Greatest Transfer of Wealth to the Super-Rich in Modern American History

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“If we are going to stop Republicans from taking healthcare from millions and slashing Medicare to give tax cuts to the wealthy and large corporations, now is the time to stand up and fight back.”

The tax plan passed today by the House of Representatives is a flat giveaway to America’s richest households and corporations,” argued Josh Bivens of the Economic Policy Institute in a statement. (Photo: Tax March/Twitter)

With their passage of a deeply unpopular $1.5 trillion tax cut bill on Thursday, House Republicans did their part in “paving the way for the greatest transfer of wealth from regular people to the super-rich in modern American history,”—a move that sparked a flood of outrage from progressive activists and lawmakers who vowed to mobilize and do everything in their power to “kill the bill.”

“If we are going to stop Republicans from taking healthcare from millions and slashing Medicare to give tax cuts to the wealthy and large corporations, now is the time to stand up and fight back,” said Sen. Bernie Sanders (I-Vt.) in a call to action that was echoed by many of the progressive groups that played a significant role in the fight against Trumpcare.

Now that the House bill has passed, “the fight now turns to the Senate, where the Trump tax scam has always faced much tougher odds,” noted CREDO political director Murshed Zaheed said in a statement.

As Common Dreams reported on Tuesday, Senate Republicans crammed a provision into their own tax bill that would strip healthcare from 13 million Americans—a fact opposition groups have used in recent days in an effort to galvanize grassroots forces.

“It is no surprise that Trump’s lapdogs in the Senate want to use the Trump tax scam to try to gut healthcare for millions of Americans,” Zaheed said, “but the grassroots resistance they’re about to experience will be just as intense as the tidal wave of opposition that repeatedly stopped the zombie Trumpcare bill. If the Senate manages to pass the Trump tax scam despite massive public opposition, we suspect many senators will come to regret it next year.”

Just ahead of the House vote on Thursday, the nonpartisan Joint Committee on Taxation (JCT) released an analysis that dealt yet another blow to the GOP’s insistence that their plan is primarily focused on providing relief to middle- and working-class Americans.

The Senate GOP plan—expected to hit the floor for a vote before Thanksgiving next week—will raise taxes on low-income Americans beginning in 2021, JCT found. More broadly, the Senate plan would sharply hike taxes on millions of families that earn less than $75,000 a year beginning in 2027.

Citing these numbers, the Washington Post‘s Paul Waldman wrote, “If you’re one of those white working-class voters who propelled Donald Trump into the presidency and gave Republicans total control of Washington, the GOP has a message for you: Sucker!”

By contrast, the wealthiest Americans—including President Donald Trump and his family—stand to gain massively from both the House and Senate plans. According to an NBCanalysis published Thursday, Trump and his heirs would save more than a billion dollars if the House measure became law.

The tax plan passed today by the House of Representatives is a flat giveaway to America’s richest households and corporations,” argued Josh Bivens of the Economic Policy Institute in a statement. “Most of the same people who cast this vote to deprive the government of tax revenue will now cynically pivot and start wringing their hands about the federal budget deficit, arguing that vital programs like Medicare and Medicaid must be slashed.”

“Disgusting,” concluded Fight for $15 on Twitter, “but the fight isn’t over. This is one of the worst pieces of legislation in history. Call your Senators and tell them to vote NO!”

Tens of thousands being dropped from US student loan relief program

By J. Cooper
15 November 2017

October marked 10 years since the George W. Bush administration enacted the Public Service Loan Forgiveness (PSLF) program as an incentive to young college graduates to pursue careers as teachers, in government, or at non-profit institutions. The program was advertised as a way for some recent graduates to see an exit sign on their student loan debt.

In 2006, average student loan debt for undergraduates was just under $20,000. For graduate students it was nearly $40,000. For the class of 2016, average undergraduate debt had climbed to $37,172. For graduate students, the average is considerably higher. In that same period, college tuition has increased 63 percent.

Over the past 10 years over half a million graduates have signed up for PSLF. However, according to a recent article in Rolling Stone, more than half of those have been disqualified for myriad bureaucratic reasons. Last month a total of only 137 individuals were deemed eligible to have the balance of their student loans wiped clean. Thousands are just finding out that their years of paying on time won’t count under the federal forgiveness plan because they took out the wrong type of loan, their employer has been disqualified, or their original lender sold the loan to an unqualified institution. President Trump’s budget proposes eliminating the program entirely for borrowers after July 2018.

As many of these borrowers are now discovering, if your employer hasn’t provided the correct proof of employment in a qualifying position, if the loan you are carrying is not through the sole federal direct-loan program, if you have missed even one of the 120 payments required within the 10-year span, or if you paid extra in one payment and skipped the next, you can be disqualified.

New York Times article from October 27 profiles a 46-year-old teacher who enrolled in the PSLF plan the year it was announced, thinking he had done everything according to the rules, only to discover in 2015 that he had been enrolled in a “particular type of ineligible payment plan and would need to start his decade of payments all over again.” One of the online comments from November 5 announces that several class action suits have been launched on behalf of borrowers who were not informed their loans were out of compliance.

Another commenter says: “By the time I’d learned that [one of the loans did not qualify], my loans had ballooned to $90k because I was only paying interest on them with 8.5 percent. … that nonsense impacted my career choices (deciding to stay in nonprofits to secure the forgiveness), my retirement funds, and my sanity. I will end up paying more than $55K in interest on my $60k loan. Truly criminal.”

Among the thousands disqualified or affected are teachers, doctors, lawyers, even police. A lawsuit by the American Bar Association was filed earlier this year after the Department of Education (DoE) announced it had “rescinded without explanation the association’s status as a qualified employer under PSLF and notified ABA employees and others who had previously been approved for participation in the program that they no longer qualified,” according to the DoE website.

Most of those applying for the PSLF program are those with postgraduate degrees. Currently there is no limit on the amount a graduate student can borrow, and it is not uncommon for a graduate student to embark on their first job out of school with $100,000 in debt. To discover, after 10 years working at a public service job, known for low salaries, that you don’t qualify for the program after all, not only impacts the financial wellbeing of the individual, but can have serious psychological effects.

Jason Delisle, a resident fellow at the American Enterprise Institute, a conservative think tank, revealed that when the PSLF program was first created, it was intended to be small and unattractive. “Washington policymakers did not foresee the program growing to its current size. After all, 10 years is a long time to work in a qualifying job, so many experts thought people wouldn’t sign up,” he wrote in Politico in July. “They also thought borrowers were averse to making loan payments linked to their incomes, as hardly anyone enrolled in an earlier version of the government’s income-based repayment plan.”

In fact, Delisle speaks for that section of the ruling elite who are determined that not even a small segment of students in debt will get any relief. Delisle argues that the PSLF program should be eliminated because it encourages graduate students to maximize their debt load, since the larger amount will be forgiven after 10 years. It’s easy for him to ignore the dire consequences for those who get the reality check that they don’t qualify after they have made their regular payments and then face decades of additional payments when they thought they might be able to buy a house or start a family.

As of July this year, the interest rates for Direct Loans increased to 7 percent for graduate students, and 4.45 percent for undergraduates. Trump’s budget proposal includes a provision to eliminate entirely the federal Subsidized Stafford Loan, which has traditionally allowed students to defer payment while enrolled in a college or university, and had a somewhat lower interest rate upon graduation. Another provision proposed in the House version of the next budget would require that all tuition waived, either through a federal program, employer benefit or university tuition waiver, be counted as taxable income.

The overwhelming burden of student debt for borrowers at all levels is becoming worse every year. This past spring, total student loan debt surpassed $1.45 trillion, about $620 billion more than all US credit card debt. Among the 44 million borrowers, the average monthly payment is $351. Trump is proposing to abolish subsidized federal loans and institute a single program for all federal student lending as a single income-based repayment plan at 12.5 percent of adjusted gross income. Today’s recent graduate can look forward to at least half a lifetime of penury as the cost of an undergraduate degree. And for those who can’t afford more than the interest every month, it’s a lifetime.

Currently, 11.2 percent of student loan dollars are in default and another 11 percent are in forbearance (a temporary payment suspension granted at the discretion of the lender while interest continues to accrue). According to the September 28 Washington Post, “millions of people had not made a payment on about $144 billion in federal student loans for at least nine months as of June, a 12 percent increase in defaults from a year earlier.”

Although the default rate has declined slightly from its 14.7 percent peak in fiscal year 2010, it is still well above rates prior to the 2007-2008 mortgage collapse and Wall Street crash—from 8.8 percent in 2009 and 7 percent in 2007. The total number of borrowers in default is at an all-time high, with 1.1 million new borrowers defaulting in 2016.

According to the Department of Education’s latest figures, the third quarter of 2017 saw a major increase in loans going into default for at least a second time. Thirty-thousand borrowers defaulted on $64 million. This was a jump of 7,100 unique loans in just three months. The previous record was set in the first quarter of 2016, with 24,500 borrowers re-defaulting on $57 million.

College graduates face an increasingly bleak future, despite being told that a college education is a necessity to get a “decent” job today. As has been widely reported, Americans between the ages of 18 and 34 are more likely to be living with their parents, rather than a spouse or partner. Employer-paid health care and pension plans are a relic of the past, forcing millions of college graduates to foot the bill for thousands of dollars in expenses in addition to the student loans. The average net worth of the 2016 college graduate is a negative $33,984.

This crushing debt provides fertile hunting grounds for rapacious debt collectors. For the fiscal quarter ending in March 2017, more than $2 billion had been “successfully” recouped for the lenders by 30 national collection agencies. Of this, $182 million was the result of wage garnishment. It should come as no surprise that feelings of despair and suicidal thoughts are so prevalent today.

As the teacher interviewed by Rolling Stone explained, the debt collectors “called day and night.” Calculating his “rehabilitated” debt at over $100,000, he said, “Not one dollar goes toward principal. I will never be able to pay it off. My only hope to escape from this crushing debt is to die.”

