling-class billionaires and banks that own companies. Hillary decries “professional corporate managers who are not the creators of the corporation.” She’ll protect billionaires like George Soros, the Rockefellers, Warren Buffet and others, who see the need to discipline their class to save their system’s top-dog status. Bill Clinton robbed the poor — by dismantling Welfare — to finance the Pentagon. Hillary would continue that crime, and the racist super-exploitation of black and Latino workers, intensifying Workfare to lower wage levels of all workers.

RULERS ‘GIVE’ WORKERS $1,200 TO SPEND, THEN DEMANDS MOST OF OUR PAY FOR WAR

Given actual military expenditures, proposed bipartisan “economic stimulus” packages, topping out at $1,200 per household, come off as a cheap election-year bribe, with each side trying to take credit for a paltry payoff. In reality, the rulers’ oil wars are robbing workers blind, while they slaughter working-class youth by the hundreds of thousands. The Democrats’ report cited above admits, with anti-Bush dismay, that from 2002 to 2008, “The total economic cost of the war in Iraq [and Afghanistan] to a family of four is a shocking…$20,900.”…. The future impact on a family of four skyrockets to…$46,400 for Iraq and Afghanistan when all potential costs from 2002 to 2017 are included.”

MAIN CLINTON FACTION WANTS POLICE STATE FOR BOSSES, TOO

Clinton plans to clean up the subprime mess with a 90-day moratorium on foreclosures and a freeze on subprime mortgage rates. Her purpose is more political than economic. She wants to impose police-state control over finance and industry. She’s following Franklin Roosevelt’s severe disciplining of U.S. capitalists in the run-up to World War II. Clinton promises “the toughest regulatory scrutiny of any president in a generation.”

It was financial deregulation, prompted by inter-imperialist rivalry in the 1980s and 1990s, which set the stage for the subprime debacle. At that time U.S. banks needed to consolidate and grow in order to compete with giant European and Japanese counterparts. Citibank led the charge against regulation and in 1999 succeeded in shattering the main regulatory obstacle to bank expansion, the 1933 Glass-Steagall Act, which had kept commercial and investment banks separate. Today Citi is perhaps the world’s biggest bank but holds yet untotaled billions of worthless subprime debt.

Capitalism by its very nature must create economic boom-and-bust cycles as well as imperialist wars in its insatiable competition for maximum profits. In the current era, it must impose fascism on the working class as well as discipline its own class to be able to preserve its system. Clinton, Obama and the rest of the candidates are dedicated to promoting and defending this bosses’ dictatorship over the working class. Supporting any one of them would be a serious mistake. Rather we should join and build the Progressive Labor Party, which has the long-term goal of communist revolution, enabling the working class to collectively decide how to apportion, according to need, the social value it alone collectively produces.

Clinton, Obama Advisors: All War, All the Time

With Hillary Clinton and Barack Obama falling all over each other posing as “anti-war” candidates, take a look at their pro-war advisors.
Clinton has:
• Madeleine Albright, Bill’s Secretary of State, the main force behind her husband’s Iraq sanctions that the UN says killed up to one million Iraqi civilians (half of them children). When asked about those sanction-caused child deaths, Albright told “60 Minutes,”: “We think the price was worth it.”
• General Wesley Clark, architect of the bombing of Serbia, who publicly stated the U.S. would bomb civilian targets regardless of “collateral damage” — civilian casualties.
• Richard Holbrooke, a Jimmy Carter aide, oversaw weapons shipment to dictator Suharto’s Indonesian military (see page 7) during the latter’s invasion and massacre of 200,000 people in East Timor.
Obama has:
• Zbigniew Brzezinski, Carter’s National Security Advisor, who boasted responsibility for the $3 billion CIA creation of the Afghan jihadist movement in 1979 which produced Osama bin Laden. When asked about its “negative consequences,” he replied, “What’s a few riled-up Muslims?”
• Anthony Lake, a Bill Clinton aide who played a key role in the U.S. invasion of Haiti.
• Sarah Sewall, author of the introduction to Bush’s General Petraeus’s Army Counterinsurgency Manual which U.S. troops use worldwide in imperialist oil wars.

Such is the motley crew that will spread wider wars no matter who’s elected president. They’re all defenders of U.S. imperialism.
the American Petroleum Institute, and the National Association of Manufacturers, is one of his biggest individual donors.

