Iceland’s On-going Revolution August 6, 2011Posted by rogerhollander in Europe, Oregon, Revolution.
Tags: deena stryker, default, democracy, Economic Crisis, financial crisis, iceland, iceland constitution, IMF, neoliberal, revolution, roger hollander
1 comment so far
Democracy 2.0: Iceland crowdsources new constitution
by Jérôme E. Roos on June 11, 2011
just three years, Iceland went from collapse to revolution and back to
growth. What can Spain and Greece learn from the Icelandic experience
and its embrace of direct democracy?
Just two or three years after its economy and government collapsed, Iceland is bouncing back with remarkable strength. This week, the small island nation earned praise
from foreign investors despite allowing its banks to collapse and
refusing to pay back some of its debt — belying the dominant idea among
Europe’s ruling class that bank failures and defaults necessarily engender disastrous economic consequences.
in an historically unprecedented move, the government has decided to
draft a new constitution with the online input of its citizens —
the creation of Iceland’s real democracy. Rather than just involving
voters at the end of the process through a referendum, the Icelanders
have an opportunity, through social media, to be directly involved in
the writing process. It’s the ultimate affirmation of participatory
democracy. It’s Democracy 2.0.
How did Iceland get from there to here? And what are the lessons for Europe’s troubled periphery?
Back in 2009, months after the greatest banking collapse in economic history, the people of Iceland took to the streets en masse to
denounce the reckless bankers who had caused the crisis and the
clueless politicians who had allowed it to develop. Quietly, as the
world was busy watching the inauguration of President Obama, the people
of Iceland overthrew their government and demanded a referendum on the country’s debt.
the referendum, the Icelanders decided not to repay foreign creditors —
Great Britain and the Netherlands — who had so foolishly deposited
their savings in one of the world’s most over-leveraged banks, Icesave.
In fact, the President had already vetoed
the deal, so the referendum was largely symbolic, but still, the
outcome of the vote (93 percent against repayment) was a watershed in
the epic battle between people power and foreign financial interests.
what’s really interesting about the Icelandic case is not just the
referendum, but the fact that the consequences of the outcome were far
from being as disastrous
as Europe’s self-proclaimed economic ‘experts’ had predicted. In fact,
within just two years of the collapse of its government, Iceland is
bouncing back rapidly, and is actually being rewarded for it by foreign
investors. As the Wall Street Journal reported yesterday:
first international bond offering since its spectacular economic and
banking collapse late in 2008 has been snapped up by investors. The
five-year $1 billion deal, yielding just under 5%, is a milestone in
rebuilding confidence internationally and follows a turnaround in the
economy, forecast to grow 2.25% this year.
So it’s no surprise that Iceland became a rallying point for the ‘indignados‘
in Spain during the mass protests that broke out there last month.
Spanish demonstrators could be seen carrying placards reading “Iceland
is my goal” and “I think of Iceland.” The Icelandic model has also come
to inspire the indignant protest movement in Greece, which is rapidly picking up steam. So what are Iceland’s main lessons for Europe’s troubled periphery?
First of all, make sure to read this excellent piece
by Robert Wade, my former Professor at the London School of Economics,
to understand how Iceland’s mistakes in the lead-up to the crisis were
just an extreme version of what we did on the continent: capital account
liberalization combined with financial deregulation and unprecedented
political disinterest in the face of an epic bubble blowing up right in
front of our eyes.
Wade helps us understand what not to do. But perhaps at this stage, it’s more interesting to find out what we should do. In
this respect, one overwhelming lesson jumps out: while letting banks
collapse and refusing to pay back foreign lenders certainly has negative
consequences in the short run, those consequences are born largely by
the reckless bankers who instigated the crisis in the first place.
of socializing the losses of the banks, making ordinary people pay for a
crisis they never caused, the Icelandic model forced the bankers to pay
for their own stupidity. During the Icelandic crisis, all three of the
country’s largest banks collapsed. The government didn’t save them.
Secondly, Iceland actually went after
those responsible — both to enact justice and to set a precedent that
this type of reckless speculation on the livelihoods of real people will
simply not be tolerated in the future. Key figures in the banking
sector have been arrested and a former prime minister has been formally charged. Treating reckless speculation as a crime is a crucial first step towards real democracy.
Thirdly, Iceland did what no one is supposed to be doing according to neoliberal dogma: just like Malaysia did — to the dismay of the IMF — during the East-Asian crisis of 1997-’98, the Icelandic government instituted capital controls
to stem the outflow of hot money from the country in the wake of its
banking collapse. The EU should have done the same (and can still do the
same) to stem the outflow of capital from the periphery.
Fourthly, and this is obviously the most crucial lesson of all, the people of Iceland managed to sever the neoliberal straitjacket
that had kept their politicians enthralled to the interests of the
financial sector for so long. Through mass mobilization, the people
toppled the government and instituted a radically new form of political
participation. The crowdsourcing of the constitution is the most
powerful symbol this new, real democracy.
As a result, the Icelandic people are now slowly but surely beginning to recover
from the worst ever economic collapse of any country during
peacetime. By contrast, countries like Greece, Spain, Ireland and
Portugal are still struggling — and likely to remain mired in deep
recession, if not outright depression, for years to come.
Untold suffering and hardship
will fall on millions of people as the ECB, IMF and Germany continue to
expect full repayment while imposing draconian (and ultimately
counterproductive) austerity measures. A lost generation
will flee these countries in a desperate search for opportunity.
Countless lives, businesses, families and dreams will be destroyed. And
for what? A handful of bankers who refuse to take a haircut?
What Iceland teaches us is that it need not be that way. The Atlantic currents and Arab winds have already reached
the European periphery. It’s just a matter of time before the first
government on the continent will be toppled by its people. Democracy 2.0
is on its way. No one can stop it now.
Originally posted to Deena Stryker on Mon
Aug 01, 2011 at 08:47 AM PDT.
Will 39 Democrats Stand Up to Stop the War Funding? June 15, 2009Posted by rogerhollander in Iraq and Afghanistan, Torture, War.
Tags: Afghanistan escalation, Afghanistan War, anti-war, defense department, democratic leadership, democrats, dod, graham, harry reid, IMF, imf funding, Iraq war, jeremy scahill, lieberman, lynn woolsey, military spending, Obama, pelosi, prisoner abuse, Rahm Emanuel, roger hollander, torture photos, U.S. militarism, war funding, war spending
add a comment
The White House and the Democratic Congressional Leadership are playing a very dirty game in their effort to ram through supplemental funding for the escalating US war in Afghanistan and continued occupation of Iraq. In the crosshairs of the big guns at the White House and on Capitol Hill are anti-war freshmen legislators and the movement to hold those responsible for torture accountable.
In funding the wars, the White House has been able to rely on strong GOP support to marginalize the anti-war Democrats who have pledged to vote against continued funding (as 51 Democrats did in May when the supplemental was first voted on). But the White House is running into trouble now because of Republican opposition to some of the provisions added to the bill (and one removed), meaning the pro-war Democrats actually need a fair number of anti-war Democrats to switch sides. In short, the current battle will clearly reveal exactly how many Democrats actually oppose these wars. And, according to reports, the White House and Democratic Leadership have the gloves off in the fight:
Rep. Lynn Woolsey of California, a leader of the antiwar Democrats, said the White House is threatening to withdraw support from freshmen who oppose the bill, saying “you’ll never hear from us again.”She said the House leadership also is targeting the freshmen.
“It’s really hard for the freshmen,” she said. “Nancy’s pretty powerful.”
On June 11, the relevant committees in the House and Senate approved the $105.9 billion spending package. According to an analysis by the Center for Arms Control and Non-Proliferation:
The bill includes $79.9 billion for the Department of Defense, primarily to fund military operations in Iraq and Afghanistan, roughly $4.4 billion more than the amount sought by the Administration. This funding is in addition to the $65.9 billion “bridge fund” in war funding for FY’09 that Congress approved last June. To date Congress has approved over $814 billion for military operations in Iraq and Afghanistan, not including the $80 billion recommended by the Conference Committee, In addition, the Obama Administration is seeking $130 billion in for fiscal year 2010. Both the House and Senate could take up the conference agreement as early as this week.In addition to funding combat operations in Iraq and Afghanistan, the bill provides $10.4 billion for the State Department and the U.S. Agency for International Development (USAID), and $7.7 billion for Pandemic Flu Response.
The current battle over war funding has brought with it a couple of high-stakes actions, which have threatened passage of the bill. Many Democrats were up in arms about an amendment sponsored by Senators Joe Lieberman and Lindsey Graham that would have blocked the release of photos depicting US abuse of prisoners (which the White House “actively” supported. Facing warnings that the provision could derail the funding package, the White House stepped in, deploying Rahm Emanuel to the Hill to convince legislators to drop the amendment, while at the same time pledging that Obama would use his authority to continue to fight the release of more photos:
White House chief of staff Rahm Emanuel ‘rushed’ to Capitol Hill and prevailed upon Senate Democrats to remove the torture photo measure in exchange for an explicit White House promise that it would use all means at its disposal to block the photos’ release. Obama also issued a letter to Congress assuring it he would support separate legislation to suppress the photos, if necessary, and imploring it to speed passage of the war-spending bill. The rider would “unnecessarily complicate the essential objective of supporting the troops,” Obama wrote.
In other words, Obama took a position that amounted to providing political cover to Democrats to support the war funding, while pledging to implement, through other means, the very policy they supposedly found objectionable.
Secondly, the White House and Congressional leadership added a provision to the bill that extends up to $100 billion in credits to the International Monetary Fund. While this sent many Republicans to the microphones to denounce the funding, the Democratic leadership portrayed the IMF funding as a progressive policy:
House Speaker Nancy Pelosi, D-Calif., is trying to paint the IMF provision as a “very important national security initiative.” The IMF, she said, “can be a force for alleviating the fury of despair among people, poor people throughout the world.”
