Sunday, July 5, 2009
The Unemployment Timebomb is Quietly Ticking
By Ambrose Evans-Pritchard
Telegraph
July 4 2009
One dog has yet to bark in this long winding crisis. Beyond riots in Athens
and a Baltic bust-up, we have not seen evidence of bitter political protest
as the slump eats away at the legitimacy of governing elites in North
America, Europe, and Japan. It may just be a matter of time.
One of my odd experiences covering the US in the early 1990s was visiting
militia groups that sprang up in Texas, Idaho, and Ohio in the aftermath of
recession. These were mostly blue-collar workers, ? early victims of global
"labour arbitrage" ? angry enough with Washington to spend weekends in
fatigues with M16 rifles. Most backed protest candidate Ross Perot, who won
19pc of the presidential vote in 1992 with talk of shutting trade with
Mexico.
The inchoate protest dissipated once recovery fed through to jobs, although
one fringe group blew up the Oklahoma City Federal Building in 1995.
Unfortunately, there will be no such jobs this time. Capacity use has fallen
to record-low levels (68pc in the US, 71 in the eurozone). A deep purge of
labour is yet to come.
The shocker last week was not just that the US lost 467,000 jobs in May, but
also that time worked fell 6.9pc from a year earlier, dropping to 33 hours a
week. "At no time in the 1990 or 2001 recessions did we ever come close to
seeing such a detonating jobs figure," said David Rosenberg from Glukin
Sheff. "We have lost a record nine million full-time jobs this cycle."
Earnings have fallen at a 1.6pc annual rate over the last three months. Wage
deflation is setting in ? like Japan. Interestingly, The International
Labour Organisation is worried enough to push for a global pact, fearing
countries may set off a ruinous spiral by chipping away at wages try to gain
beggar-thy-neighbour advantage.
Some of the US pay cuts are disguised. Over 238,000 state workers in
California have been working two days less a month without pay since
February. Variants of this are happening in 22 states.
The Centre for Labour Market Studies (CLMS) in Boston says US unemployment
is now 18.2pc, counting the old-fashioned way. The reason why this does not
"feel" like the 1930s is that we tend to compress the chronology of the
Depression. It takes time for people to deplete their savings and sink into
destitution. Perhaps our greater cushion of wealth today will prevent
another Grapes of Wrath, but 20m US homeowners are already in negative
equity (zillow.com data). Evictions are running at a terrifying pace.
Some 342,000 homes were foreclosed in April, pushing a small army of
children into a network of charity shelters. This compares to 273,000 homes
lost in the entire year of 1932. Sheriffs in Michigan and Illinois are
quietly refusing to toss families on to the streets, like the non-compliance
of Catholic police in the Slump.
Europe is a year or so behind, but catching up fast. Unemployment has
reached 18.7pc in Spain (37pc for youths), and 16.3pc in Latvia. Germany has
delayed the cliff-edge effect by paying companies to keep furloughed workers
through "Kurzarbeit". Germany's "Wise Men" fear that the jobless rate will
jump from 3.7m to 5.1m by next year. The OECD expects unemployment to reach
57m in the rich countries by the end of next year.
This is the deadly lag effect. What is so disturbing is that governments
have not even begun the spending squeeze that must come to stop their
countries spiralling into a debt compound trap.
French president Nicolas Sarkozy, with a good nose for popular moods, says:
"We must overhaul everything. We cannot have a system of rentiers and social
dumping under globalisation. Either we have justice or we will have
violence. It is a chimera to think that this crisis is just a footnote and
that we can carry on as before."
The message has not reached Wall Street or the City. If bankers know what is
good for them, they will take a teacher's salary for a few years until the
storm passes. If they proceed with the bonuses now on the table, even as
taxpayers pay for the errors of their caste, they must expect a ferocious
backlash.
We are fortunate that the US has a new president enjoying a great reservoir
of sympathy, and a clean-broom Congress. Other nations must limp on with
carcass governments: Germany's paralysed Left-Right coalition, the
burned-out relics of Japan's LDP, and Labour's death march in Britain. Some
are taking precautions: Silvio Berlusconi is trying to emasculate Italy's
parliament (with little protest) while the Kremlin has activated
"anti-crisis" units to nip protest in the bud.
We are moving into Phase II of the Great Unwinding. It may be time to put
away our texts of Keynes, Friedman, and Fisher, so useful for Phase 1, and
start studying what happened to society when global unemployment went
haywire in 1932.
