Webster G. Tarpley, Ph.D.
February 20, 2011
Washington DC, Feb. 20, 2011 – After four decades of disillusionment, and demoralization, disorientation and rout of the labor movement, the mass strike is once again abroad in the land. In dozens of state capitals, reactionary Republican governors and runaway legislatures, trading on the primitive slogans of the astroturf “Tea Party” movement, and controlled by sinister billionaires like the Koch brothers, are attempting to implement their lunatic agenda of tax cuts and deregulation for the super-rich, while attempting to shift the costs for Wall Street’s world economic depression onto the backs of working people. The reactionary attack is now so ferocious that it is goading increasing numbers of American working people into actions of self-defense, leading US workers to put aside the apathy and passivity which have prevailed in the labor movement since the Nixon administration.
In a move of unusual barbarism and savagery, Republican Governor Walker of Wisconsin is attempting to loot the wages and pensions of state workers, while at the same time stripping them of the right to collective bargaining which they have exercised for many decades. The workers, students, and citizens of Wisconsin and surrounding states have responded to Walker’s challenge by occupying the state capital and maintaining a continuous presence in downtown Madison. The situation, bearing certain formal similarities to Tahrir Square in Cairo, is now a focus of national and international attention.
De Facto General Strike of the Wisconsin Public Sector
For the first time in a very long time, the American people are fighting back, waging class defense against the merciless class hatred and class warfare coming from the plutocratic 1% who own almost 40% of the total assets of this country, while the bottom 40% of Americans own less than 1%. The Wisconsin public unions are in a de facto general strike, shutting down schools and other offices, and enlisting other segments of the population in their support. The national media, engaged at the moment in a cheerleading campaign in favor of CIA destabilizations across the Middle East, are hesitating to condemn the strikers until they get a pretext.
It is imperative that the Wisconsin public sector unions win their fight, and force Governor Walker to back down. But already, their union leaders and Democratic politicians have unilaterally given up on defending them against the wage and pension prongs of Walker’s class war assault. This preventive surrender is very unwise, to say the least. Why not wait for concessions from Walker before giving up anything? If the labor movement refuses to try to defend even the existing reduced standard of living of US workers, then no success will ever be possible.
The biggest problem for the Wisconsin public sector workers is that none of the leaders, so far as is known, has had the ability to propose a broader program than just the idea that state workers who have collective bargaining should be allowed to keep it. This is true and right, but it is also far too narrow, and will not be politically successful over time. Successful movements cannot simply advance the interests of their own limited group. They have to articulate a broader interest of the whole society, in which disparate strata of the population can see their own aspirations being expressed. The Wisconsin workers are doing this implicitly, but now they must do it explicitly, for all to see.
Who Will Pay for the Depression – Wall Street or Working People?
The big question right now is, “Who will pay for the depression?” Will it be the Wall Street parasites, who caused a crisis and who have insisted in an obscene display of $150 billion of bonuses in 2010, or will it be working people and the middle class?
If Wisconsin public-sector workers don’t want Governor Walker to flay them alive, they need to come up with some policy answers. If they don’t want the state budget to be balanced at their expense, and they need to specify where indeed the money should come from. Is there no significant mass of wealth which is currently untaxed, where a modest levy might provide the revenue to get the state out of its budget difficulties?
The Wall Street Sales Tax the Key to Labor Victory
There is: it is the financial transactions of banks, hedge funds, and brokerages, in the form of derivatives, foreign exchange, stocks, bonds, and other financial instruments which are universally exempted in this country from the state sales taxes which everyone else pays when they purchase the necessities and amenities of daily life, from consumer electronics to a car or a pair of shoes. A 1% tax on all financial transactions, which is well within the power of the state of Wisconsin to impose, would provide hundreds of millions or billions of dollars of new revenue and remove any pretext for the current assault on state workers. Right now, we repeat, bankers and hedge fund operators pay absolutely no tax on their daily turnover of trading volume, which can easily reach into trillions of dollars, even in a state like Wisconsin. They need to start paying a Wall Street Sales Tax.