It is a pathetic symbol of just how bankrupt the Congressional Democratic leadership is when it comes to US foreign policy that Nancy Pelosi and Harry Reid are trying to use funding for the IMF to convince other Democrats to support war funding. The IMF has been a destabilizing force in many countries across the globe through its austerity measures and structural adjustment schemes. Remember, it was the policies of the IMF and its cohorts at the World Bank and World Trade Organizations that sparked global uprisings in the 1990s.
To support the IMF funding scam, the Center for American Progress, which has passionately supported Obama’s escalation of the war in Afghanistan, released a position paper today called, “Bailing Out the Bailer-Outer: Five Reasons Congress Should Agree to Fund the IMF.”
Thankfully, some anti-war Democrats seem to understand the atrocious role the IMF has played and have tried to impose rules on the funding that would attempt to confront the IMF’s austerity measures by requiring that “the funds allocated by Congress for global stimulus are used for stimulatory, and not contractionary, purposes.”
By adding the IMF provision to this bill, the White House is making a bold statement about the intimate relationship of the hidden hand of US neoliberal economic policy to the iron fist of US militarism.
At the end of the day, the real issue here is: How many Democrats will actually stand up on principle to the funding of the wars, regardless of the bells and whistles the White House and Democratic Leadership attach or the threats they need to endure from their own party?
In order to block passage, 39 Democrats need to vote against it in the House. As of this writing, 34 reportedly are committed to voting against it. Jane Hamsher at Firedoglake has been doing great coverage of this issue, much of which can be found here. So too has David Swanson at AfterDowningStreet. This does seem to be one issue where phone calls and letters matter-tremendously. See where your representative stands here. As of this writing, these are the legislators who are reportedly leaning toward a “No” vote, but have not yet committed. They are the people most likely to be convinced by hearing from constituents:
- Steve Cohen
- Keith Ellison
- Chakah Fattah
- Mike Honda
- Doris Matsui
- Ed Markey
- Jim McDermott
- Gwen Moore
- Jared Polis
- Jan Schakowsky
- Jackie Speier
- Mike Thompson
- John Tierney
- Mel Watt
- Anthony Weiner
UPDATE: I just spoke to Trevor Kincaid, Jan Schakowsky’s communications director and he told me that Schakowsky will not release a statement on her position on the supplemental “until after the vote.” I asked him if she was concerned about going back on her 2007 pledge never to vote for war funding that did not call for troop withdrawal. He said, “She is currently reviewing the pros and cons of the bill.” He would provide no further comment.
Also, Jane Hamsher reports that it now appears Keith Ellison is voting no.
© 2009 Jeremy Scahill
Jeremy Scahill is the author of the New York Times bestseller Blackwater: The Rise of the World’s Most Powerful Mercenary Army. He is currently a Puffin Foundation Writing Fellow at the Nation Institute.
Stealth Move in Washington Aims to Get $100 Billion for IMF Without Congressional Debate May 14, 2009Posted by rogerhollander in Economic Crisis.
Tags: bailout, IMF, international monetary fund, latvia, mark weisbrot, obama administration, pakistan, pakistan economic crisis, pakistan economy, pakistan political stability, pakistan taliban, roger hollander, turkey
add a comment
“You don’t have to do this.” Those are the near-last words of several victims in the Coen brothers’ classic film No Country for Old Men, as they try to convince the movie’s unrelenting assassin that he should spare them. The assassin, played by Javier Bardem, finds this annoying, because in his mind these murders are pre-determined.
So it is with the IMF’s continuing confrontations with its borrowers, with one government after another pleading: “You don’t have to do this.” Turkey and Latvia were in the news last week, having joined the roster of governments whose IMF disbursements are being withheld because they find it politically impossible to impose the required punishments on their citizens.
The IMF sees these measures as necessary and pre-determined – in most cases by the borrowing countries’ having run-up unsustainable external or budget imbalances. But in fact the IMF has a long track record – dating back decades – of imposing unnecessary and often harmful conditions on borrowing countries.
Latvia missed a 200 million euro disbursement from the IMF in March for not cutting its budget enough. According to press reports, the government wants to run a budget deficit of 7% of GDP for this year, and the IMF wants 5%. Latvia is already cutting its budget by 40%, and is planning to close some public hospitals and schools in order to make the IMF’s targets, prompting street protests. Latvia’s GDP crashed by 18% in the first quarter of this year, after a 10.3% drop in the preceding quarter. These are among the worst declines in the world. This indicates that the IMF’s prescription is serious overkill. The purpose of IMF aid is supposedly to make any necessary adjustment easier, not worse.
In Pakistan, it would be surprising if the US Treasury, which is the principal overseer of the IMF, did not see a need to ease up on the contractionary IMF conditions there. The government of nuclear-armed Pakistan is facing serious political problems right now, having recently launched a major offensive against a growing Taliban insurgency. Slowing Pakistan’s economy at a time when the global economic crisis is already doing that may not be the best policy from the point of view of political stability. The IMF has negotiated an increase in Pakistan’s fiscal deficit from 3.4% to 4.6% of GDP, but is holding the line against lowering interest rates.
In almost all of its standby arrangements negotiated over the last year, the IMF has included conditions that will reduce output and employment in situations where economies are already shrinking.
Yet here in Washington there is a rush to get the IMF more money without any congressional hearings or debate. We are told that poor countries will suffer if the IMF does not get a $108bn appropriation from Congress immediately. But this is nonsense.
If we add up all of the IMF’s commitments under the 16 standby arrangements negotiated since the crisis intensified last year, the total is less than $46bn. The poorest countries will not be allowed to borrow anywhere near that amount.
The IMF already has $215bn on hand, plus more than $100bn in gold reserves. It plans to create another $250bn in SDR’s, ie the IMF’s currency. Even if we include the $67.5bn that Mexico ($47bn) and Poland ($20.5bn) together can tap under the IMF’s flexible credit line, it is clear the IMF is trying to get hundreds of billions of dollars more than it is likely to need. And it has at least ten times the money that the poor countries – whose needs are pocket change compared to IMF resources – will ever be allowed to borrow.
Yet the Obama administration, in a surprise move out of nowhere on Tuesday, decided to try and attach the $108bn for the IMF to another spending bill in order to circumvent the normal legislative process. The reason for this stealth maneuver is that they might run into trouble in the House, where legislators are wary of voting for multi-billion blank cheques after the backlash against the Tarp financial bailout. They will try to convince Congress to approve this money without hearings or debate with the idea that it must be done in order to save poor people in poor countries.
Congress should be met with a chorus of opposition: “You don’t have to do this.”
Pirate Bankers, Shadow Economies April 15, 2009Posted by rogerhollander in Africa, Economic Crisis, Nigeria.
Tags: africa government, africa poltics, capital flight, citigroup, corruption perceptions, cpi, economic justice, Free Trade, G20, global shadow economy, Gordon Brown, IMF, jacob zuma, khadija sharife, nigeria dictator, nigeria oil, oecd, roger hollander, sani abacha, swiss bank account, swiss banks, tax havens, tax justice, third world corruption, third world economy, ti, transparency international, washington consensus, World Bank
1 comment so far
Published on Wednesday, April 15, 2009 by Foreign Policy In Focus
Corruption isn’t an issue that Jacob Zuma, the current president of the African National Congress – South Africa’s liberation party – is particularly enthusiastic about. Until prosecutors dropped charges in early April, Zuma stood accused of three dozen counts of corruption, graft, fraud, and racketeering related to a rigged multibillion-dollar arms deal. He was alleged to have accepted 783 payments from French arms multinational Thint via his financial advisor Shabir Sheik, who was later convicted for graft, fraud, and corruption. Sheik has since emerged from prison, serving just 28 months of his 15-year term.
In Africa, political power is often used as a “get out of jail free” card, immunizing the venal political elite through various mechanisms. Transparency International, the global corruption watchdog renowned for its annual Corruption Perceptions Index (CPI), argues that corruption is especially rampant in Africa. TI defines corruption as the “abuse of entrusted power for private gain,” a notion limited to the governing bodies in developing countries.
But this is only half the story. A respectable financial army plays an invaluable role in a global shadow economy. A coterie of bankers, accountants, and lawyers – based in “transparent” London, New York, and Singapore – serve as the agents of tax havens and offshore financial centers, and they’re backed by multilateral financial institutions. Corrupt government leaders get away with graft much more easily and more frequently because of these international financial enablers.
According to Global Financial Integrity’s Raymond Baker, a leading capital flight expert, an estimated $900 billion is siphoned from underdeveloped regions each year. Since the 1970s, Africa has experienced a loss of $600 billion in capital flight, a considerable portion derived from odious loans that commercial and development banks provided to despotic regimes. Harvard economist James Henry argues that that more than $1 trillion worth of loans “disappeared into corruption-ridden projects or was simply stolen outright.”
Facilitating this theft are the IMF and World Bank’s structural adjustment programs through tax competition, liberalized trade, and natural resources auctioned piecemeal to corporations. These multilateral institutions made it easier for politicians and corporations to acquire capital and then spirit it out of the country.
“The IMF pushed the Washington Consensus, pushed free trade for corporations, providing them with market access and minimum impediments in Africa such as tax competition,” said Richard Murphy, director of Tax Research LLP. “The IMF helped companies not to pay their taxes. They got it horribly wrong.”
Despite TI’s emphasis on corrupt political environments – which has since become the definition of corruption – less than 5% of capital flight comes from this narrow category, according to Murphy. A much larger portion of capital flight, 30%, derives from garden-variety crimes like drug trafficking and money laundering. Multinational internal mispricing, meanwhile, constitutes an astounding 60% of illicit flight.
“TI has got it all wrong,” stated Murphy. “Transfer mispricing constitutes the largest portion of flight capital.” But even when capital flight happens because of corruption narrowly understood, like bribery, where does the money end up? Probably tax havens and places like Switzerland, which zealously protects the privacy of its depositors. Though Sudan, Chad, Equatorial Guinea and Zimbabwe rank near to last on CPI’s list of 180 countries, Switzerland comes in at a pristine fifth place. “The idea that Switzerland has a clean economy is a joke. It is a dirt-driven economy,” said Murphy.