Significantly, a recent report by Experian, the consumer credit reporting agency, notes that of the generation of borrowers now making payments, aside from students currently enrolled and thus just beginning to accrue loans, millennials have the highest percentage of past due amounts on loans in repayment (not deferred). Millennials also have the highest number of loans, 4.4 on average. This is also the generation that indicated, by a majority (51 percent) in a recent poll, that they would rather live in a socialist or communist society than under capitalism.

The legacy of Obamacare: A five percent increase in heart patient deaths

15 November 2017

When one individual inflicts bodily injury upon another such that death results, we call the deed manslaughter; when the assailant knew in advance that the injury would be fatal, we call his deed murder. But when society places hundreds of proletarians in such a position that they inevitably meet a too early and an unnatural death, one which is quite as much a death by violence as that by the sword or bullet  murder it remains. (Friedrich Engels, The Condition of the Working Class in England, 1845)

* * *

A US government program supposedly devised both to improve medical care and cut costs has, predictably, succeeded in the latter while undermining the former. Research published Sunday in JAMA Cardiology (Journal of the American Medical Association) shows that an initiative introduced five years ago under the Affordable Care Act (ACA) to induce hospitals to reduce Medicare readmissions for heart patients has resulted in an increase in mortality rates among those studied.

Under the ACA’s Hospital Readmissions Reduction Program (HRRP), hospitals were penalized financially when heart failure patients were readmitted within a month. While the program has succeeded in reducing the number of 30-day readmissions, the number of patients who died within a year rose by 5 percentage points. According to one of the study’s senior authors, these findings could account for an additional 5,000 to 10,000 deaths annually across the US due directly to the program.

For the American ruling elite, HRRP and other schemes devised by bureaucrats at the Centers for Medicare and Medicaid Services (CMS) are part of an agenda that is as deliberate as it is ruthless: Men and women in the US are living too long into old age and measures must be taken to cut costs associated with their medical care and shorten their life expectancy. This is the deadly price that must be paid to prop up a society that is one of the most socially unequal both in terms of income and the delivery of health care.

The statistics do not lie. Study researchers analyzed 115,245 patients at 416 hospitals in the American Heart Association’s Get With the Guidelines-Heart Failure registry from January 2006 to December 2014. They examined readmission and death rates before and after the program began in 2012.

* Readmission rates within one month fell from 20 percent before HRRP penalties to 18.4 percent after HRRP (down 1.6 percent). Mortality rates, however, rose by almost the same rate, from 7.2 percent before HRRP to 8.6 percent after (up 1.4 percent).

* Statistics for readmission and mortality within one year were even more damning. Readmission within one year fell by only about 1 percent, from 57.2 percent before HRRP to 56.3 percent after. But the mortality rate within one year rose from 31.3 percent before HRRP to 36.3 percent after—a shocking 5 percent increase. These figures show that there is a direct correlation between implementation of the Obamacare policy and preventable deaths.

HRRP penalizes hospitals up to 3 percent of every Medicare dollar for “excessive” repeat hospital stays. That is 15 times more than the 0.2 percent penalty levied against hospitals with high mortality rates. In other words, while hospitals with higher rates of mortality face a minimal fine, hospitals are being substantially penalized for failure to comply with a program that is resulting in increased deaths.

Compounding the misery, financial penalties from HRRP have been shown to fall disproportionately on academic medical centers and “safety-net” hospitals where “higher readmission rates are associated with the higher case-mix complexity and lower socioeconomic status,” according to the study, i.e., those treating poorer and sicker patients. In such settings, hospitals are incentivized to “game” the system by delaying admissions, increasing observation stays or shifting inpatient-type care to emergency departments, to the detriment of patient welfare.

The US mortality rate rose in 2015 in the first year-over-year increase since 2005, with life expectancy falling between 2014 and 2015 from 85.8 years to 85.6 years for men, and from 87.8 years to 87.6 years for women. According to the Centers for Disease Control and Prevention, this decline was due to an increase in eight of the 10 leading causes of death in the US, including heart disease, stroke, Alzheimer’s disease and suicide.

With heart disease rising, there is no other way to interpret the penalties imposed by the ACA for early readmission of heart patients than a deliberate effort to see more men and women die. US corporations are already reaping a grim dividend from this downward trend, with at least 12 major corporations reporting this summer that they have reduced their estimates for how much they could owe in pension and other retirement obligations by a combined $9.7 billion due to shorter life spans.

It is fitting that the health care overhaul known as Obamacare was the instigator of HRRP, an irrefutable demonstration that the ACA was the first major volley in the bipartisan drive to restrict access to affordable health care and sharply reduce the length of workers’ lives.

As the World Socialist Web Site explained as early at 2009, the Obama administration’s health care “reform” established a framework for the insurers, the corporations and the government to drastically reduce the health benefits available to low- and middle-income individuals and families. The aim is to limit the amount that the government must pay out for health care and Social Security payments, as well as what corporations must pay in pensions and other retirement benefits.

Health care in the Obamacare era has nothing in common with quality, near-universal health care, as Obama initially pledged. It is based entirely on the for-profit health care system in America, including the insurance companies, giant hospitals, health care chains and pharmaceutical companies. Any repeal of the ACA—and its replacement with “Trumpcare” or any other legislation—will maintain the class-based delivery of health care and undoubtedly worsen it for the majority of Americans.

The empirical proof provided by research published in JAMA Cardiology that an ACA program has predictably caused increased deaths should serve as a stark warning to the working class. This Obamacare program is of a piece with the bipartisan attack on jobs and living standards, the attack on immigrants and democratic rights, and the drive to war.

This assault will inevitably provoke enormous social opposition among workers and young people. This opposition must be channeled into the fight for a progressive overhaul of the health care system that takes as its starting point an end to privately owned health care corporations and medicine-for-profit and the establishment of socialized medicine, democratically administered by a workers’ government, providing free, high-quality health care for all.

Kate Randall

http://www.wsws.org/en/articles/2017/11/15/pers-n15.html

Fight the disease of globalized corporate capitalism

Fight the Disease, Not the Symptoms

Mr. Fish / Truthdig

The disease of globalized corporate capitalism has the same effects across the planet. It weakens or destroys democratic institutions, making them subservient to corporate and oligarchic power. It forces domestic governments to give up control over their economies, which operate under policies dictated by global corporations, banks, the World Trade Organizationand the International Monetary Fund. It casts aside hundreds of millions of workers now classified as “redundant” or “surplus” labor. It disempowers underpaid and unprotected workers, many toiling in global sweatshops, keeping them cowed, anxious and compliant. It financializes the economy, creating predatory global institutions that extract money from individuals, institutions and states through punishing forms of debt peonage. It shuts down genuine debate on corporate-owned media platforms, especially in regard to vast income disparities and social inequality. And the destruction empowers proto-fascist movements and governments.

These proto-fascist forces discredit verifiable fact and history and replace them with myth. They peddle nostalgia for lost glory. They attack the spiritual bankruptcy of the modern, technocratic world. They are xenophobic. They champion the “virtues” of a hyper-masculinity and the warrior cult. They preach regeneration through violence. They rally around demagogues who absolve followers of moral choice and promise strength and protection. They marginalize and destroy all individuals and institutions, including schools, that make possible self-criticism, self-reflection and transcendence and that nurture empathy, especially for the demonized. This is why artists and intellectuals are ridiculed and silenced. This is why dissent is attacked as an act of treason.

These movements are also deeply misogynistic. They disempower girls and women to hand a perverted power to men who feel powerless in the global economy. They blame ethnic and religious minorities for the national decline. They foster bizarre conspiracy theories. And they communicate in the Orwellian newspeak of alternative facts. They claim the sole right to represent and use indigenous patriotic and religious symbols.

India, built on the foundations of caste slavery, has become one of many new neofeudal states, among them Turkey, Poland, Russia and the United States. Its neofeudal structure continues to carry out atrocities against Dalits—the former “untouchables”—and now increasingly against Muslims. India’s Prime Minister Narendra Modi, who as the chief minister of the western Indian state of Gujarat oversaw a vicious anti-Muslim pogrom, has defended sectarian discrimination and violence even though this year he made a tepid declaration that “[w]e will not tolerate violence in the name of faith” and issued other unconvincing appeals for religious peace. As prime minister he has employed threats, harassment and force to silence those who decry human rights abuses and atrocities carried out in India. He attacks his critics as “anti-national”—the equivalent of “unpatriotic” in the United States.

Modi, like his fellow demagogues in other parts of the world, including Donald Trump, speaks in the language of moral purity and promotes self-serving historical myth. Indians who eat beef—a huge number—are targeted, school history books are being rewritten to conform to right-wing Hindu ideology and its open admiration for fascism, and entertainers considered too political or too salacious are under attack.

There are within America’s corporate power structures individuals, parties and groups that find the hysterical, imbecilic and irrational rants of demagogues such as Trump repugnant. They seek a return to the polished mendacity of politicians such as Hillary Clinton and Barack Obama. They hope to promote the interests of global capitalism by maintaining the fiction of a functioning democracy and an open society. These “moderates” or “liberals,” however, are also the architects of the global corporate pillage. They created the political vacuum that the demagogues and proto-fascist movements have filled. They blind themselves to their own complicity. They embrace their own myths—such as the belief that former FBI Director James Comey and the Russians were responsible for the election of Trump—to avoid examining the social inequality that is behind the global crisis and their defeat.

The 400 richest individuals in the United States have more wealth than the bottom 64 percent of the population, and the three richest Americans have more wealth than the bottom 50 percent of the U.S. population. This social inequality will only get worse as the weak controls that once regulated the economy and the tax code are abolished or rewritten to further increase the concentration of wealth among the ruling oligarchs. Social inequality at this level, history has shown, always results in these types of pathologies and political distortions. It also, potentially, presages revolution.

The short-term political and economic gains made by the Democratic Party and liberal class in the last few decades came at the expense of the working class. The liberal class, because of its complicity in globalization, has destroyed its credibility as well as the credibility of the “liberal” democratic values it claims to represent. Enraged workers, lied to for decades by “liberal” politicians such as Bill and Hillary Clinton and Obama, delight in Trump’s crude taunts and insults directed at the power structure and elites they loath. Many Americans are perhaps aware that Trump is a con artist, but he at least appears to share their disdain for the “liberal” elites who abandoned them.

