Tuesday, September 28, 2010
Monday, September 27, 2010
"Justice" Department Brings Back Hoover
Legal “Logic” Behind Raids
As we’re all aware by now, members and friends of the Freedom Road Socialist Organization (FRSO), the Anti-War Committee (AWC) and the AWC itself were recently visited by suit-wearing thugs from the FBI, who seized their paper files, cell phones and computers in various cities. The FBI has been the political police in the United States since Hoover led the Palmer Raids back in the 1919s. So this is no surprise.
It has been difficult to discover the FBI and Justice Department’s legal ‘logic’ to this process - but given some digging, anything is possible. It is clear that Obama’s Justice Department has decided to prosecute these activists. Given the continuing legality of Guantanamo, the Patriot Act, rendition, the Secrets' Act, wiretapping innovations, the RNC indictments, and other Bush ‘era’ laws and practices that have now become permanent or semi-permanent under Obama and Eric Holder, it was only a matter of time that they came calling on parts of the socialist and anti-war movements.
According to Colleen Rowley, in the 1996 “Anti-terrorism and Effective Death Penalty Act,” material aid to terrorism was defined as what you would expect – giving guns, money or recruits to an organization that was engaged in indiscriminate violence. By “terrorist” it is meant anyone on the “Foreign Terrorist Organizations (FTO)” list, as established by the US State Department. This list has existed for many years, being established in Section 219 of the Immigration and Nationality Act (INA), as amended. It was recently defended by Hillary Clinton, as the present Secretary of State is in charge of the FTO list. There are 47 organizations on the list presently – all using violence in various ways – some defensible, some not.
Right now this list is limited to foreign organizations. But there is no reason why it could not be extended to domestic organizations.
The 2001 Patriot Act established a new, added definition for material aid – giving ‘professional advice’ or ‘training’ or ‘services’ or ‘personnel’ to terrorists. Now the terms ‘professional advice’ could mean – “I think you should do this or that.” Jimmy Carter has met with Hamas – a group officially on the Foreign Terrorist Organizations (FTO) list – and suggested they make peace with Israel or with the PLO. Now you could consider this ‘giving professional advice’ to terrorists. There are US-backed charities in Afghanistan that negotiate with the local Taliban in order to survive and prosper. And you might also consider this ‘giving professional advice’ to terrorists. (I.E. “don’t attack us…we’re just trying to help.”) Neither of these examples have been prosecuted – just as military negotiators with the Taliban right now are not prosecuted.
Prosecution is reserved for those outside the government orbit, or those who are more powerless.
David Cole and the Humanitarian Law Project decided to challenge this Patriot Act law in 2009, in a case called “Holder v Humanitarian Law Project.” The Humanitarian Law Project was a religious group interested in aiding PKK refugees in and out of Turkey, based on humanitarian grounds. The PKK – the Kurdistan Workers Party – is on the FTO list. Part of their aid was to encourage the PKK to use peaceful means to pursue their goals. On June 21, 2010, in a 7 to 2 decision, the conservative Supreme Court majority plus 1 ‘liberal’ voted against the Humanitarian Law Project. The logic was that even ‘speech’ about a ‘terrorist organization’ might legitimize that organization. (!!) Lower courts had declared these provisions in the Patriot Act about freedom of speech invalid. Pacifists like the Humanitarian Law Project could be sentenced to 15 years for suggesting militant organizations pursue peaceful methods. The Supreme Court overruled the lower courts – and the Obama administration and the Bush appointees all appeared on the same page.
The government (and Holder) in this case was represented by Elena Kagan, who recently joined the court. If you don’t find this significant, I’ve got some smelling salts for you. The June 2010 ‘Holder v Humanitarian Law Project’ decision basically shut down any freedom-of-speech for social activists to, with or regarding militant or violent organizations – 5 months after, in ‘Citizens United,’ the same Supreme Court gave corporations the right to all the free speech their disembodied money could buy. Could this decision even intimidate journalists into not talking to militant organizations, because they are 'legitimizing' them?
Evidently, FRSO and Anti-War Committee members went to the Middle East or to Columbia to meet with the FARC, PFLP and Hezbollah – all on the FTO list. The FSP published laudatory articles on these organizations in their newspaper, Fight Back. The facts in each matter might legally exonerate certain FRSO and Anti-War Committee members. For instance, just meeting with people, and not writing about them, might be a significant fact. In addition, this case will test whether ‘journalism’ and ‘advocacy journalism’ is covered under the Patriot Act. It also explains the 'why now?' about these raids. The green light was given in June.
At any rate, this part of the Patriot Act is ‘settled law,’ due to the Supreme Court decision. Claiming a freedom-of-speech defense, based on support of the goals and methods of specific organizations on the FTO list, is sure to be more difficult than the position of the Humanitarian Law Project. Which is why facts are the only detail that might mitigate the prosecution, at least on legal grounds. Of course, I am not an attorney.
The real legal issue here is the FTO list and ultimately the Patriot Act itself. The related no-fly “Terrorist Watch List’ now has nearly a million names on it (do you think there are a million ‘terrorist’ supporters in the US?!!). The odds that the Supreme Court will rule against themselves are zero. The odds that the Republican/Democrat government will reject provisions in the Patriot Act, or over-rule the Supreme Court, are almost nil. Will the so-called ‘liberal’ Obama administration back-peddle on their own Justice Department and drop or plea bargain? As they say in the ‘biz’, asked and answered.
Red Frog
9/27/10
As we’re all aware by now, members and friends of the Freedom Road Socialist Organization (FRSO), the Anti-War Committee (AWC) and the AWC itself were recently visited by suit-wearing thugs from the FBI, who seized their paper files, cell phones and computers in various cities. The FBI has been the political police in the United States since Hoover led the Palmer Raids back in the 1919s. So this is no surprise.
 |
| I Never Left |
According to Colleen Rowley, in the 1996 “Anti-terrorism and Effective Death Penalty Act,” material aid to terrorism was defined as what you would expect – giving guns, money or recruits to an organization that was engaged in indiscriminate violence. By “terrorist” it is meant anyone on the “Foreign Terrorist Organizations (FTO)” list, as established by the US State Department. This list has existed for many years, being established in Section 219 of the Immigration and Nationality Act (INA), as amended. It was recently defended by Hillary Clinton, as the present Secretary of State is in charge of the FTO list. There are 47 organizations on the list presently – all using violence in various ways – some defensible, some not.
Right now this list is limited to foreign organizations. But there is no reason why it could not be extended to domestic organizations.
The 2001 Patriot Act established a new, added definition for material aid – giving ‘professional advice’ or ‘training’ or ‘services’ or ‘personnel’ to terrorists. Now the terms ‘professional advice’ could mean – “I think you should do this or that.” Jimmy Carter has met with Hamas – a group officially on the Foreign Terrorist Organizations (FTO) list – and suggested they make peace with Israel or with the PLO. Now you could consider this ‘giving professional advice’ to terrorists. There are US-backed charities in Afghanistan that negotiate with the local Taliban in order to survive and prosper. And you might also consider this ‘giving professional advice’ to terrorists. (I.E. “don’t attack us…we’re just trying to help.”) Neither of these examples have been prosecuted – just as military negotiators with the Taliban right now are not prosecuted.
Prosecution is reserved for those outside the government orbit, or those who are more powerless.
David Cole and the Humanitarian Law Project decided to challenge this Patriot Act law in 2009, in a case called “Holder v Humanitarian Law Project.” The Humanitarian Law Project was a religious group interested in aiding PKK refugees in and out of Turkey, based on humanitarian grounds. The PKK – the Kurdistan Workers Party – is on the FTO list. Part of their aid was to encourage the PKK to use peaceful means to pursue their goals. On June 21, 2010, in a 7 to 2 decision, the conservative Supreme Court majority plus 1 ‘liberal’ voted against the Humanitarian Law Project. The logic was that even ‘speech’ about a ‘terrorist organization’ might legitimize that organization. (!!) Lower courts had declared these provisions in the Patriot Act about freedom of speech invalid. Pacifists like the Humanitarian Law Project could be sentenced to 15 years for suggesting militant organizations pursue peaceful methods. The Supreme Court overruled the lower courts – and the Obama administration and the Bush appointees all appeared on the same page.