Tax justice was billed as the “big issue” of the recent G20 meeting in London, a gathering of the largest economies in the world. By targeting Switzerland and numerous island economies, Prime Minister Gordon Brown conveniently shifted attention away from UK crown dependencies and overseas territories, accounting for more than a quarter of all tax havens worldwide.
And London is the head office.
“Tax havens are little more than booking centers. I’ve seen transactions where all the decisions are made in London, but booked in havens,” stated an official of Britain’s Serious Fraud Office, to John Christensen, cofounder of the Tax Justice Network and former economic advisor to Jersey, one of the world’s leading tax havens – and a UK crown dependency.
High-net-worth individuals have already secreted away more than $11.4 trillion, Christensen estimates, resulting in a loss of over $250 billion in taxes each year, minus corporate profits declared in tax havens.
The presence of tax havens, guaranteeing protection and discretion to corrupt political elites and economic criminals, directly undermines democracy and development, manipulating legal vacuums in unanticipated ways.
“The IMF is in favor of the highly flawed incentive of tax holidays. Many countries have lost huge sums of revenue, because tax incentives undermine revenue base of developing countries,” said Christensen. “Corporations prefer weak governments that are anxious to secure investments, and despotic governments,” he stated.
Over 60% of global trade occurs in unobserved vacuums. The Organization for Economic Cooperation and Development (OECD), composed of 27 high-income countries, have decided to focus on these conduits as well as the exotic islands, thus marginalizing and absolving structural exploitation, the lax regulation, and the culture of secrecy, all of which underpins the larger OECD economies such as London.
The strength of offshore hubs – an intricate labyrinth that facilitates flight and protects the corrupt through obscuring transparency, depends on the lack of automatic exchange of information between countries experiencing capital flight and those on the receiving end. After intensive lobbying by the international financial community, the IMF removed just such a provision on information exchange from the final drafts of its Article of Agreement. Presently, governments are only able to interrogate havens when already in possession of data related to illicit financial transactions and assets. The power of offshore hubs expanded when the IMF paved the way for capital account liberalization in the late 1970s. Cross-border flows increased eightfold. Unlike tax havens, offshore hubs relocate at the first sign of financial regulation. This is often done via costly flee clauses. The move to target and regulate tax havens, which range from shell companies to conduit markets to hedge funds, shouldn’t detract from the importance of regulating offshore hubs as distinct entities.
Going after the Real Corrupters
During his days on the throne, according to the Tax Justice Network’s John Christensen, former Nigerian dictator Sani Abacha had a standing order to transfer $15 million from state coffers to his Swiss bank account each day, resulting in a personal fortune of $3-$5 billion. One hundred banks (including Citigroup) knowingly protected Abacha and facilitated his plunder. Since the early 1990s, the population of Nigerians living on less than one dollar per day has increased by 10%.
Nigeria’s economy is largely dependent on hydrocarbon contracts, which is the root of the problem. “Hydrocarbon contracts in particular are very secretive, especially with regards to taxation, and it is difficult to get evidence of payment, with many political parties and politicians receiving payment on the side,” said Christensen.
Nigeria isn’t the only country subject to opaque transactions and capital flight. Wall Street’s $56 trillion tumble was triggered by toxic assets traded in the shadow economy. Suddenly, the spotlight in the United States fell on discretely marketed tax havens and powerful multinationals, many of them on the receiving end of taxpayer-subsidized bail-out funds. The Government Accountability Office reported that 83 of the top 100 corporations maintained multiple subsidiary units in tax havens.
The key to addressing corruption in the broadest sense is through country-by-country reporting. Such reports reveal the presence of multinationals in each country, trade names, financial performance, physical assets, the number of employees, sales to third parties, and intra-group trading, profits, and tax payments to the governments in each location. “Country-by-country reporting already works in the US where states all have different corporate taxes,” stated Murphy. “It would allow us to ‘look through’ havens, and if nothing of value is added there, we can simply ignore it and tax the companies where performance is happening.”
The automatic exchange of information in conjunction with country-by-country reporting would bolster accountability by precipitating automatic sanctions on havens, disincentivising capital flight and corruption. In doing so, the magnifying glass of transparency would fall on unchecked and unregulated shadow economies in developed and developing countries alike.
Now that would be an economic revolution.
Bad News From America’s Top Spy February 17, 2009Posted by rogerhollander in Economic Crisis.
Tags: administation, Afghanistan, Africa, al-qaida, bailout, banks, capitalism, china, chris hedges, christopher bond, corruption, crisis, default, Dennis Blair, department of defense, dof, economic collapse, economic growth, economy, europe, free market, government, hamas, health, hezbollah, ilo, IMF, intelligence, Iraq, islamic jihad, job loss, Latin America, martial law, marx, military, money, national intelligence, Obama, Pentagon, recession, riots, roger hollander, senate, senate intelligence, soviet union, Taliban, terrorists, violence, Wall Street, war
add a comment
Posted on Feb 16, 2009, www.truthdig.com
|AP photo / Petros Giannakouris|
By Chris Hedges
We have a remarkable ability to create our own monsters. A few decades of meddling in the Middle East with our Israeli doppelgänger and we get Hezbollah, Hamas, al-Qaida, the Iraqi resistance movement and a resurgent Taliban. Now we trash the world economy and destroy the ecosystem and sit back to watch our handiwork. Hints of our brave new world seeped out Thursday when Washington’s new director of national intelligence, retired Adm. Dennis Blair, testified before the Senate Intelligence Committee. He warned that the deepening economic crisis posed perhaps our gravest threat to stability and national security. It could trigger, he said, a return to the “violent extremism” of the 1920s and 1930s.
It turns out that Wall Street, rather than Islamic jihad, has produced our most dangerous terrorists. You wouldn’t know this from the Obama administration, which seems hellbent on draining the blood out of the body politic and transfusing it into the corpse of our financial system. But by the time Barack Obama is done all we will be left with is a corpse—a corpse and no blood. And then what? We will see accelerated plant and retail closures, inflation, an epidemic of bankruptcies, new rounds of foreclosures, bread lines, unemployment surpassing the levels of the Great Depression and, as Blair fears, social upheaval.
The United Nations’ International Labor Organization estimates that some 50 million workers will lose their jobs worldwide this year. The collapse has already seen 3.6 million lost jobs in the United States. The International Monetary Fund’s prediction for global economic growth in 2009 is 0.5 percent—the worst since World War II. There are 2.3 million properties in the United States that received a default notice or were repossessed last year. And this number is set to rise in 2009, especially as vacant commercial real estate begins to be foreclosed. About 20,000 major global banks collapsed, were sold or were nationalized in 2008. There are an estimated 62,000 U.S. companies expected to shut down this year. Unemployment, when you add people no longer looking for jobs and part-time workers who cannot find full-time employment, is close to 14 percent.
And we have few tools left to dig our way out. The manufacturing sector in the United States has been destroyed by globalization. Consumers, thanks to credit card companies and easy lines of credit, are $14 trillion in debt. The government has pledged trillions toward the crisis, most of it borrowed or printed in the form of new money. It is borrowing trillions more to fund our wars in Afghanistan and Iraq. And no one states the obvious: We will never be able to pay these loans back. We are supposed to somehow spend our way out of the crisis and maintain our imperial project on credit. Let our kids worry about it. There is no coherent and realistic plan, one built around our severe limitations, to stanch the bleeding or ameliorate the mounting deprivations we will suffer as citizens. Contrast this with the national security state’s strategies to crush potential civil unrest and you get a glimpse of the future. It doesn’t look good.
“The primary near-term security concern of the United States is the global economic crisis and its geopolitical implications,” Blair told the Senate. “The crisis has been ongoing for over a year, and economists are divided over whether and when we could hit bottom. Some even fear that the recession could further deepen and reach the level of the Great Depression. Of course, all of us recall the dramatic political consequences wrought by the economic turmoil of the 1920s and 1930s in Europe, the instability, and high levels of violent extremism.”
The specter of social unrest was raised at the U.S. Army War College in November in a monograph [click on Policypointers’ pdf link to see the report] titled “Known Unknowns: Unconventional ‘Strategic Shocks’ in Defense Strategy Development.” The military must be prepared, the document warned, for a “violent, strategic dislocation inside the United States,” which could be provoked by “unforeseen economic collapse,” “purposeful domestic resistance,” “pervasive public health emergencies” or “loss of functioning political and legal order.” The “widespread civil violence,” the document said, “would force the defense establishment to reorient priorities in extremis to defend basic domestic order and human security.”
“An American government and defense establishment lulled into complacency by a long-secure domestic order would be forced to rapidly divest some or most external security commitments in order to address rapidly expanding human insecurity at home,” it went on.
“Under the most extreme circumstances, this might include use of military force against hostile groups inside the United States. Further, DoD [the Department of Defense] would be, by necessity, an essential enabling hub for the continuity of political authority in a multi-state or nationwide civil conflict or disturbance,” the document read.
In plain English, something bureaucrats and the military seem incapable of employing, this translates into the imposition of martial law and a de facto government being run out of the Department of Defense. They are considering it. So should you.
Adm. Blair warned the Senate that “roughly a quarter of the countries in the world have already experienced low-level instability such as government changes because of the current slowdown.” He noted that the “bulk of anti-state demonstrations” internationally have been seen in Europe and the former Soviet Union, but this did not mean they could not spread to the United States. He told the senators that the collapse of the global financial system is “likely to produce a wave of economic crises in emerging market nations over the next year.” He added that “much of Latin America, former Soviet Union states and sub-Saharan Africa lack sufficient cash reserves, access to international aid or credit, or other coping mechanism.”
“When those growth rates go down, my gut tells me that there are going to be problems coming out of that, and we’re looking for that,” he said. He referred to “statistical modeling” showing that “economic crises increase the risk of regime-threatening instability if they persist over a one to two year period.”
Blair articulated the newest narrative of fear. As the economic unraveling accelerates we will be told it is not the bearded Islamic extremists, although those in power will drag them out of the Halloween closet when they need to give us an exotic shock, but instead the domestic riffraff, environmentalists, anarchists, unions and enraged members of our dispossessed working class who threaten us. Crime, as it always does in times of turmoil, will grow. Those who oppose the iron fist of the state security apparatus will be lumped together in slick, corporate news reports with the growing criminal underclass.