Economic Collapse Burying Workers; Will Spark Wider Wars

The global economic collapse is crushing workers even more. The UN’s International Labor Organization (ILO) predicted that the subprime crisis and rising oil prices will increase world unemployment by five million (Agence France Press, 1/23) over and above the already 189.9 million now jobless. That forecast was reached before the current turbulences in the world’s financial markets. “We still don’t know the impact of the stock market crisis on the employment figures,” explained ILO chief José Salazar-Xirinchs.
Trenton, NJ Mayor Douglas Palmer, president of the U.S. Mayor’s Conference, told 250 mayors meeting in Washington that the subprime crisis is “an economic tsunami…hitting our cities.” A recent Conference study said home values would drop by $1.2 trillion this year.

The mayors are asking for immediate federal help, but — even though some cities are suing banks and speculators who caused the subprime mess — their main response has been to cut social services even more nation-wide. Sacramento city officials have responded to a $55 million projected budget shortfall for next year by ordering an immediate hiring freeze and ending some discretionary spending. In Virginia, Fairfax County — facing a $220 million deficit for the coming fiscal year — is considering cuts to school districts. On January 24th, billionaire New York City Mayor Bloomberg announced an across-the-board 5% cut for all city departments, for a total slash of $1.5 billion in two years, including a $505 million dollar reduction in schools.

The effects of the current economic crisis are also hitting countries closely linked to U.S. imperialism. During the current world economic forum in Davos, Switzerland, the governor of Mexico’s Central Bank reported that his country’s economy will be hit badly — 40% of Mexico’s Gross Domestic Product depends on trade with the  U.S. Already, Mexico is predicting a slowdown in growth for 2008. On top of that, hundreds of thousands of Mexican immigrant workers in the U.S. are losing their jobs because of the subprime crisis (many work in construction) and general economic collapse, reducing their remittances to relatives back in Mexico.

This racist aspect of the subprime crisis is affecting Britain and Spain. Immigrant workers involved in construction there are losing their jobs.

International financier George Soros is not bullish about this crisis. He told the Davos economic forum that there is a profound difference in the current crisis, marking the end of an era of credit expansion based on the dollar as the international reserve currency. He called it the worst economic crisis since World War II. The hope that the rising economies of China and India will help ease the situation is being dashed since they depend on exporting to the U.S. and European markets, hard-hit by the current crisis. For example, incomes for workers in the U.S. have not risen in real terms for three decades because of downsizing, racist wage-cuts and the lack of mass fight-back by the union movement. The subprime crisis has put working-class homeowners — who borrowed money based on the rising values of their homes — in a hole, decreasing consumer spending. Less consumption and a falling U.S. dollar might spur China and other countries, who have lent the U.S. trillions by buying Treasury bonds, to cash in their investments, sinking the U.S. economy even more.

Soros is worried that resulting political tensions, including U.S. protectionism, may disrupt the global economy and plunge the world into recession or worse.

That “worse” could turn economic conflicts into a shooting war among the world’s imperialists for a bigger share of the capitalist pie. The subprime and credit-crunch crises are just symptoms of a capitalist system based on speculation, endless imperialist wars and racist-fascist attacks against the international working class. None of the tricks the bosses used in recent decades have worked, including Thatcherism, Reagan’s “trickle-down voodoo economy,” Clinton’s “new economy” or Bush’s tax cuts. U.S., British and other capitalists’ turning away from production has created an even more parasitic capitalist class, still more dependent on financial speculation and increasing fraud, without creating real value. Each new scheme — dot.com, subprime mortgages, etc. — created bigger bubbles, dragging the world economy down.

But capitalism won’t fall by itself. Since its birth the profit system has been based on boom-and-bust cycles, accompanied by massive wars, recessions and depressions. The anarchistic capitalist production system will continue as long as we workers let them make us pay with our blood for their profits. Previous wars and crises led to workers’ revolutions: the Paris Commune, the Bolshevik and Chinese revolutions. As the international working class prepares for May Day 2008, we in the Progressive Labor Party must step up our efforts to win workers, youth and soldiers worldwide to see that the only way out of this capitalist hell is building a massive revolutionary communist movement to bury the bosses once and for all.

The Demon Is Capitalism

A Demon of Our Design: Markets, Hedge Funds and the Perils of FInancial Innovation
By Richard Bookstaber
John Wiley & Sons, Inc., 2007

“Complexity cloaks chaos” concludes Richard Bookstaber in A Demon of Our Own Design. He draws on insider knowledge of recent Wall Street debacles to paint a future of bigger, more frequent financial collapses. The need to reinvigorate value-producing manufacturing becomes more severe with each crash: the attacks on the working class sharper.