The government (and Holder) in this case was represented by Elena Kagan, who recently joined the court. If you don’t find this significant, I’ve got some smelling salts for you. The June 2010 ‘Holder v Humanitarian Law Project’ decision basically shut down any freedom-of-speech for social activists to, with or regarding militant or violent organizations – 5 months after, in ‘Citizens United,’ the same Supreme Court gave corporations the right to all the free speech their disembodied money could buy. Could this decision even intimidate journalists into not talking to militant organizations, because they are 'legitimizing' them?
Evidently, FRSO and Anti-War Committee members went to the Middle East or to Columbia to meet with the FARC, PFLP and Hezbollah – all on the FTO list. The FSP published laudatory articles on these organizations in their newspaper, Fight Back. The facts in each matter might legally exonerate certain FRSO and Anti-War Committee members. For instance, just meeting with people, and not writing about them, might be a significant fact. In addition, this case will test whether ‘journalism’ and ‘advocacy journalism’ is covered under the Patriot Act. It also explains the 'why now?' about these raids. The green light was given in June.
At any rate, this part of the Patriot Act is ‘settled law,’ due to the Supreme Court decision. Claiming a freedom-of-speech defense, based on support of the goals and methods of specific organizations on the FTO list, is sure to be more difficult than the position of the Humanitarian Law Project. Which is why facts are the only detail that might mitigate the prosecution, at least on legal grounds. Of course, I am not an attorney.
The real legal issue here is the FTO list and ultimately the Patriot Act itself. The related no-fly “Terrorist Watch List’ now has nearly a million names on it (do you think there are a million ‘terrorist’ supporters in the US?!!). The odds that the Supreme Court will rule against themselves are zero. The odds that the Republican/Democrat government will reject provisions in the Patriot Act, or over-rule the Supreme Court, are almost nil. Will the so-called ‘liberal’ Obama administration back-peddle on their own Justice Department and drop or plea bargain? As they say in the ‘biz’, asked and answered.
Red Frog
9/27/10
P.S. - The prosecutions never were pursued, which shows the fragility of the Government's cases.
Friday, September 24, 2010
Masters of the Universe
“Liquidated – an Ethnography of Wall Street” – Karen Ho, 2009 (Part I)
Karen Ho is a former anthropology student from the U of Minnesota that worked on Wall Street until she was downsized, then followed up with further research into the denizens of that strange New York tribe. Like anthropologists who investigate the ‘primitive’ peoples of the Amazon, Ho instead spent time with the ‘masters of the universe’ – the employees of investment banks on Manhattan.
She worked in the 1990s, and so this book is a nice follow-up to “Den of Thieves,” which covered the triumph of financialization in the 1980s. (see review below) Ho has the ability to chart what that decade did to the Street in the ‘go-go’ 90s of Bill Clinton. As one Democrat once asked me about Clinton, “What do you have against prosperity?” Of course, I answered, ‘Whose?’
This book is unusual in that it combines economic with anthropological/cultural analyses. Ho’s first anthropological point is that the people in investment banking and Wall Street generally see themselves as ‘smart’ – maybe even geniuses. The firms mostly recruit from Harvard, Princeton and to a lesser extent, Yale. If you are a graduate of those schools, the Street does not think you even need an MBA. They do hire MBA’s from lesser schools on the east coast, but merely graduating from Harvard or Princeton guarantees you a place in the pantheon – er, the corporate finance department of a Goldman Sachs or a Morgan Stanley. Ever since Mommy put them in a private nursery school, and told them they were ‘exceptional’, until the day they graduate from Princeton, they believe it. The Wall Street firms, who recruit in these school constantly, tell them the same thing, all the while lavishing them with high-class food, cocktails and trips. The young idealist who enters Harvard thinking about ‘saving the world’ is soon turned into the investment banker thinking about getting rich. Up to 40% of the graduating classes of these schools enter Wall Street – the highest proportion of any ‘discipline.’ So the cream of the bourgeois crop is soon – sour. Ho went to Princeton, and lived to tell the tale.
Ho’s second anthropological point is that ‘work’ becomes a value that knows no peer. First and second year employees of the investment banks work 6-7 day weeks, 12-15 hours a day, eat catered food at work, and are driven home by chauffeured limos if they stay that long. They grind out Power-Point and Excel spreadsheets if they are on the technical end, or schmooze corporate CEO’s if they are on the ‘relationship’ end. They lose friends, they drop relationships, they do nothing but work. The 40-hour-a-week worker is to them a ‘chump’ – lazy, unambitious, weak and beneath respect. That, of course, includes the admins, the back-office, the assistants, and all the staff of the banks. Since investment bankers in whatever area are amazingly legally “exempt’ from overtime rules – syndicate, research, corporate finance, sales, trading - they work all the time. Bringing a brown bag, wearing tennis shoes to work, helping an admin, or even socializing with staff is a sign that the ‘master of the universe’ is not one. Class, anyone?
Ho’s third anthropological point is that Wall Street itself is subject to the ruthless downsizing, ‘right-sizing,’ asset stripping and mergers that they advocate for corporate America. Wall Street firms have constant turnover – most people never stay in the same firm for long. The reason is they have the planning outlook of a 4 year old. Short term internal and market trends combine to make them hire and fire constantly, in small layoffs mostly. While they blame the market, it is really the short-term focus of the street that enforces their employment policies, as even in good times, they lay-off. Of course, having a golden parachute, or have packed big money away, or having ‘connections’ or a Harvard pedigree is somewhat different from the loading dock worker who loses his job at Amazon.com. But that doesn’t stop them, because working-class America is invisible to these people, except as a bunch of rubes.
Ho’s point is that these attitudes gained at work carry over into the ideology of Wall Street. I’m smart, I work hard, I get fired, so I have the right to ‘advise’ you because I’ve been there and I’ve lived it, and I know better.
Ho’s fourth point is the most important, from the economic point of view. She neatly analyzes the conflict within capital between corporate capital and finance capital – essentially giving a very good history lesson on the development of this relationship since the early days of the modern corporation in the early 1900s. The conflict between ‘managerial’ capitalism and ‘shareholder’ capitalism came to a head in the 80s, when the ‘shareholder’ group won the battle, and Wall Street took command of the economy. Ho very carefully points out that this was the FIRST time that financial capital had dominated so severely, unlike the ‘neo-classical fable’, as she puts it, that postulates an early ‘idyllic’ time when the shareholder dominated. The shareholder never did.
Essentially it boils down to whether the corporation is an entity responsible to many parties – suppliers, employees, shareholders, the environment, the society, the community in which it is located, the country – or just one – the shareholder. After World War II, and with the long lingering effects of the 30s still on everyone’s mind, ‘welfare’ capitalism was ascendant. 90% of all financing of corporate growth was done internally, through exploitation of labor. The rest was through corporate bond offerings – i.e. debt. Equity offerings – i.e. stock – was rare and only a third possibility. The ‘ownership’ society – defined as owning stock – was limited to a very small part of the population.
Adam Smith, in his “Wealth of Nations,” actually based his vision of capital on the sole entrepreneur, the independent businessman – not the corporation, or Trust as it was called then. Smith said the Trust would fail because it did not involve personal considerations of profitability. Capitalist classicists and neo-classicists have had difficulty trying to reconcile the modern corporation with their seminal theory, or actually, seminal fantasy. Modern capitalism started as the ideology of the local shoe-store owner.