The committee’s Republican vice chairman, Sen. Christopher Bond of Missouri, not quite knowing what to make of Blair’s testimony, said he was concerned that Blair was making the “conditions in the country” and the global economic crisis “the primary focus of the intelligence community.”
The economic collapse has exposed the stupidity of our collective faith in a free market and the absurdity of an economy based on the goals of endless growth, consumption, borrowing and expansion. The ideology of unlimited growth failed to take into account the massive depletion of the world’s resources, from fossil fuels to clean water to fish stocks to erosion, as well as overpopulation, global warming and climate change. The huge international flows of unregulated capital have wrecked the global financial system. An overvalued dollar (which will soon deflate), wild tech, stock and housing financial bubbles, unchecked greed, the decimation of our manufacturing sector, the empowerment of an oligarchic class, the corruption of our political elite, the impoverishment of workers, a bloated military and defense budget and unrestrained credit binges have conspired to bring us down. The financial crisis will soon become a currency crisis. This second shock will threaten our financial viability. We let the market rule. Now we are paying for it.
The corporate thieves, those who insisted they be paid tens of millions of dollars because they were the best and the brightest, have been exposed as con artists. Our elected officials, along with the press, have been exposed as corrupt and spineless corporate lackeys. Our business schools and intellectual elite have been exposed as frauds. The age of the West has ended. Look to China. Laissez-faire capitalism has destroyed itself. It is time to dust off your copies of Marx.
Tags: al-Qaeda, alba, Alvaro Uribe, april howard, ben dangl, Bolivia, bush administration, china trade latin america, cia, Colombia, colombia auc, colombia paramilitaries, counterinsurgency, cyril mychaelejko, DEA, dirty wars, Ecuador, Evo Morales, farc, foreign policy, Free Trade, Free Trade Latin America, guatemala, hamas, hezbollah, hillary clinton, Hugo Chavez, human rights, IMF, Latin America, latin america politics, Lula de Silva, negroponte, obama administration, plan colombia, plan guatemala, plan mexico, Rafael Correa, roger hollander, rumsfeld, torture, Venezuela, war on terror, washington consensus
add a comment
|Written by Cyril Mychalejko|
|Tuesday, 27 January 2009|
Source:New Politics Winter 2009, Vol. XXII
Much is being made across the political spectrum in the United States about Washington’s waning influence in Latin America. The region has seen an emergence of left and center-left presidents voted into office, many as a result of budding social movements growing democracy from the grassroots. Some pundits and analysts are suggesting that this phenomenon is occurring because of the Bush Administration’s perceived neglect of the region. Rather, what is happening is blowback from Washington’s continued meddling in the economic and political affairs of an area arrogantly referred to as the United States’ “backyard.” Latin America’s growing unity in rejecting the Washington Consensus remains fragile in the face of U.S. opposition. Washington has been quietly using the war on drugs, the war on terrorism, and a neo-cold war ideology to institutionalize a militarism in the region that risks returning us to the not so far off days of “dirty wars.”
Breaking the Chains
Venezuelan President Hugo Chavez’s election in 1998 sparked the beginning of the leftward electoral paradigm shift in the hemisphere. After he orchestrated a failed coup attempt in 1992, he was elected six years later based on a campaign that promised to lift up the impoverished nation’s poor majority through economic policies that ran counter to the free market fundamentalism and crony capitalism pursued by the country’s oligarchs, with the aid of Washington and international financial institutions such as the World Bank and the International Monetary Fund (IMF). Chavez also began to challenge the idea of U.S. hegemony in the region by advocating a united Latin America based on the ideas of one of his intellectual mentors, Simón Bolívar, the 19th century revolutionary instrumental in defeating Spain’s control of the region. Chavez, who also claims to be influenced by the teachings of Karl Marx and Jesus Christ, has championed what he calls a “Socialism of the 21st Century.” A fierce and outspoken critic of neoliberalism, Chavez has said “I am convinced that a path to a new, better and possible world is socialism, not capitalism,” words that have been scarce in the region’s capitals with the exception of Cuba.
Since Chavez’s ascent to power, we have seen presidents elected in Argentina, Bolivia, Brazil, Chile, Ecuador, Nicaragua, Paraguay, and Uruguay which translates into a majority of countries in the region advocating center-left and left-wing political programs (while Mexico and Peru missed joining this new Latin American consensus by narrow, if not fraudulent, election outcomes).
While it is true that, despite these developments, socialism is a long way off from taking hold in the region, the rejection of Washington’s Free Trade Area of the Americas (FTAA) back in 2003, long before the left had firmly taken hold in the hemisphere, marked the beginning of an outright challenge to free market orthodoxy, U.S. hegemony, and corporate power. Since then we have seen multinational corporations booted out of countries and defiantly confronted by social movements, U.S. ambassadors expelled from three nation’s capitals, free trade agreements protested, illegitimate foreign debts challenged, and U.S. drug policies rejected. In addition, alternative political and economic institutions and policies have been advocated and created.
Venezuela’s Chavez developed the Bolivarian Alternative for the Americas (ALBA), an antithesis to the FTAA that advocates a trade regime based on economic, social, and political integration guided by the principals of solidarity and cooperation. Even Honduras, long seen as a U.S. satellite state dating back to the days it assisted Washington in overthrowing Guatemala’s government in 1954, has joined ALBA, showing that the creeping tide of Bolivarianism is extending to the still fragile Central America. Meanwhile, Brazil’s Lula de Silva, viewed by Washington and the U.S. corporate media as part of the “acceptable” or “responsible” left, declared in 2007 that “Developing nations must create their own mechanisms of finance instead of suffering under those of the IMF and the World Bank, which are institutions of rich nations . . . it is time to wake up.” And the region has woken up as the “Bank of the South” was formed to make development loans without the draconian economic prescriptions of Washington-controlled financial institutions, which in the past have forced countries to cut social spending, deregulate industries, and open markets to foreign capital — policies that have exacerbated poverty and inequality in the past and as a result compounded dependence on foreign capital and Washington.
In terms of security cooperation, both Brazil and Venezuela have led efforts to create a South American Defense Council, a NATO-style regional body that would coordinate defense policies, deal with internal conflicts and presumably diminish Washington’s influence in its “backyard.” While U.S. Secretary of State Condoleezza Rice said back in March that Washington “had no problem with it” and looked “forward to coordination with it,” Bloomberg News reported that Brazilian Defense Minister Nelson Jobim told Rice and National Security Adviser Stephen Hadley that the United States should “watch from the outside and keep its distance,” and that “this is a South American council and we have no obligation to ask for a license from the United States to do it.” In a similar challenge to U.S. military presence and influence, Ecuador’s President Rafael Correa decided to force the United States. to close its military base in the port city of Manta. And then there is China’s and Russia’s growing economic and political ties to the region — something that would not only be unheard of in the past, but not tolerated.
Developments such as these led the Council on Foreign Relations to declare in May that the “era of the United States as the dominant influence in Latin America is over.” Frank Bajak, writing for the Associated Press on Oct. 11, echoed this observation when he wrote, “U.S. clout in what it once considered its backyard has sunk to perhaps the lowest point in decades” and that “it’s unlikely to be able to leverage economic influence in Latin America anytime soon.” Meanwhile, The Washington Post took a more indignant and belligerent position in an Oct. 6 editorial when it questioned whether Washington should “continue to subsidize governments that treat it as an enemy” while “a significant part of Latin America continues to march away from the ‘Washington consensus’ of democracy and free-market capitalism that has governed the region for a generation.”
While conventional thinking has led many to believe that Latin America’s independence from the United States may be an irreversible paradigm shift, behind the scenes Washington has put into place policies that could unleash a reign of terror not seen since the 1980′s. Colombia has served as laboratory for this new counterinsurgency program that can be interpreted as a continuance of U.S. supported state terrorism and a re-emergence of the national security state in Latin America.
The U.S. government has sent more than $5 billion in mostly military and counter-narcotics assistance to Colombia since 2000 to fund “Plan Colombia,” a counter drug program said to be designed to fight cocaine production and narco-trafficking, as well as the Revolutionary Armed Forces of Colombia (FARC), in turn further intensifying the country’s long-standing civil war. But as the International Consortium of Investigative Journalists (ICIJ) reported in 2001 in a study sponsored by the Center for Responsive Politics, “The protection of U.S. oil and trade interests is also a key factor in the plan, and historic links to drug-trafficking right-wing guerrillas by U.S. allies belie an exclusive commitment to extirpating drug trafficking.”
The ICIJ investigation also found that “Major U.S. oil companies have lobbied Congress intensely to promote additional military aid to Colombia, in order to secure their investments in that country and create a better climate for future exploration of Colombia’s vast potential reserves.” In addition, corporations with interests in the region were reported to have spent almost $100 million lobbying Congress to affect U.S. Latin America policy.
Eight years later, Colombia has evolved into a full-fledged paramilitary state. President Álvaro Uribe, Washington’s staunchest ally in the region, his extended family, and many of his political supporters in the government and military are under investigation for ties to paramilitaries and right-wing death squads. As far as U.S. corporate collusion goes, Chiquita Brands International Inc. was forced to pay the U.S. Justice Department a $25 million settlement in 2007 for giving over $1 million to the right-wing terrorist organization United Self-Defense Forces of Colombia (AUC). Even more damaging is the fact that Secretary of Homeland Security Michael Chertoff, at the time assistant attorney general, knew about the company’s relationship with AUC and did nothing to stop it. Alabama-based coal company Drummond Co., Inc. and Coca-Cola have also been accused of hiring right-wing death squads to intimidate, murder or disappear trade unionists. This is what the ICIJ meant when they wrote about securing investments and creating a “better climate” for business.
According to the U.S. Labor Education on the Americas Project, Colombia accounts for more than 60 percent of trade unionists killed worldwide. There have also been at least 17 murders of trade unionists just this year, which, according to a report released in April 2008, accounts for an 89 percent increase in murders over the same time period from 2007. Meanwhile, The Washington Post reported in August that the collateral damage from Colombia’s civil war has resulted in more disappearances than occurred in El Salvador and Chile, while Colombia’s attorney general believes there could be as many as 10,000 more bodies scattered across the country — meaning totals would surpass those from Argentina and Peru.
