This Government and business-allied media offensive occurs in the context of a shocking information gap among members of the public. In a poll conducted by market research firm TNS-BMRB, only one in 20 private sector workers said they understood what the pension strike was about.

David Cameron’s coalition government is praised by conservative journalists and reactionary bloggers for their multi-pronged attack on public sector pensions, in which they are pushing to increase employee contributions, make employees work up to the age of 67 or 68, change the basis for calculating cost of living increases to a lower inflation index, and base pensions on career average earnings rather than final salaries. This comes on top of pension reductions that were agreed with the unions three years ago, and it sends the signal that public workers are fair game for take-backs whenever and as often as deemed necessary by the reigning political party. As for bargaining in good faith, after months of stalling in negotiations with public sector unions, the Cameron government made a pre-strike offer calculated to split working people further by offering to preserve pension arrangements for older employees while cutting them for younger employees. This attempt to divide older and younger public workers was rejected by the unions.

Race to the Bottom
Cameron was already touting his party’s plans to cut public sector pensions in November 2007 – before he became prime minister and just as the financial crisis was unfolding.  By the time the crisis came, most private sector employers had already divested themselves of any responsibility to provide decent pensions, leaving workers’ futures at the mercy of risky individual pension schemes based on the performance of the stock market. When the crisis came, private sector pensions fell like tenpins in the wake of the stock market crash and banking defaults, and conservatives saw their chance to realise a cherished objective. They availed themselves of the collapse of private pension schemes to put out the message that it was unfair for pubic workers to have more security in retirement than their now ruined private sector counterparts. The race to the bottom was on.

Next to nothing was done to reign in the banks and large corporations which caused the crash and which quickly emerged from the crisis more profitable than ever. In fact, many were, and continue to be, the recipients of huge transfusions of government welfare via ‘quantitative easing’ and interest-free handouts from central banks. At the same time, the evaporation of credit available to small businesses, home owners, and local governments led to severe reductions in public services, huge increases in unemployment, and widespread personal defaults and bankruptcy. Governments in Europe and North America responded to the perilous financial situation of vast swathes of their populations with plans to impose further ‘austerity’ on their citizens, cutting living standards and quality of life even more.

Shock Doctrine
Ignoring the lessons of previous economic crises, the dominant neoliberal establishment saw this situation as the perfect opportunity to make good on their longstanding intention to slash the public sector through defunding and privatization. In her book “The Shock Doctrine“, Canadian writer Naomi Klein shows how policies which favor multinational corporations have been propagated around the world by exploiting the vulnerabilities of people and nations in crisis. She uses the term ‘disaster capitalism’ to characterize the use of war, civil unrest, natural disasters, and economic insecurity as opportunities to further neoliberal agendas. In post-communist Eastern Europe and in Latin America, programs sponsored by Western governments and international banks to rapidly achieve the transfer of public property and revenue to the private sector were overtly referred to by Western policy makers and businessmen as ‘shock therapy’ and were touted by such luminaries as Milton Friedman and Jeffrey Sachs. In all cases, economic shock therapy has benefitted the multinationals and local oligarchs, while it has resulted in immiseration of the general population.

The financial crisis which began in 2007 and continues today has been seized upon by the neoliberal establishment as one of the biggest opportunities yet to impose a new round of shock treatment. The credit crisis, which has now mutated into the sovereign debt crisis, has allowed bankers, corporate CEOs and their fellow travellers in government to hasten their agenda of eliminating jobs on a massive scale, curtailing public services and transferring them over to profit-making businesses. They rely upon disinformation and public confusion about the causes of, and the remedies for, the economic crisis to achieve public acceptance of their plans.

Sowing Confusion
Much like the ‘debate’ on climate change, government speakers and the establishment media have created a ‘debate’ on the public pensions issue, and the value of the public sector generally, which has little basis in fact. In classic ‘big lie’ fashion, they saturate the media with myths about the underfunding of public pension schemes (for an antidote to this disinformation campaign, see Dean Baker, Public Pensions 101 ).

Like the myth of the ‘welfare queens’, created by the Reagan regime in the 1980s in order to turn public sentiment against welfare benefits for the unemployed, today’s leaders have created an image of public sector workers as a privileged class of people apart from the general population. When they refer to the ‘bloated’ pensions of public sector workers, the examples they give are invariably of higher-paid professional employees (though never of department heads and cabinet members!). They never talk about rubbish collectors, janitors, hospital care assistants or school lunch makers – the kind of workers who make up the majority of the public sector workforce, doing crucial jobs for society at low wages and with little to look forward to in the way of pensions.

The average annual public sector pension in Britain is around £7,000 per year. That average figure hides the fact that the majority of workers will get less – and women employees far less. The poverty level in Britain is currently about £11,000 per year for a couple with no dependents. In the US, the average public pension is $19,000 per year, while the poverty level for a couple with no dependents is about $15,000. It is obvious from these figures that in neither country are public sector workers looking forward to anything like a ‘gold-plated’ retirement. If they are lucky, a couple will have two small pensions to fall back on between them. But in the wake of the economic crisis, this may not be the case. And with up to half of all job seekers between the ages of 16 and 25 unable to find work in the developed countries retirees often continue to have responsibility for supporting younger members of the family.

Real Solutions
It would be far better for the majority of people and for the economy if the supposed gap between private and public sector pensions was used as a rallying point to demand improvements in the situation for the private sector, rather than engaging in a race to see who can get less. At the same time, we should insist that the bankers, brokers and corporate CEOs, ante up their fair share via financial transaction taxes, the ending of off-shore tax evasion and closing the myriads of other tax loopholes which result in the rich paying proportionately lower taxes than the average working person.

For thirty years the wages of working people have been declining in real terms while the profits of corporations have gone through the roof. Now working people are being asked to shoulder the blame for the economic crisis and accept that they – not the bankers and brokers – need to tighten their belts further and live lives of austerity. Through their attempts to divide public and private employees, the lords of the economy are trying to use one segment of the working population to police the other. How convenient for them – we shouldn’t fall for it!

Hank and Ben

Let’s rule out right away any idea that the close proximity of these crises to one another is somehow coincidental. There are too many common features between them to do otherwise. Salient among these is the role of the big financial houses in first creating, then benefitting from the crises. Goldman Sachs, whose execs are equally at home in the company’s NY headquarters, the halls of the US Treasury Department or the vaults of the Federal Reserve, spurred the first crisis by short selling subprime backed securities. For their efforts, they received $10 billion from the US government’s Troubled Asset Relief Program (TARP). In the lead up to the current crisis, Goldman helped the cash strapped Greek government borrow more money than it could afford – just like the subprime real estate borrowers in the US – and provided cover to help them protect their bond ratings and hide the transactions from the European Union, which prohibits members from running up such high levels of debt. According to the New York Times:

“Wall Street tactics akin to the ones that fostered subprime mortgages in America have worsened the financial crisis shaking Greece and undermining the euro by enabling European governments to hide their mounting debts. […]  As in the American subprime crisis and the implosion of the American International Group, financial derivatives played a role in the run-up of Greek debt. Instruments developed by Goldman Sachs, JPMorgan Chase and a wide range of other banks enabled politicians to mask additional borrowing in Greece, Italy and possibly elsewhere.” (New York Times, 13 February 2010)

In the first crisis, with one of its top men – Hank Paulson – as head of the US Treasury, Goldman not only cashed in on the TARP payouts but also watched with glee as its biggest competitors – Lehman Brothers and Bear Stearns – were allowed to fail. In the second crisis Goldman also took out insurance in the form of credit default swaps on the prospect that the Greek finance deal might go sour.

Other banks participated in the sovereign debt feeding frenzy, and not just in Greece. As the Times article put it:

“In dozens of deals across the Continent, banks provided cash upfront in return for government payments in the future, with those liabilities then leftoff the books. Greece, for example, traded away the rights to airport fees and lottery proceeds in years to come. Critics say that such deals, because they are not recorded as loans, mislead investors and regulators about the depth of a country’s liabilities.” (New York Times, ibid.)

