The Cost of Our Choices

I read Matt Taibbi’s Griftopia last year and one comparison stood out about the scale of the bailout money given to Wall Street banks vis a vis the US housing market. It turns out this comes from Nomi Prin’s, It Takes a Pillage. Taibbi gives the full quote in his latest mailbag post at Rolling Stone:

Here are some numbers for you. There were approximately $1.4 trillion worth of subprime loans outstanding in the United States by the end of 2007. By the first quarter of 2009, there were foreclosure filings against approximately 4.4 million properties. If it was only the subprime market’s fault, $1.4 trillion would have covered the entire problem, right?

Yet the Federal Reserve, the treasury, and the FDIC forked out $13 trillion to fix the housing “correction”… With all that money, the government could have bought up every residential mortgage in the country – there were about $11.9 trillion worth at the end of December 2008 – and still have had about a trillion left over to buy homes for every American who couldn’t afford them.

What a simply stunning display of mistaken priorities.

Tom Morello in Wisconsin

Tom Morello, of Rage Against the Machine and many other musical projects, was in Wisconsin last week to play a show in support of union workers and the people who were protesting in solidarity with them. He has a great write-up in Rolling Stone about the trip and I definitely recommend giving it a read.

The Capitol building in Madison has been occupied by students and workers for more than ten days now. But at 11 PM the doors are locked, and if you’re in, you’re in, and if you’re out, you’re out. We were out. And so one of the protesters on the inside claimed that I was his intern in order to slip me through security. Once inside, I was amazed at what I saw: the building was packed with a cross section of the people of Madison, all demanding justice. There were students, teachers, firefighters, policemen, veterans, nurses, old hippies and young rebels in every corner and corridor of the building. There was a festive spirit in the air and a determined feeling that they were indeed making history. On my way out, I was actually “bro-ing down” with some cops…AT A PROTEST. Quite new for me. The police were union men themselves, and wholly supportive of the protesters, and I thought, “This is a strange and new, exciting day indeed when the police are delivering bratwurst to the students occupying the State Capitol and high-fiving The Nightwatchman.”

The battle to preserve workers’ rights in Wisconsin is a watershed moment in US history. Wisconsin is Class War Ground Zero for the new millennium and a crucible for people’s rights in the United States. As the gulf between the haves and have-nots grows exponentially in the US it is here that the first domino is going to fall…one way or the other. If things go poorly, workers across the nation will be stripped of some of their most fundamental rights – to organize and to collectively bargain, to make a better life for themselves and their children. Were it not for hard-fought union struggles of the past, we wouldn’t enjoy some of the most basic human rights that we enjoy today. The next time you “have a good weekend,” you can thank the union for fighting for those two days off. If your eight-year-old son doesn’t work in a coal mine or your ten-year-old daughter doesn’t slave away in a textile mill, you can thank the union. Unions are and have historically been a crucial check against untrammeled corporate greed.

The future of worker’s rights in this country will not be decided in the courts or in Congress, on talk radio or on Fox News. The future of worker’s rights in this country will be decided on the streets of a small Midwestern city, on the streets of Madison, Wisconsin. And who knows? Maybe in your city too. Yeah, this land is our land, and to those occupying the Capitol building tonight, or marching in the streets across the Midwest tomorrow, and to the people still deciding which side they’re on at this historic crossroads, I’d like to pass along some advice from the immortal Woody Guthrie: “Take it easy…but take it!”

More videos from Morello’s time in Wisconsin are below the fold. Continue reading “Tom Morello in Wisconsin”

Egypt & Neoliberalism

At Al Jazeera English, pseudonymous Egyptian writer’Abu Atris’ has a very interesting opinion column which seeks to analyze the Egyptian revolution as a revolt against neoliberalism. Atris makes the case that Egypt was among the most thoroughly neoliberal countries in the world and the failures of neoliberalism were evidenced by the intense inequality of wealth, driven by and symptomatic of high unemployment and the privatization of public services. Of course this isn’t a dissimilar argument from the one made by Matt Stoller at Naked Capitalism.

