America's crisis takes a turn for the worse

The sharp swing against the Democratic Party in the US mid-term elections will inevitably deepen a political crisis in Washington which centres on the inability of the state to halt the historic decline of the American economy.

Obama’s inability to make any impact on a worsening economy drove voters to desperate political extremes in a rage against “big government” and its perceived failures. Conservative Democrats turned to the Republicans, whilst the Republican Party has been turned inside out by the ultra-right Tea Party movement.

The Tea Party’s God-fearing, evolution-denying, extreme nationalist representatives want to fast-track US deficit reduction by immediately shutting down government spending, including social security and publicly-funded education. One of the first decisions to be made by those newly elected will be whether to renew the programme that funds extended unemployment benefit. It runs out on December 1.

Significantly, as the electoral dust settles, the Federal Reserve – America’s central bank – is readying itself for a last throw of the dice aimed at stimulating demand. The Fed is about to announce a second massive programme of quantitative easing – printing of money to you and me.

Some are saying that Federal Reserve chairman Ben Bernanke will release a “wall of money” and as much as another $1 trillion will flood into the economy through the buying up of government bonds. It will add to the $1.75 trillion already created in the attempt to prevent financial Armageddon in 2007/8.

If it happens, the value of the dollar will fall, push interest rates down, halt the house price decline, stimulate investment and consumption and make exports from the US more attractive – or so the theory goes. But that kind of American Dream is pure fantasy.

Reality tells a different story. Despite an already declining dollar which makes US produced goods and services cheaper in international trade, they struggle to compete with commodities made by dollar-a-day labour in China, SE Asia, and Latin America. Last year US imports ($2.404 trillion) vastly exceeded exports ($1.842 trillion) in spite of a weaker dollar.

Further reductions in the value of the US currency can only accelerate the competitive downward pressure on living standards throughout the world. When US workers are obliged to buy foreign goods to feed and clothe their families they know they are cutting their own throats. The Dream is long gone.
And, despite Obama’s previous stimulus package, the Great Recession is rapidly turning into the worst slump ever. The so-called “recovery” has failed to restore the millions of jobs lost since 2008. Quite the opposite. One in 10 – close to 15 million of the American workforce – are counted as unemployed and the number is rising.

Those obliged to work part-time has more than doubled since the beginning of the recession from 4.5 million to 9.5 million. The number of “discouraged workers” no longer in the labour force because they gave up looking for work increased by more than 70% in the year to September 2010. When the unemployed, underemployed or discouraged or added together, the total reaches 17% of the workforce.

With incomes declining sharply, house prices are continuing to fall and eviction totals are mounting. Seven million homes are “delinquent” because payment deadlines have passed, are in repossession proceedings, or have already passed into the hands of the lenders. Homelessness is soaring, putting pressure on shelters which have started to charge fees of $7 (£4.50) per night.

“Big government” in the shape of the capitalist state has indeed failed because the crisis is global, with a logic and momentum beyond the reach of individual states and governments. The US election outcome provides an historic opportunity. Americans should begin the task of creating new forms of economic and political democracy in which they can forge a path to a society based on the satisfaction of the needs of the many and not the corporations. Both the Republicans and Democrats stand in the way of this much-needed social liberation.


Gerry Gold
Economics editor

Iraqi unions threaten 'mutiny' over oil law

The struggle over future control of Iraq’s oil is coming to a head, with parliament deeply divided over American proposals designed to benefit the major corporations and the country’s trade unionists vowing to resist any foreign takeover. It adds to the deepening crisis engulfing the US-UK four-year occupation of Iraq. Among Americans, sentiment against the Iraq war is at its highest level ever at 76% while the so-called surge of US troops has made no difference in terms of stability and security. Behind the invasion was the dream of privatising Iraq’s state-owned oil industry and opening up the world’s third largest reserves to the global market. Like all the other fantasies concocted by the White House, the notion of easy control of Iraq’s oil has also come up against harsh reality.