For the banks, it was a classic “heads we win, tails you lose” situation.

Protest against Greek austerity measures

The Greek government’s debt – its “sovereign debt”  – is valued at $30 billion. A default on this debt would be a severe disappointment, to put it mildly, for the banks to which it is ‘owed’. Their plans to reap profits far into future from this hidden mortgaging of an entire country’s wealth would turn to ashes, as would the derivative deals they have no doubt made on the back of these loans.

This is where another similarity with the subprime crisis becomes apparent. Both the subprime crisis and the sovereign debt crisis were accompanied by an outcry from politicians and the media that if emergency public funds weren’t appropriated to pay off the debts owed to banks financial Armageddon would follow. Marcy Kaptur, member of the United StatesHouse of Representatives, has made the case from the floor of the House that the bailout of the banks by the US government, and the media hysteria that prepared the way for it, were both part of a put-up job. Kaptur asserted that, as many of her fellow citizens suspected, attention was diverted from the real

Marcy Kaptur

victims of the subprime scam – people who were sold mortgages they couldn’t afford under false pretences – in order to give the banks one of the biggest windfalls in history.

Similarly, The Greek crisis has resulted in a transfusion of loan money from Europe and the IMF to be used to bail out the Greek government – i.e. to enable it to pay off its creditors. This is another windfall which ultimately rewards the banks and financial houses for their predatory dealings. At the same time it is a tragedy for the Greek people, who are being saddled with disastrous cuts in jobs, wages and public services, to pay for the loans.

There are signs that Spain is being set up to be the next cash cow for the financial houses. Spanish Prime Minister Zapatero has expressed worries that the English language media were focusing undue attention on his country’s debts, and there were concerns in the Spanish government about “speculative attacks” on Spain’s economy.  Zapatero has tasked the Spanish National Intelligence Center with looking into the situation (Reuters, 14 February 2010). It is likely that they would be looking for evidence of default swaps on Spanish debts and short-selling positions.

This is not at all to overlook the immediate domestic and regional factors which made these countries vulnerable to the crisis. The Greek government was notoriously tolerant of corruption and very bad at collecting taxes, while the collapse of a real estate bubble in Spain increased that country’s financial exposure. Imbalances between the economies yoked together into the Euro zone also increased the vulnerability of the weaker members. As Doug Henwood put it, there is “nothing like a once-in-2.5 generations global economic crisis to reveal the fissures underlying what from a distance seemed like a relatively placid surface”. (Henwood’s article, Old world, new crisis, which is the source of the above quote, goes into some detail about the problems underlying the until now ‘placid surface’ of the Euro zone. See: Left Business Review, no. 126, 4 May 2010, p.4).

So clearly there is an intimate relationship between the world financial crisis which kicked off in 2007 and the current sovereign debt crisis of 2009-2010. The relationship is based on the new concept of the “too big to fail” financial institutions. The big financial institutions have insinuated themselves so deeply into the global economy that they can blackmail the whole world in order to be kept in their blissful state of mega profitability. Not only are the banks themselves too big, but their ‘clients’, which they reduce to a state of indentured servitude, are themselves megalithic: in the first instance the biggest purveyors and insurers of US mortgages – Fannie Mae, Freddie Mac, AIG etc, and now the central finance mechanisms of entire countries.

The relationship between the first and second crises is not merely based on the financial houses’ use of a similar modus operandi in both cases, however. What underlies the deployment of their new instruments of debt and deception in both cases is a unifying feature of the world political economy itself. This is that the globalized world economy is in a state of long-term – perhaps permanent, or even terminal – crisis. The imperative of entrepreneurs to constantly improve their profitability by seeking out ever-cheaper costs of operation resulted in the gutting of industry in the West as production and jobs were shipped offshore to the cheapest possible labor markets. The collapse of industry and the loss of millions of well-paid jobs brought about the phenomenon of the credit-fuelled ‘service’ economy, in which consumers and enterprises increasingly relied on credit and interest rather than the production and exchange of goods for their economic survival.

The sub-prime and sovereign debt crises are only two of many crises of the past and yet to come, which are the result of the switch from production-based economies to credit-based ones. This is not to imply that production-based capitalist economics was without problems. Far from it: recurring crises of over-production resulted in the collapse of prices and devastating deflation, while at other times underproduction triggered by natural or man-made causes resulted in intolerable price inflation in certain sectors or across economies. Periodic panics wiped out stock values and destroyed banks and industries. The constant war between labor and capital over the division of the fruits of production resulted in work stoppages, civil unrest, and outright warfare.

'Offshoring' of production

The new-style crisis has different characteristics. Confrontations between labor and capital are no longer over the division of earnings from production but a desperate battle by workers to try to retain some sort of employment in the face of the elimination of entire productive sectors and even whole national economies. They face entrepreneurs who have no long-term investments or interests in any particular sector. Unlike the industrial entrepreneurs of the past, who built factories and railroads, and cities to house their workers, the entrepreneurs of debt have no vested interest in a particular place or a particular workforce. They can shift the focus of their operations to another bank, another country, another market, another sector, at the press of a computer key.

And, while industrial production is being transferred to developing nations, such as the ‘BRIC’ countries – Brazil, Russia, India and China, the old-style model of industrial capitalism based on long-term investment and development geared in large part to an internal market is not being transferred along with it. The workers of the developing countries have little bargaining power because they are at constant risk of losing their livelihoods to workers elsewhere in the world who will do the same job for less pay. Moreover, the financial collapse of the ‘consuming countries’ of the West will take the emerging economies of the developing world down as well.

The implosion of the housing market in the US, the spike in unemployment throughout the West, the severe crises of national economies in Iceland, Greece, Spain, the Baltic countries, and many others – all are outgrowths of one unitary and ongoing crisis which has its roots in the current historical phase of finance-dominated entrepreneurialism. There is no prospect of going back to the previous, industry based phase, even if such a thing were desirable. The resolution of this crisis is difficult to predict. The only realistic hope is for a resolution which  embraces the need for social reforms emphasizing sustainability over endless growth, and the equitable ownership and distribution of wealth over its concentration in a few hands. While there may be chance that such a resolution will occur, it is by no means inevitable. In fact, without mass mobilization of populaces to fight the political battles needed to push forward such reforms, it is rather unlikely.

Both conferences aimed to focus attention on the imminent onset of climate change and to achieve an international accord on which to base action to address it. The similarity between the two conferences ends there.

The roster of delegates to the Copenhagen Conference consisted of a long list of official representatives and observers from nation states, intergovernmental organizations, and non-governmental organizations (NGOs). The actual deliberations were the domain of the national delegates and, along with the final convention, were dominated by the G-8 industrial powers. NGOs and grassroots organizations were mainly kept outside the proceedings, and many which originally had accreditation were cut out of the process along the way. In the final stages of the conference grassroots representatives and climate protesters became the focus of an outbreak of police violence on the streets outside of the conference venue.

The Cochabamba conference was called and attended by hundreds of grassroots social, environmental and indigenous people’s organizations, as well as official representatives from 48 governments. No delegates were excluded and there was no police action against the attendees.

The stark contrast in the composition and conduct of the conferences was paralleled by the differences in approach and objectives. Reflecting the political complexion of the rich industrial countries, Copenhagen was dominated by the market approach to addressing climate change, carrying forth the assumption that the most effective means to arrest deterioration of the environment is to rely on the profit motive. Thus, despite acknowledging a “goal” of transferring funds and technology from developed countries to help less developed countries cut emissions, the trading of pollution rights remained embedded as the climate change strategy of choice of the industrial world. (Some of the risks and fallacies of this approach were discussed in an earlier Dittologica article. See: Trading the Environment for the Market)

The Copenhagen Accord ended up being an agreement among the richest, most developed countries, while it was boycotted by many of the world’s poor and developing nations, which were excluded from participating in the drafting process. The Cochabamba Conference was organized specifically to address the deficiencies of Copenhagen by giving voice to those who were excluded during the political maneuvering of the wealthy countries at Copenhagen.