Governor Walker says the state is broke and cannot afford to pay current wages and benefits. Since we are in a world economic depression, his argument is plausible. He also says that businesses and families cannot pay more in taxes. In many cases, although not all, this is also true. But the transactions of financial firms and banks represent a cash flow which is currently not taxed at all. Surely, if Governor Walker and so many commentator wants to talk about shared sacrifice, a 1% Wall Street sales tax on this turnover cannot be too much to ask.
Simply put, if the Wisconsin cops, firemen, teachers and other state workers forcefully demand the Wall Street sales tax as an indispensable reform, they can win. Without the Wall Street sales tax, they are very likely to be defeated. If you tell a reactionary that state workers should not have their wages and benefits reduced, the reactionary is likely to ask where the money should come from. The Wall Street Sales Tax is the one answer which puts the reactionary on the defensive, and forces him to defend the most hated group in American society today – the Wall Street zombie bankers who have shown no gratitude for the bipartisan $4 TRILLION bailout they received from the US Treasury and the Federal Reserve.
An Economic Program for Labor Victory
The state workers should build a program of demands along the following lines:
1. Trade union rights for all. This means for everybody, not just for state workers. It implies a serious commitment by trade union bureaucrats to organize the 93% of the private sector who currently have no union representation. It also implies a commitment to organize the unemployed, including most emphatically undocumented workers or illegal aliens. If the labor movement has nothing to offer to immigrant workers, they are absolutely guaranteed to show up as strikebreakers in the pay of the reactionaries – so choose which you prefer. Trade union rights need to be anchored in federal legislation by returning to the Wagner Act of 1935, and by repealing the infamous Taft-Hartley Act, which condemns many states to low-wage backwardness in a race to the bottom under reactionary “right to work” laws.
2. No cutting, no gutting, no layoffs. Fiscal austerity and budget cuts represent national suicide, condemning the United States to permanent inferiority and immiseration as dynamic powers like China dominate the world stage. No more firing of state workers or private-sector workers, since unemployment is now about 25% in real terms, meaning a very serious depression. We must reject the recommendations of the various fiscal vampires and austerity ghouls of the Bowles-Simpson Commission. There must be no reductions in Social Security, Medicare, Medicaid, Head Start, WIC, Pell Grants, and the other remaining components of the social safety net. Unemployment benefits must be fully funded on an open-ended basis for the duration of the joblessness of any individual, with special provision for the 99ers whom Obama sold out in his deal with the GOP.
3. With unemployment now reaching 25% in real terms, American democracy is in grave danger. We need immediate measures in the spirit of the Franklin D. Roosevelt New Deal to create millions of productive jobs. We need a new addition of the Works Progress Administration (WPA) and its related institutions, which were able to create 4.25 million jobs during a two-month period in the terrible winter of 1933-1934. We need a new federal agency operating on an emergency basis with the ability to cut through red tape and put people back to work rebuilding this country. We need to build tens of thousands of miles of ultra-modern fast rail. We need to build 1,000 state-of-the-art hospitals in rural America and the inner cities. We need to rebuild the entire Interstate Highway System, and roads and bridges across the country. We need modern energy production, including 100 nuclear reactors. We need to build canals and water systems. We need to fund scientific research for biomedical discoveries, high-energy physics, and a revived space program. A realistic goal would be 5 million new jobs to be created in the next three months, as a step towards the 30 million new productive jobs which would bring the country back to full employment for the first time since 1945.
4. Pay for these programs, especially public workers’ salaries and benefits and the social safety net, with a Wall Street Sales Tax. As the economic recovery gathers steam, the Congress should force Bernanke and the Federal Reserve to stop giving trillions in 0% loans to banks and credit card companies, and instead make that same cheap federal credit available to producers – to the automobile industry, to Silicon Valley, to biotech, to heavy industry, to small business, to farmers, to states building infrastructure — to any business or agency that wants to produce tangible, physical wealth as distinct from derivatives and financial services – thus benefiting all the businesses that Wall Street has been starving of credit, down to local repair shops, dry cleaners, clothing stores, supermarkets, or restaurants.