What is interesting here is that the ‘welfare’ corporation is coming very close, in form, to a socialist ‘corporation’ – or co-operation. Marx pointed out that the forms of capitalism would burst at some point, and the hidden, but pre-existing social relations of production would become dominant. So this battle between corporate ‘welfare capitalism’ and Wall Street ‘shareholder capitalism’ also marks an ideological battle between finance capital and the hidden forms of social capital – socialism –within the capitalist shell. And the advocates of shareholder capital know it well, whether they can verbalize it or not. Of course, what Ho misses, as she is not a Marxist, is that there is a reason why formerly profitable companies have to go to the Street to raise – capital. What happened in the 1980s was not just an ideological fight, but also has to do with falling rates of profit by corporate capital – and their need for another source of funds. And also as an outlook for investment – as productive investment no longer seems desirable. Enter the ‘equity’ market. As I call it, ‘the only game in town.’
There is more to the book, and I will add that in Part II.
And I bought it at Mayday Books.
Red Frog, September 24, 2010
Karen Ho is a former anthropology student from the U of Minnesota that worked on Wall Street until she was downsized, then followed up with further research into the denizens of that strange New York tribe. Like anthropologists who investigate the ‘primitive’ peoples of the Amazon, Ho instead spent time with the ‘masters of the universe’ – the employees of investment banks on Manhattan.
This book is unusual in that it combines economic with anthropological/cultural analyses. Ho’s first anthropological point is that the people in investment banking and Wall Street generally see themselves as ‘smart’ – maybe even geniuses. The firms mostly recruit from Harvard, Princeton and to a lesser extent, Yale. If you are a graduate of those schools, the Street does not think you even need an MBA. They do hire MBA’s from lesser schools on the east coast, but merely graduating from Harvard or Princeton guarantees you a place in the pantheon – er, the corporate finance department of a Goldman Sachs or a Morgan Stanley. Ever since Mommy put them in a private nursery school, and told them they were ‘exceptional’, until the day they graduate from Princeton, they believe it. The Wall Street firms, who recruit in these school constantly, tell them the same thing, all the while lavishing them with high-class food, cocktails and trips. The young idealist who enters Harvard thinking about ‘saving the world’ is soon turned into the investment banker thinking about getting rich. Up to 40% of the graduating classes of these schools enter Wall Street – the highest proportion of any ‘discipline.’ So the cream of the bourgeois crop is soon – sour. Ho went to Princeton, and lived to tell the tale.
Ho’s second anthropological point is that ‘work’ becomes a value that knows no peer. First and second year employees of the investment banks work 6-7 day weeks, 12-15 hours a day, eat catered food at work, and are driven home by chauffeured limos if they stay that long. They grind out Power-Point and Excel spreadsheets if they are on the technical end, or schmooze corporate CEO’s if they are on the ‘relationship’ end. They lose friends, they drop relationships, they do nothing but work. The 40-hour-a-week worker is to them a ‘chump’ – lazy, unambitious, weak and beneath respect. That, of course, includes the admins, the back-office, the assistants, and all the staff of the banks. Since investment bankers in whatever area are amazingly legally “exempt’ from overtime rules – syndicate, research, corporate finance, sales, trading - they work all the time. Bringing a brown bag, wearing tennis shoes to work, helping an admin, or even socializing with staff is a sign that the ‘master of the universe’ is not one. Class, anyone?
Ho’s third anthropological point is that Wall Street itself is subject to the ruthless downsizing, ‘right-sizing,’ asset stripping and mergers that they advocate for corporate America. Wall Street firms have constant turnover – most people never stay in the same firm for long. The reason is they have the planning outlook of a 4 year old. Short term internal and market trends combine to make them hire and fire constantly, in small layoffs mostly. While they blame the market, it is really the short-term focus of the street that enforces their employment policies, as even in good times, they lay-off. Of course, having a golden parachute, or have packed big money away, or having ‘connections’ or a Harvard pedigree is somewhat different from the loading dock worker who loses his job at Amazon.com. But that doesn’t stop them, because working-class America is invisible to these people, except as a bunch of rubes.
Ho’s point is that these attitudes gained at work carry over into the ideology of Wall Street. I’m smart, I work hard, I get fired, so I have the right to ‘advise’ you because I’ve been there and I’ve lived it, and I know better.
Ho’s fourth point is the most important, from the economic point of view. She neatly analyzes the conflict within capital between corporate capital and finance capital – essentially giving a very good history lesson on the development of this relationship since the early days of the modern corporation in the early 1900s. The conflict between ‘managerial’ capitalism and ‘shareholder’ capitalism came to a head in the 80s, when the ‘shareholder’ group won the battle, and Wall Street took command of the economy. Ho very carefully points out that this was the FIRST time that financial capital had dominated so severely, unlike the ‘neo-classical fable’, as she puts it, that postulates an early ‘idyllic’ time when the shareholder dominated. The shareholder never did.
Essentially it boils down to whether the corporation is an entity responsible to many parties – suppliers, employees, shareholders, the environment, the society, the community in which it is located, the country – or just one – the shareholder. After World War II, and with the long lingering effects of the 30s still on everyone’s mind, ‘welfare’ capitalism was ascendant. 90% of all financing of corporate growth was done internally, through exploitation of labor. The rest was through corporate bond offerings – i.e. debt. Equity offerings – i.e. stock – was rare and only a third possibility. The ‘ownership’ society – defined as owning stock – was limited to a very small part of the population.
Adam Smith, in his “Wealth of Nations,” actually based his vision of capital on the sole entrepreneur, the independent businessman – not the corporation, or Trust as it was called then. Smith said the Trust would fail because it did not involve personal considerations of profitability. Capitalist classicists and neo-classicists have had difficulty trying to reconcile the modern corporation with their seminal theory, or actually, seminal fantasy. Modern capitalism started as the ideology of the local shoe-store owner.
What is interesting here is that the ‘welfare’ corporation is coming very close, in form, to a socialist ‘corporation’ – or co-operation. Marx pointed out that the forms of capitalism would burst at some point, and the hidden, but pre-existing social relations of production would become dominant. So this battle between corporate ‘welfare capitalism’ and Wall Street ‘shareholder capitalism’ also marks an ideological battle between finance capital and the hidden forms of social capital – socialism –within the capitalist shell. And the advocates of shareholder capital know it well, whether they can verbalize it or not. Of course, what Ho misses, as she is not a Marxist, is that there is a reason why formerly profitable companies have to go to the Street to raise – capital. What happened in the 1980s was not just an ideological fight, but also has to do with falling rates of profit by corporate capital – and their need for another source of funds. And also as an outlook for investment – as productive investment no longer seems desirable. Enter the ‘equity’ market. As I call it, ‘the only game in town.’
There is more to the book, and I will add that in Part II.
And I bought it at Mayday Books.
Red Frog, September 24, 2010
Tuesday, September 21, 2010
Manufacturing dissent
At some level of my being I've always understood that American dissent, protest, "progressivism," and activism are a load of steaming horse manure. But I've never quite been able to articulate the inchoate feeling about why it has always struck such a false note with me. Partly, perhaps, it has had to do with the nature of the people to be found in these "movements" (I use the term rashly): ill-educated, ill-dressed, ill-spoken, and generally uncouth. I wouldn't trust them to change a light bulb, let alone successfully orchestrate meaningful change. In part, perhaps, because there has never been a program for change -- it's mostly been ill-articulated rhetoric with no grounding in action, with no basis in active confrontation with the powers-that-be. Michel Chossudovsky takes this attitude of mine a bit further and argues in this essay that the reason there's been no plausible program for change is that they've been orchestrated from on high by the very powers they're supposed to have been opposed to:
Under contemporary capitalism, the illusion of democracy must prevail. It is in the interest of the corporate elites to accept dissent and protest as a feature of the system inasmuch as they do not constitute a threat to the established social order. The purpose is not to repress dissent, but, on the contrary, to shape and mould the protest movement, to set the outer limits of dissent.