The World People’s Conference on Climate Change started from an entirely different premise from that underlying COP15. This premise was articulated by Bolivian President Evo Morales: “How can we as human beings collectively end irrational industrialization and consumption to cease provoking irreparable harm to our environment?” (Los Angeles Times, 23 April 2010) Central to the Cochabamba agenda was the idea that environmental issues and social justice are inseparable. Indigenous peoples, the poor, and the citizens of the global South suffer the most from environmental depredations: mineral extraction, pollution of the air and water, dumping of toxic wastes, disruption of sustainable agricultural practices and loss of invaluable habitats to globalized agribusiness. They are the first to experience the broader consequences of climate change in the shape of rising sea levels and drought or flooding from changing weather patterns.

The Cochabamba conference put another issue at the heart of its agenda: the idea that humans should treat the biosphere with respect, not just for their own benefit, but as a moral principle in its own right.  Alberto Acosta, a delegate from Ecuador and former president of that country’s constituent assembly said: “The starting point will establish the fundamental rights of nature, of Mother Earth, and that will establish a clear legal framework for [a] tribunal to judge crimes against the environment.” (Conference webpage) This attitude contrasts starkly with the squabbling of the developed nations at Copenhagen as they tried to avoid any commitments which would diminish their “competitiveness” in the global marketplace.

Unlike the Copenhagen Conference, the conference in Cochabamba did not have the level of governmental representation which would permit the agreement of an international accord. Its emphasis was on the development of principles to guide a grassroots movement which can push the political agenda for environmental action. Emerging from the conference was a Universal Declaration of the Rights of Mother Earth – an environmental corollary to the 1948 Universal Declaration on Human Rights, and an agreement to conduct a worldwide plebiscite on environmental priorities, rather than leave the agenda in the hands of politicians answerable to moneyed interests.

The final declaration of the conference in Bolivia, the Cochabamba Protocol, starts from the premise that it is impossible to address the issue of climate change without addressing the issue of the social system which engendered it – the capitalist economic system. As the Protocol states:

“The capitalist system has imposed on us a logic of competition, progress and limitless growth. This regime of production and consumption seeks profit without limits, separating human beings from nature and imposing a logic of domination upon nature, transforming everything into commodities: water, earth, the human genome, ancestral cultures, biodiversity, justice, ethics, the rights of peoples, and life itself.

“Under capitalism, Mother Earth is converted into a source of raw materials, and human beings into consumers and a means of production, into people that are seen as valuable only for what they own, and not for what they are. “

[Cochabamba Protocol]

Against this, the Cochabamba Protocol counterposes a vision of a human society built upon principles of sustainability, harmony and collective well-being. Underpinning this vision are the rights accorded to the natural world, referred to as ‘Mother Earth’ or, in the language of the indigenous Andean people, Pachamama:

• The right to live and to exist;
• The right to be respected;
• The right to regenerate its bio-capacity and to continue it’s vital cycles and processes free of human alteration;
• The right to maintain their identity and integrity as differentiated beings, self-regulated and interrelated;
• The right to water as the source of life;
• The right to clean air;
• The right to comprehensive health;
• The right to be free of contamination and pollution, free of toxic and radioactive waste;
• The right to be free of alterations or modifications of it’s genetic structure in a manner that threatens it’s integrity or vital and healthy functioning;
• The right to prompt and full restoration for violations to the rights acknowledged in this Declaration caused by human activities.

The Cochabamba Protocol enshrines a critique of the market-driven model of industrial development, which has provided the blueprint for most economic development models up to now. It places the responsibility for remedying the consequences of employing that model on developed nations, calling upon them to:

• Restore to developing countries the atmospheric space that is occupied by their greenhouse gas emissions. This implies the decolonization of the atmosphere through the reduction and absorption of their emissions;

• Assume the costs and technology transfer needs of developing countries arising from the loss of development opportunities due to living in a restricted atmospheric space;

• Assume responsibility for the hundreds of millions of people that will be forced to migrate due to the climate change caused by these countries, and eliminate their restrictive immigration policies, offering migrants a decent life with full human rights guarantees in their countries;

• Assume adaptation debt related to the impacts of climate change on developing countries by providing the means to prevent, minimize, and deal with damages arising from their excessive emissions;

• Honor these debts as part of a broader debt to Mother Earth by adopting and implementing the United Nations Universal Declaration on the Rights of Mother Earth.

The decisions of the Cochabamba Conference will be placed before world leaders at the 2010 United Nations Climate Change Conference to be held in Cancun, Mexico. They will provide a clear alternative to the conventional profit-driven proposals of Copenhagen and its predecessors. In the meantime, popular movements will be working to build political support in countries around the world to help move the Cochabamba agenda forward at the national level.

To those conditioned to a cynical view of the prospects for humanity and the environment by the power monopoly of the developed nations, the proceedings at Cochabamba may seem hopelessly  idealistic. In fact, the aspirations voiced by the delegates at Cochabamba are both idealistic and realistic: unless humanity overturns the profit-driven model of development and adopts environmental sustainability as its salient ideal, there can be no realistic hope of a future world in which we can, or would want to, live.

Orinoco Flow ; published 18 February 2008.

Two years ago Dittologica examined the events around Venezuela’s moves to nationalize oil production in its vast Orinoco region, which adjoins the country’s northern coast. We noted that contrary to the somewhat hysterical reaction in US political circles and the press, oil nationalization was hardly a radical move in the light of past nationalizations carried out by oil producers from Saudi Arabia to Mexico. The Venezuelan move consisted of a mandatory purchase at fair market value of controlling shares in existing oil operations in the Orinoco belt, and not an expropriation. Most foreign companies operating there accepted the buyout, but ExxonMobil and ConocoPhillips chose to fight the move in the courts and pulled out of Venezuela. We pointed out that “Staying in Venezuela also positions [foreign oil companies] advantageously should the situation for transnational businesses improve there.”

That advantage has now materialized. A United States Geological Survey report released at the end of January 2010 drastically upped the calculation of recoverable oil in the Orinoco to 513 billion barrels – double the proven reserves of Saudi Arabia. The deposits are too large to be worked by any single company, so this month, Venezuela signed joint venture deals with foreign oil companies to begin exploiting these reserves. According to the Associated Press (10 February 2010) the work will be divided between two consortia of companies. The first will include Repsol (Spain), Petronas (Malaysia) and Oil and Natural Gas Corp., Oil India Ltd. and Indian Petroleum Corp. The other consortium will include Chevron (US), Suelopetrol (Venezuela) and Mitsubishi, Jogmec and Inpex (Japan). ExxonMobil and ConocoPhillips are conspicuously absent from the list.

Who’s running the show?; published 3 March 2008.
This article looked at a few of the many ways in which large corporations use their financial and political weight to manipulate government policy to their own benefit. One example was the ménage à trois between British aerospace giant BAE Systems, the British government and the Saudi Arabian royal family, known as the Al Yamamah scandal. Prominently featured in this scandal were payments by the British government to a Saudi prince of £30 million every three months for 20 years in order to secure lucrative weapons contracts for BAE.

The article left off at a point just before a critical decision was issued by the High Court of England and Wales in a judicial review, ruling that the Blair government’s order to the Serious Fraud Office (SFO) to cease investigation of the scandal was illegal. The SFO appealed the ruling to the House of Lords, which overturned the High Court ruling.

This month the US Department of Justice (DoJ) and the UK’s SFO reached plea bargain agreements with BAE in relation to corrupt practices in several other countries. BAE also admitted making false statements and covert payments related to the Saudi deals. The DoJ settlement requires BAE to pay $400 million in fines, but doesn’t prevent them from continuing to do business with the US government since they weren’t found guilty of corruption. In the SFO settlement, BAE pleaded guilty to “accounting irregularities” involving a radar system sold to Tanzania and agreed to a £30 million fine.