It will eventually become apparent to some, perhaps many, of Trump’s supporters that he is cravenly in the service of the 1 percent and has turbocharged the corporate kleptocracy. The Democratic Party, busy purging Bernie Sanders supporters from its ranks, is banking on this epiphany to revive its political fortunes. The Democratic leadership has no real political strategy, other than to hope that Trump implodes. They are backing and funding opposition movements such as Indivisible and the women’s marches, as well as the witch hunt about Russian interference in the 2016 U.S. presidential election, all of which have as their sole focus removing Trump and restoring the Democratic Party to power. This form of resistance is sterile and useless.

But there are other resistance movements—the most prominent being the battle by the water protectors at Standing Rock to block the Dakota Access pipeline—that attack the disease. It is easy to tell the resistance from the faux resistance by the response of the state. During the women’s marches, Democrats, including Debbie Wasserman Schultz, were honored participants. The police were usually courteous and helped facilitate the marches; arrests were few and coverage by the corporate press was sympathetic. In contrast, during the long encampment at Standing Rock, which took place under the Obama administration, the nonviolent resisters were physically attacked by police, the National Guard and private security contractors. These forces used dogs, pepper spray, water cannons in subzero temperatures, sound machines, drones, armored vehicles and hundreds of arrests in their efforts to destroy the resistance.

Attack the symptoms and the state will be passive. Attack the disease and the state will be ruthless.

Once Trump’s base begins to abandon him—the repression in Turkey under President Recep Tayyip Erdoğan is a good example of what will happen—the political landscape will turn very ugly. Trump and his allies, in a desperate bid to cling to power, will openly stoke hate crimes and violence against Muslims, undocumented workers, African-Americans, progressives, intellectuals, feminists and dissidents. He and his allies on the “alt-right” and the Christian right will move to silence all organs of dissent, including corporate media outlets fighting to restore the patina of civility that is the window dressing to corporate pillage. They will harness the power of the nation’s substantial internal security apparatus to crush public protests and to jail opponents, even those who are part of the faux resistance.

Time is not on our side. If we can build counter-capitalist movements that include the working class we have a chance. If we can, like the water protectors at Standing Rock, mount sustained acts of defiance in the face of severe state repression, we have a chance. If we can organize nationwide campaigns of noncooperation we have a chance. We cannot be distracted by the symptoms. We must cure the disease.

Chris Hedges
Columnist
Chris Hedges is a Pulitzer-Prize winning journalist, New York Times best selling author, former professor at Princeton University, activist and ordained Presbyterian minister. He has written 11 books,…
Mr. Fish
Cartoonist
Mr. Fish, also known as Dwayne Booth, is a cartoonist who primarily creates for Truthdig.com and Harpers.com. Mr. Fish’s work has also appeared nationally in The Los Angeles Times, The Village Voice, Vanity…

The GOP Is Proposing a 250 Percent Tax Hike on Millions of Americans

NEWS & POLITICS
Traditional Republican voters could get hit the hardest.

Photo Credit: Gage Skidmore/Creative Commons

The GOP just declared war on the strivers who start their own businesses.

Or to put it another way: The nice young couple who just opened their own independent coffee shop around the corner will likely be hit with a huge tax increase—as much as 250%—while the corporation that operates thousands of coffee shops all around the world is getting its taxes cut 43%.

The complicated new bill (remember when the GOP promised tax simplicity?) also lavishes federal tax favors on rich individuals and on those who live in low tax states.

No wonder the GOP developed the nearly 500-page tax bill in secret. Had the public’s business been conducted in public, this bill simply would not exist. But it may become law because, if there is anything we know about Washington in the age of Trump, it is that our elected leaders don’t listen to us, they listen to the political donor class, and in Trump’s case, to those advisers he says reside in his head.

The Republican tax plan targets a class of voters who have formed the core of the GOP constituency since the age of Lincoln: entrepreneurs and small business owners. The party used to promote tax favors for those who start new enterprises.

But now Trump has turned Washington into a federally protected wetland for big established business and comfortable billionaires, stocking the swamp with the most voracious predators on Wall Street. The GOP bill shows it is on the side of Wall Street, at the expense of Main Street.

The tax plan would dramatically raise taxes on many entrepreneurs, in some cases more than doubling the tax rate they pay on their profits. That explains why groups like the National Federation of Independent Business attacked the bill, saying in a statement that the bill “does not help most small businesses.”

Currently, freelancers, small-business owners and others pay taxes at rates of 10% and then 15% on their profits if their total income puts them below about $125,000 annually. The GOP would tax these same businesses at 25% on about one-third of their profits and at 10% to 15% rates on the rest.

So, if your small business made a profit of $1,000, you would pay 10% rate on the first $700 and a 25% rate on the other $300.  Your total tax would rise by $5.

This completely contradicts the oft-stated GOP claim that what matters are marginal tax rates, the rate paid on the next dollar of income. And, of course, it makes the federal income tax system even more complicated.

Meanwhile, big corporations—known as C Corps to tax policy wonks—would pay a 20% rate.

Ponder that for a moment. The nearly 3,000 companies that own nearly all the business assets would be taxed at a lower rate than the guy who fixes your shoes.

Raising taxes on the smallest businesses while giving the Big Boys a tax rate cut from 35% to 20% only makes sense if you negotiate in secret and you only allow into the room lobbyists hired by those who can afford to buy high-priced influence peddlers.

David Cay Johnston is a Pulitzer Prize-winning investigative journalist specializing in tax matters and the author of The Making of Donald Trump. Follow him @DavidCayJ.

https://www.alternet.org/news-amp-politics/gop-proposing-250-percent-tax-hike-millions-americans?akid=16333.265072.1fP8kF&rd=1&src=newsletter1084983&t=6

On the Centenary of the October Revolution

7 November 2017

One hundred years ago today, on the morning of November 7, 1917, the Military Revolutionary Committee of the Petrograd Soviet, chaired by Leon Trotsky, issued a proclamation to the citizens of Russia. It stated:

The Provisional Government has been overthrown. State power has passed into the hands of the organ of the Petrograd Soviet of Workers’ and Soldiers’ Deputies, the Military Revolutionary Committee, which stands at the head of the Petrograd proletariat and garrison.

The cause for which the people have struggled—the immediate offer of a democratic peace, the abolition of landlord ownership of land, workers’ control over industry, the creation of a Soviet government—this has been assured!

Long live the revolution of workers, soldiers and peasants!

Vladimir Lenin

Later that afternoon, Lenin—who had been denounced just three months earlier as a state criminal by the bourgeois Provisional Government—received a thunderous ovation as he emerged from hiding and entered the hall where the Soviet delegates were assembled. Witnessing the extraordinary events of that day, the American socialist journalist John Reed left behind a memorable description of the Bolshevik leader, “loved and revered as perhaps few leaders in history have been.” Lenin, he wrote, was a “strange popular leader—a leader purely by virtue of intellect,” possessed “with the power of explaining profound ideas in simple terms, of analyzing a concrete situation. And combined with shrewdness, the greatest intellectual audacity.”

After he had made his way to the speaker’s lectern, Lenin began his address to the delegates with the following words: “Comrades, the workers’ and peasants’ revolution, about the necessity of which the Bolsheviks have always spoken, has been accomplished.”

As Russia still adhered to the old Julian calendar, the overthrow of the Provisional government entered into history as the October Revolution. But though the Russian calendar lagged 13 days behind that of Western Europe and North America, the Bolshevik seizure of power catapulted Russia, in political terms, to the forefront of world history. The insurrection led by the Bolsheviks was the culmination of a political struggle that had begun eight months earlier, in February 1917, with the overthrow of the tsarist autocracy, which had ruled Russia for more than 300 years.

Women’s march during the February Revolution

The uprising in February-March 1917 unleashed a protracted struggle over the political perspective and historical significance of the revolution that had erupted in Russia. The bourgeois Cadet party, the reformist Mensheviks, and the peasant-based Socialist Revolutionaries viewed the revolution in primarily national terms. The overthrow of the tsarist regime, they insisted, was no more than a national-democratic revolution. The tasks of the revolution were confined to replacing the tsarist regime with some sort of parliamentary republic, modeled on that of France or Britain, dedicated to promoting the development of the Russian economy on a capitalist basis.

In actual practice, the bourgeois Cadet party, fearful of the revolutionary upheaval and despising the masses, opposed any changes in the existing social structure that threatened their wealth. As for the Mensheviks and Socialist Revolutionaries, their reformist programs excluded any significant encroachment on capitalist property. Russia, they insisted, was not ripe for a socialist revolution. Decades of capitalist development would be required before a transition to socialism could be considered a realistic possibility.

Within the framework of this perspective, the political overthrow of the capitalist class and the assumption of power by the working class were absolutely rejected. The political subordination of the working class to bourgeois rule meant continued support for Russia’s participation in the bloodbath of the imperialist world war that had begun in 1914.

Prior to Lenin’s return from exile in April 1917, the main Bolshevik leaders in Petrograd—Lev Kamenev and Joseph Stalin—had accepted the Menshevik subordination of the working-class soviet (council) to the Provisional Government. Flowing from this, Kamenev and Stalin accepted the Menshevik argument that, with the overthrow of the tsarist regime, Russia’s participation in the imperialist war had been transformed into a democratic struggle against autocratic Germany, which should be supported by the working class. The blatantly imperialist interests of the Russian bourgeoisie were sugarcoated with hypocritical phrases about a “democratic peace.”

Lenin’s return to Russia on April 16 led to a dramatic change in the orientation of the Bolshevik Party. In opposition to the allies of the Provisional Government in the Petrograd Soviet, as well as a substantial faction of the Bolshevik leadership, Lenin called for the transfer of power to the soviets. The basis of this revolutionary demand, which stunned not only the Mensheviks but also most of Lenin’s comrades in the Bolshevik leadership, was a profoundly different conception of the historical significance of the Russian Revolution.

Soldiers demonstration in February, 1917

Since its very beginning in August 1914, Lenin had insisted that the imperialist world war marked a new stage in world history. The bloody carnage unleashed by the war arose from the global contradictions of capitalist imperialism. The contradictions of the imperialist system, which the capitalist regimes sought to resolve through war, would necessarily evoke a revolutionary response from the international working class.