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/5742937/The-unemployment-timebomb-is-quietly-ticking.html
Wednesday, April 29, 2009
Article Critique: “New Trends in Democracy and Development: Democratic Capitalism in South Africa, Nigeria, and Kenya” - Rita Kiki Edozie
Edozie uses the theoretical frameworks of political economy and comparative studies to show how the global regimes of capital are having effects on contemporary national democratic politics and how a democratic crisis in each country is associated with an economic crisis. Among these are South Africa’s French Connection Scandal, Nigeria’s Globacom Affair, and Kenya’s Anglo-Leasing Finance Scandal (Edozie 43). According to Edozie, when considering the relationship between capitalism and democracy, one must consider two things: the region’s context of economic development and economic conditions that foster the emergence of democracy, as well as the performance of democratic regimes that speak to the conditions required for democratic stabilization, consolidation, and effective performance (45).
Edozie explains that in the developing world context, the analyses of problems that influence democracy are defined in socio-political, economic, and cultural, terms Edozie labeled as external or extrinsic (47). In the case of Africa, such factors cause significant effects on unevenly developed economic structures in developing democracies. Democratic transitions in which economic and democratic reform occur simultaneously allow for the formation of “democratic capitalism” (Edozie 48). From here Edozie moves into specific examples in the African context: South Africa, Nigeria, and Kenya’s network of democratic capitalism. All three countries serve as important examples of the “phenomena” of democratic capitalism and show how intrinsic features such as liberal democracies and pluralism, along with extrinsic features such as global laissez-faire capitalism are contributing to a crisis of democracy (49). These three countries were selected because they are among the wealthiest of African economies on the continent. However, compared to other advanced industrial democracies throughout the world these African countries are relatively poor (Edozie 49).
Beginning with South Africa, the crisis of democracy is attributed to the second election and the assumption of Thabo Mbeki as the executive power. After his rise to power, the ANC become more centralized and dominating and “talking left while acting right” (Edozie 50). Others such as Jacob Zuma further tarnished the name of the ANC by illegally benefitting from a multibillion dollar arms contract, or the “French connection” as Edozie terms it. The tension originally began as a power dispute between Jacob Zuma, the Deputry President of the ANC and Bulelani Ngcuka, head of South Africa’s Directorate of Special Investigations. Ngcuka illegally benefitted from an arms trade deal with his financial partner Schabir Shaik, the director of the Nkobi Holdings and the African Defence Systems (Edozie 56). Tension built within the party as those with different ideologies (pro-reform vs. traditional revolutionary beliefs) clashed. Such internal conflict made it impossible for the ANC government to focus effectively on the issues of South Africa such as the HIV/AIDS epidemic and unemployment among others. and put democracy at risk.
Next Edozie moves onto Nigeria and its incumbent ruling party, the People’s Democratic Party (PDP). In Nigeria much of the political tension was caused between the battles between the country’s legislature and the executive. Impeachment charges were brought against then President Obasanjo and then counter charges against key legislators. Later on when Abubaka won the presidency, tension arose between the Southern Christians and the Northern Muslims. More pro-economic reform policy was pushed by the executive, putting more emphasis on personal power politics and the ideology of Nigerian ethno-regionalism (Edozie 50).
Under the NARC regime Edozie elaborates on the Globacom Affair. This affair had international connections, and very heavy relations with the US Department of Justice, the FBI, and Congressman William Jefferson. The Nigerian Presidency claimed to have been acting on behalf of the FBI to investigate the Vice President involvement in the laundering of money from privatization program funds and using them to purchase shares in Globacom and other US ‘front’ companies (Edozie 54). Such accusations of scandal, money laundering, and corruption are never conducive to democracy, and to accuse a President of those wrongdoings truly damages democracy in Nigeria.
Finally Edozie elaborates on the crisis in Kenya and the historic transition election in 2002 that brought President Mwai Kibaki and the National Rainbow Coalition Party (NARC) to power. With Kibaki’s ascension to power came Kenya’s adaptation of nurture capitalism in democratic politics. In 2003 a sensational corruptions scandal was discovered in Nigeria, now known as the Anglo-Leasing Finance Scandal. Its major players included NARC, President Kibaki, and a host of his other key ministers. The government of Kenya wanted to replace its passport printing system and sources its bids from international companies. A French firm quoted the transaction at 6million Euros, and a British firm, Anglo-Leasing Finance, quoted 30 million dollars. The scandal happened when the contract was awarded to Anglo-Leasing, which then sub-leased the contract to the French firm for 6 million dollars. NARC ministers were implicated but no charges were brought against them (Edozie 58-9). When the people can’t trust their own elected officials due to monetary scandal, democracy is in danger indeed.