These penalties barely put a dent in BAE’s operations, so it looks like they got away with it again. But perhaps not, since on 26 February the Campaign Against Arms Trade (CAAT)  and The Corner House filed for judicial review of the settlements. Perhaps Dittologica will return to this subject again with better news.

Trading the environment for the market; 13 September 2008.
Dittologica attempted to point out the illogic of relying on market-based solutions to address the impending climate catastrophe. Since then, the United States has elected as its president Barack Obama, whose solution for climate change is – you guessed it – carbon trading markets. Although carbon trading legislation is currently blocked by the even more retrograde Republicans in Congress, the US Environmental Protection Agency may introduce a cap-and-trade program without waiting for Congressional approval (Business Week, 22 February 2010).

Meanwhile, earlier this month the British Parliament’s Environmental Audit Committee released its findings that carbon trading is failing to rein in pollution (Financial Times, 8 February 2010) . Poor market conditions have suppressed the trading value of carbon permits. The committee is calling for the government to prop up the price of the permits by establishing a floor under their value. This proposed government intervention to save the carbon market has an eerie resemblance to last year’s bank bailouts. When the free-market predictably fails, government is called in to provide a backstop.

The failure in December of the Copenhagen summit to produce any sort of national commitments only adds to the grim prospect that effective and timely solutions to the environmental crisis will not be achieved.

Financial crisis: ‘green shoots’ of change?; published 25 May 2009.
Last May Dittologica reflected on the worldwide impact of the financial crisis, highlighting the fall of Iceland’s neo-liberal government, the implosion of the Latvian economy and large scale labor mobilizations around the world. We suggested that there was a window of opportunity for grassroots movements to push progressive changes through.

Most countries have declared themselves out of recession and stock markets have regained half of their lost ground. But working people have seen no improvement: unemployment rates hover at near-record levels, home foreclosures continue apace, and wage levels are stalled or dropping. But the biggest threat to the non-rich is the advance of the deficit hawks. Now that the banks have been saved and are back to awarding multi-million dollar bonuses to themselves, the cry has gone up that the gaps in public finances resulting from bailouts and diminished tax revenues have to be filled by cutting social spending.

Nowhere is this more apparent than in Greece. In order to mask its debt problems and avoid the appearance of violating European Union rules, the Greek government arranged with Goldman Sachs and other big investment banks to undertake “swaps” which allowed them to borrow huge sums off the books. The outing of this ruse in the teeth of the economic crisis sent the Greek government scurrying to Europe for help, but to little avail. Its ministers now mouth the nostrums of neo-liberalism as they promise to cut social services, jobs and wages – and thereby make the Greek people pay for the foolish actions of their government and the banks . The Greek unions have called strikes and taken to the streets to show their resolve not to be scapegoated for the crisis.

In the US, legislators, industry lobbyists and media commentators are jointly calling for cuts to be made in social security, medical assistance and other social support programs. The state level governments are reeling from the cut-off of federal subsidies and are being forced to slash their social and education budgets. The Congress has reached gridlock and can’t even move moderate programs forward, while the ideological divide among citizens is growing sharper.

Different variations on the above themes are unfolding across most of the industrialized world.  The economic crisis, far from abating, is progressing to a new, more politicized stage. The threats and opportunities that we highlighted last May are growing more pronounced.

“And that’s why we’ll continue to shape a Doha trade agreement that opens global markets, and why we will strengthen our trade relations in Asia and with key partners like South Korea and Panama and Colombia.”

Porfirio Lobo

The two Latin American countries named in that excerpt were among the only countries of the region to have sent representatives to Lobo’s inauguration that day. Most other countries in Latin America – and around the world – regard Lobo’s election as illegitimate, coming as it did amidst the crisis created by the coup.

Was Obama’s tribute to Panama and Colombia at this time merely a coincidence? Not entirely. The US president is CEO of a global enterprise seeking to build a solid bloc of nations around the principles of free trade – principles which put economic powerhouses like the US, China and the European Union into the ring to compete on “equal” terms with countries like Haiti, Mozambique, and Honduras. The political elites of Panama and Colombia have accepted these grossly skewed terms of engagement. In contrast, and to the surprise of many, Zelaya, son of a prominent businessman, and having previously shown no marked reformist tendencies, encouraged his country to join the Venezuelan-initiated regional trade bloc, ALBA.

Manuel Zelaya

ALBA promotes Latin American economic co-operation and integration as a counterbalance to the economic dominance of the US on the continent. Even worse in the eyes of Washington and the Honduran comprador class, Zelaya also raised the minimum wage of Honduran workers by 60%.

According to a Panamanian vice-president:

“Every multinational knows that if Honduras raises its hourly rate, the rest of Latin America and the Caribbean will have to follow. Haiti and Honduras have always set the bottom line for minimum wages. The big companies are determined to stop what they call a ‘leftist revolt’ in this hemisphere. In throwing out Zelaya they are sending frightening messages to all the other presidents who are trying to raise the living standards of their people.” (Information Clearing House, August 07, 2009)

Although the immediate pretext for the coup was Zelaya’s effort to organize a non-binding opinion poll on presidential term limits, there is little question that his government’s left-progressive realignment was a source of annoyance for local elites and foreign business, and was a major factor underlying the coup.

Protesting the Coup

The part played by the US in the Honduran coup has been a matter of debate and confusion. Given the US’s record of promoting and supporting coups in Latin America, it doesn’t take a great leap of faith to imagine that the US played a direct behind-the-scenes role. This impression is reinforced by the extremely close relationship between the US military and the Honduran military, which carried out the coup. Many Honduran officers are alumni of the US military’s notorious School of the Americas (now rebranded as the Western Hemisphere Institute for Security Cooperation), which graduates specialists in torture and suppression of popular movements. During the 1980s, Honduras served as a staging area for US military interference in the civil wars in Nicaragua and El Salvador.

Of those who believe the US had a role in the coup, some think that the ball was already rolling before Obama’s inauguration and, as with Kennedy and the Bay of Pigs invasion, Obama inherited the fallout of his predecessor’s schemes. This is certainly plausible. What is certain, however, is that the Obama administration’s attempts to influence the restoration of democracy in Honduras after the coup were tepid and inconsistent. Many countries around the world immediately declared support for the ousted Zelaya and refused to recognize the coup headed by Roberto Micheletti.

Obama in his first public reaction referred to the Honduran situation as an illegal coup and stated his belief that Zelaya remained the president. After that initial statement, however, the Obama administration  – and especially Secretary of State Hillary Clinton – backpedalled and dithered about their position on the coup. The term “coup” was excised from discussion, because calling what happened a coup would require the cut-off of US aid to the Honduran government and military. Instead, references were focused on “respect for democratic norms”, “return to rule of law” and “constitutional order”. This allowed considerable wiggle room for the instigators of the coup, who claimed to be acting in defense of the constitution. While other countries and international organizations were calling for the immediate and unconditional return of Zelaya to office, the U.S. appeared to be keeping the crisis at arm’s length. Subsequently, while refusing to condemn the coup’s flagrant violation of Honduran citizens’ human rights, which included repression of protesters, extra-judicial killings, jailings and press censorship, the US adopted a position of supporting a compromise between President Zelaya and those who illegally ousted him. Although Zelaya submitted to the humiliation of negotiations with the “de-facto” government imposed by the coup, the latter never honored any of the compromises that were reached.

Zelaya with supporters

Some commentators have suggested that Obama sought to avoid the kind of interference in Honduran affairs which elsewhere has exposed US foreign policy to criticism. This is similar to the excuses made for Obama before his inauguration, when he failed to take a stand on the Israeli invasion of Gaza. The fact that he criticized Russian actions against Georgia at that time, and that his administration has not shied away from interventionist policies in other nations – Iran, Afghanistan and Pakistan – casts considerable doubt on that theory. The US only seems to show reticence to intervene when intervention doesn’t further its geostrategic objectives.