I don’t think the argument that Egypt was a revolt against neoliberalism undercuts the methods of that revolt as an economic uprising, driven by solidarity between unionized workers, the poor, and students. Rather, Atris’ neoliberalism argument explains the conditions which led to this incredible uprising.

Tell me if this description of events sounds familiar:

The only people for whom Egyptian neoliberalism worked “by the book” were the most vulnerable members of society, and their experience with neoliberalism was not a pretty picture. Organised labor was fiercely suppressed. The public education and the health care systems were gutted by a combination of neglect and privatization. Much of the population suffered stagnant or falling wages relative to inflation. Official unemployment was estimated at approximately 9.4% last year (and much higher for the youth who spearheaded the January 25th Revolution), and about 20% of the population is said to live below a poverty line defined as $2 per day per person.

For the wealthy, the rules were very different. Egypt did not so much shrink its public sector, as neoliberal doctrine would have it, as it reallocated public resources for the benefit of a small and already affluent elite. Privatization provided windfalls for politically well-connected individuals who could purchase state-owned assets for much less than their market value, or monopolise rents from such diverse sources as tourism and foreign aid. Huge proportions of the profits made by companies that supplied basic construction materials like steel and cement came from government contracts, a proportion of which in turn were related to aid from foreign governments.

Most importantly, the very limited function for the state recommended by neoliberal doctrine in the abstract was turned on its head in reality. In Mubarak’s Egypt business and government were so tightly intertwined that it was often difficult for an outside observer to tease them apart. Since political connections were the surest route to astronomical profits, businessmen had powerful incentives to buy political office in the phony elections run by the ruling National Democratic Party. Whatever competition there was for seats in the Peoples’ Assembly and Consultative Council took place mainly within the NDP. Non-NDP representation in parliament by opposition parties was strictly a matter of the political calculations made for a given elections: let in a few independent candidates known to be affiliated with the Muslim Brotherhood in 2005 (and set off tremors of fear in Washington); dictate total NDP domination in 2010 (and clear the path for an expected new round of distributing public assets to “private” investors).

The descriptions of the suppression of labor, the privatization of services, public service austerity measures for non-elites, and rampant unemployment without a meaningful response from the government sound an awful lot like what we’re experiencing in the US.

Atris warns of post-revolution Egypt turning back towards neoliberal policies as a new government and new public society are formed. The dangers are real:

A neoliberal fix would, however, be a tragedy for the pro-democracy movement. The demands of the protesters were clear and largely political: remove the regime; end the emergency law; stop state torture; hold free and fair elections. But implicit in these demands from the beginning (and decisive by the end) was an expectation of greater social and economic justice. Social media may have helped organise the kernel of a movement that eventually overthrew Mubarak, but a large element of what got enough people into the streets to finally overwhelm the state security forces was economic grievances that are intrinsic to neoliberalism. These grievances cannot be reduced to grinding poverty, for revolutions are never carried out by the poorest of the poor. It was rather the erosion of a sense that some human spheres should be outside the logic of markets. Mubarak’s Egypt degraded schools and hospitals, and guaranteed grossly inadequate wages, particularly in the ever-expanding private sector. This was what turned hundreds of dedicated activists into millions of determined protestors.

What’s so powerful about this is that the analysis takes the clear economic causes for revolution in Egypt and connects them to still elemental, but broader, social justice guideposts. To put things a bit differently, if there’s a market that produces a system of values of cronyism, theft of wealth, destruction of government, and torture, the market is broken and needs to be replaced with a system that values people, values labor, and values civil society. The people of Egypt – driven primarily by unionized workers, students and the poor – forced out a dictatorial ruler who’d built a neoliberal system of government. What comes next will be up to these same people, but hopefully the common thread ends up being a rejection of neoliberalim and not merely a rejection of Mubarak.