This understanding of the world historical context of the Russian Revolution formed the basis of the policies that were to guide the Bolshevik Party following Lenin’s return. Lenin insisted that the Russian Revolution had to be understood as the beginning of the world socialist revolution. Upon opening the Seventh Congress of the Bolshevik party in April 1917, he stated:

The great honor of beginning the revolution has fallen to the Russian proletariat. But the Russian proletariat must not forget that its movement and revolution are only part of the world revolutionary proletarian movement, which in Germany, for example, is gaining momentum with every passing day. Only from this angle can we define our tasks.

In the months between April and October, Lenin wrote scores of articles in which he imbued and elevated the consciousness of party members, and the tens of thousands of workers who read Bolshevik pamphlets, newspapers and leaflets, with an understanding of the international character of the revolution. Those who claim that the Bolshevik revolution was a “putsch” or coup d’état plotted in secret simply ignore the fact that Lenin’s appeals for a socialist revolution were being read, studied and debated in factories, in soldiers’ barracks and in the streets of all the major cities of Russia.

In September, just a month before the seizure of power, the Bolshevik Party published Lenin’s pamphlet, The Tasks of the Proletariat in Our Revolution. There was nothing ambiguous, let alone surreptitious, in Lenin’s presentation of the Bolshevik Party’s program and intentions. With an astonishing level of historical consciousness, Lenin explained the objective necessity of which Bolshevik policies were an expression:

The war is not a product of the evil will of rapacious capitalists, although it is undoubtedly being fought only in their interests and they alone are being enriched by it. The war is a product of half a century of development of world capitalism and of its billions of threads and connections. It is impossible to slip out of the imperialist war and achieve a democratic non-coercive peace without overthrowing the power of capital and transferring state power to another class, the proletariat.

The Russian revolution of February-March 1917 was the beginning of the transformation of the imperialist war into a civil war. This revolution took the first step towards ending the war; but it requires a second step, namely the transfer of state power to the proletariat, to make the end of the war a certainty. This will be the beginning of a “breakthrough” on a worldwide scale, a breakthrough in the front of capitalist interests; and only by breaking through this front can the proletariat save mankind from the horrors of war and endow it with the blessings of peace.

In the aftermath of the “July Days”—the brutal suppression of the working class by the Provisional Government—Lenin was forced into hiding. Leon Trotsky, who had returned to Russia in May and soon joined the leadership of the Bolshevik Party, had been imprisoned. But he was released in September, in the aftermath of the aborted counterrevolutionary coup of General Kornilov, and was elected chairman of the Petrograd Soviet. In the weeks that followed, Trotsky emerged as the greatest mass leader and orator of the Revolution. He played the decisive role in the strategic planning and organization of the Bolshevik insurrection.

Leon Trotsky

There was, without question, an element of genius in Trotsky’s leadership of the Bolshevik insurrection. But Trotsky’s role in the October Revolution was, no less than Lenin’s, prepared on the basis of his analysis of the place of the Russian Revolution in world history. In fact, Trotsky, in his elaboration of the theory of permanent revolution, had been the first to foresee, as far back as 1905, that the democratic revolution against tsarist autocracy in Russia would necessarily develop into a socialist revolution that would transfer power to the working class.

Trotsky’s analysis challenged claims that the political tasks of the working class were determined by the economic backwardness of Russia, which was supposedly “not ready” for a socialist revolution. “In an economically backward country,” he wrote in 1905, “the proletariat can come to power sooner than in a country of the most advanced capitalism.”

But how would the working class sustain its revolution? Trotsky, far in advance of the events of 1917, wrote that the working class

will have no alternative but to link the fate of its political rule, and, hence, the fate of the whole Russian revolution, with the fate of the socialist revolution in Europe. That colossal state-political power given it by a temporary conjuncture of circumstances in the Russian bourgeois revolution it will cast into the scales of the class struggle of the entire capitalist world. With state power in its hands, with counterrevolution behind it and European reaction in front of it, it will send forth to its comrades the world over the old rallying cry, which this time will be a call for the last attack: Workers of all countries, unite!

* * * * *

Amidst the nightmarish reality of the First World War, which by October 1917 had already cost the lives of millions of soldiers, the news of the Bolshevik insurrection passed like an electric shock through the consciousness of the masses. The February Revolution was a Russian event. But the October Revolution was a world-changing event. What had been merely a “specter” in 1847 now existed as a revolutionary government, which had come to power on the basis of a working class insurrection.

Rosa Luxemburg

Rosa Luxemburg, learning of the Revolution while still in prison, wrote to a friend of the impatience with which she awaited the morning newspapers in order to follow the developments in Russia. She expressed doubts as to whether the revolution could survive in the face of the armed opposition of world imperialism. But of the greatness of the revolutionary event she had no doubt, and she beheld with admiration what Lenin and Trotsky—comrades whom she had known for many years—had achieved. The Bolshevik-led insurrection, Luxemburg wrote, “is a world-historical act, whose example will live for eons.”

Many years later, celebrating the twenty-fifth anniversary of the October Revolution, the American Trotskyist leader James P. Cannon recalled the impact of 1917 on socialists throughout the world:

For the first time, concentrated in revolutionary action, we had a demonstration of the real meaning of Marxism. For the first time, we learned from the example and teachings of Lenin and Trotsky and the leaders of the Russian revolution the real meaning of a revolutionary party. Those who remember that time, whose lives became welded to the Russian revolution, must think of it today as the greatest inspiring and educational force that the oppressed class of the world has ever known.

The October Revolution ranks among the greatest and most progressive events in world history. It is part of the chain of world-historical events—such as the Reformation, the American Revolution and the French Revolution—that rank as great milestones in the development of human civilization.

The global impact of the October Revolution was incalculable. It was an event that ignited a worldwide movement of the working class and the oppressed masses against capitalist exploitation and imperialist oppression. It is all but impossible to think of a significant political or social conquest of the working class in the twentieth century, anywhere in the world, which did not owe some substantial portion of its realization to the October Revolution. The establishment of the Soviet state was the first great achievement of the October Revolution. The victory of the Bolshevik Revolution demonstrated in practice the possibility of the working class conquering state power, ending the rule of the capitalist class, and organizing society on a non-capitalist and socialist basis.

However, while the establishment of the Soviet Union was the immediate product of the Bolshevik-led insurrection, the creation of this state does not encompass the full historical significance of the October Revolution. The establishment of the Soviet state in October 1917 was only the first episode in the new epoch of World Socialist Revolution.

This distinction between episode and epoch is critical to an understanding of the fate of both the Soviet Union and the contemporary world. The dissolution of the Soviet Union in 1991 marked the end of the state founded in 1917. But it did not mark the end of the epoch of world socialist revolution. The dissolution of the Soviet Union was the outcome of the abandonment, which began in the early 1920s, of the international socialist perspective upon which the October Revolution was based. The Stalinist program of socialism in one country, promulgated by Stalin and Bukharin in 1924, was a turning point in the nationalist degeneration of the Soviet Union. As Trotsky warned, Stalinist nationalism—which found political support in a rapidly growing bureaucratic elite—separated the fate of the Soviet Union from the fight for world socialism. The Communist International, which had been founded in 1919 as an instrument of world socialist revolution, was degraded into an appendage of the Soviet Union’s counterrevolutionary foreign policy. The treacherous and disorienting policies of Stalin led to devastating defeats of the working class in Germany, France, Spain and many other countries.

In 1936, Stalin launched the Great Terror, which during the next four years resulted in the physical extermination of virtually all of the leading representatives of revolutionary internationalism within the working class and socialist intelligentsia. Trotsky was assassinated in Mexico in 1940.

* * * * *

The dissolution of the USSR in 1991 was hailed as a momentous victory for world capitalism. At long last the specter of communism and socialism had been eradicated. History had come to an end! The October Revolution had ended in ruins! Of course, such proclamations were not supported by a careful examination of what had occurred during the previous 74 years. No account was given of the enormous achievements of the Soviet Union, which included not only its central role in the defeat of Nazi Germany in World War II, but also the immense advances in the social and cultural conditions of the Soviet people. But aside from its efforts to obliterate from collective memory all recollection of Soviet achievements, the essential falsification of twentieth-century history has been the effort to define the fate of socialism on the basis of a nationalist narrative of the October Revolution, in which the Bolshevik seizure of power is presented as an aberrant, illegitimate and even criminal event in Russian history. The original Bolshevik conception of October must, in turn, be either ridiculed or ignored. No enduring historical and political relevance can be attributed to the October Revolution.

Red Guard unit at the Vulkan factory in Petrograd during the revolution

This reactionary narrative, aimed at divesting the October Revolution of all legitimacy, relevance and honor depends, however, on one small thing: that the world capitalist system has resolved and transcended the contradictions and crises that gave rise to war and revolution in the twentieth century.

It is precisely here that the efforts to discredit the October Revolution and all future efforts to realize socialism fall apart. The quarter-century that has passed since the dissolution of the USSR has been marked by relentless and intensifying social, political and economic crisis. We now live in an age of perpetual war. Since the initial US invasion of Iraq in 1991, the number of lives destroyed by American bombs and missiles easily surpasses one million. With geopolitical conflicts intensifying, the outbreak of a third world war is seen more and more as inevitable.

The economic crisis of 2008 exposed the fragility of the world capitalist system. Social tensions are mounting against the backdrop of levels of inequality that are the highest in a century. As the traditional institutions of bourgeois democracy are unable to bear the pressure of escalating social conflict, the ruling elites turn ever more openly to authoritarian forms of rule. The Trump administration is merely one disgusting manifestation of the universal breakdown of bourgeois democracy. The role of the military, police and intelligence agencies in the running of the capitalist state is becoming ever more open.

Throughout this centenary year, innumerable articles and books have been published whose aim is to discredit the October Revolution. But the declarations of the “irrelevance” of October are belied by the tone of hysteria that pervades so many of these denunciations. The October Revolution is treated not as a historical event, but as an enduring and dangerous contemporary threat.