Last November’s election, in which Porfirio Lobo was declared the winner, was boycotted by international election monitors such as the Carter Center, which refused to sanction elections taking place under the repressive conditions of the coup. Most governments in Latin American, and elsewhere, dismiss the election as fraudulent. The government’s public claims of high voter turnout have been shown to contradict its own data (The Real News Network, December 8, 2009).

The inauguration of Lobo on January the 27th cements the illegal actions of the coup and the highly questionable conduct of the election. Two days after the inauguration the US normalized relations with Lobo’s government, as if all was well again. According to US Assistant Secretary of State Arturo Valenzuela, who attended the inauguration,  “Things are moving very much in the right direction. A truth commission is going to be installed soon and quickly” (America.gov, 28 January 2010).

The coup leaders and their spawn in the new government haven’t done the best job of telling the truth yet, so it is difficult to believe that any “truth commission” in which they play a part will do much better. Nevertheless, from the US perspective, Zelaya is out for good and that means things are “moving very much in the right direction”.

One of the distinctive features of the monstrous assault on Gaza’s civilian population was the way in which the Jewish religion was used as an incitement to brutality on the part of the Israeli Defense Forces (IDF). The use of religion in this way comes as no surprise: history is thick with similar examples. When a nation state is founded on the basis of religious and/or ethnic identity such disastrous consequences are almost inevitable, particularly where such a regime is superimposed over a diverse population.

Various political and humanitarian arguments are made for the existence of a Jewish state in the Middle East. But it is the presumed right of Israel to occupy lands identified as Jewish in the archaic, ethnic-cleansing mythology of the Old Testament/Tanakh that has provided the general ideological context for Israel’s militaristic behavior, and specifically, last year’s Gaza onslaught.

The name of the operation itself had connotations of religious/ethnic self-righteousness, with a cynical edge. “Cast Lead” is a reference to a song sung in Israel to commemorate the beginning of Hanukah, the start of which coincided with the start of the Gaza invasion. Hanukah is often celebrated by the giving of gifts to children, and this song refers to the traditional children’s gift of a “dreidel” – a cast lead top – giving this choice of name for the military operation a particularly macabre twist.

In the aftermath of the assault on Gaza, IDF veterans began to reveal the extent to which religious propaganda was used within the Israeli army in preparation for the action. This propaganda emphasized the primacy of Jewish interests in the entire region of Eretz Israel – the mythical “Land of Israel” as defined in archaic religious texts. The army denies that it officially sponsored the distribution of such literature to Israeli forces, but this assertion is contradicted by accounts from within the army that pamphlets handed to troops bore stamps of the IDF and military rabbinate when they were distributed.

The pamphlets given to Israeli soldiers before and during the Gaza invasion included  passages such as these quotations from the writings of extremist rabbi Shlomo Avinern:

“[There is] a biblical ban on surrendering a single millimeter of it [the Land of Israel] to gentiles, though all sorts of impure distortions and foolishness of autonomy, enclaves and other national weaknesses. We will not abandon it to the hands of another nation, not a finger, not a nail of it … Is it possible to compare today’s Palestinians to the Philistines of the past? And if so, is it possible to apply lessons today from the military tactics of Samson and David? A comparison is possible because the Philistines of the past were not natives and had invaded from a foreign land … They invaded the Land of Israel, a land that did not belong to them and claimed political ownership over our country … Today the problem is the same. The Palestinians claim they deserve a state here, when in reality there was never a Palestinian or Arab state within the borders of our country. Moreover, most of them are new and came here close to the time of the War of Independence.”
(Haaretz, 21 January 2009)

The chief rabbi of the IDF, Brigadier General Avichay Rontzki, who is head of religious activities in the military, has been associated with the movement to ethnically cleanse and illegally occupy Palestinian land. An October 2008 article in the Israeli daily newspaper Haaretz describes Rontzki’s project to minister to Jewish extremists serving prison sentences for anti-Palestinian terrorist activities. The same article mentions that the military rabbinate under Rontzki had expanded its “educational” activities to combat units of the IDF:

“The Military Rabbinate has been conducting such programs for years, but has greatly stepped up its activities during the past year. Most of the controversial programs are organized by the Jewish Awareness Department of the [military] rabbinate.”
(Haaretz, 28 October 2008)

Rontzki and other rabbis also made personal appearances among the troops in the lead-up to the war. According to Haaretz:

“Officers and soldiers reported that they felt “spiritually elevated” and “morally empowered” by conversations with rabbis who gave them encouragement before the confrontation with the Palestinians.”
(Haaretz, 26 January 2009)

Military instructions which paralleled the sentiments expressed in the religious instructions noted above were issued to troops in preparation for combat in Operation Cast Lead. Breaking the Silence, an organization of IDF veterans committed to exposing the illegal and immoral circumstances under which they were forced to fight, has revealed that before and during the invasion Israeli soldiers were instructed to treat the inhabitants of Gaza collectively as enemies and essentially to regard the entire territory as a free fire zone. As one Israeli veteran of the invasion said:

“…we asked [our brigade commander] what was going on in Gaza and what was to be expected, stuff like that, and he went so far as to say this was war and in war as in war, no consideration of civilians was to be taken. You shoot anyone you see. I’m paraphrasing here, not literally quoting, but the gist of the matter was very clear. […] He said something along the lines of “Don’t let morality become an issue. That will come up later.” He had this strange language: “Leave the nightmares and horrors that will come up for later, now just shoot. […] If you face an area that is hidden by a building – you take down the building. Questions such as “who lives in that building” are not asked. Whatever gets in your way, you do everything to prevent its getting in your way, regardless of the humanitarian implications of such an action. This was the spirit of things with anyone we happened to talk to.”
(Breaking The Silence website)

The results of this policy in Gaza have been well documented by human rights organizations and the UN – the death of 1,400 Palestinians, including around 300 children; massive destruction of property and infrastructure; and the psychological scarring of an entire generation.

One year since the unleashing of this terror, the borders of Gaza remain sealed and the Israelis, along with their Egyptian allies, maintain a stranglehold on the flow of vital supplies for the sustenance of the population and reconstruction of the war damage. On 23 December 2009 a report on the current situation in Gaza was jointly issued by sixteen prominent international aid organizations. It states that:

“Goods and equipment earmarked for rebuilding languish in storage outside Gaza. And much of Gaza still lies in ruins… This is not an accident; it is a matter of policy. The Israeli government’s blockade, imposed in 2007 after Hamas took control of Gaza (though long preceded by regular closures and restrictions), not only forbids most Gazans from leaving or exporting anything to the outside world, but also only permits the import of a narrowly-restricted number of basic humanitarian goods. Desperately-needed reconstruction materials are not counted amongst these. So the civilian population and the United Nations and aid agencies that aim to help them are prohibited from importing materials like cement or glass for reconstruction in all but a handful of cases.”

And so the Israeli persecution of the population of Gaza continues. It is difficult to imagine that the Israelis foresee any favorable outcome for themselves or the region from this. However, if their objective is to insure the hatred of another generation of Palestinians and the continuation of regional conflict then they are going about it exactly the right way. That there could be a conscious policy based on this idea is not as preposterous as it sounds. Israel has a well-developed siege mentality which it has used as a vehicle for rallying nationalist sentiment and attracting international sympathy.

Without the ongoing strife between Israel and its Arab neighbors and inhabitants, there would be no justification for the vast sums in military and economic aid given to Israel by the US. Worse yet from the Zionist perspective, there would be the prospect of an accommodation and between peoples and nations in the region. This would finally make the Zionist project totally obsolete except in the minds of those so indoctrinated by religion as to be unreachable by reason.

Baghdad burning

Gordon Brown, the UK’s unelected premier and chief accomplice to George Bush’s chief accomplice, Tony Blair, personally selected Sir John Chilcot to head the committee of inquiry. Chilcot had previously served on the flawed Butler Review into the reliability of the intelligence claims made to justify the war. Brown also hand picked the other four members of the committee – all government insiders of the revolving door variety, including Sir Martin Gilbert, who in addition to openly supporting the march to war, predicted that Bush and Blair would be remembered alongside Roosevelt and Churchill for their deeds in Iraq.