Stoller on Labor & Egypt

Matt Stoller has a post up at Naked Capitalism, which, while worthy to be read in full, draws out another set of lessons from the revolution in Egypt qua model for economic change movements in the United States:

Egyptians are trying to throw off the IMF-imposed austerity measures that created such a system for their country. The new government there is proposing raising taxes on oligarchs, increasing food subsidies, and reducing inequality. Their new cabinet is letting more people apply for “monthly portions of sugar, cooking oil, and rice.” The previous cabinet, “which was comprised of businessmen and former corporate executives”, had refused this.

And look at how Egypt is treating public employees: “Temporary workers who have spent at least three years working for the government will now be given permanent contracts that carry higher salaries, and benefits such as pension plans, and health and social insurance.”

Pension plans, health, and social insurance, oh my! How are they planning to pay for this? One member of a left-of-center party made it quite clear:

Confiscating wealth looted by cronies of the former regime, more egalitarian distribution of wealth, gradual taxation, better government oversight, and placing “a reasonable ceiling” on profitability of goods and services sold to the public are among the measures that should restore an economic balance to society, he said.

It is too early to pretend like this is a done deal, but it is certainly the case that the mass exercise of people-power in Egypt made this far more possible than it had been before. Even after Mubarak resigned, and even when the army tried to ban labor gatherings, the Egyptian labor movement continued to strike, gather, and make demands.

What’s so powerful about this is that it based in soundly liberal economic ideals: before some people have too much,  everyone must have a baseline of wealth. Workers don’t exist to be exploited. Government doesn’t exist to speed a transfer of wealth from the poor and working class to the rich. In fact, it should work to ensure that there is upward economic mobility in society through basic things like education, livable wages, retirement security, and healthcare. These things are eminently achievable if there is a willingness in society to prioritize them over the accumulation of wealth in the hands of the few.

People around the US, in the UK and in the Middle East are finding that they can get things done by going outside existing power structures and organize together. Common vision for economic life and common analysis of inequalities that keep them from achieving the life they want to live have brought workers into the streets around the world. Success has bred success, which has bred more courage for people to take action in the face of repressive and unresponsive forces.

For those of us in the labor movement, working on economic justice issues more broadly or working within Democratic politics the challenge is clear: either wake up to the fact that people are hungry for an economy that works for them or wake up to the fact that you’re irrelevant at best and a big part of the problem at worst. Mass change movements tend to come in cycles. Waves roll as far as they can reach and then stop. We’re in the midst of a big wave right now and while there is little professional activists can do to existentially change it, there is still a role for dedicated organizing to make this grow farther and wider. After all, saying Egypt happened because of Facebook is like saying the civil rights movement happened because Rosa Parks wouldn’t give up her seat on the bus. There is still a major role for people who seek to develop strategic methods for strengthening the hand of the workers in the streets of Madison, New York, London and Bahrain. Involvement would be a statement of commitment, of trust with the folks in the street and a readiness to keep up the pressure.

The largest problem that Americans fighting for economic justice face is a not thinking big enough. What’s happening in Wisconsin can’t be just about saving collective bargaining or protecting a larger slice of public worker pensions. The goals must be systemic and the end vision must be inspiring. In so doing, the pressure should shift from a defensive posture around basic worker rights to an offensive one which calls the question of how we got to where we are today and who is responsible for the destruction of our economy and our governments’ abilities to provide an adequate social safety network. If all this happens, great things could be possible.

Economics & Pensions in Wisconsin

Dean Baker has a short piece in Politico that contains the most straight forward rebuttal to attacks on public workers from the right.

The reality that no honest person can dispute is that state budget crises are almost entirely due to the economic downturn, not out of control spending. This in turn was the result of Wall Street fraud and greed and the incredible incompetence of people like Alan Greenspan and Ben Bernanke, who failed to rein in the housing bubble before it grew to such dangerous levels.