The fear that underlies the denunciations of the October Revolution found expression in a recently published book by a leading academic specialist in historical falsification, Professor Sean McMeekin. He writes:

Like the nuclear weapons born of the ideological age inaugurated in 1917, the sad fact about Leninism is that, once invented, it cannot be uninvented. Social inequality will always be with us, along with the well-intentioned impulse of socialists to eradicate it… If the last hundred years teaches us anything, it is that we should stiffen our defenses and resist armed prophets promising social perfection.

In an essay published in the New York Times in October, columnist Bret Stephens warns:

Efforts to criminalize capitalism and financial services also have predictable results… A century on, the bacillus [of socialism] isn’t eradicated, and our immunity to it is still in doubt.

The anxiety expressed in these statements is not without foundation. A newly published poll shows that among American “Millennials” (people below the age of 28), a greater percentage would prefer to live in a socialist or communist society than in a capitalist one.

* * * * *

Throughout this centenary year, the International Committee of the Fourth International has celebrated the anniversary of the October Revolution by studying and explaining its origins and significance. It conducted this important historical work as the only political tendency in the world that represents the program of international socialism upon which the October Revolution was based. The defense of this program is rooted historically in the struggle waged by Trotsky—first as the leader of the Left Opposition and later as the founder of the Fourth International—against the nationalist betrayal and perversion of the program and principles of the October Revolution by the Stalinist bureaucracy. While defending all that was achieved within the Soviet Union as a consequence of the October Revolution, this never assumed the form of an adaptation, let alone capitulation, to the reactionary policies of the bureaucratic regime.

Thus, the Fourth International is the contemporary expression of the program of World Socialist Revolution. In the present period of insoluble capitalist crisis, this program once again is acquiring intense relevance. The October Revolution lives not only in history, but in the present.

We call on workers and youth throughout the world to join the fight for world socialism.

http://www.wsws.org/en/articles/2017/11/07/pers-n07.html

Survivors of Northern California fires face new ordeal of recovery

By Therese Leclerc
6 November 2017

The fires are out in Northern California. The California Department of Forestry and Fire Protection has announced that all the wildfires that have ravaged the counties of Napa, Lake, Sonoma, Mendocino, Butte and Solano, north of San Francisco, since October 9 have been completely contained.

At the height of the blaze, 42 residents lost their lives as 10,000 firefighters, many of them volunteers, worked shifts of up to four days straight to battle the infernos. Crews were mobilized from throughout the state. Others came in from neighboring Nevada and Oregon and from as far away as Canada, Mexico and Australia.

With the extinguishing of the flames, however, the ordeal for the survivors has entered a new stage.

The fires are the most severe California has ever faced. Some 15,000 homes and 3,000 vehicles were destroyed or damaged.

Figures released by the state insurance commissioner’s office last week put the damage at over $3 billion. That figure is certain to rise.

For the first time, this year’s fires, driven by up-to-50-mph winds, engulfed urban areas, such as the city of Santa Rosa, where the Coffey Park neighborhood was reduced to ashes after the flames jumped six lanes of Highway 101.

Homeowners and renters, still in makeshift accommodation, are currently tackling the onerous task of cleaning up, attempting to retrieve any of their belongings that may have survived and applying for insurance and what federal assistance is available.

California has declared a public health emergency in the fire area. Mobile homes that were incinerated in Santa Rosa were found to have contained asbestos. Freon from air conditioners and heavy metals such as arsenic, copper and lead pose health risks throughout the area as well.

Recent rain—and the rainfall to come with the approach of winter—risks carrying the hazardous waste down into waterways, and even into water treatment plants, downstream of destroyed forests and charred neighborhoods.

Some homes have been designated toxic waste sites, further complicating the job for residents trying to salvage belongings.

There are residents who face even more obstacles to regaining their homes and jobs. These are the undocumented workers, who form the core workforce of the main industries in the region—hospitality, tourism and the wineries. It is estimated that some 28,000 undocumented adults and children lived in the region worst affected by the flames.

These workers do not qualify for Federal Emergency Management Agency (FEMA) aid. One of the many details required on the FEMA application forms is a social security number, denied to these residents, some of whom have lived in the area for up to 18 years. Children of these families who are American citizens do qualify for federal aid, but there is a fear that if the family seeks aid, other family members will be detained and deported.

This fear also kept many out of the shelters set up for residents who lost their homes or were ordered to evacuate endangered areas. Members of the National Guard were stationed at the shelters.

In the days following the outbreak of the fires, dozens of these families slept in cars and on beaches along the California coast.

Officials have said it will take years for the region to recover, socially and economically. Judging by the experience of residents in the wake of other recent disasters in the United States and its territories, that may be an understatement.

In Houston, recently flooded after the passage of Hurricane Harvey, the disaster is worsening the level of social inequality in the region.

NBC reported on October 23 that the poor in the Houston area are likely to fall further into poverty and homelessness while the wealthy are moving ahead with rebuilding.

Those who have been receiving temporary assistance from FEMA over the last two months now find themselves struggling to regain a foothold in their lives.

“Displaced renters have found themselves reliant on the whims of landlords or the generosity of friends,” the NBC report stated. “Homeowners without flood insurance are in a similar bind, while those who have it are waiting for their claims to go through. Some are maxing out their credit cards, or moving back into damaged houses.

“In some prosperous neighborhoods,” the report added, “certain homeowners aren’t bothering to wait for their insurance checks—if they had flood insurance at all—and are paying their contractors up front.”

An even more extreme situation exists in Puerto Rico, devastated by Hurricane Maria in late September. Most residents have been told they will be without power until January or February, with some of those in the outlying areas having to wait until spring or summer, according to the Army Corps of Engineers.

The hardship experienced by people in these situations can become permanent. In New Orleans, flooded in the wake of Hurricane Katrina in 2005, residents were temporarily removed to neighboring states, far from their homes and jobs. Twelve years later, many are still displaced. While some have managed to start again in their new location, those who would prefer to return face expenses most people cannot meet. There is a lack of affordable housing in the city and new safety standards for elevating homes. Some people will never be able to return.

In Northern California, those who manage to overcome all the obstacles to rebuilding may encounter a further problem: insurance rate hikes.

In a press conference on Tuesday, state insurance commissioner Dave Jones warned that in the wake of the disaster insurers were likely to reevaluate the risk that wildfires pose to structures previously considered low-risk to such threats.

“I am concerned the fire we just experienced is not an anomaly and may represent a new normal,” Jones said.

http://www.wsws.org/en/articles/2017/11/06/cali-n06.html

This party isn’t gonna get any better

The hopes for rebuilding and strengthening the left lie outside the Democratic Party.

Clockwise from top left: Nancy Pelosi, Tom Perez, Cory Booker and Chuck Schumer

Clockwise from top left: Nancy Pelosi, Tom Perez, Cory Booker and Chuck Schumer

TWO STORIES have gotten attention in recent weeks as key indicators of what direction each of the major political parties is heading in the lead-up to the 2018 midterm elections.

Arizona Sen. Jeff Flake, one of Donald Trump’s leading Republican critics, announced that he wouldn’t run for re-election after it became apparent he wouldn’t win a primary challenge from Kelli Ward, the rabid xenophobe whose campaign is part of Steve Bannon’s master plan remake the Republican Party in Donald Trump’s vile image.

A few days earlier, Democratic National Committee (DNC) chair Tom Perez purged a number of Bernie Sanders’ key allies from the organization’s leadership posts and its rule committee.

Many of the progressives were replaced with current and former lobbyists for big banks and energy corporations. Also appointed was Donna Brazile, best known most recently for using her job at CNN to leak debate questions to the Clinton campaign–“an interesting choice for a committee that focuses on ‘rules,'” as Branko Marcetic noted for In These Times.

Put the two stories together and what do you have? At a time of growing polarization in which people are moving toward both ends of the political spectrum, the Republican Party is moving further to the right while the Democratic Party is…also moving further to the right.

– – – – – – – – – – – – – – – –

BERNIE SANDERS’ stunning success last year as a self-proclaimed socialist running for the Democratic presidential nomination created justifiable excitement on the left about the prospects for socialism to finally break out of isolation after many decades in the American wilderness.

Since then, Sanders’ popularity has only increased. A recent Harvard-Harris poll has him as the most popular politician in either party, with especially strong support registering among young people generally and Blacks and Latinos of all ages.

It isn’t hard to see why. While Sanders is pushing for policies like a single-payer health care system that would benefit the vast majority of the country, other leading Democrats have little to offer beyond hoping that the Robert Mueller investigation of the Trump campaign’s ties to Russia will somehow lead to the president’s impeachment.

No wonder many supporters of the Democrats are getting restless. The same Harvard-Harris poll shows that 52 percent of Democrats support “movements within the Democratic Party to take it even further to the left and oppose the current Democratic leaders.”

Even more encouragingly, the AFL-CIO convention passed a resolution last week calling for labor to form an “independent political voice” because “the time has passed when we can passively settle for the lesser of two evils.”

These expressions of frustration with corporate Democrats are important, but they shouldn’t give the left a false sense of confidence that the maneuverings of Perez and the DNC represent the last gasp of a clueless old guard whose time has passed.

In fact, as the outlook for the 2018 midterm elections starts to take shape, it’s looking more likely that the party apparatus knows what it’s doing in maintaining control than the progressives who think they’re reshaping the party from the inside.

– – – – – – – – – – – – – – – –

ALL THIS takes place in the context of political volatility around the world.

Countries that have failed to restore living standards to the level before the Great Recession of 2007-08 have seen increasing polarization, creating crises for parties of the center–and the rise of more radical parties and leaders on both the right and left.

In the U.S., Trump’s victory in the Republican primaries was both the culmination of a decades-long move to the right and a dramatic shift in the GOP’s internal power dynamics–to the extent that its traditional corporate power brokers now have to accommodate and sometimes follow the ideologically hardened nationalism and fascist flirtations of sections of the party’s base.

Jeff Flake’s problem in Arizona wasn’t that Kelli Ward and Steve Bannon are wildly popular–Harvard-Harris puts Bannon’s approval rating at 16 percent–but that they increasingly dominate a party shifting even further to the right.

