Tag Archives: U.S. economy

Fascist Economy Rules the Roost for U.S. Big Bosses

In contrast with the rapid and vast restructurings in the auto and banking industries, health care “reform” is proving a much harder task for Obama and the dominant, imperialist wing of U.S. capitalists he serves. The hallmark of fascism, tightened, centralized economic control  — which, like an expanded military, U.S. rulers need to compete in a sharpening global rivalry — is developing unevenly.

In effect, the government runs GM and Chrysler, and banks and brokers have dwindled to a dominant handful. But individual capitalists have yet to display the sense of “sacrifice” Obama demanded at his inauguration, “giving our all to a difficult task.”

Reforming — especially nationalizing — health care would benefit the U.S. capitalist class as a whole in various ways. It could relieve the major expense of workers’ health care — which, for instance, cost GM $3 billion annually — thereby boosting companies’ profits. By reducing such costs, it could free up capital for rebuilding infrastructure and the rulers’ war machine, as well as make them more competitive with rivals in Europe, Japan and Canada where health care is already nationalized. It also could make people more directly dependent on the government and consequently loyal to it.

Health Battle Shows Narrow Capitalist Self-interest Persists

Reluctant, self-interested capitalists are turning Obama’s health roadshow “town meetings” into bad days on Jerry Springer. New York Times columnist, Nobel Prize winner and leading proponent of economic fascism Paul Krugman lamented: “Angry protesters…have been drowning out, and in some cases threatening, members of Congress trying to talk about health reform.” (NYT, 8/6) “Well-heeled interest groups are helping to organize the town hall mobs,” Krugman continued. “Key organizers include…a new organization called Conservatives for Patients’ Rights…run by Rick Scott, the former head of Columbia/HCA, a for-profit hospital chain.” Such hospitals, and their doctors, will lose big if Obama succeeds in eliminating current fee-for-service — which enables them to charge what the traffic will bear — and replaces it with government-mandated salaries and test charges.

Health insurers, HMO’s — fearing marginalization if a federal plan takes hold — also oppose Obama, who’s trying to carry out U.S. capitalism’s larger, long-term interests. Drug makers, however, love him, for the same reason: profits (not patriotism). Their lobbying group PhRMA has authorized a $150-million advertising budget to back Obama’s plan. Pharmaceuticals “stand to gain millions of new customers from the expansion of healthcare coverage.” (NYT, 9/9/09)

Obama’s consolidation/nationalization effort has succeeded most in auto, where short-term profit has vanished. This has slashed the DuPont’s financial power, whose Wilmington Trust is the largest creditor — meaning loser — in GM’s bankruptcy.

At GM, Obama installed ExxonMobil director Edward Whitaker as chairman. This oil giant is the largest beneficiary of U.S. imperialism’s wars in Iraq and Afghanistan. This may even have engineered the demise of the 95-year-old influence of the DuPont family, which sometimes has been at odds with U.S. imperialists’ broader agenda. Seeing the handwriting on the wall, DuPont president Ellen Kullman quit GM’s board in December, just after Obama’s election.

Greedy Execs Ignore War Agenda for Quick Cash

Many bank executives, like health industry bosses, mainly see the current crisis as an opportunity to get even richer. Frank Rich, another NY Times’ U.S. imperialist pundit, noted, “Nine…bailed-out banks — which in total received $175 billion of taxpayers’ money, but as yet have repaid only $50 billion — are awarding a total of $32.6 billion in bonuses for 2009.” (8/9) He includes Goldman and JP Morgan. The same day’s Times editorialized for government regulation of bankers’ compensation.

CEOs and others who won’t submit to the leading rulers’ greater needs invite the full force of state power upon them. Convicted Enron bosses rot, or have died, in jail. The ever-unfolding Madoff case and last month’s round-up of crooked politicians and rabbis in New Jersey and Brooklyn help the rulers test just how much public sentiment they can stir up against wayward servants of their own class. This includes the potential to spread anti-Semitism in case it’s needed against Goldman for grabbing billions in bonuses.

But in-fighting among the bosses is no mere sideshow for workers. Capitalists’ disciplining of one another punishes the working class in far greater numbers. For every Bernie Madoff or Enron or WorldCom telecommunications exec, tens of thousands of workers lost jobs and pensions. This is especially true for black and Latino workers who, due to racist discrimination, have been thrown on the scrap heap in disproportionate numbers.

U.S. rulers are counting on Obama to impose the wartime economic discipline they require. Viewing his proposed reforms as “progress” would be a serious political mistake. Our Party’s task is to spread the only viable alternative — for workers — to Obama’s “town meeting” message. In short, we must eliminate the profit system which creates all kinds of exploiters of the working class — whether those driving for short-term immediate profits or their long-range imperialist opponents, primarily concerned with saving their system. Destroying capitalism with a communist revolution will take a lifetime of effort. J


Auto and Banks Rapidly Consolidate

In further consolidation, the bosses backing Obama have anointed just two firms, Goldman Sachs and JP Morgan Chase, as the U.S.’s flagship financiers. Goldman’s close Washington ties have earned it the nickname “Government Sachs.” And, trying not to be too obvious, once word hit the papers, JP Morgan called off an unprecedented July board meeting in Washington that was to have included Rahm Emanuel, Obama’s chief of staff.