To maintain their legitimacy, the economic elites favor limited and controlled forms of opposition, with a view to preventing the development of radical forms of protest, which might shake the very foundations and institutions of global capitalism. In other words, "manufacturing dissent" acts as a "safety valve", which protects and sustains the New World Order.
To be effective, however, the process of "manufacturing dissent" must be carefully regulated and monitored by those who are the object of the protest movement.
The mechanisms of "manufacturing dissent" require a manipulative environment, a process of arm-twisting and subtle cooptation of individuals within progressive organizations, including anti-war coalitions, environmentalists and the anti-globalization movement.
Whereas the mainstream media "manufactures consent", the complex network of NGOs (including segments of the alternative media) are used by the corporate elites to mould and manipulate the protest movement.
The objective of the corporate elites has been to fragment the people's movement into a vast "do it yourself" mosaic. War and globalization are no longer in the forefront of civil society activism. Activism tends to be piecemeal. There is no integrated anti-globalization anti-war movement. The economic crisis is not seen as having a relationship to the US led war.
Dissent has been compartmentalized. Separate "issue oriented" protest movements (e.g. environment, anti-globalization, peace, women's rights, climate change) are encouraged and generously funded as opposed to a cohesive mass movement. This mosaic was already prevalent in the counter G7 summits and People's Summits of the 1990s.
Sunday, September 19, 2010
Imperialism and Global Political Economy
A couple of weeks back I was trying to persuade Red Frog to read "Imperialism and Global Political Economy" by Alex Callinicos, a copy of which can be found in Mayday (where indeed I bought my own copy last year). Here is an ISR review of the book. As I told Red Frog, this is a book written by an academic: careful arguments buttressed by facts and figures.
If -- big if -- a book club is ever resurrected in the Twin Cities, then this book by Callinicos, as well as books by Harvey and Brenner, should be on the reading list. Dare one hope?
If -- big if -- a book club is ever resurrected in the Twin Cities, then this book by Callinicos, as well as books by Harvey and Brenner, should be on the reading list. Dare one hope?
Sunday, September 12, 2010
Labor Day?
Notes on 9/9/10 Meeting at May Day on a Mass Party of Labor
I attended the forum given by the “Campaign for a Mass Party of Labor” (whew) and made some notes. It was a full house, with Greens, some Socialists and many independent progressives attending. The main initial issue, of course, is ‘why’ a labor party? After all, other organizations have run. The Greens, independents like Henry Wallace and Jesse Ventura, and some radical African-American politicians have run or attempted to run candidates. Dennis Kucinich, who carried many of the south-side precincts in Minneapolis, has announced he would not break with the Democrats, according to one attendee, so a split right now of the Democrats is not in the offing. He will not run away from his Party. And so why not labor?
As panel-member David Riehle ably pointed out, Minnesota and the Midwest have a history of successful Labor Party – specifically “Farmer-Labor” activism - which continued from the late teens to the early 50s.
In the present period, the first issue everyone questions is the role of the labor leadership. What wasn’t noted by anyone is that Richard Trumka, head of the AFL-CIo, actually initiated and lead a demonstration of 10,000 workers to Wall Street itself, protesting against the bailout of the investment banking industry right outside the NY Stock Exchange. The bailout of GM and Chrysler from declaring bankruptcy, ‘cash for clunkers’ program and the ‘house-buyer’ tax break were a relatively small part of the stimulus, and bailouts. Much of the ‘relief’ money is going to projects and states with no relation to future growth or actual need. Most went to bailout investment banks. Trillions in free money is being made available to the banks to loan to us at 6% and back to the government at higher rates than the Fed charges. (!) The AFL-CIO made the point in a mass way. Who else has summoned that many to Wall Street? Rage Against the Machine? Trumka also initiated a mass demonstration in Chicago against the banking industry that moved right into the bank lobbies and shut them down. Of course, Trumka has also sweat bullets on TV when asked by Bill Moyers why he continues to uncritically support the Democrats.
Why labor? Questions from the floor suggested the word ‘labor’ was a bit archaic. The difference of a ‘labor’ or ‘workers’ or ‘working families’ or whatever you want to call it, party, is that it represents the most numerous class in the US. By nature, a labor party is the most ‘democratic’ party – really a word that should not be owned by the people that misuse that word, the “Democrats.” The Democratic Party is run by rich people from finance, communications, high-tech and advertising companies, who use labor as voting cattle. It cannot be said to be a “democratic” party at heart.
Why labor? Labor, by being the most numerous class in the US, is also by its very nature able to shut down the functioning of the whole society if it chose to. While investment bankers ‘toil’ away on their computer screens, it is the material world of brokerage back-offices, tech support, subways, communications, electricity and food that keep these people in business. Of course in the long run, who made their three-piece suits, their computers, their Beemers, transported their steaks, generated their electricity and heat, and mixed their martinis? Not them, that is for sure. They’d be naked without the working class.
One of the questioners asked about the role of some trade union leaders, who are only concerned with jobs for their little bargaining unit. A response from one speaker was that ‘some labor unions would make gas chambers’ if it got members jobs. This seemed to be an intentionally over-the-top comment to point out that some unions do not care what they build, or make, as long as they make it. The nature of a Labor Party is that it breaks unions and union members out of ‘small group’ thinking and gets them to look at what is good for society as a whole. And enables them to work towards doing something other than building stadiums for private enterprise, for instance, or weapons, or any other useless or anti-social product. After all, you are somewhat trapped in a job, no matter what they do.
For instance, converting the old Ford plant to making wind turbines and equipment would be a socially and environmentally progressive thing to do, but Ford is not interested in doing it. However, the local UAW thinks it is a good idea. I might add, perhaps better than continuing to build F-150s. The UAW in Fremont California is working with Tesla to manufacture an all-electric car in the old Saturn plant closed by GM. This too shows the UAW is not as asleep as GM is.
As panel-member Greg Gibbs pointed out, many Labor Party activists from the 1996 “Labor Party” became activists for Ralph Nader and the Greens in 2000 when the Labor Party failed to run candidates, or show any interest in running candidates. The Green Party still exists in town, and has made a gallant attempt to change the dynamics in Minneapolis - creating a situation where the battle is not between Democrats and Republicans in the city, but between Democrats and Greens. However, recent events are showing the Greens are running out of ‘fuel’ – organizationally, ideologically, etc. The recent mayoral campaign that eschewed a Green Party label, and ran John Kolstad as an ‘independent’ with support from the Ron Paulites, on a ‘small business’ platform, is indicative of this. And there is a reason why – especially during a massive recession/initial depression like we have now. The Green Party does not have a proletarian orientation, to put it bluntly.
Another astute question from the floor was questioning the typical labor program of higher wages and more production, irrespective of environmental issues. This is certainly a timely question. The exact labor approach to this question is still being worked out, but the ‘green jobs’ initiative is a start. Converting the economy from a non-sustainable to a sustainable one, while helping workers not loose jobs, is probably one of the main tasks faced by labor.
Gibbs pointed out that Tony Mazzochi, who founded the Labor Party in 1996 and Labor Party Advocates in 1984, was the first chair of Earth Day. We also mustn’t forget that in Seattle in 1999 at the protests against the World Trade Organization, unions and greens formed a block. Labor may have to prioritize fundamental issues – creating a full employment economy, single-payer health care, sustainable food and sustainable jobs, job democracy - and not just getting the highest wages possible. The material fundamentals of life have to be seen as more important than simple high wages.
Anyway, just notes on the discussion at MayDy.