The Democrats, of course, have their own polarization to deal with. But unlike their weakened and divided Republican counterparts, the Democratic leadership has remained united around a vision of corporate liberalism–with political platforms that read like generic corporate brochures about the benefits of a diverse workplace and the wonders of retraining programs when you inevitably get laid off.

This party unity in spite of the discontent of its base was clear last year when Sanders won 45 percent of primary voters, but was backed by only 8 percent of the elected officials, staffers, lobbyists and donors who made up the party’s “superdelegates.”

Republicans have reflected the polarization of this period so much more clearly than Democrats in part because there is much less room for radical left-wing politics inside parties owned by the 1 Percent than there is room for radical right-wing politics.

The militants inside the Republican Party have been funded by a constellation of billionaires with overlapping reactionary agendas, ranging from libertarianism to Christian theocracy to fascism.

These ideologues may cause some discomfort among party donors in the boardrooms of ExxonMobil and Morgan Stanley, but ultimately, all sides can agree on the general principle of empowering the wealthy and keeping everyone else divided and oppressed.

This doesn’t work as a blueprint for the radical left, which has to be built by large numbers of working people in the labor movement and grassroots organizations “speaking with an unquestionably independent political voice,” as the AFL-CIO resolution put it.

Instead, we have the worst of both worlds: hundreds of unions and civil rights organizations that have been completely captured by a Democratic Party owned by Silicon Valley, Wall Street and the Pentagon.

Rather than acting as “pressure groups” inside the party, this professional left more closely resembles, as Jane Hamscher once famously put it in the early days of the Obama administration, a “veal pen” that forms a left flank to protect the party from the wrath of their own members.

– – – – – – – – – – – – – – – –

OF COURSE, this is precisely the situation that many progressives are hoping can be changed by the wave of Sanders supporters fighting from the inside for the soul of the Democratic Party.

“A striking feature of the current political moment is that many activists on the Left are flocking to the Democratic Party, Frances Fox Piven and Lorraine C. Minnite wrote at In These Times.

“But the Democrats are not merely gaining voters,” they continue. “They are gaining activists, people who are committing not only to pull the party lever in the voting booth, but who are determined to rejuvenate and transform the party, beginning at the local level.”

It’s easy to see why that scenario would be attractive to people. But the hard truth is that an organization which has dominated American politics for as long as the Democrats doesn’t allow itself to be “transformed” without a fight–and there aren’t many indications so far that the party’s left is up for even the kind of battle that would change its current rightward direction, much less really transform the Democrats.

The response of the Sanders wing to the DNC purge, for example, was anything but threatening.

“I’m concerned about the optics, and I’m concerned about the impact,” complained James Zogby, one of the purged DNC executive committee members. “”I want to heal the wound of 2016.” Zogby voiced similar sentiments on Twitter: “This doesn’t bring the party together, it deepens the divide at a time we need all hands on deck.”

Not exactly a Bannon-like threat to go to war against the party hacks who sold their souls to corporate interests.

Zogby’s comments reflect the larger timidity of the party’s left wing to wage any kind of fight that will threaten organizational unity in upcoming elections. Unlike Bannon and the Tea Party before him, Sanders Democrats aren’t planning to wage primary challengesagainst centrist House and Senate incumbents in 2018.

The fear of continued Republican rule in Congress in the Trump era is understandable. But as long as that fear continues to be the primary architect of liberal strategy, Democrats will continue moving rightward, assuming its base will follow.

– – – – – – – – – – – – – – – –

THE IDEA that progressives have no choice but to work inside the Democratic Party in order to stop Trump and Bannon rests on the assumption that there’s nothing we can do to stop the Republicans outside the halls of Congress.

This might be the biggest problem with the electoral focus of the left: It’s taking attention away from the sources of our greatest power.

One professional football player started a protest last year that has revived a discussion of racist police murders and inspired hundreds of other players to engage in workplace protests in defiance of their employer and the president of the United States.

Hundreds of thousands of women have come forward with their stories of sexual abuse, which has not only dramatically changed awareness of the issue, but led to the investigation, suspension and termination of dozens of powerful executives.

These actions offer a glimpse of the social power just of uncoordinated individuals. Imagine how powerful those protests could be if civil rights groups called for millions of us to kneel outside district attorney’s offices until cops were arrested for killing Black and Brown people. Or if unions organized a campaign to identify and fire the thousands of managers guilty of sexual harassment every day.

Yes, it’s possible for the left to do protests and electoral work at the same time. But they’ll only be effective if they flow from a unified strategy, based on an understanding that our greatest power lies outside of a rigged political system.

The fight to get Congress to pass a “clean” DREAM Act, for example, would be greatly strengthened if it was based less on appeals to Democrats and Republicans to do the right thing, and more on the credible threat that there will be widespread and sustained upheaval on many campuses and in workplaces and communities if 800,000 DACA recipients lose their legal status on March 1.

Similarly, we should be clear that the growing support for single-payer health care will only have a chance at becoming law when we’ve built a powerful movement including patients and health care workers together.

We’re, of course, nowhere near that level of struggle. By contrast, engaging in electoral work inside the Democratic Party, particularly at the local level, feels more productive to many progressives at the moment. It’s the path of least resistance–but people should ask themselves why that is.

The current popularity of Bernie Sanders and progressive politics shows that for the first time in decades, it’s possible to see a future U.S. with a genuine left-wing party, which could have a transformative impact not only here, but around the world.

But that project has to be rooted among people committed to building that alternative not on the Democrats’ terms, but on the explosive potential of popular struggle.

Otherwise there’s a very real danger that we will lose a new radical generation to the doomed project of “reshaping” the Democratic Party in much the same way that bunny rabbits reshape a python after they walk through its open jaws: briefly.

Editor’s Note: This article was initially published with an ableist word, “lame,” in the headline, which has since been deleted. This was a mistake we regret, and we apologize for it.

https://socialistworker.org/2017/10/31/this-party-isnt-gonna-get-any-better

The US media and the Kennedy assassination documents: “Move along, nothing to see here”

By Bill Van Auken
30 October 2017

The Trump administration’s partial release of previously classified documents related to the November 22, 1963 assassination of President John F. Kennedy has been dropped by the US mass media with what can only be described as unseemly haste.

Last Thursday night, when the White House announced that it was releasing only 2,800 of the once-secret papers, withholding a significant amount of the most sensitive material in compliance with demands from the Central Intelligence Agency and the Federal Bureau of Investigation, the event was widely covered, including the publication of numerous articles in advance of the document release concerning its historic significance. A large force of reporters was deployed to stake out the National Archives.

By Sunday, it was as if the whole thing had never happened. The question was not discussed on any of the Sunday television talk shows, and neither the New York Times nor the Washington Post published so much as a word about the assassination documents in either their news or editorial pages.

From the outset, the media’s treatment of the event was characterized by a palpable nervousness. Cable news anchors and talking heads expressed their concerns that Trump’s extraordinary acknowledgment that he had “no choice” but to withhold a significant number of files because of CIA and FBI warnings over “potentially irreversible harm to our nation’s security” would only encourage “conspiracy theorists.”

This epithet, when used in relation to the Kennedy assassination, applies to roughly two-thirds of the American population, who reject the official story. Codified in the cover-up produced by the Warren Commission, this narrative insists that the murder of the 35th president of the United States was the work of a lone gunman, Lee Harvey Oswald, firing a $21 mail order rifle at Kennedy’s motorcade as it moved through Dallas’s Dealey Plaza.

This majority consensus has declined somewhat from the period of 1975 to 2001, when polls showed that over 80 percent of the population rejected the US government’s version of the Kennedy assassination.

Why would the withholding of the documents not strengthen the views of the hundreds of millions of “conspiracy theorists” who populate the United States? What plausible explanation is there for this action other than the fact that the files contain incriminating material relating to elements within the US government and its intelligence agencies?

It is not as if the documents that were released are of such scant interest as to justify the media’s collective response of “Move along folks, nothing to see here.” They expose a state apparatus steeped in bloodshed and criminality, in which assassination was an accepted means of advancing US imperialist interests.

Some of the documents concern conspiracies exposed over 40 years ago, such as the CIA’s connivance with the Mafia in plotting the assassination of Cuban leader Fidel Castro with such exotic methods as exploding seashells and a toxic wetsuit. Then there are newly exposed files that raise serious questions about a state conspiracy surrounding the assassination. These includes a document citing FBI Director J. Edgar Hoover’s frantic demand, two days after Kennedy’s death and before the investigation had even begun, for something to be “issued so that we can convince the public that Oswald is the real assassin.”

Along similar lines is a truncated file from the 1975 Rockefeller Commission’s investigation of the CIA, which records the agency’s former director Richard Helms being asked, “Is there any information involved with the assassination of President Kennedy which in any way shows that Lee Harvey Oswald was in some way a CIA agent or agent.. .” The file leaves the question uncompleted and Helms’s answer unrecorded.

Whether there exist withheld files containing the answers to such questions is unknown. No thinking person, however, can give the slightest credence to Trump’s Saturday night tweets pledging to release “ALL #JFKFiles other than the names and addresses of any mentioned person who is still living,” in order to “put any and all conspiracy theories to rest.” Trump, who during the 2016 race for the Republican presidential nomination charged that the father of his rival, Ted Cruz, was part of the conspiracy, will make public only the documents the CIA allows.

In its rather cursory coverage of the document release under the headline “A Peek Back at an Era of Secrets and Intrigue,” the New York Times on Friday commented that the “once-secret documents…harken back to an era of Cold War intrigue and spy-versus-spy contests, when assassinations and clandestine plots were a matter of trade craft, not John le Carré novels.”

The article approvingly quotes political analyst Larry Sabato as stating, “It was a very different time, and you have to remember the context. Almost everything revolved around the bipolar system we had between the United States and the Soviet Union.”

That it was “a very different time” no one can deny. The Kennedy assassination marked a turning point in the crisis of US imperialism and was bound up with political, economic and social contradictions that have only deepened in the more than half-century since. But to suggest that we have left behind the era of “assassinations and clandestine plots” is ludicrous.