Despite what should be considered as a total failure from a policy and, more importantly, human rights standpoint, this same Colombian model has been promoted by Washington to other nations in the region, and — remarkably — has been embraced by these countries. In 2005, Guatemalan officials called for their own “Plan Guatemala,” while Oscar Berger, president at the time, asked for a permanent DEA station in the country and for U.S. military personnel to conduct anti-narcotics operations. In addition, he was a proponent of a regional rapid deployment force, initially conceived to fight gangs, but later adjusted to include counter-narcotics and counter-terrorism in order to attract U.S. support. It should be noted that the AFL-CIO, along with six Guatemalan unions, filed a complaint, allowed through labor provisions of the Central America Free Trade Agreement (CAFTA), on April 23, 2008, charging the Guatemalan government with not upholding its labor laws and for failing to investigate and prosecute crimes against union members — which include rape and murder. This speaks to the idea of securing a “business-friendly” climate like in Colombia, which many in Washington want to reward with a free trade agreement. Guatemala’s government is currently led by President Alvaro Colom, a politician who represents the country’s ruling oligarchs. Pre-election violence during his campaign claimed the lives of over 50 candidates (or their family members) and political activists, in a country Amnesty International reports is infested with “clandestine groups” comprised of members of “the business sector, private security companies, common criminals, gang members and possibly ex and current members of the armed forces” responsible for targeting human rights activists.
This regional militaristic strategy finally materialized into policy on June 30 when President Bush signed into law the Meridia Initiative, or “Plan Mexico,” which according to Laura Carlsen of the Americas Program “could allocate up to $1.6 billion to Mexico, Central American, and Caribbean countries for security aid to design and carry out counter-narcotics, counter-terrorism, and border security measures.”
Just one day later, investigative journalist Kristen Bricker reported that a video had surfaced showing a U.S.-based private security company teaching torture techniques to Mexican police. This led Amnesty International to call for an investigation on July 3 to determine why techniques such as “holding a detainee down in a pit full of excrement and rats and forcing water up the nostrils of the detainee in order to secure information” were being taught. Later in July the Inter Press Service published a story about a 53-page report on Human Rights and Conflicts in Central America 2007-2008 that suggested “Central America is backsliding badly on human rights issues, and social unrest could flare up into civil wars like those experienced in the last decades of the 20th century.”
Nevertheless, Washington continues to push for the re-militarization of the region, as evidenced by a $2.6 million aid package given to El Salvador in October to “fight gangs.” Coincidentally, this was announced just months after the Inter Press Service reported in a June 16 article that U.S. Deputy Secretary of State John Negroponte “expressed concern over supposed ties between the Revolutionary Armed Forces of Colombia (FARC) guerrillas and the Farabundo Martí National Liberation Front (FMLN),” while also announcing that “the Bush administration is on the alert to Iran’s presence in Central America.”
Playing the Terror Card
In order to up the ante as a means of promoting this militaristic vision for the Americas and to vilify strategic “enemies” such as Venezuela’s Hugo Chavez and Bolivia’s Evo Morales, Washington has added the “War on Terror” into the equation by spreading unfounded allegations about Islamic terrorist infiltration into the region.
Journalists Ben Dangl and April Howard of Upside Down World, reporting for EXTRA! in Oct. 2007, wrote “In the Cold War, Washington and the media used the word ‘communism’ to rally public opinion against political opponents. Now, in the post– September 11 world, there is a new verbal weapon — ‘terrorism.’” This puts into context Washington’s evidence-lacking assertions that the Tri-Border Area, where Brazil, Paraguay and Argentina meet, is a hub for Islamic Terrorist groups such as Hezbollah and Hamas, claims the mainstream media have obsequiously parroted, yet Dangl and Howard helped disprove. Dangl and Howard, reporting from Ciudad del Este, a city located in the center of this alleged “hotbed” of terrorsim, talked with Paraguayan officials, as well as local residents, all of whom denied there was any presence of foreign terrorist groups. They pointed out that the governments of Brazil and Argentina have also denied the claims. But the terrorist assertions haven’t stopped there.
Norman A. Bailey, a former U.S. spy chief for Cuba and Venezuela, testified before the House Committee on Foreign Affairs on July 17 that “financial support has been provided [by drug traffickers] to insurgent groups in certain countries, most notoriously to the FARC in Colombia, as well as to ETA, the Basque separatist organization, and most importantly to Hamas, Hezbollah and Islamic Jihad, through their extensive network in Venezuela and elsewhere in Latin America.”
The State Department’s David M. Luna, Director for Anticrime Programs, Bureau of International Narcotics and Law Enforcement Affairs, gave a statement on Oct. 8 claiming that international terrorist organizations will collaborate with regional criminal networks to smuggle WMD’s across the U.S.’s border with Mexico.
“Fighting transnational crime must go hand in hand with fighting terrorists, if we want to ensure that we ‘surface them,’” stated Luna. He also went on to regurgitate the empty claims of the Tri-Border Islamic threat.
That same day the Associated Press reported that U.S. officials were concerned with alliances being formed by terrorist groups such as Al-Qaida and Hezbollah and Latin American drug cartels.
“The presence of these people in the region leaves open the possibility that they will attempt to attack the United States,” said Charles Allen, a veteran CIA analyst. “The threats in this hemisphere are real. We cannot ignore them.”
And on Oct. 21 The Los Angeles Times reported that U.S. and Colombian officials allegedly dismantled a drug and money laundering ring used to finance Hezbollah.
This post-Sept. 11 fear-mongering, being carried out for years now, has served as a pretext for Washington to deploy Special Operations troops in embassies across the globe, including Latin America, “to gather intelligence on terrorists…for potential missions to disrupt, capture or kill them.”
The New York Times, which broke the story on March 8, 2006, reported that this initiative, led by then-Secretary of Defense Donald Rumsfeld, was an attempt to broaden the U.S. military’s role in intelligence gathering. The soldiers, referred to as “Military Liaison Elements,” were initially deployed without the knowledge of local ambassadors. This changed after an armed robber in Paraguay was killed after attempting to rob a group of soldiers covertly deployed to the country. Senior embassy officials were “embarrassed” by the episode as the soldiers were operating out of a hotel, rather than the embassy.
But in a follow-up by The Washington Post on April 22, “the Pentagon gained the leeway to inform — rather than gain the approval of — the U.S. ambassador before conducting military operations in a foreign country” when deploying these “elite Special Operations Troops.” This development has remained largely under the radar, with the exception of analysis by Just the Facts, a joint project of the Center for International Policy, the Latin American Working Group Education Fund, and the Washington Office on Latin America.
A New Cold War?
In Oct. 2006 President Bush signed a waiver that authorized the U.S. military to resume certain types of training to a number of militaries in the region which had been suspended as a result of a bill intended to punish countries not signing bilateral agreements that would grant immunity to U.S. citizens from prosecution before the International Criminal Court.
Bush was forced to act as a result of Venezuela’s growing influence in the region, as well as the “red” threat that China’s growing business in the region presented.
“The Chinese are standing by and I can’t think of anything that is worse than having those people go over there and get indoctrinated by them. And I think maybe we should address that because that’s a very serious thing,” said Sen. James Inhofe (R-OK), at a March 14, 2008, hearing of the Senate Armed Services Committee.
Sen. Hillary Rodham Clinton (D-NY), at the same hearing, said this was “a serious threat” and called for ending the restrictions on U.S. military training programs imposed on Latin American nations for refusing to sign the bilateral immunity agreements. Of course, Latin American nations should not be subject to sanctions for quite properly rejecting the immunity agreements; but neither should there be training programs for their repressive militaries, to teach these militaries repressive practices.
The Associated Press reported in Oct. that “China’s trade with Latin America jumped from $10 billion in 2000 to $102.6 billion last year. [And] In May, a state-owned Chinese company agreed to buy a Peruvian copper mine for $2.1 billion.”
These developments should further perpetuate the “Red Scare” making its way through the Senate. Then there is Russia’s military sales and cooperation with Venezuela. U.S. News and World Report’s Alastair Gee wrote a fear-mongering article on Oct. 14, 2008, in which he stated, “This is not the first time Russians have sought close links with Latin America. In 1962, the stationing of Soviet missiles in Cuba nearly precipitated nuclear war with the United States. The Soviets also funded regional communist parties and invited students from the region to study in Soviet universities.”
But more importantly, it is the region’s “march away from the ‘Washington consensus’ of democracy and free-market capitalism” that has drummed up a cold war mentality in Washington. With democratically elected presidents in the region openly embracing socialism and socialist-style policies, economic programs in various countries that include nationalizing industries and “redistributing the wealth”, and social movements ideologically and physically confronting free market capitalism, it should come as no surprise that anti-globalization movements have found themselves classified as a national security threat to the United States. A declassified April 2006 National Intelligence Estimate entitled “Trends in Global Terrorism: Implications for the United States,” states, “Anti-U.S. and anti-globalization sentiment is on the rise and fueling other radical ideologies. This could prompt some leftist, nationalist, or separatist groups to adopt terrorist methods to attack US interests.”
Developments in Latin America are reason for hope and optimism that “a new, better and possible world” could be on the horizon. But these very same reasons are cause for concern.
With Washington’s imperial stretch on the decline, both militarily and economically, both history and current conditions suggest it will try to reassert itself in Latin America — just as it did after Vietnam.
But because of the deeply embedded and institutionalized nature of Washington’s imperial machine, it doesn’t matter much which party controls the White House and Congress. To fight these developments, we need to continue to grow grassroots media projects and support independent journalists, build long-term solidarity with Latin American social movements and build social movements in the United States, fight free trade and do our part to shed light upon the structural violence threatening Latin America’s promising future — which is directly tied to ours.
Cyril Mychalejko is an editor at http://www.UpsideDownWorld.org.