Edozie’s collection of data for the three countries suggests that the democratic crises experienced by each country are linked to national and global economic structures including elites, electorates, and capitalist interests (60). These developing countries more aggressively “seek business investment for the purpose of economic growth and poverty reduction” (Edozie 61). But because of this, they tend to turn into nurture capitalist economies because they must rely on large domestic and international corporations who exploit the people of these countries. The governing bodies of these countries tend to support no-reform policies rather than economic reform because they realize how harmful such polices are to the welfare and interests of the people. Even still, since economic policy almost always presides with the executive and elite who are loyal to the central banks and creditors, they tend to form political majorities in parliament mobilized to support the technocratic, pro-reform economic policy (Edozie 62). Therefore, the interests of the people are never really given a chance.
Edozie’s evidence showing that people of these countries are demanding more than just democratic representation (such as suffrage, entitlements, or political rights) is her overall strength. She does not say that the political parties in South Africa, Kenya, and Nigeria have taken part in corrupt practices, but gives specific evidence of their wrongdoings as well as shows how the people reacted to them. She uses the labor strikes, demonstrations, riots, and militant conflicts of the people to show that constituencies in all three countries are demanding democracies that provide the redistribution of the already scarce resources (Edozie 62). Democratic capitalism is being rejected by the people. The future of the countries depend on whether or not each country can get beyond their crises through peaceful political means. In the case of South Africa it may mean allowing other parties than the ANC to have a share in the political process of the country. Similar are the cases in Nigeria and Kenya where there is a need to create a multi-ethnic, multiparty systems that foster national development and equal access to material wealth for everyone, rather than just the elite few.
Works Cited:
Edozie, Rita Kiki. “New Trends in Democracy and Development: Democratic Capitalism in South Africa, Nigeria, and Kenya.” Politikon. 35:1, 43-67.
Saturday, April 25, 2009
THINK BEFORE YOU DRINK: WHAT YOU SHOULD KNOW ABOUT BACARDI
Rock around the Blockade, which campaigns in solidarity with Cuba, has launched a Boycott Bacardi campaign to highlight the organised attempts by the Bacardi company to undermine the Cuban Revolution – a stance belied by its publicity for its apparently ‘Cuban’ rum.
In advertising its lead brand white rum, Bacardi plays on its Cuban roots, misleading drinkers into believing that Bacardi still has some links with the island. In fact the Bacardi empire is based in the Bahamas and the Bacardi company broke all ties with Cuba after the Revolution of 1959, when its cronies in the hated Batista dictatorship were overthrown by a popular guerrilla movement led by Fidel Castro and Ernesto ‘Che’ Guevara.
Since then the Bacardi company has backed illegal and violent attempts to undermine the Cuban Revolution, including funding the Cuban-American National Foundation (CANF), a virulently anti-Castro right-wing exile organisation based in Miami, which has been responsible for systematic acts of terrorism against Cuba. Bacardi’s lawyers also helped draft the US Helms-Burton Act, which extends the United States’ blockade of Cuba to third countries, in breach of international trade law. So central was the role of Bacardi’s lawyer, Ignacio E Sanchez (a CANF member) in establishing Helms-Burton that US Senator William Dengue said the law should be renamed the Helms-Bacardi Protection Act.
The Helms-Burton Act was designed to tighten still further the United States blockade of Cuba. The blockade prevents the sale of food, medicines and other essential supplies to Cuba and threatens other countries (including Britain) if they trade with Cuba. It has been estimated that the blockade has cost Cuba over $40 billion in lost production and trade. Every year the US blockade is overwhelmingly condemned by the United Nations.
The blockade is responsible for severe shortages and suffering among the Cuban people. For instance, the prestigious American Association for World Health (AAWH) reported in 1997 that the US blockade is contributing to malnutrition and poor water quality in Cuba and that Cuba is being denied access to drugs and medical equipment which is causing patients, including children, to suffer unnecessary pain and to die needlessly. The AAWH gave examples of a heart attack patient who died because the US government refused a licence for an implantable defibrillator, of Cuban children with leukaemia denied access to new life-prolonging drugs and of children undergoing chemotherapy who, lacking supplies of a nausea-preventing drug, were vomiting on average 28 times a day.