If anything, the end of the “bipolar system” through the 1991 dissolution of the Soviet Union, and the subsequent attempt by Washington to offset the declining global influence of US capitalism through the pursuit of a “unipolar” world by means of military force, has seen an explosive development of state criminality that makes the methods of the early 1960s look quaint by comparison.

Assassinations have moved from the realm of covert operations to open state policy, including not only a global drone assassination program initiated under the Obama administration that has killed thousands, including American citizens, but also the open discussion of “decapitation” operations to murder Syria’s Bashar al-Assad and North Korea’s Kim Jung-un.

Wars are launched behind the backs of the American people, with no debate, much less authorization by Congress, and with the CIA arming and supporting Al Qaeda elements to carry out regime-change operations in Libya and Syria.

With the Trump administration, the political underworld of CIA assassins and criminals that emerges in the still limited number of documents released about the Kennedy assassination is, together with the military brass, firmly in control of the levers of state power.

The truncated coverage of the Kennedy documents by the major media and the concerns expressed about “conspiracy theories” are driven less by the events of November 1963 than by the ongoing conspiracies in Washington. The real worry is not so much what will be exposed about the state criminals of the 1960s, but rather the light these crimes shed upon the methods of a government that is today far more thoroughly dominated by the sprawling US military and intelligence apparatus.

Among the most revealing reactions to the Trump administration’s limited release of the Kennedy documents is that of the Democratic Party. Twenty-five years ago, the Democratic-led Congress passed the legislation requiring that all of the Kennedy files be released by October 26, 2017. That Trump bowed to the CIA and FBI in keeping a substantial number of these documents secret provoked not a peep of protest from any leading figure in the Democratic Party, which has moved uninterruptedly to the right since the Kennedy assassination.

The Democrats are seeking to align themselves as closely as possible with the CIA and the military. They oppose Trump not from the standpoint of the threat of nuclear war against Korea, his vendetta against immigrants, his assault on health care, his tax cuts for the rich or his scrapping of corporate and environmental regulations, but rather on the basis that he is “colluding” with Russia to “sow divisions” within American society.

The Democratic Party has emerged as a champion of Internet censorship and a general assault on democratic rights aimed at suppressing “conspiracy theories” exposing the conditions producing mass opposition within the working class to war, social inequality and the destruction of living standards.

http://www.wsws.org/en/articles/2017/10/30/kenn-o30.html

Chomsky: Imagine a World Without Neoliberals Privatizing Everything in Sight

NEWS & POLITICS
A proposal for a progressive social and economic order for the United States.

Noam Chomsky.
Photo Credit: screenshot via Democracy Now!

This is the first part of a wide-ranging interview with world-renowned public intellectuals Noam Chomsky and Robert Pollin. The next installment will appear on October 24.

Not long after taking office, it became evident that Donald Trump had engaged in fraudulent populism during his campaign. His promise to “Make America Great Again” has been exposed as a lie, as the Trump administration has been busy extending US military power, exacerbating inequality, reverting to the old era of unregulated banking practices, pushing for more fuel fossil drilling and stripping environmental regulations.

In the Trump era, what would an authentically populist, progressive political agenda look like? What would a progressive US look like with regard to jobs, the environment, finance capital and the standard of living? What would it look like in terms of education and health care, justice and equality? In an exclusive interview with C.J. Polychroniou for Truthout, world-renowned public intellectuals Noam Chomsky and Robert Pollin tackle these issues. Noam Chomsky is professor emeritus of linguistics at MIT and laureate professor in the department of linguistics at the University of Arizona. Robert Pollin is distinguished professor of economics and co-director of the Political Economy Research Institute at the University of Massachusetts at Amherst. Their views lay the foundation for a visionary — yet eminently realistic — progressive social and economic order for the United States.

C.J. Polychroniou: Noam, the rise of Donald Trump has unleashed a rather unprecedented wave of social resistance in the US. Do you think the conditions are ripe for a mass progressive/socialist movement in this country that can begin to reframe the major policy issues affecting the majority of people, and perhaps even challenge and potentially change the fundamental structures of the US political economy?

Noam Chomsky: There is indeed a wave of social resistance, more significant than in the recent past — though I’d hesitate about calling it “unprecedented.” Nevertheless, we cannot overlook the fact that in the domain of policy formation and implementation, the right is ascendant, in fact some of its harshest and most destructive elements [are rising].

Nor should we overlook a crucial fact that has been evident for some time: The figure in charge, though often ridiculed, has succeeded brilliantly in his goal of occupying media and public attention while mobilizing a very loyal popular base — and one with sinister features, sometimes smacking of totalitarianism, including adoration of The Leader. That goes beyond the core of loyal Trump supporters…. [A majority of Republicans] favor shutting down or at least fining the press if it presents “biased” or “false news” — terms that mean information rejected by The Leader, so we learn from polls showing that by overwhelming margins, Republicans not only believe Trump far more than the hated mainstream media, but even far more than their own media organ, the extreme right Fox news. And half of Republicans would back postponing the 2020 election if Trump calls for it.

It is also worth bearing in mind that among a significant part of his worshipful base, Trump is regarded as a “wavering moderate” who cannot be fully trusted to hold fast to the true faith of fierce White Christian identity politics. A recent illustration is the primary victory of the incredible Roy Moore in Alabama despite Trump’s opposition. (“Mr. President, I love you but you are wrong,” as the banners read). The victory of this Bible-thumping fanatic has led senior party strategists to [conclude] “that the conservative base now loathes its leaders in Washington the same way it detested President Barack Obama” — referring to leaders who are already so far right that one needs a powerful telescope to locate them at the outer fringe of any tolerable political spectrum.

The potential power of the ultra-right attack on the far right is [illustrated] by the fact that Moore spent about $200,000, in contrast to his Trump-backed opponent, the merely far-right Luther Strange, who received more than $10 million from the national GOP and other far-right sources. The ultra-right is spearheaded by Steve Bannon, one of the most dangerous figures in the shiver-inducing array that has come to the fore in recent years. It has the huge financial support of the Mercer family, along with ample media outreach through Breitbart news, talk radio and the rest of the toxic bubble in which loyalists trap themselves.

In the most powerful state in history, the current Republican Party is ominous enough. What is not far on the horizon is even more menacing.

Much has been said about how Trump has pulled the cork out of the bottle and legitimized neo-Nazism, rabid white supremacy, misogyny and other pathologies that had been festering beneath the surface. But it goes much beyond even that.

I do not want to suggest that adoration of the Dear Leader is something new in American politics, or confined to the vulgar masses. The veneration of Reagan that has been diligently fostered has some of the same character, in intellectual circles as well. Thus, in publications of the conservative Hoover Institution at Stanford University, we learn that Reagan’s “spirit seems to stride the country, watching us like a warm and friendly ghost.” Lucky us, protected from harm by a demi-god.

Whether by design, or simply inertia, the Republican wrecking ball has been following a two-level strategy. Trump keeps the spotlight on himself with one act after another, assuming (correctly) that yesterday’s antics will be swept aside by today’s. And at the same time, often beneath the radar, the “respectable” Republican establishment chips away at government programs that might be of benefit to the general population, but not to their constituency of extreme wealth and corporate power. They are systematically pursuing what Financial Times economic correspondent Martin Wolf calls “pluto-populism,” a doctrine that imposes “policies that benefit plutocrats, justified by populist rhetoric.” An amalgam that has registered unpleasant successes in the past as well.

Meanwhile, the Democrats and centrist media help out by focusing their energy and attention on whether someone in the Trump team talked to Russians, or [whether] the Russians tried to influence our “pristine” elections — though at most in a way that is undetectable in comparison with the impact of campaign funding, let alone other inducements that are the prerogative of extreme wealth and corporate power and are hardly without impact.

The Russian saboteurs of democracy seem to be everywhere. There was great anxiety about Russian intervention in the recent German elections, perhaps contributing to the frightening surge of support for the right-wing nationalist, if not neo-fascist, “Alternative for Germany” [AfD]. AfD did indeed have outside help, it turns out, but not from the insidious Putin. “The Russian meddling that German state security had been anticipating apparently never materialized,” according to Bloomberg News. “Instead, the foreign influence came from America.” More specifically, from Harris Media, whose clients include Marine Le Pen’s National Front in France, Benjamin Netanyahu in Israel, and our own Donald Trump. With the valuable assistance of the Berlin office of Facebook, which created a population model and provided the needed data, Harris’s experts micro-targeted Germans in categories deemed susceptible to AfD’s message — with some success, it appears. The firm is now planning to move on to coming European races, it has announced.

Nevertheless, all is not bleak by any means. The most spectacular feature of the 2016 elections was not the election of a billionaire who spent almost as much as his lavishly-funded opponent and enjoyed fervent media backing. Far more striking was the remarkable success of the Sanders campaign, breaking with over a century of mostly bought elections. The campaign relied on small contributions and had no media support, to put it mildly. Though lacking any of the trappings that yield electoral success in our semi-plutocracy, Sanders probably would have won the Democratic Party nomination, perhaps the presidency, if it hadn’t been for the machinations of party managers. His popularity undimmed, he is now a leading voice for progressive measures and is amassing considerable support for his moderate social democratic proposals, reminiscent of the New Deal — proposals that would not have surprised President Eisenhower, but are considered practically revolutionary today as both parties have shifted well to the right [with] Republicans virtually off the spectrum of normal parliamentary politics.

Offshoots of the Sanders campaign are doing valuable work on many issues, including electoral politics at the local and state level, which had been pretty much abandoned to the Republican right, particularly during the Obama years, to very harmful effect. There is also extensive and effective mobilization against racist and white supremacist pathologies, often spearheaded by the dynamic Black Lives Matter movement. Defying Trumpian and general Republican denialism, a powerful popular environmental movement is working hard to address the existential crisis of global warming. These, along with significant efforts on other fronts, face very difficult barriers, which can and must be overcome.

Bob, it is clear by now that Trump has no plan for creating new jobs, and even his reckless stance toward the environment will have no effect on the creation of new jobs. What would a progressive policy for job creation look like that will also take into account concerns about the environment and climate change?