Red Frog
9/12/10
I attended the forum given by the “Campaign for a Mass Party of Labor” (whew) and made some notes. It was a full house, with Greens, some Socialists and many independent progressives attending. The main initial issue, of course, is ‘why’ a labor party? After all, other organizations have run. The Greens, independents like Henry Wallace and Jesse Ventura, and some radical African-American politicians have run or attempted to run candidates. Dennis Kucinich, who carried many of the south-side precincts in Minneapolis, has announced he would not break with the Democrats, according to one attendee, so a split right now of the Democrats is not in the offing. He will not run away from his Party. And so why not labor?
As panel-member David Riehle ably pointed out, Minnesota and the Midwest have a history of successful Labor Party – specifically “Farmer-Labor” activism - which continued from the late teens to the early 50s.
In the present period, the first issue everyone questions is the role of the labor leadership. What wasn’t noted by anyone is that Richard Trumka, head of the AFL-CIo, actually initiated and lead a demonstration of 10,000 workers to Wall Street itself, protesting against the bailout of the investment banking industry right outside the NY Stock Exchange. The bailout of GM and Chrysler from declaring bankruptcy, ‘cash for clunkers’ program and the ‘house-buyer’ tax break were a relatively small part of the stimulus, and bailouts. Much of the ‘relief’ money is going to projects and states with no relation to future growth or actual need. Most went to bailout investment banks. Trillions in free money is being made available to the banks to loan to us at 6% and back to the government at higher rates than the Fed charges. (!) The AFL-CIO made the point in a mass way. Who else has summoned that many to Wall Street? Rage Against the Machine? Trumka also initiated a mass demonstration in Chicago against the banking industry that moved right into the bank lobbies and shut them down. Of course, Trumka has also sweat bullets on TV when asked by Bill Moyers why he continues to uncritically support the Democrats.
Why labor? Questions from the floor suggested the word ‘labor’ was a bit archaic. The difference of a ‘labor’ or ‘workers’ or ‘working families’ or whatever you want to call it, party, is that it represents the most numerous class in the US. By nature, a labor party is the most ‘democratic’ party – really a word that should not be owned by the people that misuse that word, the “Democrats.” The Democratic Party is run by rich people from finance, communications, high-tech and advertising companies, who use labor as voting cattle. It cannot be said to be a “democratic” party at heart.
Why labor? Labor, by being the most numerous class in the US, is also by its very nature able to shut down the functioning of the whole society if it chose to. While investment bankers ‘toil’ away on their computer screens, it is the material world of brokerage back-offices, tech support, subways, communications, electricity and food that keep these people in business. Of course in the long run, who made their three-piece suits, their computers, their Beemers, transported their steaks, generated their electricity and heat, and mixed their martinis? Not them, that is for sure. They’d be naked without the working class.
One of the questioners asked about the role of some trade union leaders, who are only concerned with jobs for their little bargaining unit. A response from one speaker was that ‘some labor unions would make gas chambers’ if it got members jobs. This seemed to be an intentionally over-the-top comment to point out that some unions do not care what they build, or make, as long as they make it. The nature of a Labor Party is that it breaks unions and union members out of ‘small group’ thinking and gets them to look at what is good for society as a whole. And enables them to work towards doing something other than building stadiums for private enterprise, for instance, or weapons, or any other useless or anti-social product. After all, you are somewhat trapped in a job, no matter what they do.
For instance, converting the old Ford plant to making wind turbines and equipment would be a socially and environmentally progressive thing to do, but Ford is not interested in doing it. However, the local UAW thinks it is a good idea. I might add, perhaps better than continuing to build F-150s. The UAW in Fremont California is working with Tesla to manufacture an all-electric car in the old Saturn plant closed by GM. This too shows the UAW is not as asleep as GM is.
As panel-member Greg Gibbs pointed out, many Labor Party activists from the 1996 “Labor Party” became activists for Ralph Nader and the Greens in 2000 when the Labor Party failed to run candidates, or show any interest in running candidates. The Green Party still exists in town, and has made a gallant attempt to change the dynamics in Minneapolis - creating a situation where the battle is not between Democrats and Republicans in the city, but between Democrats and Greens. However, recent events are showing the Greens are running out of ‘fuel’ – organizationally, ideologically, etc. The recent mayoral campaign that eschewed a Green Party label, and ran John Kolstad as an ‘independent’ with support from the Ron Paulites, on a ‘small business’ platform, is indicative of this. And there is a reason why – especially during a massive recession/initial depression like we have now. The Green Party does not have a proletarian orientation, to put it bluntly.
Another astute question from the floor was questioning the typical labor program of higher wages and more production, irrespective of environmental issues. This is certainly a timely question. The exact labor approach to this question is still being worked out, but the ‘green jobs’ initiative is a start. Converting the economy from a non-sustainable to a sustainable one, while helping workers not loose jobs, is probably one of the main tasks faced by labor.
Gibbs pointed out that Tony Mazzochi, who founded the Labor Party in 1996 and Labor Party Advocates in 1984, was the first chair of Earth Day. We also mustn’t forget that in Seattle in 1999 at the protests against the World Trade Organization, unions and greens formed a block. Labor may have to prioritize fundamental issues – creating a full employment economy, single-payer health care, sustainable food and sustainable jobs, job democracy - and not just getting the highest wages possible. The material fundamentals of life have to be seen as more important than simple high wages.
Anyway, just notes on the discussion at MayDy.
Red Frog
9/12/10
Thursday, September 9, 2010
Why millions march in France but not the US
Rick Wolff examines why millions march in France (and other European countries), while no-one marches in the USA. The difference between Europe and the US is interesting to those like me who have lived in both places. The degree of brainwashing is less in Europe, and there has historically been more heightened social and political awareness and more mass mobilisation. Or to put it briefly, more class consciousness -- with all that that entails of understanding who's the oppressor, who the oppressed, what the various subtle mechanisms of oppression that are being employed, and how to fight back on a collective basis.
Monday, September 6, 2010
The Fire Next Time
"Fire on the Mountain" - by Terry Bisson, 1992, republished 2009
This rare and legendary science fiction book is about the triumph of John Brown’s raid on Harper’s Ferry, and how it sparked a slave uprising in the South to create the independent black nation of Nova-Africa. The nation started by Brown and Harriet Tubman, and joined by Frederick Douglass, eventually spreads to the north, where a revolution in the 1940s extends Nova Africa's socialism across north America – forming the USSA – the United Socialist States of America.
Against a background of visits to Mars, hydrogen and plasma-drive dirigible airships and cars, porcelain engines and a ‘living’ pair of shoes, Bisson tells a story of deep history – a what-if Brown had not been surrounded and hung. The story starts in the present as a black woman communist, Yasmin, comes north from Charleston to visit her dead husband’s mother, get her daughter Harriet, and deliver the journal of a long-dead relative who joined Brown. Bisson weaves a powerful story combining 3 sources. The first is a diary narrative of that relative, a black boy that becomes "Mr. Abraham," who eventually joins Brown and Tubman’s army “up the mountain.” The second are letters from a southern Tidewater doctor who turns against slavery, and meets the black boy, becoming one of the Army of the North Star’s doctors, and training Abraham to be a doctor himself. The third is the present-day story of the boy’s modern relatives, Yasmin and Harriet.
Of course this never happened. Bisson makes it seem real. The key here is that Tubman was not sick and instead joined Brown, and made the correct tactical decision to blow up the bridge that Lee’s troops would use to cross the river, and so evade capture in Harper’s Ferry. (Bisson points out that Brown was not so good at tactics.) The rebels instead escaped up the mountain next to town, along the present-day path of the Appalachian Trail, which Bisson here re-christens the “The North Star Trail.” At the top, they start the first “fire on the mountain’ for all the slaves to see – a sign of deliverance.