Tags: abolitionists, alienated labor, bailout, black candidate, capitalism, capitlism's failure, Economic Crisis, economic recovery, emancipation proclamation, food crisis, franklin dmitryev, freedom, great depression, hillary clinton, homeless, ilo, IMF, labor, labour, lincoln, marx, Marxist Humanism, New Deal, news and letters, Obama, olga domanski, paulson, proposition 8, republic windows, revolt, revolution, Robert Gates, roger hollander, roosevelt, state capitalism, timothy geithner, unemployment, unemployment rate, world war II
add a comment
by Olga Domanski and Franklin Dmitryev
National Co-Organizers, News and Letters Committees
NEWS & LETTERS, December 2008 – January 2009
The shocking news released Dec. 5 of half a million more workers being thrown into unemployment nearly eclipsed the importance of the election, just one month earlier, of the first African American president.
No one, however, can dismiss the historic importance of a Black man winning the presidency of so racist a land as the U.S. has proved to be since its very birth. None could fail to be moved by the fully interracial and multiethnic millions rejoicing in Grant Park in Chicago, and dancing in the streets of both Harlem and Times Square in New York on election night. Far from simple euphoria, it seemed to manifest a totally new kind of experience. Throughout the whole campaign, the hundreds of thousands who had poured out to Obama’s rallies had been seen by some pundits as portending nothing less than a “revolutionary political shift.” What made it “revolutionary” was that the aspirations of those thousands who poured out to the rallies and stood in long lines on Nov. 4 were casting their ballots for a “change” that went deeper into freedom than just political freedom, to self-determination in everyday life. What distinguished the election of Obama was that it went beyond race as the determinant to the question of freedom.
Getting beyond race as the determinant does not mean forgetting that we are a brutally racially divided land, as any sober look at the conditions of Black America verifies. It is to say that Obama spoke in a language that resonated with the desire for a fuller freedom than the U.S. has up to now been willing to set loose–the freedom for Gays to marry, for women to control their reproductive lives, for immigrants to move freely across borders, for an end to discrimination against all the minorities of this country; and the freedom to live in peace with international neighbors.
WHAT FREEDOM MEANS
Although the theme of Obama’s inauguration is said to be “A New Birth of Freedom,” neither candidate spoke of “freedom” during the election campaign. President Bush has so corrupted the word in the militaristic way he used it as meaning invading another country and forcing his perversion of “freedom” on them, that it requires spelling it out in your actions.
When California’s Proposition 8 took away same-sex marriage, the breadth and depth of the immediate protests, by Gay and straight alike, revealed how serious the masses are about “change” being not just political, but a change in human relations. (See ‘The movement is ours!’: Lesbian activist critique)
What is important now is “what happens after.” Since winning the election, Barack Obama set two more records. One was the amazing speed with which he set up his cabinet and chose his “teams”–immediately after having asserted that there is only “one president at a time.” It emphatically conveyed the need to act quickly because the crisis kept deepening. The other was the strong move to the center very nearly every one of his choices represented. Nothing better demonstrated that deliberate direction than the selection of Hillary Clinton as Secretary of State, given the fact that Obama’s victory stemmed in large part from his vigorous opposition to the war on Iraq and his condemnation of her vote to approve the invasion. To the same “national security team” he also named Robert Gates as the first Secretary of Defense ever held over from a different party, who for two years had been in charge of the war Obama opposed. Only the relentlessly increasing severity of the economic crisis briefly delayed the announcement of the “defense team” until after the selection of Timothy Geithner as Secretary of the Treasury and the rest of his “economic team,” all of them also “experienced” players not dedicated to “change.”
While a pull to the center is to be expected once the winner claims a mandate, so quickly did it raise new questions about the direction Obama was taking, that what that extraordinary election meant is in danger of being completely disregarded. Let us not miss the historic importance of Obama’s win, or dismiss him as just another politician whose victory makes no difference. It is impossible to discount the percentages of youth, women, immigrants, and Black voters who participated in the election, some for the first time in their lives. But the dimension most crucial was the number of white workers who cast their vote for a Black candidate.
It is a moment that reaches back to one of the most significant chapters of American history, when the Abolitionist movement represented nothing less than a “new dimension of American character.” It was the first integrated movement in American history, and it is no small matter that in his speeches Obama cited such a movement that was not “racial”–which is to say that the Abolitionist movement made itself the expression of the Black masses’ struggle for freedom and in that way spoke in a language that was demanding action on a question of human freedom for all. It encompassed not only anti-slavery and interracial equality, but internationalism and women’s struggles for freedom–150 years ago.
Obama roots himself not in that radical movement, but in the compromiser Lincoln who was attacked by them for putting off the Emancipation Proclamation until he was forced into it. Nevertheless, his nod toward that glorious page of U.S. history reflects the revolutionary forces simmering beneath the surface of our society.
Are we seeing the beginnings of Black and labor coalescing, as is needed to make a decisive turning point–and will it encompass all the forces from Latino labor to women to Queer? What gave the Abolitionists the extra dimension as intellectuals and as human beings was their alignment with these kinds of struggles from below. Most crucial for our day is the unifying philosophy needed to avoid one more unfinished revolution.
GLOBAL ECONOMIC CRISIS DECISIVE
What proved to be the real determinant in the 2008 election was the devastating global economic crisis. The opposition to war in Iraq and Afghanistan, which had been the number one reason for supporting the Democratic ticket, was pushed to a secondary position. It is why the first posts decided were the “economic recovery program” team.
So many people have been losing jobs, losing homes, going without doctor visits, putting off purchases from clothing to cars, that it was hardly a surprise when the U.S. economy was declared to be in a recession that began in December 2007. Economists and politicians are starting to acknowledge that conditions will continue to worsen well into 2009 at least–with others forecasting “several years of high unemployment…and widespread income losses.”
By November the unemployment rate was reported at 6.7%, with 11.2% for African Americans and one in three for Black teenagers. These official figures do not count the millions who have stopped looking for work or who have had to settle for part-time jobs, who would bring the overall figure up to 12.5%. In the year since November 2007, 3.2 million more people are unemployed, 2.8 million more are involuntarily working part-time, and 1.3 million more are not counted as part of the labor force. Many have lost health insurance. Dreams of retirement shattered, millions dread an old age of poverty.
HUMAN COST OF CAPITALISM’S FAILURE
After a decade of working people’s incomes stagnating and temporary jobs proliferating, these new blows have meant a million bankruptcies this year alone and three million families losing their houses, with Moody’s forecasting five million more foreclosures by 2010. Such anger has built up that some governors and sheriffs have had to declare moratoriums on foreclosures or evictions. The homeless have been building tent cities or, with the help of groups like Miami’s Take Back the Land, taking over homes left vacant by foreclosures. From Republic Windows workers to Prop. 8 protesters (see Republic Windows and Doors sit-in stops bosses’ wage theft), “Yes, we can” has been given deeper content linking back to the slogan’s origin in farmworker struggles.
Republic Windows and Doors workers who occupied their factory demanding justice.
With recession spreading to Europe and Japan, the International Monetary Fund has declared a “major downturn” for the world economy. Globally, the International Labor Organization projects that unemployment will rise by 20 million. Though food prices have retreated, the world food crisis has worsened, with the economic crisis pushing over 100 million people worldwide into poverty and farmers reducing production in the face of lower crop prices. Already children are starving from Afghanistan to Zimbabwe. Two years of widespread strikes and revolts over high food prices and other economic troubles give a hint of how the global nature of the crisis also affects the international character of revolutionary impulses that are stirring.
What is most significant about Obama’s quickly gathered economic team is that, like Bush’s Treasury Secretary Henry Paulson, all these economists have had to throw out their faith in the “free market.” Instead they are tossing around proposals for massive state intervention in the economy through deficit-swelling public works programs to provide jobs, in addition to stepping up the ongoing program of corporate bailouts and nationalization.
Ideologues from the Left and center, clamoring for a “new New Deal,” too often forget how the history of the New Deal has been rewritten. First, it did not materialize out of the benevolence of Pres. Roosevelt. The context was strikes, organizing, revolt–the threat of revolution was in the air. That is exactly what the New Deal was supposed to save capitalism from. Today, millions want to change this society top to bottom–and that means a much deeper change than what Obama has in mind.
Second, the New Deal did not halt the Great Depression. It took World War II to cover over capitalism’s decade-long crisis. Civilization can hardly survive a World War III, yet capitalism has no other solution to offer. At $685 billion, the Pentagon’s budget is 85% higher (after inflation) than in 2000–the highest since World War II. Even that is not all the military spending, yet it nearly equals the sum of all other countries’ defense budgets combined.
STATE-CAPITALISM NO SOLUTION
No matter how “green” the new version of the New Deal is painted, it cannot save capitalism from the deep structural crisis into which it has been plunged by the development of the contradictions inherent in capital’s very being. No matter who is appointed to the various posts, or how much cooperation Obama forges with Republicans, all their efforts are about searching for ways to keep capitalism alive. None of the answers proposed by the politicians, advisers or pundits even recognizes what the crisis stems from–capitalism’s law of motion.
As the October-November 2008 Lead in News & Letters (Bailout can’t save capitalism from its own gravediggers) put it:
“Trying to steer opposition in their own direction, nearly all politicians expressed their ‘outrage’ while claiming there is no alternative to saving capitalism and showing ‘bipartisan’ solidarity with capitalists when the whole economy is at risk. This crisis revealed how rapidly objective events can call the whole capitalist system into question and generate a lot of action and new thinking about what is possible. Past failures surely show that the opposite of alienated labor is not to be found in statist intervention, political parties or trade unions, all of which broker on capitalist ground. At this crucial moment of capital’s reorganization, it is important to engage that rethinking with Marx’s concept of what it would take for humanity to break with being organized under the rule of capitalist production’s alienated labor.”
Capitalist rule can only be broken when the masses of working people take control of production and make decisions themselves, not letting anyone else do the thinking for them–whether that be managers, the labor bureaucracy, or planners touting a new New Deal. While that takes a revolution that can only be made by the masses, the history of the 20th century shows the urgency of the question of what happens after the revolution. Revolt and even revolution can be dragged back to the various forms of state-capitalism: the welfare state, fascism, or totalitarian “Communism.” What is needed is unity not only of white labor with Black masses and undocumented immigrants, anti-war youth with Gay and women’s liberationists, and unity across borders, but of theory and practice, rooted in a philosophy of revolution, in so new a relationship as to lay the foundations for a truly human society.