Despite attempts to keep the parliamentary process hidden from view, more and more Iraqis are coming to realise the purpose behind a law drafted in Washington before the invasion even took place. The long-sought "hydrocarbons framework" law would give Big Oil virtually unrestricted access to 80% of Iraq’s reserves. According to leaked documents, Iraq stands to lose billions of dollars in oil revenue. Meanwhile, a parallel law carving up the country’s oil revenues between the different regions will add to the sectarian and ethnic divisions that have appeared since the overthrow of Saddam Hussein.

Trade unionists are the most powerful group opposing the carve-up. Subhi al-Badri, head of the Iraqi Federation of Union Councils, said recently: “This law cancels the great achievements of the Iraq people. If the Iraqi Parliament approves this law, we will resort to mutiny. This law is a bomb that may kill everyone. Iraqi oil does not belong to any certain side. It belongs to all future generations." Oil workers staged a three-day strike last month, defying arrests by armed troops, and union president Hassan Jumaa Awaad, has warned: “If those calling for production-sharing agreements insist on acting against the will of Iraqis, we say to them that history will not forgive those who play recklessly with wealth and destiny of a people and that the curse of heaven and the fury of Iraqis will not leave them.”

A recent poll commissioned by a coalition of NGOs and other groups found that a clear majority Iraqis from all ethnic groups would prefer "Iraq's oil to be developed and produced by Iraqi state-owned companies" over foreign companies. Most Iraqis are, however, in the dark about the laws, in yet another example of US-style “democracy”. More than three out of four Iraqis - including nine of 10 Sunni Arabs - say "the level of information provided by the Iraqi government on this law" was not adequate for them to "feel informed" about the issue.

Far from being a great display of US-driven global corporate power and reach, the invasion and occupation of Iraq has turned into a great debacle. It is coming to represent the end of empire rather than the beginning of a new one, the place where corporate-driven globalisation ran into the sands.

Paul Feldman, AWTW communications editor

Brown sings Bush's praises

There are those who convinced themselves that New Labour’s close relationship with the most reactionary White House in history was restricted to Tony Blair and that once he was gone, normal service would be resumed (whatever that might be). Gordon Brown’s flattering comments about president Bush show, however, an unbroken continuity. The style may be different, and the emphasis switched to issues like Darfur and trade, but the essence remains the same. New Labour and the Republican White House see eye to eye on almost everything. Brown, after all, voted for the invasion of Iraq and Afghanistan as well as the replacement of the Trident nuclear fleet. He has approved the use of the early-warning station at Menwith Hills near Harrogate as part of America’s plan to build a missile defence shield in Europe. And, above all, Brown is totally behind the draconian measures taken in the name of the “war on terrorism”. On his way to the US, Brown, who has more connections in Washington than Blair ever did, said: “We should acknowledge the debt the world owes to the United States for its leadership in this fight against international terrorism."

Was he talking about the regime that built Camp X-Ray in Guantanamo? Or the CIA practice of kidnapping people and sending them off to be tortured by “friendly” governments – otherwise known as extraordinary rendition (which, incidentally, Britain’s MI5 has been closely involved with). Or the raft of illegal wiretapping and surveillance of American citizens which has created a police-state apparatus in the US. Paul Craig Roberts is no radical. He was an assistant secretary of the Treasury in the Reagan administration. He now warns: “The American constitutional system is near to being overthrown.” In a recent blast against the White House, he said that the Bush regime is in such dire straits over Iraq, that it could be tempted to create a national crisis through a provocation of its own or allowing a terror strike to take place. He wrote: “Bush has put in place all the necessary measures for dictatorship in the form of ‘executive orders’ that are triggered whenever Bush declares a national emergency. Recent statements by Homeland Security Chief Michael Chertoff, former Republican senator Rick Santorum and others suggest that Americans might expect a series of staged, or false flag, ‘terrorist’ events in the near future.”