Expand the Strike Front or Face Certain Defeat
This is a program for economic recovery, and it would allow Wisconsin state workers to build a real united front alliance with the main components of American society, while isolating the financial predators. This program speaks to the needs of public sector workers, private sector workers, union workers and unorganized workers, the unemployed, immigrant workers, students, farmers, small businessmen, executives of industrial corporations, retired people, the US military, and veterans – everybody but the top 1% of bankers. State workers and their supporters need to reach out to each and every one of these groups and organized them for a process of political strike support leading to a mass movement that can actually guarantee the survival and future prosperity of this country.
The general rule for a mass strike process is that any struggle which is not rapidly expanding to include representatives of new additional groups is in immediate danger of stagnation and collapse. Narrow trade union methods will not succeed. Strike support does not mean delivering hot soup to a picket line, it means providing a program and a strategy for victory when before there were none.
As reactionary politicians go, Governor Walker of Wisconsin is evidently an amateur and a bungler. By making such a direct frontal attack on collective bargaining by state workers in Wisconsin, he has stupidly created a broad-based backlash across his state and far beyond, producing a situation in which union leaders and some local officials of the Democratic Party have been forced to fight back. Just before his sneak attack on the public unions, Walker had presided over a $117 million tax cut for corporations. His argument is that any taxes on corporations and the rich threaten to interfere with the process of job creation – a process which is in any case largely nonexistent, as it has been since fall of 2008 at the latest. When the rich get money, they do not spend it on plant and equipment; they rather buy derivatives from Goldman Sachs, or use the cash to set up runaway shops in the low-wage countries of South Asia. But in order to avoid the hypothetical threat of preventing the rich from creating jobs, Walker is eager to destroy concrete, existing public sector jobs. It makes no sense, except to the logic of pure greed.
The Hand of Koch over Wisconsin: The American Legislative Exchange
The current crisis has Koch’s fingerprints all over it. Walker is one of a whole stable of reactionary politicians, including Washington primitives like Senator DeMint, who are controlled by Koch. The assault on state workers nationwide is being coordinated by the American Legislative Exchange (ALEC), which aims at busting state unions. Walker’s Tea Party supporters, such as they arte, were bussed in by Americans for Prosperity, another group controlled by Koch.
Economics 101: Budget Cuts and Fiscal Austerity Lead to Bigger Deficits, Not Balanced Budgets
Austerity must be rejected not only for the humanitarian reason that it kills people, but also because it fails in its own narrow terms of moving the budget towards balance In a depression like this one, the world banking panic caused by the collapse of the derivatives bubble in September 2008 has reduced both effective demand and the scale of overall economic activity, as banks and corporations hoard cash, and consumers attempt to pay off debt. Because of the insane derivatives bubble stoked by Wall Street zombie bankers and hedge fund hyenas using their derivatives, the private sector has atrophied and degraded. This means that a very large part of the surviving economic activity is represented by the public sector, in other words government at all levels. Under these circumstances, cuts in government spending radically reduce the remaining economic activity, so that production falls, unemployment rises, and the government must step in to provide unemployment benefits. Government workers paying taxes and consuming goods are transformed into jobless. The result of all this is that government deficits rise, rather than being reduced. That’s right: under the depression conditions, budget cuts in public worker layoffs lead to bigger and bigger deficits, not progress towards balanced budgets.
Budget Cuts and Austerity Do Not Work in a Depression – From Herbert Hoover the Arnold Schwarzenegger
Ask the infamous Herbert Hoover, since this is exactly what he tried to do – balance the budget in a depression using cuts. Or ask the widely hated Arnold Schwarzenegger, who mercilessly cut the California budget during the last several years of his administration, only to find that the more he cut, the bigger the deficit grew in the following year. Or, take the case of Germany 1930-33, just before Hitler’s seizure of power. Chancellor Bruening cut some 20% out of the German national budget, but tax revenues kept falling, unemployment kept growing, production kept falling, and the depression kept getting deeper. Bruening never did get out of the Depression, but he succeeded in destroying the German political system and opening the door to a Nazi mass movement and all the horrors of Hitler. These are examples of where austerity policies like those advocated by Governor Walker have led historically. What need is there to repeat this exercise in cruelty and futility?