It is that concept of the unity of theory and practice on which News and Letters Committees was organized. News & Letters was created as its concretization in the only Marxist-Humanist journal in the U.S. That is why News and Letters Committees is starting the New Year with a series of classes in all the locals on “Confronting Today’s Crises: The Marxist-Humanist return to Marx and the revolutionary abolition of capitalism.” (See An invitation and an appeal for announcement of classes.) Their aim is theoretic preparation for revolution, part of which is working out a new book of Marxist-Humanism on Marx. The classes cannot be a “how to” manual on breaking with capitalism and achieving a new society, but a methodology.
While no one can overlook the historic significance of this election, the deep crisis the world is in cannot be solved by Obama or any administration. What is needed is a totally new relationship of the movements from theory and from practice on the basis of a unifying philosophy of revolution. It is no easy task. We invite your participation in the classes and contributions to the discussion in the paper, and appeal for your help to keep News & Letters going.
1. This new dimension’s historic meaning is spelled out in American Civilization on Trial: Black Masses as Vanguard: “These New England Abolitionists added a new dimension to the word intellectual, for these were intellectuals whose intellectual, social and political creativity was the expression of precise social forces. They gloried in being ‘the means’ by which a direct social movement expressed itself, the movement of slaves and free Negroes for total freedom…” (p. 34).
2. “New Day for U.S. Economic Policy,” by Larry Mishel, http://www.epi.org/content.cfm/newsflash_081105_obama. Others simply called the latest figures “dismal” and “frightening”; see “Jobs Vanish–Quickly,” 12/6/08 Chicago Tribune.
3. “Rubinomics Recalculated,” by Jackie Calmes, 11/24/08 New York Times, points out the links between Obama’s top economic advisers and Robert Rubin, and “the economic formula that came to be called Rubinomics: balanced budgets, free trade, and financial deregulation.” Named to head the new “Economic Recovery Advisory Board” is Paul Volcker, whose “solution” to the 1970s crisis was to drive up interest rates, helping to push the U.S. into deep recession in the early 1980s and to precipitate the debt crisis in Africa, Latin America and Asia. See “Can Africa Survive Obama’s Advisers?” by Patrick Bond in Links, Nov. 12, 2008 (http://links.org.au/node/738).
Can Africa survive Obama’s advisers? January 8, 2009Posted by rogerhollander in Africa, Economic Crisis.
Tags: Africa, africa debt, aids south africa, apartheid, Bill Clinton, Economic Crisis, Federal Reserve, IMF, jubilee usa, lawrence summers, naomi klein, nyerere, Obama, patrick bond, paul volker, rhodes, robert rubin, roger hollander, shock doctrine, South Africa, stiglitz, thabo mbeki, tim geithner, transafrica, treasury department, volker shock, Wall Street, wall street journal, washington consensus, World Bank
add a comment
Kenyans celebrate Obama’s victory.
November 12, 2008 — One of Barack Obama’s leading advisers has done more damage to Africa, its economies and its people than anyone I can think of in world history, including even Cecil John Rhodes. That charge may surprise readers, but hear me out.
His name is Paul Volcker, and although he is relatively unknown around the world, the 82-year-old banker was recommended as “a legend!” to Obama by Austan Goolsbee, the president-elect’s chief economic adviser (and a professor at the University of Chicago). Volcker was recently profiled by the Wall Street Journal: “The cigar-chomping central banker from 1979 to 1987, he received blame for driving up interest rates and tipping the US into the deepest recession since the Great Depression.”
We’ll consider the impact of Volcker’s rule on Africa in a moment. But why dredge up crimes nearly 30 years old?
This kind of reckoning is important, as three current examples suggest:
- Reparations lawsuits are now being heard in New York by victims of apartheid who are collectively requesting US$400 billion in damages from three dozen US corporations who profited from South African operations during the same period. Supreme Court justices had so many investments in these companies that in May they had to bounce the case back to a lower New York court to decide, effectively throwing out an earlier judgment against the plaintiffs: the Jubilee anti-debt movement, the Khulumani Support Group for apartheid victicms, and 17 000 other black South Africans.
- Last month a San Francisco court began considering a similar reparations lawsuit — under the Alien Tort Claims Act — filed by Larry Bowoto and the Ilaje people of the Niger Delta against Chevron for 1998 murders similar to those that took the life of Ken Saro-Wiwa on November 10, 1995.
- In Boston last month, Harvard University’s Pride Chigwedere released a study into preventable deaths — at least 330 000 — caused by former African National Congress and South African President Thabo Mbeki’s AIDS policies during the early 2000s. The ex-president has “blood on his hands”, according to Zackie Achmat of the Treatment Action Campaign, requesting a judicial inquiry.
The same critical treatment is appropriate for Volcker, because of the awesome financial destruction he imposed, within most Africans’ living memory. His policies stunted the continent’s growth when it most needed internal economic coherence.
Even the International Monetary Fund’s official history cannot avoid using the famous phrase most associated with the Fed chair’s name: “The origins of the debt crisis of the 1980s may be traced back to and through the lurching efforts of the world’s governments to cope with the economic instabilities of the 1970s… [including the] monetary contraction in the United States (the ‘Volcker Shock’) that brought a sharp rise in world interest rates and a sustained appreciation of the dollar.”
Volcker’s decision to raise rates so high to rid the US economy of inflation and strengthen the fast-falling dollar had special significance in Africa, write British academics Sarah Bracking and Graham Harrison: “1979 marked a radical change in global economic policy, inaugurated with the ‘Volcker Shock’ (so called after Paul Volcker, then chairman of the Board of Governors of the Federal Reserve) when the United States suddenly and dramatically raised interest rates, [which] increased the cost of African debt precipitously, since a majority of debt stock was held in dollars. The majority of the newly independent states had been effectively delivered into at least twenty years of indentured labor. From that point on access to finance became a key policing mechanism directed at African populations.”
Adds journalist Naomi Klein in her book The Shock Doctrine, “In developing countries carrying heavy debt loads, the Volcker Shock was like a giant Taser gun fired from Washington, sending the developing world into convulsions. Soaring interest rates meant higher interest payments on foreign debts, and often the higher payments could only be met by taking on more loans… It was after the Volcker Shock that Brazil’s debt exploded, doubling from $50 billion to $100 billion in six years. Many African countries, having borrowed heavily in the seventies, found themselves in similar straits: Nigeria’s debt in the same short time period went from $9 billion to $29 billion.”
The numbers involved were daunting for low-income countries. According to University of California economic geographer Gillian Hart, “Medium and long-term public debt shot up from $75.1 billion in 1970 to $634.4 billion in 1983. It was the so-called Volcker Shock… that ushered in the debt crisis, the neoliberal counterrevolution, and vastly changed roles of the World Bank and IMF in Latin America, Africa, and parts of Asia.”
Elmar Altvater of Berlin’s Free University recalls how the world “slid into the debt crisis of the 1980s after the US Federal Reserve tripled interest rates (the so called ‘Volcker Shock’), leading to what later has been described as the ‘lost decade’ for the developing world.”
How “lost”? The British Medical Journal complained in 1999 of orthodox World Bank structural adjustment policies that immediately followed: “According to Unicef, a drop of 10-25% in average incomes in the 1980s-the decade noted for structural adjustment lending-in Africa and Latin America, and a 25% reduction in spending per capita on health and a 50% reduction per capita on education in the poorest countries of the world, are mostly attributable to structural adjustment policies. Unicef has estimated that such adverse effects on progress in developing countries resulted in the deaths of half a million young children-and in just a 12-month period.”
A few honest mainstream economists also explain Africa’s economic crisis in these terms. “The external shock that might have precipitated the developing country slowdown is the increase in real interest rates after the Volcker Shock in 1979″, wrote World Bank senior researcher William Easterly in 2001. “The interest on external debt as a ratio to GDP has a statistically significant and negative effect on growth.”
A few blocks away from the Federal Reserve, one of Volcker’s closest allies was World Bank president Tom Clausen, formerly Bank of America chief executive officer. As the Volcker Shock wore on, in 1983, Clausen offered his board of directors this frank confession: “We must ask ourselves: How much pressure can these nations be expected to bear? How far can the poorest peoples be pushed into further reducing their meagre standards of living? How resilient are the political systems and institutions in these countries in the face of steadily worsening conditions? I don’t have the answers to these important questions. But if these countries are pushed too far, and too much is demanded of them without the provision of substantial assistance in their adjustment efforts, we must face the consequences. And those will surely exact a cost in terms of human suffering and political instability.”
At that point, “Africa was not even on my radar screen”, Volcker told interviewers Leo Panitch and Sam Gindin.
Meanwhile, the World Bank’s sister institution, the International Monetary Fund, was described by Tanzanian president Julius Nyerere as “a neo-colonial institution which exploits the poor to make them poorer and serves the rich to become richer”. Volcker had, ironically, played a central role in the destruction of the Bretton Woods system’s dollar-gold convertibility arrangement, effectively a US$80 billion default on holders of dollars abroad, when in 1971 he served Richard Nixon as under-secretary of the Treasury.
Eight years later, he was chosen to chair the Federal Reserve, which sets US (and by extension world) interest rates. As Jimmy Carter’s domestic policy advisor Stuart Eizenstat explained, “Volcker was selected because he was the candidate of Wall Street. This was their price, in effect.”
In 1985, Ronald Reagan offered Clausen’s job to Volcker, but he decided to stay on at the Fed until 1987, when he went back to a high-paid Wall Street job.
Now he is back, and according to a recent profile by the Wall Street Journal, “Obama is increasingly relying on Mr. Volcker. His staff now routinely reviews policy proposals and speeches with Mr. Volcker. Conference calls and face-to-face meetings of the Obama economic team are often reorganized to accommodate his schedule. When the team discusses the financial crisis, ‘The most important question to Obama: What does Paul Volcker think?’ says Jason Furman, the campaign’s economic-policy director… When Sen. Obama raised the prospect of a package of spending and tax measures to ‘stimulate’ the economy, Mr. Volcker disapproved. ‘Americans are spending beyond their means,’ he told the group. A stimulus package would delay the belt-tightening and savings needed, he added, proposing instead better regulation and assistance to banks.”