Historically, many empires have been undone by letting go of their domestic manufacture-based economies. A seventeenth-century Spaniard enthused: “Let London manufacture… as long as our capital can enjoy them. …All the world serves [Madrid] and she serves nobody.” Eventually, London used its manufacturing to become the center of a new empire, while’s Spain’s empire declined.

Speculation: U.S. Imperialism’s Hidden Weakness

The financial sector now accounts for 31 percent of U. S. corporate profits — up from 20 percent in 1990 and 8 percent back in 1950. But, larger percentages of financial profits come from hedge fund speculation. New York Times business columnist Floyd Norris blames these financial “innovations” for spreading the housing-related credit market crisis.
On the other hand, China has a growing industrial economy allowing it to become an emerging imperialist competitor. Not long ago U.S. “experts” questioned China’s economic viability since Chinese banks carried too many non-performing loans. China Investment Corporation, the state-run investment fund, will spend two-thirds of its $200 billion shoring up these banks. Their percentage of “bad” loans has already dropped by half.
Chinese imperialists got this capital from exploiting workers in their vast, rapidly-expanding manufacturing sector. They can get away with it because capitalist leaders long ago hijacked the communist revolution. They’ve turned it into it’s opposite — another exploitive capitalist nightmare.

Spiral to Hell

Bookstaber gives a running account of financial “innovations” beginning in the 1980s. He explains the mathematics behind investment strategies that caused such infamous disasters as the 1987 crash and the demise of Long Term Capital Management. He worked with many of the players and admits to contributing to financial catastrophes.
He freely admits speculative “financial tools” help for only a few years. The investment community “invents” one speculative scheme after another trying to stay ahead of the inevitable payback. By now, the very design of financial markets insures a “liquidity spiral to hell.”

His solution is to reduce “tight coupling and complexity of financial transactions.” The financial markets shouldn’t use “every financial instrument that can be dreamt up.” Speculation shouldn’t rely on large sums of borrowed money. This “leverage” speeds up the spiral to catastrophe, spreading the danger to areas beyond the original investment. Bookstaber hopes “simpler financial instruments and less leverage will create a market that is more robust and survivable.”

He never asks why U.S. bosses turned to financial speculation in the first place. Industrial opportunities to extract surplus value and profit failed to keep pace with those of emerging imperialist competitors. U.S. financial titans were forced to speculate to keep up. Bookstaber’s solution is fanciful in this climate.

Workers Create All Value

The value of an automobile or airplane is greater than the sum of the parts that make it up. The amount of labor in production creates the increase in value. The boss can’t use this extra value until he sells the product. Marx called this part of the process exchange. Exchange itself doesn’t create any value.
As exchange becomes less connected to creation of value, it turns into speculation. One boss can make money at the expense of another, but no value is created in the exchange. That’s what increasingly opaque hedge funds are all about. Eventually the house of cards collapses if no extra value is created to back up these financial “tools.”

Ruling-class strategic thinkers have awakened to the danger and to the need to actually produce value. They are re-industrializing on the backs of low-paid immigrant and black labor, starting with expanding subcontractors.

Racist practices like this hurt all workers. The network of non-union subcontractors has grown to include low-paid sub-assembly and assembly factories. Conditions in traditional union plants — with older white and black workers — are being driven down to subcontractor levels. Even in union facilities, the new hires get paid half what veteran co-workers make. The bosses may not be able to stop speculation, but they can and will attack us.

Re-industrialization with low-paid domestic labor is only the beginning. The bosses hope to rein in emerging imperialist competitors like Russia and China through control of Mideast oil. The current wars are only a prelude to more bloody oil wars. Eventually, direct confrontation will be necessary, leading to world war.

Poverty, war, racism and economic crisis are the demons of the capitalist design. We need a new design that produces for the needs of our class, not the profits of the bosses — communism.

Auto Workers Strike Navistar War-Truck Production

CHICAGO, IL, Nov. 25 — Since Oct. 23, about 4,000 workers, members of the United Auto Workers (UAW), have been striking over unfair labor practices against Navistar. Over 500 of those workers, in UAW Locals 6 and 2293, work just outside Chicago building the MaxxPro engines for the blast-resistant trucks used by the U.S. military in Iraq. The MaxxPro chassis is built in Garland, Texas, and the trucks are assembled in West Point, Mississippi. Both plants are non-union.