However, politicians like Gov. Walker have managed to instead focus public anger on public sector employees who have the audacity to want to maintain a middle class life style. It would be great if the events in Wisconsin can be a turning point. If our economy was being managed by competent people we would have no problem assuring the whole population of the same sort of pension and health care benefits that most workers used to have and public employees still enjoy. We just have to stop handing over all of our money to Wall Street.

This is really the truth. There was a massive economic downturn in 2007-2008 which wrecked public pensions, along with all other pensions. Matt Stoller, on Twitter, points out, “Assets fell from $87.8B in 2007 to $61.8B in 2008. WI slashed benefits, raised costs.”

Even if you convinced me to ignore the Wall Street collapse as the primary cause for public pension troubles in Wisconsin, Brian Beutler points out that Gov. Scott Walker created this current budget crisis out of whole cloth to have an excuse to destroy public unions.

this broadside comes less than a month after the state’s fiscal bureau — the Wisconsin equivalent of the Congressional Budget Office — concluded that Wisconsin isn’t even in need of austerity measures, and could conclude the fiscal year with a surplus. In fact, they say that the current budget shortfall is a direct result of tax cut policies Walker enacted in his first days in office.

“Walker was not forced into a budget repair bill by circumstances beyond he control,” says Jack Norman, research director at the Institute for Wisconsin Future — a public interest think tank. “He wanted a budget repair bill and forced it by pushing through tax cuts… so he could rush through these other changes.”

Beutler links to an op-ed in Madison’s Capitol Times, which points out:

In its Jan. 31 memo to legislators on the condition of the state’s budget, the Fiscal Bureau determined that the state will end the year with a balance of $121.4 million.

To the extent that there is an imbalance — Walker claims there is a $137 million deficit — it is not because of a drop in revenues or increases in the cost of state employee contracts, benefits or pensions. It is because Walker and his allies pushed through $140 million in new spending for special-interest groups in January.

To recap, the main issue with state budget and public pensions is due the Wall Street-caused economic collapse. And even withstanding that collapse, which Wisconsin largely survived without necessitating austerity measures, the only trouble exists now because Walker blew the budget with tax cuts for his pet projects which he is only now trying to pay for by breaking unions in Wisconsin.

Gene Sharp Profile in NYT

The New York Times has a profile on Gene Sharp, arguably one of the most important advocates for freedom of the last hundred years. Sharp’s writing on non-violent strategic campaigning, specifically on the overthrow of dictatorships, has been instrumental to the thinking of activists in places like Serbia and Egypt, and remains instructive for countless other freedom movements. From the Times article:

Dalia Ziada, an Egyptian blogger and activist who attended the workshop and later organized similar sessions on her own, said trainees were active in both the Tunisia and Egypt revolts. She said that some activists translated excerpts of Mr. Sharp’s work into Arabic, and that his message of “attacking weaknesses of dictators” stuck with them.

Peter Ackerman, a onetime student of Mr. Sharp who founded the nonviolence center and ran the Cairo workshop, cites his former mentor as proof that “ideas have power.”

Mr. Sharp, hard-nosed yet exceedingly shy, is careful not to take credit. He is more thinker than revolutionary, though as a young man he participated in lunch-counter sit-ins and spent nine months in a federal prison in Danbury, Conn., as a conscientious objector during the Korean War. He has had no contact with the Egyptian protesters, he said, although he recently learned that the Muslim Brotherhood had “From Dictatorship to Democracy” posted on its Web site.

While seeing the revolution that ousted Hosni Mubarak as a sign of “encouragement,” Mr. Sharp said, “The people of Egypt did that — not me.”

A line from the preface of From Dictatorship to Democracy is worth highlighting following the recent revolutions in Egypt and Tunisia and ongoing uprisings in Bahrain, Algeria, and Iran.

The fall of one regime does not bring in a utopia. Rather, it opens the way for hard work and long efforts to build more just social, economic, and political relationships and the eradication of other forms of injustices and oppression.