By November 8, the odds of Volcker being appointed US Treasury Secretary were 10%, according to the WSJ‘s betting pool. The race was between New York Federal Reserve Bank president Tim Geithner and former Bill Clinton-era Treasury Secretary Lawrence Summers, at 40% odds each. Geithner served under Summers and Robert Rubin in Bill Clinton’s Treasury Department during the 1990s.
Summers is best known for the sexism controversy which cost him the presidency of Harvard in 2006. But 15 years earlier he gained infamy as an advocate of African genocide and environmental racism, thanks to a confidential World Bank memo he signed when he was the institution’s senior vice president and chief economist: “I think the economic logic behind dumping a load of toxic waste in the lowest-wage country is impeccable and we should face up to that… I’ve always thought that underpopulated countries in Africa are vastly underpolluted, their air quality is vastly inefficiently low…”
After all, Summers continued, inhabitants of low-income countries typically die before the age at which they would begin suffering prostate cancer associated with toxic dumping. And in any event, using marginal productivity of labour as a measure, low-income Africans are not worth very much anyhow. Nor are African’s aesthetic concerns with air pollution likely to be as substantive as they are for wealthy northerners.
Such arguments were said by Summers to be made in an “ironic” way (and in his defence, he may have simply plagiarised the memo from a colleague, Lant Pritchett). Yet their internal logic was pursued with a vengeance by the World Bank and IMF long after Summers moved over to the Clinton Treasury Department, where in 1999 he insisted that Joseph Stiglitz be fired by World Bank president James Wolfensohn, for speaking out against the impeccable economic logic of the Washington Consensus.
Volcker, Summers and a whole crew of similar capitalist economists are whispering in Obama’s ear for a resurgent US based on brutal national self-interest. They need Obama to relegitimate shock-doctrinaire neoliberalism — and in turn, they need Obama’s Africa advisers (like Witney Schneidman) to promote military imperialism in the form of the Africa Command.
Whose advice will prevail?
Can Obama instead hear supporters like Bill Fletcher, Imani Countess and Danny Glover, who made TransAfrica (as one example) a visionary economic justice organisation, by fighting the policies of Volcker and Summers? Can AfricaAction, the Institute for Policy Studies, the American Friends Service Committee, Jubilee USA, ActionAid and other genuine advocates for the continent get a word in edgewise, between fits of cackling from the corporate liberals who think they own Obama? Will the president-elect ever get advice from economists James K. Galbraith of the University of Texas or Center for Economic and Policy Research codirectors Dean Baker and Mark Weisbrot, who correctly read the various financial crises way ahead of time, and whose records promoting social justice would serve Africa far better?
Probably not. So it is vital for Africans to wake up to the danger that the likes of Volcker and Summers represent. Anyone paying attention to the continent’s economic decline since 1980 knows the damage they did, but Obama apparently needs to hear more of their sins against his father’s people before he chooses his Treasury Secretary next week. And while he’s at it, how about a revision of Obama’s utterly neoliberal ‘fundamental objective’ for the continent, which is “to accelerate Africa’s integration into the global economy”?
[Patrick Bond directs the Centre for Civil Society in Durban, South Africa: http://www.ukzn.ac.za/ccs; this article was originally a ZNet commentary.]
Ecuador: A Philosophical Analysis December 23, 2008Posted by rogerhollander in Ecuador Politics, History, Government, Culture, Ecuador Writing, Ecuador: A Philosophical Analysis.
Tags: campesino, Ecuador, ecuador analysis, Ecuador Government, Ecuador history, Ecuador politics, eugene gogol, gotha program, IMF, indigenous, Latin America, lucio gutierrez, luis macas, manta military base, marx, marxist humanist, mpd, neoliberal, nina picari, Pachakutik, roger hollander, wilma salgado
add a comment
(My political writing, I freely admit, has a schizophrenic character. When I am attempting to place an article in a mainstream publication, I have no choice to try to “lay it between the lines.” My major achievement in this respect was the oped piece of mine on free trade published by the Los Angeles Times in October of 2005. In writing to “family and friends,” I am much more free to be explicit about my political revolutionary socialism, but I tone it down there as well – don’t want to turn people off with Marxist terminology [sadly, and for reasons which are too complicated to go into here, this is the reality]. However, I often write for the Marxist-Humanist periodical, “News and Letters,” and it is here where I feel under no compulsion to censor myself. See for yourself the difference in style and content in these various efforts.)
ECUADOR ANALYSIS (June 2003) for News and Letters
What is occurring in Ecuador today is a classic example of the fate of philosophically rudderless progressive political movements. It is characterized by the confusion and bickering within the ranks of the governing coalition (the Patriotic Society Party, organized by Gutiérrez, and Pachakutik, the political wing of the Indigenous movement,), but, above all, by the opportunism of the Right and its capacity to exploit philosophic debility through cooptation.
Colonel Gutiérrez’s dramatic and decisive electoral victory of November 2002 was nothing less than an expression of massive popular discontent with the neo-Liberal status quo. His position as a viable presidential candidate in the first place arose directly and exclusively from his support of the aborted popular coup d’etat of January 2000, that was the culmination of decades of intense political organizing within the Indigenous communities. The uprising was in response to a government that had overseen a major banking collapse which caused the loss of capital equal to the nation’s annual GNP and that was in the process of accelerating the implementation of the IMF’s economic plan for the country. The demands of the movement (which was lead by the Indigenous and campesino communities but included the support of labor and other progressive social organizations) included a moratorium on payment of the external debt, and end to privatization, freezing utilities costs, fundamental restructuring of the nation’s political institutions through popular assemblies, and the reclaiming of sovereignty over the military base at Manta, which is in the hands of the U.S. military.
Both Pachakutik, which was in formal electoral coalition with Gutiérrez, and the Marxist-Leninist backed Movement for Popular Democracy (MPD), which backed the Gutiérrez candidacy, based their support on written and signed agreements that reflected the demands of January 2000.
Gutiérrez’s drift to the right began immediately after his stunning victory in the first electoral round (the pundits had him coming in fourth or fifth). As with so many progressive politicians who begin to taste real power, he felt the immediate need to “assure” the investing community that had nothing to worry about from a Gutiérrez presidency. Many of his supporters, with the naiveté that is a product of philosophical vagueness, saw this as a necessary “tactical” maneuver. They should not have been surprised, however, when his first act as president was to worship at the shrine of Bush and the IMF.
Five months into the Gutiérrez presidency, both the government and, to a degree, the Indigenous and social movements, are in a state of disarray. There have been scandals, nepotism, corruption, ministerial resignations, and a total of thirty-one strikes and work stoppages that have included teachers, public health workers, civil servants and oil workers in the public sector, and workers in agriculture and transportation in the private sector.
The advancement of the neo-Liberal economic agenda and the alignment with Bush and Uribe on the Colombia question are now fixed policies. The pathetic ideology that Gutiérrez employs to mask his treasonous adventure speaks of including all Ecuadorians in the sharing of power, again a traditional approach when so-called progressives take power (e.g., Papandreou in Greece, Mitterrand in France, the NDP in Ontario, Canada). Thus he has given the socially oriented ministries (education, health, social welfare, etc.) to the progressives and the economic ministries (finance, international trade, etc.) to the Right (the chief of whom is Mauricio Pozo, Minister of the Economy, longtime Central Bank functionary and neo-Liberalism true believer). Guess who has all the power, influence and budget.
There has been some bitter sweetness to all this. Nina Picari of Pachakutik, a prominent and respected Indigenous leader, is Secretary of State, to my knowledge the first Indigenous woman ever to hold such a position anywhere. The sweetness is to see an Indigenous person in traditional dress, representing a nation on the international scene, where she is taking leadership on the question of human right for Indigenous peoples. She is no Colin Powell. The bitterness comes from the fact that she lends credibility to a corrupt government that is certain to taint her own credibility in the future and contribute to disunity within her own movement. The same can be said of long time Indigenous leader and fighter, Luis Macas of Pachakutik, who as Minister of Agriculture is making attempts to stop the flow of communal lands to agribusiness; and Wilma Salgado, who, as head of the banking insurance entity, is taking concrete steps to bring a degree of justice to those who lost their life savings.
Those who integrate themselves with apparently progressive governments or popular fronts usually do so based upon the naïve believe that they can do more “good” from within than from without. What they end up achieving is confusion and conflict within the movements they represent. They fail to recognize that it is the masses in motion, not leaders from above, that initiate fundamental social change. In effect, they separate themselves not only from their initial base support, but also from libratory philosophy.
Marx spoke to this in his scathing critique (Critique of the Gotha Program) of the unification of the two German socialist tendencies (one of which was considered to be Marxist) based upon bourgeois and reformist principles with respect to the questions of labor, nationalism and the state; Marx re-enunciated the essential themes of true liberation from the oppression of capital: “the need to uproot the state machinery, the state form, to pose an international not a national viewpoint, the vision of the nonstate to be, ‘from each according to his ability, to each according to his needs,’ and the inseparable relation of theory and organization …”[i] The adoption of
programs of contradictory and incorrect principles render such tendencies which adopt them at
best irrelevant and at worst counter-revolutionary.
Pachakutik has recently reaffirmed its support of and participation in the Gutiérrez government.
It is doubtful, in the light of those who have the real power within the government, that this will be
sustained much longer. However, the longer it is, the greater the damage to popular movements.
[i] Gogol, Eugene, “The Concept of Other in Latin American Liberation: Fusing Emancipatory Philosophic Thought and Social Revolt,” (Lexington Books, 2002) p. 363. I highly recommend this important book by the former managing editor of News and Letters. It takes a sweeping view of the Latin American scene, and speaks to the various dead end paths taken by failed revolutionaries, from Cuba to Nicaragua to Central America, etc.