Brown, Tubman and Kagi eventually use the tactics of guerilla and political warfare up and down the Shenandoah Valley, the Cumberlands, the Smokies and other ranges to confuse and militarily defeat Robert E Lee, who resorts to terror and hanging of suspect blacks. Male slaves start to join the army in droves as it begins to evade capture and win battles. The war then becomes internationalized, sort of a Spain of the 1860s. Garibaldi’s Italian revolutionaries arrive through Mexico to fight the ‘Mericans who had seized it from Mexico, backed by Mexican republicans, then move north. A Haitian mule cavalry brigade from Toussaint L’Overture’s free Haiti land surreptitiously in the south. German volunteers from the 1948 Commune; a brigade from London organized by Marx; Molly Maquires from the Appalachian coal-fields and Cherokee Indian allies filter into the mountains to help the North Star Army fight Lee. Irish dockers lend a hand against English supply to the slave states. Independence for California is declared by Chinese and Irish railroad workers and an uprising in New Orleans against slavery succeeds. Philadelphia becomes the early Barcelona of the Americas; Whitman joins Brown in the mountains; Emerson and Thoreau argue about the ‘Cause.’ And the “Cause’ succeeds, through guts, blood and fire - not through speeches alone.
Bisson includes a hilarious aside about a book kept by an old white lady who lives near Harper’s Ferry, who gives it to Yasmin as an insult. It is called “John Brown’s Body.” It is a right-wing fantasy about Brown’s defeat at Harper’s Ferry, and his hanging. In this book, the war eventually starts, but it is not for an independent black nation, but to keep the South in the Union. After the war, the ex-slaves are treated like chattel and denied all their rights. The ex-slave owners keep all the land and political power. There is no socialist revolution in the North - the world continues to be run by the same ruling class of people. Yasmin is appalled by this white-supremacist fantasy. She eventually throws the book out the window of the car.
‘Fire on the Mountain’ can be seen as a counter-point to Newt Gingrich’s book on Gettysburg – a reactionary fantasy about Lee winning at Gettysburg. Instead, in ‘Fire’, Lincoln leads a failed Whig invasion of Nova-Africa, and is celebrated by Copperheads and slavery advocates, not the slaves. The Bible is described as being loved by ‘bloodthirsty crackers’ for being an ‘encyclopedia of torments’ - a phrase I love. Bisson, a former member of the John Brown Anti-Klan Committee, specializes in progressive science-fiction. He has many other sci-fi novels to his credit, and this certainly augurs well for the others.
And I bought it at Mayday Books.
Red Frog, 9/6/10, Labor Day (Because American Labor didn’t want to celebrate May Day.)
This rare and legendary science fiction book is about the triumph of John Brown’s raid on Harper’s Ferry, and how it sparked a slave uprising in the South to create the independent black nation of Nova-Africa. The nation started by Brown and Harriet Tubman, and joined by Frederick Douglass, eventually spreads to the north, where a revolution in the 1940s extends Nova Africa's socialism across north America – forming the USSA – the United Socialist States of America.
Of course this never happened. Bisson makes it seem real. The key here is that Tubman was not sick and instead joined Brown, and made the correct tactical decision to blow up the bridge that Lee’s troops would use to cross the river, and so evade capture in Harper’s Ferry. (Bisson points out that Brown was not so good at tactics.) The rebels instead escaped up the mountain next to town, along the present-day path of the Appalachian Trail, which Bisson here re-christens the “The North Star Trail.” At the top, they start the first “fire on the mountain’ for all the slaves to see – a sign of deliverance.
Brown, Tubman and Kagi eventually use the tactics of guerilla and political warfare up and down the Shenandoah Valley, the Cumberlands, the Smokies and other ranges to confuse and militarily defeat Robert E Lee, who resorts to terror and hanging of suspect blacks. Male slaves start to join the army in droves as it begins to evade capture and win battles. The war then becomes internationalized, sort of a Spain of the 1860s. Garibaldi’s Italian revolutionaries arrive through Mexico to fight the ‘Mericans who had seized it from Mexico, backed by Mexican republicans, then move north. A Haitian mule cavalry brigade from Toussaint L’Overture’s free Haiti land surreptitiously in the south. German volunteers from the 1948 Commune; a brigade from London organized by Marx; Molly Maquires from the Appalachian coal-fields and Cherokee Indian allies filter into the mountains to help the North Star Army fight Lee. Irish dockers lend a hand against English supply to the slave states. Independence for California is declared by Chinese and Irish railroad workers and an uprising in New Orleans against slavery succeeds. Philadelphia becomes the early Barcelona of the Americas; Whitman joins Brown in the mountains; Emerson and Thoreau argue about the ‘Cause.’ And the “Cause’ succeeds, through guts, blood and fire - not through speeches alone.
Bisson includes a hilarious aside about a book kept by an old white lady who lives near Harper’s Ferry, who gives it to Yasmin as an insult. It is called “John Brown’s Body.” It is a right-wing fantasy about Brown’s defeat at Harper’s Ferry, and his hanging. In this book, the war eventually starts, but it is not for an independent black nation, but to keep the South in the Union. After the war, the ex-slaves are treated like chattel and denied all their rights. The ex-slave owners keep all the land and political power. There is no socialist revolution in the North - the world continues to be run by the same ruling class of people. Yasmin is appalled by this white-supremacist fantasy. She eventually throws the book out the window of the car.
‘Fire on the Mountain’ can be seen as a counter-point to Newt Gingrich’s book on Gettysburg – a reactionary fantasy about Lee winning at Gettysburg. Instead, in ‘Fire’, Lincoln leads a failed Whig invasion of Nova-Africa, and is celebrated by Copperheads and slavery advocates, not the slaves. The Bible is described as being loved by ‘bloodthirsty crackers’ for being an ‘encyclopedia of torments’ - a phrase I love. Bisson, a former member of the John Brown Anti-Klan Committee, specializes in progressive science-fiction. He has many other sci-fi novels to his credit, and this certainly augurs well for the others.
And I bought it at Mayday Books.
Red Frog, 9/6/10, Labor Day (Because American Labor didn’t want to celebrate May Day.)
Sunday, September 5, 2010
William Upski Wimmsatt, Author visit
Monday, September 6 (Labor Day) · 5:00pm - 7:00pm
Location Mayday Bookstore, 301 Cedar Ave, West Bank, Minneapolis (enter down stairs at side of building)
IN PLEASE DON'T BOMB THE SUBURBS, Wimsatt weaves a first-person tour of America's cultural and political movements from 1985-2010. It's a story about love, growing up, a generation coming of age, and a vision for the movement young people will create in the new decade. With humor, storytelling, and historical insight, Wimsatt lays out a provocative vision for the next twenty-five years of personal and historical transformation. Never heard of Billy Wimsatt before? Your life just got better.
Akashic Books site: http://www.akashicbooks.com/pleasedont.htm
Location Mayday Bookstore, 301 Cedar Ave, West Bank, Minneapolis (enter down stairs at side of building)
IN PLEASE DON'T BOMB THE SUBURBS, Wimsatt weaves a first-person tour of America's cultural and political movements from 1985-2010. It's a story about love, growing up, a generation coming of age, and a vision for the movement young people will create in the new decade. With humor, storytelling, and historical insight, Wimsatt lays out a provocative vision for the next twenty-five years of personal and historical transformation. Never heard of Billy Wimsatt before? Your life just got better.
Akashic Books site: http://www.akashicbooks.com/pleasedont.htm
Saturday, September 4, 2010
Social networking sites
I was talking earlier today to the mysterious "Red Frog," whose true identity -- like the Phantom -- remains shrouded in mystery. He expressed surprise that I use a social networking site like Faceboook to discuss politics. But there's no injunction against using it for this purpose; among my Facebook "friends" I have people like Alex Callinicos, Doug Henwood, Michael Yates, Norman Solomon, and Gopal Balakrishnan, scattered on four continents. We can trade information, stories and discussions almost instantly. This is a link I posted a couple of hours ago on Facebook, which has been subsequently picked up and reposted by at least three other people; an excerpt below:
"The truth is, there is no Islamic army or terrorist group called Al Qaida. And any informed intelligence officer knows this. But there is a propaganda campaign to make the public believe in the presence of an identified entity representing the 'devil' only in order to drive the 'TV watcher' to accept a unified international leadership for a war against terrorism. The country behind this propaganda is the US and the lobbyists for the US war on terrorism are only interested in making money." (Robin Cook, ex-British foreign secretary)
Survival +
One book I'd warmly recommend -- based on both the excerpts available on Amazon and the author's online essays -- is Charles Hugh Smith's "Survival +." This is the kind of book Mayday tends to stock and Craig should definitely look at acquiring at least half a dozen copies. The author maintains his own site.