The AAWH concluded that a humanitarian catastrophe had been averted only because the Cuban government has maintained a high priority for a system designed to deliver primary and preventive care to all its citizens. It is worth recording that, despite the effects of the blockade, Cuba last year received a World Health Organisation (WHO) award for meeting all the WHO targets for all countries by the year 2000 – the only country so far to have done so.
This is the humane, socialist system that Bacardi seeks to destroy.
Through its support for the blockade and its funding of CANF, Bacardi shares the responsibility for the suffering imposed on Cuba over the last 40 years by those who refuse to accept the socialist path chosen by the Cuban people. At the beginning of June 1999, the courts of Cuba issued a lawsuit against the US government and its representatives for human damages as a result of aggression perpetrated against Cuba for the last 40 years, based on witness statements and recently declassified US government papers. These crimes include the destruction of ships and civilian aircraft, biological and guerrilla warfare, the firebombing of factories and crops, assassination and the Bay of Pigs invasion of Cuba by US-trained mercenary troops in April 1961. The death toll from these activities is set at at least 3,400 Cuban citizens. These are the sort of terrorist acts supported by the Bacardi empire.
Not content with this, Bacardi has now resorted to stealing the Havana Club label. Although the blockade means that Cuban rum cannot be sold in the USA, in 1974 Cubaexport registered the Havana Club trademark there to prevent its use by other companies. The rights to the trademark were bought by the French company Pernod Ricard when it set up a joint venture with Havana Club Holdings in 1994 - in the face of threatening letters from Bacardi.
In 1996, Bacardi started illegally marketing its own Havana Club. Pernod Ricard sued. But, thanks to a section (section 211) hastily tacked onto last year’s US budget after frantic lobbying by Bacardi’s lawyers, Bacardi won. Section 211 arbitrarily stipulates that no court in the USA may recognise or in any way validate any claim regarding trademarks and commercial names related to properties ‘confiscated’ by the Cuban government. Bacardi claims Havana Club uses former Bacardi assets nationalised by Cuba in 1960. Section 211 contravenes international trade law, and Pernod Ricard is taking the case to the World Trade Organisation. As Castro pointed out, ‘I hope no one will now complain if we start marketing a Cuban Coca-Cola.’
Boycott Bacardi!
The Boycott Bacardi campaign launched by Rock around the Blockade will use petitions, protests, leaflets, stickers and direct action to expose the truth behind Bacardi’s ‘Cuban’ image and persuade consumers not to buy Bacardi. People throughout Britain will be asked to pledge not to buy any Bacardi products and pubs, clubs, student bars and shops will be asked not to stock them.
The campaign aims to threaten Bacardi’s profits and force them to get off Cuba’s back. It will build on the success of similar campaigns against other multinational companies involved in inhumane activities, such as that against Nestle for promoting powdered baby milk in underdeveloped countries and that against Shell for its involvement in atrocities committed against the Ogoni people in Nigeria. These campaigns attracted worldwide support and forced the companies involved to reconsider their policies.
Already a number of student bars and pubs have decided to make a stand against Bacardi’s activities by no longer stocking Bacardi and replacing it with Havana Club, a genuine Cuban rum whose sales bring much-needed hard currency into the Cuban economy. The challenge from Havana Club worldwide has left Bacardi sales down an estimated $25 million since 1990.
Don’t drink Bacardi – it’ll leave a bad taste in your mouth!
For further information contact Rock around the Blockade
c/o FRFI, BCM Box 5909, London WC1N 3XX
e-mail: rcgfrfi@easynet.co.uk
Monday, April 20, 2009
"Really Really Free Market" and State News Response by Allison Voglesong (YDS Co-Coordinator)
Got a good idea for this Really Really Free Market? Join the facebook group and let us know you plan to make it happen. There are no official organizers, so come join the horizontal effort to make cool stuff happen.
Saturday, April 25th
Valley Court Park, East Lansing
10 am -- 3 pm
Students Protest In-State Tuition Increases
Response by Allison Voglesong
Here's the VIDEO, which is a little better to clarify:
THE QUOTE IN THE PUBLISHED ARTICLE is a startling misrepresentation of my statement, particularly considering that the original comment I made regarding "keggers" was made in jest. The reporter asked me to repeat the point I had made to another protester that was not put into context in the article. More frustrating is that the young lady asked me to repeat myself and I made it clear to her that I was not suggesting our strategy to gain student interest in protesting the tuition increase was to throw keggers to get names on petitions.
