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Fear of the Working Class At Home And Internationally Stirs Some Debate Among the Bankers

There is growing concern among sections of the capitalist class that the rising opposition to their global offensive and the market will get out of control.
Never concerned about stuffing their pockets, they do worry about going to far

Richard Mellor
Retired member, AFSCME Local 444

As the conservative and right wing Christian elements of the Bush administration warn the US populace of impending doom at the hands of the liberal/homosexual and pro immigrant, terror supporting Americans. The serious representatives of the US capitalist class are deeply concerned about the real issues; wages, benefits, housing, health-care, and not least, food.

The world's bankers met in Jackson Hole Wyoming in August, in one of their strategy sessions aimed at ensuring their plunder of global society's wealth continues with the least disruption. Ben Bernanke, the chairman of the US Federal Reserve, expressed concern that the spoils of global plunder, what these representatives of the capitalist class refer to as "globalization", are being unevenly distributed.

Much of the concern was focused on the developing world (an interesting term as this world never really "develops") where the effects of global capitalism are devastating. Among the problems are protectionist obstacles to the free flow of goods, services, capital etc. that would slow the world economy. But it is also the social unrest caused by the increased super-exploitation of the poorer countries that is on their minds. While the recent placing of mine nationalization on hold by Bolivia's Morales has no doubt cheered them up a bit, the world's bankers are concerned the anger of the masses may not be contained and could at some point find a more formidable organizational expression.

But it is not just the former colonial world that is a cause for concern. The increased income disparity in the US is worrying to these more astute representatives of the capitalist class. Between 2000 and 2005 the US economy grew 12% and production was up 17% while the medium hourly wage rose a meager 3%. "Inequality is potentially a concern for the US economy...to the extent that incomes and wealth are spreading apart, I think that is not a good trend.", Bernanke warned US senators in July. (Financial Times 11-2-06)
Lawrence Summers, former US treasury secretary has also written on the subject of late, expressing fears about the "anxious middle" referring to the US middle class.

The Union leadership has done a very good job in holding back any attempt by the ranks of organized labor to halt this trend but, unlike the Union leaders, the serious strategists of capital are well aware of the anger beneath the surface of US society. The have read history, they are very conscious of the potential power of the working class in this country; they are worried that the working class will burst though these obstacles to a fight back.

During the tech boom of the nineties profits reached a 40 year high and some gains were made particularly by workers on the bottom rungs of the economic ladder. Despite the booming economy and record profits, the gains workers made were due to market forces and not to an organized offensive on the part of the leaders of organized labor. Despite these favorable conditions, top Union officials continuously tell workers that we have to take concessions in these difficult economic times. This is their excuse for not launching an offensive against the well orchestrated attacks by the employers who have made it clear in their journals that they intend on taking back all the gains of the 1930's.

The capitalist class is salivating as profits continue to swell. According to the Financial Times, labor's share of the national income has fallen from 58.2% in 2000 to 56.8 in 2005, as profits equaled 13.6% of GDP in the second quarter of 2006. Economists Thomas Piketty and Emmanuel Saenz of US Berkeley
estimate that the "share of total income captured by the top hundredth in the US doubled from 8% in 1980 to 16% 2004. (1)

The big corporations are having a field day. According to a report from the International Confederation of Free Trade Unions (ICFTU) released in July this year:

The average corporate tax rate in industrialized countries has fallen from 45% to 30% over the last 20 years

Out of the 275 largest corporations in the US, 82 paid no tax or received a tax refund one of the years between 2001 and 2003

And as a share of total taxation, corporate taxes have dropped by 15% in the UK and 22% in Italy since the 1980's, by 41% in Germany and 43% in Japan since the 1970's and by 53% in the US since the late 1960's. (2)

On top of this, US workers are returned much less of our money in terms of social services than other industrial countries. According to the article quoted above, among middle-income economies, only Russia and Mexico have higher levels of inequality and the "American Dream" is presently "a more common reality in Nordic countries than in the US."

The working class in the US has been under ferocious assault over the last period. Having no political party of our own has contributed to the fact that we receive social benefits from the employers in the main, something they resent as the median wage does not include total compensation which includes retirement, health care and other benefits and the cost of health care has sky rocketed. Unable to eliminate contractual obligations that contain such provisions, the employers have used their friends in the judiciary more aggressively. Steel, auto, airlines; the bosses in all these industries have used the bankruptcy courts to eliminate pensions even when they're not bankrupt.

The November elections don't offer much hope. The heads of organized labor are advocating the same strategy that has failed time and time again; elect a Democrat. It is this policy that has driven most Americans from the electoral process. The staunchest advocates of democracy and the right to vote have been quoted many times in the press as going to the polls, "holding my nose and voting for the lesser of two evils."

The Times article above describes the case of Jack Drake, whose job allows him much access to corporate financial information. "Almost every day I listen to chief executives explaining how well their companies are doing", he says, but, he adds, "I want the republicans out but I don't see the Democrats coming up with any good ideas." (3)
In California, the state labor federation is supporting all the bond measures. One of the major selling points to an already debt laden population is that this doesn't raise taxes. Of course it doesn't, it just raises interest payments, costing the working class and our children billions in payments to moneylenders who are the same forces that cut our wages and benefits and their taxes. The same forces that send working class kids to Iraq while theirs go to Harvard or the firm. No worker should support these measures, but for the union leaders, like the concessions on the job, it is better than the alternative of mobilizing workers, using our power to stop production and force concessions on them and ultimately gain control over the resources of society and their allocation

The Iraq war may be enough to tip the scales for the Democrats but nothing is certain and it cannot be ruled out that the elections will be rigged. Either way, not much will change for workers economically and the worries of the bankers will still be there; what if the working class moves?

Class rule is a complex state of affairs and despite all their tricks and media stunts to convince workers that we actually can make a difference if we vote for the candidates from one of their parties, most workers recognize that we are being exploited and that the ruling class are thugs. The problem they ask is: what can be done about? But the likes of Lawrence Summers and Bernanke recognize that the stomach is the root-cause of many a great social struggle and they see the need for addressing these issues, just like they do the environment. They see workers on the offensive in Latin America, Asia, China, France, and they know that the US working class will not be left out of the fight; they can't be held back indefinitely.

Still, at times one has to laugh at the honesty among thieves. Federal Reserve chairman Bernanke has made a few blunders. He has had to learn the ropes, the ins and outs of how to deceive the public. After making some overly honest remarks about inflation he received a lesson from Trent Lott, the Republican from Mississippi, who commented, "He's got to learn from Greenspan on how to say a lot that actually says nothing," (4)

Perhaps Bush would be a better mentor on this subject.


(1) Financial Times 11-2-06: Why ordinary Americans have missed out on the benefits of growth
(2)  link to www.icftu.org
(3) FT 11-2-06
(4) link to thehill.com

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