Brown originally ordered the hearings to be held in secret, but rescinded this order under pressure from various sources, including Chilcot himself. In the end, Brown was evidently convinced that public airing of the proceedings would present little challenge to his own sanctimonious posturing on the war and would be preferable to the public outcry that would accompany attempts to keep the hearings secret.

The first week of the Chilcot Inquiry has certainly not been a disappointment for fans of cringing dissimulation. So far, the hearing room drama has focussed on the revelation of a profound secret that everyone already knew: Washington was pushing for a military assault on Iraq even before 9/11, and pushed harder for one after that event. None of the witnesses believed at the time that Saddam had the military capabilities that the US accused him of possessing. But the broad picture that emerges  from their testimony is that, somehow, the Americans managed to get control over the Prime Minister’s brain, and the UK policy establishment then had no choice but to fall in line behind their leader and see events through to their cataclysmic conclusion.

Another deep dark non-secret to emerge is that high level functionaries in the British government doubted US assertions of a link between Saddam Hussein and Osama bin Laden. Of course, in reality, no one in the US government believed this either, and it strains credibility to think that any of the witnesses believed that their US counterparts believed this. But none of the inquiry witnesses so far has had the courage to suggest  that the alleged connection between bin Laden and Saddam was a calculated lie intended to channel public sentiment from outrage at the terrorist events into support for the invasion of a sovereign nation that happens to have huge oil reserves. Instead, they allow the obfuscation a modicum of legitimacy by suggesting that US officials may have been genuinely worried. Thus Sir Peter Ricketts, former chairman of the joint intelligence committee, states:

“Certainly, at that early stage, they didn’t produce evidence, but the tone of voice was more, ‘If there turns out to be a link between Saddam Hussein and Osama bin Laden, then you know, that’s going to have major implications for Iraq and Saddam Hussein’.” (transcript of the Iraq Inquiry hearing, 24 November 2009)

The truth of the matter – that everyone, including the Americans, knew that there was no link between Al Qaeda and Iraq – is left entirely to surmise. Perhaps this can be put down to the British penchant for understatement. It will be a welcome surprise if this inquiry produces anything more than understatement and opportunities for surmise.

In a similar vein, Sir William Patey, British Ambassador to Saudi Arabia, makes the shocking revelation that that 9/11 changed things “a bit”. As with the bogus Al Qaeda link, he, Ricketts and other hearings participants can acknowledge that before 9/11 the US had already embraced regime change as policy. It goes without saying, however, that neither he nor anyone else in the room will admit that the US took 9/11 as a pretext for full scale roll-out of the neo-conservative’s international policy agenda – the “new Pearl Harbor” that Condoleeza Rice and her co-conspirators were looking for, and that by participating in the military assault the UK became an accessory in the attempt to realize that agenda.

In fact, Ricketts indicates his (understated) acceptance that 9/11 actually was connected with Iraq, if only by analogy:

“Not to say that we had any evidence that Iraq was  directly linked in any way to the 9/11 attack, we didn’t have any such evidence, but it did throw into greater relief the threat from Iraqi WMD without any inspector control over it, and I think that’s probably the way in which 9/11 impacted Iraq policy in the first place.” (transcript of the Iraq Inquiry hearing, 24 November 2009)

Bush & Blair

Ricketts seems to be saying that despite there being no evidence of a direct link between Iraq and 9/11, the events of 9/11 suddenly woke everyone up to the deadly potential of  Iraq’s conjectural weapons of mass destruction. The implication is that one could almost understand where the Yanks were coming from. One could understand this if someone in Rickett’s position could somehow be ignorant of the fact that Iraq’s infrastructure had been destroyed in the Gulf War and by a decade of sanctions; that the country was under constant aerial surveillance and periodic air attack; that it had had a series of international weapons inspections; and that even if it had WMDs, it didn’t possess the means to deliver these to targets in the UK or the US – factors that together rendered Iraq an unlikely source of anxiety. No doubt, the entire UK policy establishment did know this, yet apparently 9/11 could still “throw into greater relief the threat from Iraqi WMD”.

One of the supposedly major revelations of the inquiry so far is the observation by Sir Christopher Meyer, former British ambassador to the US, that Tony Blair first used the term “regime change” the day after a private meeting with Bush at the latter’s Texas ranch in April 2002. It would appear that Bush sprinkled Blair with fairy dust which made him change his stance on the issue. Apparently, Bush must also have given Blair some of the fairy dust to take away and use on his cabinet and advisers.

Apparently as a result of being so dusted, according to Meyer:

“We found ourselves scrabbling for the smoking gun, which was another way of saying ‘it’s not that Saddam has to prove that he’s innocent, we’ve now bloody well got to try and prove that he’s guilty.’” (Reuters, 26 November 2009)

This is an interesting turn of  phrase, by the way. Normally in British and American jurisprudence there is a presumption of innocence until guilt is proven. This is why the IAEA’s inspectors were involved in trying to establish whether in fact there was a WMD program in Saddam’s Iraq. Meyer however, like the Americans, seems to have regarded this supposed approach as a “bloody” inconvenience.

However, the more orthodox line, that the UK only sought compliance with UN resolutions, is espoused by Ricketts:

“We quite clearly distanced ourselves in Whitehall from talk about regime change… there was no increased appetite among UK ministers for military action in Iraq [up until March 2002].” (The Guardian, 24 November 2009 )

…and by Ambassador Patey:

“I mean, my sense was that the Americans didn’t hold great store by the inspection regime and, therefore, there was always a debate as to just how much effort were they prepared to put into getting [UN Resolution] 1284 implemented. I think we were almost more enthusiastic about getting inspectors, had greater faith that the inspection regime would ultimately deliver the answers on WMD and lead to a different situation in Iraq.” (transcript of the Iraq Inquiry hearing, 24 November 2009)

“Almost” more enthusiastic?

In any case, up to March 2002 there was supposedly “no increased appetite” for war in the UK policy establishment. So what happened to change that? Perhaps for some there really wasn’t a change, for as Meyer said:

“We could have achieved more by playing a tougher role … if, for example, at [Bush's ranch in] Crawford Tony Blair had said: “I want to help you, George, on this but I have to say, in all honesty, that I will not be able to take part in any military operation unless we have palpable progress on the [Arab-Israeli] peace process and we have absolute clarity on what happens in Iraq if it comes up.” (The Guardian, 26 November 2009)

In other words, according to Meyer the illegal attack on Iraq might have been okay except that it was done in the wrong way, without adequate preparatory horse-trading.

Finger-pointing and backside-covering seems to be the general theme so far. Everyone had their doubts and reservations about the slide into war, but no one will admit their failure to try to halt this march towards massacre. There is still hope that future sessions will bring some truly new information to the surface. At the very least, there is the prospect of Tony Blair squirming to answer an uncomfortable question or two when his turn comes. But despite his tendency to spout embarrassing platitudes as if they were profound truths, it is likely that the Teflon Prime Minister will get away with it again.

Wistfully, Meyer intoned: “I think what would Margaret Thatcher have done.”

Indeed, what would Maggie have done? One shudders to imagine!

In December 2007 Zuma was selected by the ruling party, the African National Congress, to replace Thabo Mbeki, who had been discredited for attempting to ensnare Zuma in dubious corruption charges, and more generally, for the failure of his neoliberal policies to improve the living standards of the nation’s majority.

The outbreak of street violence in the country’s poor townships nearly two years into Zuma’s tenure signals that the ANC has not yet done what is needed to win back the confidence of the people.