Friday, September 3, 2010
Rasmus's "Epic Recession"
Mayday has in stock Jack Rasmus's "The Epic Recession: Prelude to Global Depression" (I bought my own copy at Mayday). For some weeks I've been thinking of writing my own amateurish and bungling review of this important book but have been saved from the effort by this one here, written by Suzi Weissman, which is far superior to any pathetic effort on my part. As a caveat, the book is heavy going and not for the faint of heart. I may yet write something on another important book along (roughly) the same lines: "The Great Credit Crash," edited by Martijn Konings, with contributions, inter alia, from the likes of Peter Gowan, Thomas Ferguson, Michael Hudson, Walden Bello, and Leo Panitch. This, too, I bought at Mayday. And this, too, is a taxing book that makes demands on the reader. In defence of the two books above it has to be said that economic and political reality is complex, and to acquire perspective and insight -- historical or otherwise -- into the present quagmire takes careful study.
An excerpt from Weissman's review:
It's a pity there's no book club in the Twin Cities to discuss worthwhile books like this. There was a Marxist book club, organised by Dean Gunderson; that, however, seemingly folded about a year or so back.
An excerpt from Weissman's review:
Rasmus recognizes the theoretical debt he owes to three economic thinkers: John Maynard Keynes, whose work is more about how to recover than what produced the crisis; Irving Fischer, who identified debt and deflation as the main mechanisms that drive a downturn into a depression; and Hyman Minsky, the theorist who wrote about the role of speculative investment, showing how the accumulation of debt can destabilize the entire financial system and provoke the kind of financial meltdown we have just experienced. Although Minsky died in 1996, his thinking is so pertinent to the crises of 2007-10 that financial journalists and academics have called it a "Minsky moment."
Rasmus tries to take the work of these theorists further in order to understand the nature of the current crisis and he pledges to do this more fully in subsequent volumes as this crisis unfolds. His analysis is also aided by a thorough grounding in Marxist economic theory. Missing in Keynes, Fischer, and Minsky, he writes, is "...the consideration of the price for labor and its relationship to product and asset pieces: how wage deflation is related to product and asset deflation."
It's a pity there's no book club in the Twin Cities to discuss worthwhile books like this. There was a Marxist book club, organised by Dean Gunderson; that, however, seemingly folded about a year or so back.
Thursday, September 2, 2010
Jimmy Johns workers strike today in Minneapolis:
Source
Fast Food Chain Rocked by Work Stoppages in Sign of Mounting Economic Frustration among US Workers
Press Conference and Rally: 4pm September 2, Block E Jimmy Johns, Minneapolis
MINNEAPOLIS- Service was anything but 'freaky fast' at Jimmy Johns today as workers walked off the kitchen floor in an unprecedented move to demand improved wages and working conditions at nine Minneapolis franchise locations. Announcing the formation of the IWW Jimmy Johns Workers Union, the workers are seeking a pay increase to above minimum wage, consistent scheduling and minimum shift lengths, regularly scheduled breaks, sick days, no-nonsense workers compensation for job-related injuries, an end to sexual harassment at work, and basic fairness on the job.
“I have been working at Jimmy Johns for over two years and they still pay me minimum wage and schedule me one-hour shifts,” said Rikki Olsen, a union member at the Block E location. “I'm working my way through school and can barely make ends meet. I'd get another job, but things are just as bad across the service industry. Companies like Jimmy John's are profitable and growing, they need to provide quality jobs for the community.”
Source
Interesting essay at wsws. I'm reluctant to paste an excerpt as it deserves to be read and digested in its totality. I'll get a printout for myself.
Wednesday, September 1, 2010
The Counter-Revolution Cometh
"Den of Thieves," by James Stewart, 1991
The 1980s were a pivotal decade in the development of American capitalism. It was during the last two years of Carter, and the two Reagan presidencies, that the American labor movement was soundly defeated in a series of strikes. During the 80s, jobs disappeared to Mexico and overseas, factories closed, and the U.S. successfully beat-up a number of small countries. Finance-dominated capital began to spread over the whole world economy. Two recessions occurred, one as deep as a mine-shaft. The markets fell off a cliff twice. The S&L industry collapsed, and had to be rescued by tax-payers. The decade ended with the destruction of the degenerated Soviet workers’ state – finishing this decade of the global class war with a massive victory for capital. It was an ugly fucking time. I remember it well.
It is upon the success of this mini counter-revolution against Roosevelt, so to speak, that the Clinton, Bush and Obama presidencies are built, and the consequences of which we are living today.
James B Stewart was a reporter for the Wall Street Journal, and represents the best of that paper’s reporters. In this meticulously-researched history, Stewart has dug out of the 80s dust-bin the financial creatures of that time - specifically Michael Milken and Ivan Boesky – the junk bond kings. Stewart judges Milken to be the most prominent financier of the 1980s, who was treated as a ‘national treasure’ by the finance industry. What is significant about that is that Milken ended up going to jail for 10 years for 6 felonies, and paying a fine the size of Guatemala. The most prominent financier? Tells you something. Boesky is now mostly remembered for being the model for Gordon Gekko, and actually making a defense of greed a part of a 1986 talk he gave at Drexel’s annual event, the “Predators Ball.”
‘Junk” bonds (now politely called ‘high yield’ bonds) are risky corporate bonds issued by companies with weak finances. Miliken bet that the companies would not go bankrupt, and so created their debt to be bought by others. He convinced so many other people and companies to issue and to buy junk bonds that his firm, Drexel (Burnham Lambert) became a power-house on Wall Street. Using that financial base, he began to buy or ‘raid’ companies in mostly hostile takeovers, thus initiating a wave of mergers across the United States. In the process, Drexel made millions in corporate finance fees. People like Henry Kravis, Ronald Perelman, Carl Icahn, Rupert Murdoch, Irwin Jacobs, Kirk Kerkorian, Ted Turner and Felix Rohatyn became famous ‘arbitrageurs’ during this time, who also rolled companies for profit. They paid no heed to the consequences – to the real economy, or to the working class.
What is consistent across the junk bond/takeover/S&L 80s, the ‘tech wreck’ of the 90s, the Enron/World Com pyramid schemes, and the real-estate/CDO bubble of the Oughts is that someone on Wall Street convinces others that their product has more value than it does, and the bubble cometh. It is basically a con-job, and this repetitive con-job is the real foundation of American finance capital at this point.
The “den of thieves’ was a large circle of people on Wall Street – principally Martin Siegel, first at Kidder Peabody; Dennis Levine at Drexel-NY; Milken at Drexel-Beverly Hills and Boesky at his own corporation- who traded inside information, which allowed them to make bets on the market or coerce companies into acting they way they wanted. Along with paying for and profiting off inside information, they arranged ‘parking’ schemes to keep assets off companies books, created dummy companies to hide losses or assets, hid profits in order to pay no taxes, evaded net capital rules, bribed and black-mailed companies to buy bonds, and made deliberately false statements. More colloquially called ‘lies.’