Robert Pollin: A centerpiece for any kind of progressive social and economic program needs to be full employment with decent wages and working conditions. The reasons are straightforward, starting with money. Does someone in your family have a job and, if so, how much does it pay? For the overwhelming majority of the world’s population, how one answers these two questions determines, more than anything else, what one’s living standard will be. But beyond just money, your job is also crucial for establishing your sense of security and self-worth, your health and safety, your ability to raise a family, and your chances to participate in the life of your community.

How do we get to full employment, and how do we stay there? For any economy, there are two basic factors determining how many jobs are available at any given time. The first is the overall level of activity — with GDP as a rough, if inadequate measure of overall activity — and the second is what share of GDP goes to hiring people into jobs. In terms of our current situation, after the Great Recession hit in full in 2008, US GDP has grown at an anemic average rate of 1.3 percent per year, as opposed to the historic average rate from 1950 until 2007 of 3.3 percent. If the economy had grown over the past decade at something even approaching the historic average rate, the economy would have produced more than enough jobs to employ all 13 million people who are currently either unemployed or underemployed by the official government statistics, plus the nearly 9 million people who have dropped out of the labor force since 2007.

In terms of focusing on activities where job creation is strong, let’s consider two important sets of economic sectors. First, spending $1 million on education will generate a total of about 26 jobs within the US economy, more than double the 11 jobs that would be created by spending the same $1 million on the US military. Similarly, spending $1 million on investments in renewable energy and energy efficiency will create over 16 jobs within the US, while spending the same $1 million on our existing fossil fuel infrastructure will generate about 5.3 jobs — i.e. building a green economy in the US generates roughly three times more jobs per dollar than maintaining our fossil fuel dependency. So full employment policies should focus on accelerating economic growth and on changing our priorities for growth — as two critical examples, to expand educational opportunities across the board and to build a green economy, while contracting both the military and the fossil fuel economy.

A full employment program also obviously needs to focus on the conditions of work, starting with wages. The most straightforward measure of what neoliberal capitalism has meant for the US working class is that the average wage for non-supervisory workers in 2016 was about 4 percent lower than in 1973. This is while average labor productivity — the amount each worker produces over the course of a year — has more than doubled over this same 43-year period. All of the gains from productivity doubling under neoliberalism have therefore been pocketed by either supervisory workers, or even more so, by business owners and corporate shareholders seeing their profits rise. The only solution here is to fight to increase worker bargaining power. We need stronger unions and worker protections, including a $15 federal minimum wage. Such initiatives need to be combined with policies to expand the overall number of job opportunities out there. A fundamental premise of neoliberalism from day one has been to dismantle labor protections. We are seeing an especially aggressive variant of this approach today under the so-called “centrist” policies of the new French President Emmanuel Macron.

What about climate change and jobs? A view that has long been touted, most vociferously by Trump over the last two years, is that policies to protect the environment and to fight climate change are bad for jobs and therefore need to be junked. But this claim is simply false. In fact, as the evidence I have cited above shows, building a green economy is good for jobs overall, much better than maintaining our existing fossil-fuel based energy infrastructure, which also happens to be the single most significant force driving the planet toward ecological disaster.

It is true that building a green economy will not be good for everyone’s jobs. Notably, people working in the fossil fuel industry will face major job losses. The communities in which these jobs are concentrated will also face significant losses. But the solution here is straightforward: Just Transition policies for the workers, families and communities who will be hurt as the coal, oil and natural gas industries necessarily contract to zero over roughly the next 30 years. Working with Jeannette Wicks-Lim, Heidi Garrett-Peltier and Brian Callaci at [the Political Economy Research Institute], and in conjunction with labor, environmental and community groups in both the states of New York and Washington, we have developed what I think are quite reasonable and workable Just Transition programs. They include solid pension protections, re-employment guarantees, as well as retraining and relocation support for individual workers, and community-support initiatives for impacted communities.

The single most important factor that makes all such initiatives workable is that the total number of affected workers is relatively small. For example, in the whole United States today, there are a total of about 65,000 people employed directly in the coal industry. This represents less than 0.05 percent of the 147 million people employed in the US. Considered within the context of the overall US economy, it would only require a minimum level of commitment to provide a just transition to these workers as well as their families and communities.

Finally, I think it is important to address one of the major positions on climate stabilization that has been advanced in recent years on the left, which is to oppose economic growth altogether, or to support “de-growth.” The concerns of de-growth proponents — that economic growth under neoliberal capitalism is both grossly unjust and ecologically unsustainable — are real. But de-growth is not a viable solution. Consider a very simple example — that under a de-growth program, global GDP contracts by 10 percent. This level of GDP contraction would be five times larger than what occurred at the lowest point of the 2007-09 Great Recession, when the unemployment rate more than doubled in the United States. But even still, this 10 percent contraction in global GDP would have the effect, on its own, of reducing carbon dioxide (CO2) emissions by precisely 10 percent. At a minimum, we would still need to cut emissions by another 30 percent within 15 years, and another 80 percent within 30 years to have even a fighting chance of stabilizing the climate. As such, the only viable climate stabilization program is to invest massively in clean renewable and high energy efficiency systems so that clean energy completely supplants our existing fossil-fuel dependent system within the next 30 years, and to enact comparable transformations in agricultural production processes.

The “masters of the universe” have made a huge comeback since the last financial crisis, and while Trump’s big-capital-friendly policies are going to make the rich get richer, they could also spark the next financial crisis. So, Bob, what type of progressive policies can and should be enforced to contain the destructive tendencies of finance capital?

Pollin: The classic book Manias, Panics, and Crashes by the late MIT economist Charles Kindleberger makes clear that, throughout the history of capitalism, unregulated financial markets have persistently produced instability and crises. The only deviation from this long-term pattern occurred in the first 30 years after World War II, roughly from 1946-1975. The reason US and global financial markets were much more stable over this 30-year period is that the markets were heavily regulated then, through the Glass-Steagall regulatory system in the US, and the Bretton Woods system globally. These regulatory systems were enacted only in response to the disastrous Great Depression of the 1930s, which began with the 1929 Wall Street crash and which then brought global capitalism to its knees.

Of course, the big Wall Street players always hated being regulated and fought persistently, first to evade the regulations and then to dismantle them. They were largely successful through the 1980s and 1990s. But the full, official demise of the 1930s regulatory system came only in 1999, under the Democratic President Bill Clinton. At the time, virtually all leading mainstream economists — including liberals, such as Larry Summers, who was Treasury Secretary when Glass-Steagall was repealed — argued that financial regulations were an unnecessary vestige of the bygone 1930s. All kinds of fancy papers were written “demonstrating” that the big players on Wall Street are very smart people who know what’s best for themselves and everyone else — and therefore, didn’t need government regulators telling them what they could or could not do. It then took less than eight years for hyper-speculation on Wall Street to once again bring global capitalism to its knees. The only thing that saved capitalism in 2008-09 from a repeat of the 1930s Great Depression was the unprecedented government interventions to prop up the system, and the equally massive bail out of Wall Street.

By 2010, the US Congress and President Obama enacted a new set of financial regulations, the Dodd-Frank system. Overall, Dodd-Frank amount to a fairly weak set of measures aiming to dampen hyper-speculation on Wall Street. A large part of the problem is that Dodd-Frank included many opportunities for Wall Street players to delay enactment of laws they didn’t like and for clever lawyers to figure out ways to evade the ones on the books. That said, the Trump administration, led on economic policy matters by two former Goldman Sachs executives, is committed to dismantling Dodd-Frank altogether, and allowing Wall Street to once again operate free of any significant regulatory constraints. I have little doubt that, free of regulations, the already ongoing trend of rising speculation — with, for example, the stock market already at a historic high — will once again accelerate.

What is needed to build something like a financial system that is both stable and supports a full-employment, ecologically sustainable growth framework? A major problem over time with the old Glass-Steagall system was that there were large differences in the degree to which, for example, commercial banks, investment banks, stock brokerages, insurance companies and mortgage lenders were regulated, thereby inviting clever financial engineers to invent ways to exploit these differences. An effective regulatory system today should therefore be guided by a few basic premises that can be applied flexibly but also universally. The regulations need to apply across the board, regardless of whether you call your business a bank, an insurance company, a hedge fund, a private equity fund, a vulture fund, or some other term that most of us haven’t yet heard about.

One measure for promoting both stability and fairness across financial market segments is a small sales tax on all financial transactions — what has come to be known as a Robin Hood Tax. This tax would raise the costs of short-term speculative trading and therefore discourage speculation. At the same time, the tax will not discourage “patient” investors who intend to hold their assets for longer time periods, since, unlike the speculators, they will be trading infrequently. A bill called the Inclusive Prosperity Act was first introduced into the House of Representatives by Rep. Keith Ellison in 2012 and then in the Senate by Bernie Sanders in 2015, [and] is exactly the type of measure that is needed here.

Another important initiative would be to implement what are called asset-based reserve requirements. These are regulations that require financial institutions to maintain a supply of cash as a reserve fund in proportion to the other, riskier assets they hold in their portfolios. Such requirements can serve both to discourage financial market investors from holding an excessive amount of risky assets, and as a cash cushion for the investors to draw upon when market downturns occur.

This policy instrument can also be used to push financial institutions to channel credit to projects that advance social welfare, for example, promoting investments in renewable energy and energy efficiency. The policy could stipulate that, say, at least 5 percent of banks’ loan portfolios should be channeled to into clean-energy investments. If the banks fail to reach this 5 percent quota of loans for clean energy, they would then be required to hold this same amount of their total assets in cash.

Finally, both in the US and throughout the world, there needs to be a growing presence of public development banks. These banks would make loans based on social welfare criteria — including advancing a full-employment, climate-stabilization agenda — as opposed to scouring the globe for the largest profit opportunities regardless of social costs…. Public development banks have always played a central role in supporting the successful economic development paths in the East Asian economies.

Editor’s note: This interview has been lightly edited for length and clarity.

Copyright, Truthout. Reprinted with permission.

 

 

C.J. Polychroniou is a regular contributor to Truthout as well as a member of Truthout’s Public Intellectual Project. He is the author of several books, and his articles have appeared in a variety of publications.

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