Quite simply I am disappointed that more students show more interest in assemblies like "Cedarfest" and less interest in assembling to confront real problems that directly affect their ability to go to college. What was the point of Cedarfest that got so many people involved? Observing the frequency of "keggers" and their popularity, I find it discouraging that tuition is treated with such apathy here at MSU. Sadly, the State News Reporter, Ursula, did not choose to include that point when noting my comment about the appeal of "keggers" to large numbers of students. My bottom line is that it's too bad more students don't care and/or aren't vocal about this tuition issue. How do we get more students interested (at the very least) in what is going on with their school and their investment in their education? I think that point is well represented by my comments towards the end of the video.
If there are any responses, first answer the underlying question I'm trying to address. What is it that students respond to best or most often when assembling together? I'd love to know how to get more students excited about making a difference to encourage university transparency and accountability. It's too bad the tuition issue in itself isn't exciting enough.
Allison Voglesong
James Madison 2010
Major International Relations
Political Economy Specialization
Co-Coordinator, MSU Young Democratic Socialists
Member, Roosevelt Institution
Tuesday, April 14, 2009
Poll: Many Americans prefer socialism over capitalism
This poll made our day.
According to a recent Rasmussen Report, only 53 percent of American adults believe capitalism is better than socialism.
Not a very good spread for the profits-before-people, greed-is-good crowd. Ayn Rand must be rolling in her grave.
These numbers of course reflect the deep, transformative moment we are living in. An economic depression is a powerful force for people to experience, leading them to question the system that got us here.
Then there is the 20 percent that say socialism is better than capitalism, according to Rasmussen. Another wow! Twenty-seven percent are not sure which is better.
As the population gets further away from the Cold War years, the more they are open to socialism. The under 30 population is essentially divided: 37 percent prefer capitalism, 33 percent socialism and 30 percent are undecided.
Thirty-somethings are a bit more supportive of the current system with 49 percent for capitalism and 26 percent for socialism.
But the ones over 40 strongly favor capitalism, and just 13 percent of those believe socialism is better. What happened to the radical baby boomers?!
As you may imagine, those who have money to invest chose capitalism by a 5-to-1 margin. But for the rest of us who have no money to invest – a quarter of us say socialism would be o.k. Only 40 percent of non-investors think capitalism is better.
These are amazing statistics considering Rasmussen did not define either capitalism or socialism in their questions.
In an earlier survey by the polling firm they found, 70 percent of Americans prefer a free-market economy. When using the term “free market economy,” Rasmussen asserts, it attracts more support than using the term “capitalism.”
“Other survey data supports that notion. Rather than seeing large corporations as committed to free markets, two-out-of-three Americans believe that big government and big business often work together in ways that hurt consumers and investors,” the poll summary stated.
Imagine how Americans would react if truly a national conversation was had on the benefits of socialism. Right now most Americans see it as a “government-managed” economy and they aren’t convinced the government could do any better than the corporate royalty, according to further poll findings.
Not included in the current popular view of socialism is democratization of the economy – where representatives of all communities, unions, schools, etc., would actually be involved in steering economic policy and decision making on all levels – micro and macro.
Recently, a colleague of mine, Sam Webb, the chair of the Communist Party said of the current economic and political situation:
“Is there any reason to think that millions in motion can't transform this country and world into the just, green, sustainable and peaceful "Promised Land" that Martin Luther King dreamed of?
“It would be a profound mistake to underestimate the progressive and socialist potential of this era. The American people have a once-in-a-lifetime opportunity within their reach.”
While polls are just a snapshot of a very fluid and dynamic process of what people think, the more long term forces of the economy are already having this profound effect.
Monday, April 13, 2009
Dyson Visits, YDS Documents and Interacts
From the Left (no pun intended): Nicole Iaquinto, Co-Founder MSUYDS; Michael Eric Dyson (top), Professor of Sociology, Georgetown University; Michael Davidson (bottom), MSUYDS member; Allison Voglesong, Co-Coordinator MSUYDS
Many a YDS member came to MSU's Kellogg Center to fill the Big Ten room on April 9th to hear Dr. Michael Eric Dyson speak at the 2009 Race in 21st Century America 6th National conference. Dyson went above and beyond the theme of "Health Care and Communities of Color," delivering (and occasionally singing) a rousing address well into the night. Participants were given the opportunity to dialog with the guest, and YDS members stuck around to snap this photo at the end of the night.