Navistar is using scabs at the Melrose Park engine plant here, with a wink and a nod from the UAW leadership that boasts, “Our commitment has always been to both the membership and the company because we, the UAW, know we need each other to be successful, but I am not sure the company agrees.” No solidarity rallies have been organized or attempts made to stop the scabs. In fact, the company was able to increase output and meet its October production targets despite the strike, delivering 140 MaxxPro blast-resistant trucks for the Pentagon’s mine-resistant, ambush-protected vehicle program. Navistar has orders for almost 3,000 MaxxPros, more than any other supplier, and plans to build 500 a month by February.
Navistar, encouraged by the massive concessions just granted to GM, Ford, Chrysler and Delphi, is taking a hard line with the workers and the union leaders. As with the other recent contracts, the union is asking for some “guarantee” of work over the life of the new contract, but Navistar is forming a joint venture with a major auto producer in India and is unwilling to grant guarantees.

PLP will be organizing support for, and attempting to build some ties with, Navistar workers on strike against this war profiteer. One good way to solidify ties would be uniting to physically stop scabs from entering the plant.

Obrador’s ‘Fight’ All About Oil for Mexico’s Bosses

“Our movement has the obligation to play a very important role, given the imminent decision of the usurper government and its allies, to hand over the oil to the foreigners ….. It’s obvious that it was this that led them to carry out the electoral fraud of 2006, to violate the constitution and impose the coup d’etat.” — Lopez Obrador, addressing over 100,000 followers last November 18 in Mexico City’s Zócalo.

Since 1938 when Mexico’s oil industry was nationalized, there’s been a tug of war between elements of the Mexican and U.S. ruling classes, seeking to re-privatize it, and other elements of Mexico’s elite who adamantly oppose it. This struggle has lasted for decades without major consequences or disruptions.

However, the sharpening inter-imperialist rivalry and relative decline of U.S. imperialism relative to its rivals are rapidly changing this. Wars in the Middle East and other oil-producing areas have endangered energy security for the world’s imperialists, forcing U.S. bosses to speed efforts to take over Mexico’s energy industry and militarize the country via the Merida Plan. An added bonanza: Mexican oil costs $4 a barrel to produce. But this drive has also sharpened what has become the main contradiction in Mexico: privatization versus nationalization, with its potential of escalating into civil war.

Since 1983, U.S. imperialists and their Mexican allies have intentionally run PEMEX into the ground, to justify privatizing it. Consequently PEMEX is practically bankrupt, owing over $42 billion to private investors despite yearly revenues of almost $100 billion. Of this, the government takes $60 billion in taxes, or 40% of its budget. Very little of the rest is invested in PEMEX or into exploring for, and drilling, new wells. If this persists at its present rate, in seven years, PEMEX will be unable to extract any oil from the ground.

This scenario and the pressing needs of their U.S. masters requires the consolidation of control over Mexico’s oil, cheap labor, and a new but growing aerospace industry linked to the one in Southern California. To address this situation and in preparation for global war President Felipe Calderon and his political cohorts are preparing a reform bill to privatize Mexico’s energy sector. This has forced those rulers who oppose privatization to move their struggle from the legislative chambers to the streets of every city, town and village.

Heading their efforts, Lopez Obrador is building his Convencion Nacional Democratica with an alternative plan. So far he has traveled to 1,009 municipalities and gathered over 1.7 million signatures of people committed to becoming representatives of what he calls the “Legitimate Government of Mexico.” By the end of 2008, he will have visited all 2,500 Mexican municipalities and hopes to have signed up another five million representatives.

Obrador’s alternative plan would immediately invest about $36 billion in PEMEX. He claims $20 billion would come from the federal budget by halving the high salaries and perks of top bureaucrats in the three branches of government and PEMEX. The other $16 billion would come from the surplus obtained from selling the oil above the price set by the Mexican Congress. Because of oil’s high price, this sum could easily top its $10 billion average of the last three years. Like a true capitalist defender, Obrador wouldn’t raise taxes on the corporations or on his billionaire friend Carlos Slim, even though all private enterprises combined pay less than $20 billion in taxes.

Obrador aspires to turn Mexico into a major energy power and use its huge revenues to enrich a few Mexican capitalists and fund some social programs a la Venezuela’s Hugo Chávez. The Mexican capitalists he represents are fearful that a U.S. take-over of PEMEX will not only deny them access to its profits but will also destabilize the country by further grinding the working class into poverty and hopelessness. These nationalist capitalists want stability to keep their exploitation of the working class running smoothly. However, U.S. bosses plan to militarize the country to squelch the nationalists’ opposition, if necessary, and any potential working-class rebellion.