Levine, a greedy and lazy fatty, eventually gets caught by the SEC in insider trading through a bank in the Caribbean, Bank Leu, based on his profitable bets on stocks. Levine traded right before certain announcements that would drive the price up, and then sold. The SEC started to notice the pattern. Levine pleads guilty, spilling the beans on others, and the whole den unravels, though it takes years – from the lowest, Levine, to the highest, Milken. Rudi Giuliani makes an appearance as the head of the New York DA’s office, who prosecutes the insider-trading schemes in a hot or cold way, depending on his political fortunes. Milken is defended by Drexel, which pays his monthly millions-of-dollars legal bills and his monthly millions-of-dollars public relations bills, until the chairman, Fred Joseph, sees enough evidence to pull the plug. Far too late, of course. The firm doing Milken’s PR work, Robinson Lake, had worked on the Reagan campaign, and were a forerunner of the ‘dirty’ politics propaganda we are now so familiar with from the Republican right. All of the ring goes to jail, and the government collects almost a billion in fines. Only one – Siegel- seems to regret what he did, and works for the government to help the prosecution case. In October 1989, the junk bond market itself collapses, sending the DOW into a 200-point decline, as companies over-leveraged on junk bonds finally do declare bankruptcy. And finally Drexel itself declares bankruptcy for the same reason, in February 1990.
Stewart’s analysis of the events showed that all the S&Ls that Milken convinced to buy junk bonds, like Columbia Savings, were taken over by the government, and then rescued by tax-payers for billions of dollars. The law that allowed S&L’s to invest in risky investments was passed during the Reagan administration. The S&L crisis was the other, interconnected nightmare during the 80s and early 90s that is supposed to be part of our collective Lady Gaga amnesia.
At the end, the returns on junk bonds were about equal to a low-risk money market fund – directly contradicting Milken’s siren song of mega-cash, even on his own terms. Only the firms made money off the boom. Companies merged and went out of existence, factories closed and workers were sent home, while assets were swapped like whores at a drunken billionaires’ yacht party – all to enrich individuals on Wall Street.
The lesson of this book is that the recent real estate bubble and CDO boom weren't born yesterday, but are rooted in the overwhelming domination of the economy, the press and the political machines by the finance industry over the last 30 years. Stewart’s story reads more like a financial detective story, structured by the rise and fall of some shitheads, and its natural structure provides a plot with which few potboilers can compete. Reality many times trumps fiction.
And I bought it at Mayday Books used book section.
Red Frog, 9/1/2010
The 1980s were a pivotal decade in the development of American capitalism. It was during the last two years of Carter, and the two Reagan presidencies, that the American labor movement was soundly defeated in a series of strikes. During the 80s, jobs disappeared to Mexico and overseas, factories closed, and the U.S. successfully beat-up a number of small countries. Finance-dominated capital began to spread over the whole world economy. Two recessions occurred, one as deep as a mine-shaft. The markets fell off a cliff twice. The S&L industry collapsed, and had to be rescued by tax-payers. The decade ended with the destruction of the degenerated Soviet workers’ state – finishing this decade of the global class war with a massive victory for capital. It was an ugly fucking time. I remember it well.
James B Stewart was a reporter for the Wall Street Journal, and represents the best of that paper’s reporters. In this meticulously-researched history, Stewart has dug out of the 80s dust-bin the financial creatures of that time - specifically Michael Milken and Ivan Boesky – the junk bond kings. Stewart judges Milken to be the most prominent financier of the 1980s, who was treated as a ‘national treasure’ by the finance industry. What is significant about that is that Milken ended up going to jail for 10 years for 6 felonies, and paying a fine the size of Guatemala. The most prominent financier? Tells you something. Boesky is now mostly remembered for being the model for Gordon Gekko, and actually making a defense of greed a part of a 1986 talk he gave at Drexel’s annual event, the “Predators Ball.”
‘Junk” bonds (now politely called ‘high yield’ bonds) are risky corporate bonds issued by companies with weak finances. Miliken bet that the companies would not go bankrupt, and so created their debt to be bought by others. He convinced so many other people and companies to issue and to buy junk bonds that his firm, Drexel (Burnham Lambert) became a power-house on Wall Street. Using that financial base, he began to buy or ‘raid’ companies in mostly hostile takeovers, thus initiating a wave of mergers across the United States. In the process, Drexel made millions in corporate finance fees. People like Henry Kravis, Ronald Perelman, Carl Icahn, Rupert Murdoch, Irwin Jacobs, Kirk Kerkorian, Ted Turner and Felix Rohatyn became famous ‘arbitrageurs’ during this time, who also rolled companies for profit. They paid no heed to the consequences – to the real economy, or to the working class.
What is consistent across the junk bond/takeover/S&L 80s, the ‘tech wreck’ of the 90s, the Enron/World Com pyramid schemes, and the real-estate/CDO bubble of the Oughts is that someone on Wall Street convinces others that their product has more value than it does, and the bubble cometh. It is basically a con-job, and this repetitive con-job is the real foundation of American finance capital at this point.
The “den of thieves’ was a large circle of people on Wall Street – principally Martin Siegel, first at Kidder Peabody; Dennis Levine at Drexel-NY; Milken at Drexel-Beverly Hills and Boesky at his own corporation- who traded inside information, which allowed them to make bets on the market or coerce companies into acting they way they wanted. Along with paying for and profiting off inside information, they arranged ‘parking’ schemes to keep assets off companies books, created dummy companies to hide losses or assets, hid profits in order to pay no taxes, evaded net capital rules, bribed and black-mailed companies to buy bonds, and made deliberately false statements. More colloquially called ‘lies.’
Levine, a greedy and lazy fatty, eventually gets caught by the SEC in insider trading through a bank in the Caribbean, Bank Leu, based on his profitable bets on stocks. Levine traded right before certain announcements that would drive the price up, and then sold. The SEC started to notice the pattern. Levine pleads guilty, spilling the beans on others, and the whole den unravels, though it takes years – from the lowest, Levine, to the highest, Milken. Rudi Giuliani makes an appearance as the head of the New York DA’s office, who prosecutes the insider-trading schemes in a hot or cold way, depending on his political fortunes. Milken is defended by Drexel, which pays his monthly millions-of-dollars legal bills and his monthly millions-of-dollars public relations bills, until the chairman, Fred Joseph, sees enough evidence to pull the plug. Far too late, of course. The firm doing Milken’s PR work, Robinson Lake, had worked on the Reagan campaign, and were a forerunner of the ‘dirty’ politics propaganda we are now so familiar with from the Republican right. All of the ring goes to jail, and the government collects almost a billion in fines. Only one – Siegel- seems to regret what he did, and works for the government to help the prosecution case. In October 1989, the junk bond market itself collapses, sending the DOW into a 200-point decline, as companies over-leveraged on junk bonds finally do declare bankruptcy. And finally Drexel itself declares bankruptcy for the same reason, in February 1990.
Stewart’s analysis of the events showed that all the S&Ls that Milken convinced to buy junk bonds, like Columbia Savings, were taken over by the government, and then rescued by tax-payers for billions of dollars. The law that allowed S&L’s to invest in risky investments was passed during the Reagan administration. The S&L crisis was the other, interconnected nightmare during the 80s and early 90s that is supposed to be part of our collective Lady Gaga amnesia.
At the end, the returns on junk bonds were about equal to a low-risk money market fund – directly contradicting Milken’s siren song of mega-cash, even on his own terms. Only the firms made money off the boom. Companies merged and went out of existence, factories closed and workers were sent home, while assets were swapped like whores at a drunken billionaires’ yacht party – all to enrich individuals on Wall Street.
The lesson of this book is that the recent real estate bubble and CDO boom weren't born yesterday, but are rooted in the overwhelming domination of the economy, the press and the political machines by the finance industry over the last 30 years. Stewart’s story reads more like a financial detective story, structured by the rise and fall of some shitheads, and its natural structure provides a plot with which few potboilers can compete. Reality many times trumps fiction.
And I bought it at Mayday Books used book section.
Red Frog, 9/1/2010