Brown, of course, is working on his own plan for a police-state apparatus with his proposals to double detention without charge to 58 days and allow police to question suspects endlessly. He is taking his cue from the unelected and unaccountable group who constitute the Association of Chief Police Officers (ACPO). They came to prominence during the 1984-85 miners’ strike. ACPO set up a centralised command and turned Britain into a series of militarised zones which miners were prevented from entering. Even a cross-party committee of MPs and peers has seen through the government’s plans. A report by the Joint Committee on Human Rights (JCHR) today concludes that there is not enough evidence to justify extending the detention time. The JCHR's report concluded that the law should not be altered because of "precautionary arguments that such a need may arise at some time in the future.” Chairman, Andrew Dismore, said: "As far as we've heard there has not yet been a case where 28 days was inadequate. This is being proposed on the possibility that it might be in future." But New Labour doesn’t give a fig for MPs’ concerns. As a Home Office spokesman countered: "The police believe it is right and proper for the government to address this issue.” So there you have it. The inspector calls and the government jumps.

Paul Feldman, communications editor

Democracy beyond the Bush regime

More and more American commentators are beginning to question whether the American political system can survive the Bush regime. Joe Conason, a columnist for the New York Observer and Salon, is blunt. In It Can Happen Here (Thomas Dunne Books, 2007), Conason says: "For the first time since the resignation of Richard M. Nixon more than three decades ago, Americans have had reason to doubt the future of democracy and the rule of law in our own country. Today we live in a state of tension between the enjoyment of traditional freedoms, including the protections afforded to speech and person by the Bill of Rights, and the disturbing realisation that those freedoms have been undermined and may be abrogated at any moment." Conason explains how Bush claims an authority that transcends the separation and balancing of power among the branches of government. His book cites evidence of widespread disenchantment and fear amongst the electorate, which led to the defeat for the Republicans in last autumn’s mid-term Congressional elections. Voters are fed up with what Conason describes as the lies, corruption and cronyism of the Bush administration seen from Iraq to the handling of Hurricane Katrina.

Conason writes: "The most obvious symptoms can be observed in the regime's style, which features an almost casual contempt for democratic and lawful norms; an expanding appetite for executive control at the expense of constitutional balances; a reckless impulse to corrupt national institutions with partisan ideology; and an ugly tendency to smear dissent as disloyalty. The most troubling effects are matters of substance, including the suspension of traditional legal rights for certain citizens; the imposition of secrecy and the inhibition of the free flow of information; the extension of domestic spying without legal sanction or warrant; the promotion of torture and other barbaric practices, in defiance of American and international law; and the collusion of government and party with corporate interests and religious fundamentalists."

The title of Conason’s book is drawn deliberately from the title of the novel by Sinclair Lewis, It Can’t Happen Here, which was published 1935. Lewis, the first American to win the Nobel Prize for Literature, envisaged the USA in thrall to a fascist dictator. Buzz Windrip, a plainspoken, folksy Southern politician had risen to power during a period of profound unrest in America. Lewis, who had been expelled from Nazi Germany, had written: ""When fascism comes to America, it will be wrapped in the flag and carrying a cross." Conason sees striking resemblance between the demagogic villain of Lewis’s book, and the present White House incumbent. Yet the authoritarian regime in Washington is, as Conason acknowledges, not fascist. The American people are not cowed or defeated by the Bush regime. But it remains true that in many countries, including Britain, the political system that evolved in tandem with capitalism, with its democratic side the result of generational struggles, is indeed in profound crisis. Globalisation of the world economy, leading to the transfer of powers and decision-making out of the hands of national governments, has tied capitalist democratic structures to corporate power in a much more direct way. In 1992, the arch-conservative political theorist Francis Fukuyama, claimed that the end of the Soviet Union marked the ultimate triumph for the Western democracies, which were themselves the last word in history as far as political systems were concerned. How hollow and stupid his words sound today! Yet relying on liberal sentiment to resuscitate the façade of bourgeois democracy would be a major mistake and could lead to the outright fascist dictatorship that Conason and others fear. Bush enjoys as much power as he does partly as the result of the supine nature of Senate Democrats. Surely the next word in history has to be the extension of democratic principles and ideals in new ways and into new areas like the workplace, colleges and communities, replacing corporate power with a genuine people’s power.

Paul Feldman, communications editor