Only time will tell how this contradiction among these vultures will evolve. But from Oaxaca to Tabasco, workers are simmering with anger over the racist capitalist exploitation they suffer. PLP must win all workers and youth to the understanding that neither Calderon nor Obrador or Hugo Chávez, nor U.S. or any other imperialists represent our interests. PLP’ers and friends must work in factories, schools, neighborhoods and mass movements, like Obrador’s, to offer workers and youth the only alternative to capitalism: uniting millions of workers, students and soldiers to build the PLP and smash all capitalists/imperialists. From this we’ll build a communist society, where workers will control oil and everything else, serving the needs of the international working class.

Profit System Drowns Workers . . . . Again

VILLAHERMOSA, TABASCO, MEXICO, Nov. 12 — A half million are homeless and there are uncounted deaths from the torrential rains that hit the state of Tabasco for several days — all because of capitalism’s utter disregard for Mexico’s workers. Eighty percent of Tabasco, a state larger than Massachusetts, was under water. Many spent days on the roofs of their houses. Roads, bridges and more than 100,000 homes have been destroyed. Potable water, food, medicine and clothes are in very short supply for tens of thousands of workers and their families who have still not found refuge.

Even worse than the horrific effects of Katrina in New Orleans, such natural phenomena are turned into racist, anti-working class tragedies by the profit system. Most of Tabasco’s victims were extremely poverty-stricken workers and indigenous people — in a country where 40% are jobless and half the population tries to survive on less than $2 a day.

Tabasco’s local bosses and Mexico’s federal rulers are responsible for these deaths, injuries and destruction. “The tragedy of Tabasco could have been avoided with relatively simple and inexpensive measures,” said Salvador Briceño, director of the UN’s International Strategy for the Reduction of Disasters (El Universal, 11/3).

Opposition mis-leader López Obrador, who ran against the current president, Felipe Calderon, cynically used the disaster to build his own base of support. He accused the Federal Commission of Electricity of being responsible for the dams overflowing. Normally the dams should be kept 40% to 50% full so there is enough room for more water in case of serious storms (La Jornada, 11/7). But because the state-owned electric company buys 31% of its electricity from private utilities it doesn’t need the water power of the main dam. Out of disregard for the lives and safety of the working class, it allows it to be underutilized and therefore remain filled to 94% of capacity. Obrador spreads the lie that nationalist state capitalism, unlike private enterprise, is committed to serving the people.

Although Obrador mobilized millions for his election campaigns, neither he nor the union leaders have organized solidarity among the same masses to demand aid for Tabasco’s victims. Nor did they expose the real cause of the tragedy, capitalism. While planning for racist exploitation and wars for profits, and aided by its politician and union leader lackeys, the capitalists are incapable of central planning for — nor do they care about — the needs of the working class.

In 1999, floods in Tabasco were an omen of more extreme disasters like the current one. But government officials, bosses and their capitalist politicians ignored these warnings. Negligence, corruption, militarization and bosses’ obscene profits have been their guiding principles, not workers’ needs. Mexican capitalist Carlos Slim, the world’s second richest man, increased his vast stolen wealth from $5 billion to $49 billion in just a few years.

President Calderon has made deals for billions of U.S. blood money. Calderon sent more than 8,000 soldiers to Tabasco, not to help the workers and their families, but to “prevent looting” of his buddies’ businesses. Calderon wants to protect the state-owned oil company, PEMEX to bring it more under U.S. control. Laura Gurza, coordinator of Civil Protection, rushed to reassure the bosses that, “National security and governability were not at risk due to the catastrophe.” Concern for protecting the bosses’ property came first, workers’ well-being last.

On the other hand, thousands of impoverished Mexican workers responded immediately, bringing food, water and clothing to the victims. International solidarity saw U.S. workers and many countries bring goods to collection centers. We should organize help for our sisters and brothers in Tabasco, in our shops and unions, our churches and community organizations, our schools and on our campuses.

However, unfortunately all this aid cannot solve the problem, which continues to be capitalism and its drive for maximum profits. Other tragedies will occur because of deforestation, the construction of dams and the poverty forcing workers into neighborhoods endangered by dikes, channels or useless walls.

The best help for victimized workers in Tabasco, the Dominican Republic, Honduras, New Orleans and worldwide is to build the fight to destroy the real root of these disasters, the system of capitalism and imperialism, a system which sacrifices workers’ lives for profits. We should dedicate our lives to building a communist world where the life and security of workers is primary, the central goal of society. That means spreading CHALLENGE and PLP’s ideas which will make bosses, profits and corrupt politicians a sad chapter in humanity’s history.