Behind the scenes, Mellon’s Bank of New York (BNY) and Boston’s State Street, both trustees of Obama’s bailout funds, have become, with JP Morgan, undisputed custodians of U.S. capital. BNY manages $19.5 trillion, JP Morgan $13.5 trillion and State Street $11.3 trillion. Beleaguered Citigroup today comes in a distant and dwindling fourth at $1.8 trillion.

And don’t underestimate former titan, now relatively small Brown Brothers Harriman. This old-money “wealth advisor’s” partners, having bankrolled House banking czar Barney Frank, pull important levers in Washington.

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Bosses’ Stimulus Plan: $4 Billion for More Racist Cops


To help keep a lid on the New Depression’s growing millions of angry, jobless workers (now 26 million unemployed and under-employed), Barack Obama is giving new life to racist community policing. Obama earmarked $4 billion of his $827-billion stimulus package for Community Oriented Policing Services and “other law enforcement needs.” (New York Times, 2/6).

The Clinton regime, in a glaring example of fascism disguised as liberal “progress,” had put 100,000 new cops on the street in the name of “community policing.” Now Obama wants to double that to 200,000.

Community policing began in earnest in Boston during the early 1990s. The Boston Police Department (BPD) then formed the Ten Point Coalition with pastors in the city’s mainly black Roxbury, Dorchester and Mattapan sections. The cop-loving clergy created a network of stoolpigeons. Tips about “criminal activity” — usually minor offenses like drug use or vandalism — poured in from pastors, principals and merchants. Arrests soared.

Under this scheme, cops expand their ability to terrorize black and Latino neighborhoods by finding allies among church, school and other local leaders. Pretending to combat gang violence, community policing in fact targets rebellion. That’s why it hits the most oppressed — unemployed black and Latino young people — the hardest and why Obama needs it desperately in today’s collapsing economy.

The cops had won the ministers to consider “all youth as their responsibility regardless of the parish the youth lived in or the youth’s denominational affiliation” and to “spend time on the streets at night, getting to know the kids.” (Encyclopedia of Police Science, 2006) In effect, the notoriously racist BPD succeeded in creating a new version of the Nazi’s World War II-era Judenrat. The Judenrat were Jewish “community leaders” who, collaborating with the Nazis, betrayed their neighbors to the gas chambers.

Boston’s top cop in the early 1990s was Bill Bratton, the rulers’ leading apostle for community policing. Bratton has since brought the liberal rulers’ racist gospel, with varying success, to New York and Los Angeles.

Liberals have a long vicious history. It was the liberals (anti-communist Social Democrats) who ushered in Hitler in Germany. And his party adopted the name “National Socialist” (NAZI in German) because a majority of German workers had voted for socialism so the Nazis figured they could use the liberal fig-leaf of “socialist” to win the working class to fascism.

That’s why it would be wrong to think that the beleaguered U.S. bosses need to assert police power only in inner cities. They need to control all of society and Bratton-style policies help immensely. In mostly white, suburban, middle-class Topsfield, Mass., “Police are arresting twice as many people and writing twice as many citations as they were just two years ago [after the police chief]  adopted several community policing strategies.” (Salem News, 1/22)

With the whole working class — black, Latino and millions of whites — being hit by the bosses’ Depression, the rulers fear working-class rebellions like the ones in the 1930s, when they had to order out the National Guard every week in 1937. With Guard troops in Iraq and Afghanistan, they’ll need those 200,000 extra cops here, while pushing patriotism among white youth as well to get them to join the Army.


Intensifying militarization — again masquerading in liberal guise — accompanies Obama’s burgeoning police state. Facing armed conflict now in Iraq, Afghanistan and Pakistan and eventually with Iran, China or Russia, Obama seeks to avoid imperialist predecessor Kennedy’s disastrous choice of advisors.

Obama has put four-star officers in key war-planning posts. General James Jones is National Security Advisor and Admiral Dennis Blair directs national intelligence. In launching the U.S. genocide in Vietnam, Kennedy relied on academic Ivy League experts like McGeorge Bundy, who had read all the books but hadn’t a clue about the technicalities of waging war.

“Anti-war” Obama’s preference for war-bloodied brass has become so obvious that he backed off on appointing General Anthony Zinni as ambassador to Iraq, whom he had already promised the job. “Late last week, Lt. Gen. Karl W. Eikenberry, a former top military commander in Afghanistan, was named as the next ambassador to Kabul. That made it unlikely that the White House would name another general to a high-profile diplomatic post, and fuel criticism that it was militarizing American foreign policy.” (NYT, 2/6) Phony peacemaker Obama then made the obvious move of replacing Zinni with Peace Corps alumnus Christopher Hill.

Obama’s coziness with the cops and generals destroys his credibility as an agent of pro-working-class change. His choice of Paul Volcker to head a panel on economic restructuring proves Obama serves only the highest, imperialist echelons of the U.S. capitalist class. Volcker was once top economist at Chase Manhattan Bank when David Rockefeller ran it. In the early 1980s, as Federal Reserve chief, Volcker threw millions out of work by jacking up interest rates for the bankers’ benefit. Now he and Obama preside over an effort to restore U.S. rulers’ profits through misery and war.

In these hard times, workers can rely only on our own class. And the only purely working-class political organization is the Progressive Labor Party. We encourage the rebellions Obama and his bosses dread. It is our long-term goal to crush their top-down oppression with bottom-up base-building in the working class for a communist revolution.

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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.

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