The South African example is hardly unusual. All over the world citizens of purported democracies are disappointed with the leadership offered by their political parties and elected leaders. As is the case in South Africa, where the party of resistance to apartheid has become the party of accommodation to the profit motive, it is also true for the United States, where those who voted for “change” aren’t getting much for their effort. And it is true for the UK, where an imperial-style succession landed the citizens with a leader they didn’t select and whose handling of the economy has fatally wounded the public’s confidence in the purportedly progressive Labour Party.

Even worse, the concept of democracy is often used as an overlay to mask autocracy or political chaos, as in the elections imposed by the occupying powers on Afghanistan and Iraq.

Democracy as currently practiced is too often a matter of window dressing and stirring words. And yet, in the face of overwhelming evidence of its absence, the citizens who bear the brunt of this failure are largely confused as to what is wrong. The problem is almost always regarded as the failing of individual politicians or political parties – an assessment which is nurtured by commercial and state controlled information networks. The solution to political failure supposedly consists in waiting for the next round of elections and then voting for another candidate put forward by the entrenched parties and their corporate backers.

Critical analysis of the manner in which political society is structured rarely finds its way into mainstream discourse. Instead, politicians and their shadows in the media promote the view that tinkering around the edges – a touch of regulation here; a dash of quantitative easing there; a few public figures shamed into resignation; a new round of elections – will solve all problems.

There are, or course, many around the world who not only hope for real change but who have a vision of a different kind of society. Their hopeful visions take many forms and shapes, but today the different visions are coalescing around recognition that universalization of the social and economic model bequeathed by the social engineers of the late 19^th and early 20^th centuries have led humanity down the wrong path. This model, based on the paroxysms of the industrial revolution, came in both right-wing and left-wing varieties. Although a vast simplification, it would not be inaccurate to say that a main ingredient lacking in those traditional political models is the incorporation and preservation of mass popular movements. While mass movements often arise in the face of social adversity and become a political force capable of remaking the political order, they rarely persist beyond the transformations they bring about.

And yet grassroots movements are the stuff of real democracy. Such movements are purpose-built to make and remake society from the bottom up. They are based on the identity of common issues faced by large swathes of the population, and on a concerted cooperative effort to right wrongs and improve the collective lot. They are the seeds from which local self-determination can grow.

The effectiveness and prospects for success are greater when citizens are directly and collectively involved in solving their problems and creating suitable conditions for their own development.

It should go without saying that such movements cannot flourish without the active support of higher-level government institutions, which can provide funding, resources and organization beyond those available at local and grassroots levels. It is a two way street, and loss of accountability or responsiveness at either end is fatal.

In his recent book, The Food Wars, Walden Bello, sociologist, activist,  and member of the Philippine House of Representatives, documents the work of several international mass movements which assert the agenda of peasants and small farmers against the inroads of globalized-industrialized agriculture. Chief among these organizations are Via Campesina and Movimento dos Trabahaldores Rurais Sem Terra, which, in concert with other mass-based organizations, have taken on the WTO juggernaut and stalemated its drive to complete the monopolization of food production around the world by international agribusiness. As Bello writes:

“The paradigm of food sovereignty [championed by these movements] challenges at every point the pillars of capitalist industrial agriculture, emphasizing, among other principles, food self-sufficiency, the right of a people to determine their patterns of agricultural production, farming that is not based on chemical-intensive agriculture or biotechnology, equality in land distribution, and agricultural production and distribution resting mainly on small farmers and cooperative enterprises.” (Walden Bello, The Food Wars, 2009, p.148)

Internationally linked grassroots movements such as the ones Bello documents in The Food Wars may well represent the wellsprings of a new kind of social revolution for the twenty-first century. They not only challenge the destructive and exploitative practices of globalized capitalism, but they also provide models for civic organization at the grassroots level. To quote Bello again:

“…small farmer or peasant based farming is becoming a model for the locally or regionally sustained alternative economies that people are searching for. Peasants and their allies are demonstrating how food sovereignty and other paradigms based on the same principles are relevant, and indeed crucial considerations for all sectors of society.” (Bello, ibid, p.149)

It is worth reiterating that grassroots movements cannot succeed without support from centralized political structures which are supportive of their agendas. Grassroots movements cannot attain state power by themselves, but they can build coalitions to provide critical support to progressive political actors, whom they may or may not field themselves, and who must in turn be committed to using the state’s resources to support the goals of the mass movements. As stated earlier, any fracture in the relationship between the two would mean the end of  the entire project. This is precisely what has happened with so many of the world’s “labor” parties, which are “labor” in name only.

Faced with the justified loss of confidence in existing democratic processes around the world, perhaps the time is ripe to look beyond the next “election”, and to put aside hopes that the entrenched parties of the elites will fix the problems we face. Perhaps it is time to join others with similar problems and aspirations and try to build political power from the ground up.

Several months ago we had already seen “green shoots” of recovery. Coupled with this, the unbridled enthusiasm of last week’s experts had convinced many that indeed the world’s economies have begun surging forward and prosperity is just around the corner.

To others the celebrations seemed slightly premature.

Imagine that the economy is a person. Imagine that this person is sprinting full speed towards a cliff, seemingly oblivious to the danger. As you watch, horror stricken, the  ill-fated sprinter dashes over the sheer 300 foot precipice and plunges to the bottom. Peering down over the cliff edge, you see the broken body far below – there is no sign of life. Then, after an agonizing interval, you think you see a toe twitch. Then one of the fingers seems to jerk. Is there actually some life in the twisted body below, or are these just the convulsions of rigor mortis? In shock at what you have just witnessed, you failed to notice that a small crowd has gathered alongside the cliff edge, and now, seeing the toe twitch and the finger jerk, they send up a loud cheer: The runner is alive and recovering! Hearing the commotion, you look over at the crowd as they hug, shake hands and give each another high-fives. The runner remains prostrate at the bottom of the cliff.

This scenario is a close analogy for the behavior of many talking heads in the media – fronting for business as “reporters” and “commentators” – who have been echoing the politicians’ cries that the recession is over and the economy in recovery. Similarly, Ben Bernanke, who shills for the American banking industry as chairman of the US Federal Reserve, recently announced that the recession is “probably over” (BBC, 15 September 2009 ).

It seems strange that the evidence for the start of recessions seems to demand much greater rigor on the part of analysts than the declaration of its end. A state of recession is only officially declared after it can no longer be denied that an economy has been in decline for at least two full financial quarters. Even then, the standard of proof is high enough that a long period of argument can ensue after the economy has already disappeared over the cliff and is rapidly losing altitude. You might recall last year’s repeated reassurances that even though the markets were a bit off the economy’s “fundamentals” were sound. However, one or two small twitches from the broken body at the bottom of the chasm are sufficient to trigger ecstatic declarations that recession is over and the ascent back to normalcy has begun.

And so we had Fed Chairman Bernanke: “From a technical perspective, the recession is very likely over”; and from UK Business Secretary Peter Mandelson: “I think the signs are that it is [over]”; Bank of England Governor, Mervyn King (not quite as ebullient): “…there are now signs that growth has resumed in the third quarter”. France, Germany and Japan have all declared themselves to be out of recession. This was cause for great joy and celebration in the business press.

And what did the much vaunted “growth” consist of?

• Stock prices have risen around 50% since reaching their nadir last March, but the underlying business activity has barely budged. The gap between the value of stocks and the actual earnings of the companies selling them has never been wider.

• Auto sales in the US and Europe recently showed an increase; however the programs whereby governments handed out cash to consumers for buying cars are now ending or ended, and the auto sales market is expected to return to the doldrums.

• Home sales in the US also increased for a time on the back of a government subsidy (an $8,000 tax credit), collapsed prices and low interest rates. But the pick-up is expected to fizzle as the subsidy ends in November and bargain hunters reach their saturation point.

• Orders for durable goods in the US also increased recently, but this was largely the result of a one-off increase in orders for Boeing aircraft.

• The optimistic “growth” assessment was partly based on public mood swings. Having reached the lowest depths of despair a few months ago, consumer confidence has, we are told, shown some upward movement lately. However, this supposed up-tick in confidence is not matched by any significant increase in consumer spending. Apparently, the public is not putting its money where its mood ring is.

