The grapes of wrath are back

President Obama’s tour of Asia may have plenty of celebrity star status about it but cannot disguise the reality that the United States is on its knees economically and financially and needs all the help it can get, particularly from China. The Chinese have their own agenda, however, and helping out its former adversary is not exactly top of Beijing’s list of priorities.

Despite the multi-trillion bank bail-outs and stimulus packages introduced by the Obama White House and his predecessor, the US economy hangs by a thread and the social toll is mounting.

For example, in what must be one of the most embarrassing United Nations reports ever written, a special envoy has accused America of “shameful neglect” of its homeless. UN special rapporteur Raquel Rolnik for the right to adequate housing has just completed a seven-city tour of America.

“The housing crisis is invisible for many in the US," she said. "I learned through this visit that real affordable housing and poverty is something that hasn't been dealt with as an issue. Even if we talk about the financial crisis and government stepping in order to promote economic recovery, there is no such help for the homeless."

She added: "I think those who are suffering the most in this whole situation are the very poor, the low-income population. The burden is disproportionately on them and it's of course disproportionately on African-Americans, on Latinos and immigrant communities, and on Native Americans."

The US government compiles statistics galore – but none on homelessness. Campaign groups say that more than 3 million people were homeless at some point over the past year. Los Angeles is no city of angels, with 17,000 households a night without shelter.

RealtyTrac describes itself as “the leading online marketplace of foreclosure properties”, with more than 1.5 million default, auction and bank-owned listings from over 2,200 US counties, along with detailed property, loan and home sales data. Its October report showed that 332,000 properties were claimed back last month alone.

More Americans have lost their homes this year than during the entire decade of the Great Depression. California, of course, was where many workers migrated to during the 1930s, their experiences captured in John Steinbeck’s great Novel, The Grapes of Wrath. The state posted the nation’s second highest state foreclosure rate for the second month in a row, with 85,420 properties seized in October.

With unemployment in the America up to 16% on some measures, the slide towards another Great Depression continues. Calls are now going out for measures to protect the US economy from the Chinese, who have used the last 12 months to extend their industrial capacity at a phenomenal rate and to produce goods at rock bottom prices for export to you know where. Respected economists like Paul Krugman have accused China of dumping its employment abroad and “stealing American jobs”.

So the scene is set for a new phase of the global crisis, one where trade wars and protectionism take centre stage. Obama may be feted in China, but the country’s leaders have no intention of raising the yuan’s value against the dollar to make exports more expensive, as the White House wants. Obama will return to Washington empty handed as the combined social crisis of homelessness and unemployment reaches tipping point.

Paul Feldman
Communications editor

The only way to stop the Tories

As time runs out for the New Labour government, the big question is how do we stop the Tories? The answer is made more difficult by the fact that there is no practical electoral answer to this matter.

For example, there is no way that you could advocate a vote for New Labour at the forthcoming general election. The party led by Gordon Brown is essentially capitalist in its outlook and practice, as it has shown in more than 12 years in power. From the beginning under Tony Blair, it assumed the role of the political management team in Britain for global corporate and financial power.

Policies inherited from the previous Tory governments have been deepened and applied in a ruthless fashion across the public sector, from education to health, while the private sector was set free to pursue profit and promote globalisation. Internationally, the government pursued neo-imperialist policies by invading Iraq and Afghanistan while domestically New Labour constructed the edifice of an authoritarian state.

Now that the world capitalist economy has plunged into crisis, New Labour government is in trouble politically and with the electorate. Tough! There’s no way anyone should help them out by lending them a vote at the next election and certainly not on the spurious ground that the Tories “will be worse”.

As for voting Lib Dem, well the party has swung so far to the right under Nick Clegg that even a forensic scientist would be hard-pressed to tell them apart from David Cameron’s Tories.

Over the last couple of decades not only have the three main parties have coalesced while the capitalist state, including the Parliamentary system, now openly rather than covertly functions in the service of economic and financial elites, as the bank bail-outs demonstrated.

So where does that leave us? What is certain is that the economic crisis is set to get far worse over the next six months, that whoever wins the election will be faced with an immediate political crisis and that we will have to produce some unconventional solutions to find a practical way forward.

In an interview with the Financial Times today, Michael Geoghegan, chief executive of HSBC, warns of a second downturn in the coming months. One of the better capitalised banks, HSBC is holding off from expansion plans in the expectation of a W or “double-dip” recession.

Geoghegan has no doubt studied the latest unemployment figures from the United States, which show that 7.2 million people have lost their jobs since the beginning of the current recession in December 2007. The total population of the unemployed in America is now 15.1 million. One estimate is that about one-in-six employable Americans are without a job.

Meanwhile, California – the eighth largest economy in the world – is bankrupt. Thousands of public sector workers are losing their jobs and having their pay cut. Students are revolting against plans a mid-year increase in tuition fees. This is the kind of crsis that the Tories, or whatever political formation comes out of the election, will face. Not some cuts here and there but ruthless, savage, drastic and draconian cuts in the midst of a recession. And beginning the day after the election.

So to answer the question about how to stop the Tories, it means building a movement that recognises what’s at stake. A World to Win’s People’s Charter for Democracy suggests how economic and political power could be transferred out of the hands of the powerless majority. The way forward, in our view, lies beyond putting a cross on a ballot paper for a Parliamentary system that masks the need for the state to dispense with democratic niceties in order to impose the crisis on ordinary people.

Paul Feldman
Communications editor