Stop calling them “conservatives” – they are reactionaries and proto-fascists
News commentators persist in applying the misnomer of “conservative” to the strikebreaking forces now mobilizing in Wisconsin and many other states. This is scientifically inaccurate, and also a huge public relations gift to the union busters. In Wisconsin in particular, public-sector unions have had the right of collective bargaining for more than half a century. The forces controlled by Koch and his ilk would now like to turn the clock all the way back to the early 19th century, when trade unions were banned as a conspiracy in restraint of free trade. The union busters have no respect for tradition, no regard for the status quo, no interest in organic growth, and no patience with notions of gradual reform in any direction. They are right wing radicals, militant reactionaries, or right wing extremists, destined as such to gravitate into proto-fascist directions as the world economic depression deepens and the special privileges of the legions of greed are threatened.
Whatever the “Tea Party” might have been when it got started in early 2009, it has by now being totally absorbed into the Koch machine, meaning the militant extremist and reactionary wing of finance capital. This is an extremely ominous development. Back in the 1930s, fascist millionaires like Pew of Sun Oil, Pitcairn of Pittsburgh Plate Glass, and DuPont financed strikebreaking organizations like the Silver Shirts, the Sentinels of the Republic, the Crusaders, and the Southern Committee for the Constitution. This is where the Tea Party is headed. When you get right wing goon squads who are paid and deployed against worker demonstrations and strikes by super-rich moneybags, then you are on the road to Italy in 1922 and Germany in 1933, when fascist movements took power.
Obama: Strikebreaker in Chief
President Obama and the Democratic Party can be relied upon to betray the movement of working people as soon as they get the chance. Obama has been waging his own campaign against teachers’ unions from the first day he entered office, although with methods which are slower and more indirect than those used by the unfortunate Governor Walker. Obama calls his union-busting program against the teachers’ unions the Race to The Top, which he is implementing with Secretary of Education Arnie Duncan and such figures as the foundation operative Michelle Rhee. All working people need to understand that none of the principal factions of the Democratic Party are on their side, if only because they are all tied to Obama, whose loyalties are with Wall Street. Cuomo in New York and Jerry Brown in California are pushing the same slow death for the state unions, but they are more deceptive than Walker.
The retreat of American labor began with the General Electric strike of 1969, followed by the Nixon policies of Phase 1 (wage controls), Phase 2, and Phase 3, which started unions on the path to defeat. Jimmy Carter regarded unions as just another special interest with no claim on the loyalty of the Democratic Party, and Obama represents the same approach. The retreat became a rout when Reagan busted the air traffic controllers’ union PATCO in 1981, and since then unions have been continuously on the ropes. Under Bush, millions of productive jobs were destroyed. Obama promised the unions card check to facilitate organizing, but has delivered absolutely nothing. The rebirth of labor ferment is therefore one of the most hopeful signs we have seen in many decades. But right now the reviving labor movement lacks the two main ingredients necessary for victory – an economic program and an organizing strategy capable of mobilizing the entire US population, way beyond the narrow confines of today’s shriveled unions ranks. These are the two urgent tasks which must be addressed.
General Strike Against Anti-Worker Policies, Austerity Psychosis
The US may soon be ripe for a nationwide general strike against austerity, layoffs, unemployment, and budget cuts. Obama and Boehner went to carve the federal budget, reducing vital services and attacking the entitlements which are the economic rights of Americans. Walker in Wisconsin, Kasich in Ohio, Scott in Florida, Christie in New Jersey, Perry in Texas, Brewer in Arizona, McDonnell in Virginia and many more are leading a drive to reduce the United States to a low-wage nation of super-exploited coolies and serfs. A general strike could convince their backers that their methods are too dangerous, and generate a real backlash. Rich Trumka, are you listening over there at the AFL-CIO? Where is your call for a general strike against austerity, Rich? Put it out soon, Rich, or the movement might just sweep you aside.
Turn Any GOP Government Shutdown or Default into a General Strike
If DeMint, Ryan, and the rest of the Koch brigade in Congress insist on shutting down the US government or driving it into bankruptcy default in March, they will be showing that their rhetoric about maintaining government services in Wisconsin or anywhere else is a pack of lies. At that point, the response of the American people should be to turn the GOP’s government shutdown into an open-ended nationwide general strike of the public and private sectors around the demands listed above. Maybe that will give Wall Street something to think about. For the first time in many decades, class conflict in the United States shows signs of becoming a two-way street.