A more telling indicator of the real state of the economy is found in the health of the shipping industry. According to the Wall Street Journal, banks underwriting the shipping industry are looking at $90 billion in losses in the coming year (Wall Street Journal, 14 September 2009). A catastrophic slump in international trade has left ship owners and builders unable to pay their debts, and billions of dollars worth of ships have been seized by creditors, while bargain hunters have been able to buy vessels at knock down prices. With trade at near-standstill, one wonders what they will do with them – perhaps sell them for scrap.

Meanwhile, in the US and Europe, jobs are being lost at record rates; unemployment is projected to continue rising and stay high for the foreseeable future (OECD, 16 September 2009). Home foreclosures are accelerating, house prices are falling and consumer spending is staggering along in a trough. Wages are frozen or falling, millions of workers are working reduced shifts, and in some countries millions of the unemployed are facing the prospect of their unemployment insurance running out. Local and national governments are talking about budget cuts which will create more job losses and cripple services which are more essential than ever in the current crisis.

The only real winners at this point are the big investment banks. They have experienced a phenomenal recovery based on risks they took with the trillions of dollars handed directly to them by their comrades in government and on the enforced elimination of some of their biggest competitors during the depths of the financial crisis. As a result, Goldman Sachs employees are receiving bonuses averaging over $600,000 each this year, while, declarations of the G20 leaders notwithstanding, senior execs can expect packages worth up to $20 million. It’s a similar story at Morgan Stanley and the other remaining Wall Street investment firms.

While it is clear that the largesse being pumped from national treasuries into the banking sector are ensuring the banking industry’s recovery – or at least sustaining its affluence – it is far from clear what we were meant to believe was driving the supposed recovery of other sectors. The $800 billion Obama stimulus program in the US has certainly had beneficial effects in boosting social and infrastructure projects across the country. But it is dwarfed by the many trillions in losses throughout the economy and is far too small to kick-start a general recovery.

Did the real state of affairs suddenly dawn on the G20 leaders meeting in Pittsburgh in late September, or was there a change in strategy? While the Pittsburgh police were busy trying to prevent citizens from exercising their right of free speech, British Prime Minister Gordon Brown emerged from a tête-à-tête with US President Obama and tellingly proclaimed, “The recession is not over. It is not automatic that we are going to recover. We have got to ensure that that recovery happens. The path to recovery is still very fragile – fragile in the banking system and fragile in the way that different economies are finding different difficulties as they move forward.” (The Independent, 26 September 2009)

So it was all change. It is very interesting that Mr Brown highlighted the fragility of the banking sector – recipient of trillions in bailouts – rather than manufacturing, infrastructure, employment, or government finance itself. Although Obama had stated recently that the banks should not count on more government subsidies in the future, it seems that the leaders at the conference are prepared to keep paying the now even bigger “too-big-to-fail” banks whatever they want in order to avoid “failure”.

Why the duplicity of our leaders? Because this crisis is much bigger than the politicians, the bankers or the media want to let on. A world economic order based on a race to the bottom for wage earners – based on pitting workers in one part of the world against workers in another part to see who can be paid the least – is a losing proposition. And a world economy which judges its success on how inequitably wealth can be redistributed is a ticking time bomb. Yet these are precisely the premises of the late, great “globalized” world economic system. There is no future for this set-up beyond the creation and destruction of credit bubbles, with all the chaos and disruption this brings to society. A genuine solution to this situation can only be a political one, and it will have to entail radical reforms based upon principles of social and economic equality within and between nations.

So now the magic spell is broken and the body which had been levitating up the cliff face, has been allowed to fall back to the bottom with a thump. We can only anxiously await further incantations from Chairman Bernanke, Lord Mandelson and Governor King, and all their myrmidons in the media.

Protesting health care

As if it’s not enough that many Americans* have an ongoing fascination with guns, which they use to exact a high toll in death and injury among themselves year after year; not enough that their leaders are intent on using their industrial and human resources to bully other people around the world and thus make deadly enemies of them; not enough that these elected leaders argue year in, year out that it is good policy to fork over huge sums of public money to further enrich the already-rich, while the already-poor and nouveau-poor are left to twist in the wind of economic uncertainty.

Now, Americans are being sold – and many are falling for – the story that it is in their best interest not to have access to free universal health care. And this is in spite of the fact that they recently elected a president who specifically promised to dramatically broaden access to health care.

In order to convince Americans that free healthcare for all is bad, they are being subjected to a blizzard of lies by the for-obscene-profit health insurance industry and reptilian right wing politicians.  Chief among these lies is that in the rest of the developed world, where public universal health care has been in place for decades, people are worse off for it. To help make their lies seem like the truth they have focussed attention on the fact that some people in Britain have complaints about their National Health Service (NHS).

Although spun as a shocking revelation, there is nothing shocking about it at all. There has yet to be an institution invented, public or private, against which people do not have complaints. The bigger the institution and the more vital its mission the bigger and more numerous the complaints. Look at what happens when people are hit by natural disasters, flooding, earthquake, mudslides, fire or hurricanes. Regardless of how poorly or well prepared governments may be to carry out rescue efforts, there are always complaints and inquests into how things could have been done better. And this is as it should be.

However, few would suggest that the problems encountered mean that governments should therefore not be involved in the emergency disaster relief and that the matter should be left to the vicissitudes of private incentive.

Emergency field hospital for the poor, Tennesee

More than 40 million Americans with no health care constitutes a human disaster that dwarfs even the worst natural disasters. Why should a few people with complaints against the NHS be considered an indictment against the entire concept of universal health care? Isn’t it more significant that the number of people in the US with no health coverage is almost equal to the entire NHS-covered population of Britain?

Yes, there are some areas of medicine in which the US has had a slightly better success rate than Britain. But such comparisons only measure the success rate of procedures carried out on those who actually have access to them. In the US, tens of millions have no access to care at all, while for millions more the level of care they can obtain is calibrated to how much they are able to pay. For many, the plans on offer present a choice between financial disaster or physical extinction. For these millions, American-style health care has an effectiveness rating of 0%.

Britain's NHS: healthcare for all

In Britain, everyone has equal access to a world-class standard of health care – and they cherish it. The NHS is one public institution which all political parties at least claim they will preserve and protect. Any British party insane enough to campaign on a promise of abolishing the NHS would not only never be elected, but would risk inciting popular calls to send its members into exile – perhaps to the US – for punishment.

Ironically, the absence of public health care in the US actually harms the climate for small and independent businesses – institutions which hold iconic status in America’s national mythology. A new study, An International Comparison of Small Business Employment,  published by the Center for Economic and Policy Research in Washington, dispels the myth that the US is a haven for individual enterprise. The study’s analysis of OECD data shows that the United States lags behind many European counties in the share of its population that is independently employed or engaged in small service and manufacturing businesses. As the study points out:

“One plausible explanation for the consistently higher shares of self-employment and small-business employment in the rest of the world’s rich economies is that all have some form of universal access to health care. The high cost to self-employed workers and small businesses of the private, employer-based health care system in place in the United States may act as a significant deterrent to small start-up companies, an experience not shared by entrepreneurs in countries with universal access to health care.”

Some Americans are falling for Fox TV-style hysterics about public healthcare being a step on the road to “socialism”. What about public schools, the US Postal Service and Amtrak, then? Shouldn’t those deviant institutions also be pilloried as part of an “Orwellian”  plot to turn the US into a clone of Cuba or North Korea?

So while thousands of Americans are shooting each other down each year, engendering hatred against their nation by their leaders’ constant interventions around the world, and continuing to allow the increasing enrichment of the few and the increasing impoverishment of the many, why not also continue to deny life saving medical care to millions and let it be ruinously expensive for millions more? It fits right in with the American tolerance for self-harm.

* The term “Americans” is used for convenience here to refer only to the inhabitants of the United States.