Emergency Call for a United Front Against Austerity

Webster G. Tarpley, Ph.D.
October 3, 2012

No matter whether Obama or Romney wins the coming presidential election, American working people will face a savage assault on their economic rights starting after the vote. The asset stripper Romney and his sidekick Ryan have openly demanded the shredding of the existing social safety net, while channeling the proceeds to parasitical bankers and hedge fund operators. Obama, using his usual method of deception, has signaled more discreetly his intention of using the hysteria around the alleged Fiscal Cliff to seal a Grand Bargain with the reactionary Republicans at the expense of the American people during the December lame duck session of Congress.

Austerity and Sacrifice Spell Genocide Against Americans

In reality, any demand for more austerity, sacrifice, or cuts in social services on the part of the American people amounts to a demand for genocide — a Nuremberg crime. Real unemployment is now in excess of 30 million people in the United States . Over 50 million people are in the most extreme poverty, with no job, no unemployment benefits, no welfare system, no health care, and only a meager allotment of food stamps to stay alive. And Republicans and Democrats agree that food stamps will be next to go! Other families are facing foreclosures by corrupt robo-judges and robo-signers, as the American middle class is crushed under $1 trillion of student loan debt and $1 trillion of high interest credit card debt. All of this follows a secular decline of almost two thirds in the American standard of living over the last four decades.

Who Will Pay for the World Depression?

As a result of globalization and the world derivatives panic of 2008, the United States and the world are gripped by an economic depression more destructive than that of the 1930s. The central political question today is: Who will pay for this depression? The class warriors of Wall Street want working people, the middle class, and the poor to foot the bill. But justice and economic survival demand that the costs of the Depression be borne by the zombie bankers and hedge fund hyenas who were responsible for the crisis in the first place.

Class Defense Needed

The urgent need is therefore to establish the principle of class defense against the financiers and their retainers both left and right. But how? Obama’s betrayals reveal him as a committed Wall Street puppet. He has sold out the Wisconsin pro-union and recall efforts, and waged a merciless campaign of union busting against teachers. One year after their heyday, the anarchists of Occupy Wall Street have failed to grab any piece of political power. Some deluded individuals thought that Ron Paul might save them, but Ron Paul turned out to be pushing the most fascist austerity of anybody in sight. Any illusions that OWS or the libertarians represented a real alternative have long since collapsed.

The only method that can fill the resulting void is a united front of existing organizations and individuals coming together to cooperate in the fight for an emergency platform of class-based demands. This process must begin in New York City on October 27.

Life and Death Issues for Working Families

Effective intervention begins with fighting demands related to the life or death struggles of working people. The typical working family is beleaguered by threats of foreclosure, the inability to see a doctor, the inability to pay a tuition bill, the lack of a job, the exhaustion of unemployment benefits, the need to win a strike, and other concrete concerns. We must begin here, with a new Frasier-Lemke Act to freeze all foreclosures, immediate institution off Medicare for All, a student loan freeze for at least five years, open-ended jobless payments, and similar measures designed to shift the cost of the depression back onto the Wall Street bankers who are responsible. Process reforms about campaign finance reform and the like are too abstract for the present phase.

“And who will pay for that?”, the reactionaries will ask. Wall Street, like the French aristocrats before 1789, pays virtually no tax — especially on the quadrillions of dollars of buying and selling derivatives and other securities through flash trading, program trading, and high frequency trading. Apply a 1% Wall Street Sales Tax to quadrillions in financial turnover, and federal and state budgets can be replenished to permit the measures just stated. Taxes on individual income or wealth should be considered, but they cannot come close to raising the needed revenue. The answer to the question about where the money will come from is therefore the Wall Street Sales Tax.

Policy, Candidates, and Mass Struggles

The United Front Against Austerity will operate through policy and through candidates, and it will also intervene into mass struggles. In particular, any strike by teachers, policemen, firemen, or other public employees that does not specify that their demands are to be paid for by the Wall Street Sales Tax cannot hope to succeed in the current depression. National Nurses United and other effective unions have understood this. The Chicago Teachers Union was defeated, among other reasons, because they did not fight for this demand. Our approach to any strike will be to offer a program to make the bankers pay for the demands, while at the same time expanding the base of struggle in the population by bringing in potential social allies on the side of the strikers.

Nationalize the Federal Reserve and Issue 0% Long-Term Credit for Infrastructure and Physical Production

The social safety net can and must be maintained by shoring up government budgets with tax revenues extracted from the zombie bankers. But the overburdened federal budget and the bankrupt money center banks are not adequate to finance a broad-based recovery of the real economy by creating new productive plant and equipment and new productive jobs. The credit needs of a recovering US economy can only be met by taking control of the Federal Reserve System and using it as a National Bank. No longer should economic policy be controlled by cliques of bankers meeting in secret; money supply, interest rates, and approved categories of lending must be determined by public laws voted by the Congress and signed by the president. This is what nationalization of the Fed means. Right now, bankers can borrow from the Fed at 0% interest. We need to end that practice and instead create a Main Street Window where companies in manufacturing, construction, energy production, export trade, mining, and agriculture can obtain 0% credit.

Rebuild National Infrastructure and Create 30 Million Jobs

To restart the US economy as a whole, we will need an initial credit stimulus of $1 trillion to be used by the Fed to purchase 0% coupon, hundred-year bonds issued by the states to finance the rebuilding of the nation’s collapsing public works and infrastructure in superhighways and bridges; freight, passenger, and commuter railroads; ports, canals, and water projects; public housing; 1,000 modern hospitals; schools, public buildings, etc.

This infrastructure program will deliver a self-sustaining economic recovery in capital goods and other industries, while creating 30 million new productive jobs at union wages, and bringing the United States near full employment for the first time since 1945.

End Too Big to Fail, Ban Toxic Derivatives

Along the way to recovery, we will need to wipe out large parts of the mass of toxic, bankrupt, kited derivatives which is currently crushing economic activity around the world. The principle of Too Big to Fail must be ended, and insolvent banks must be subjected to bankruptcy liquidation, making sure that their toxic derivatives are wiped out. It is time to return to the New Deal Commodities Exchange Act of 1936-1982, in particular by banning the most dangerous derivatives, including Collateralized Debt Obligations, Credit Default Swaps, and the derivatives which are used to bid up the prices of food and energy. To promote the growth of world trade, we will require a new Bretton Woods System designed to maximize the economic progress of sub-Saharan Africa , South Asia , and the poorer countries of Latin America .

“But who should I vote for?”, some may still ask. Vote for whatever protest candidate seems to offer the greatest bang for the buck where you are, and try to avoid a power monopoly of either party, but do not imagine that mere voting represents an adequate response to the present crisis. It is time to stop looking for prepackaged political alternatives, and to recognize that successful action depends on your initiative in helping real alternatives to materialize.

Above all, understand that it is still possible to win. A year ago in Greece, the opposition to the brutal austerity dictates of the European Commission, International Monetary Fund, and European Central Bank was fragmented and in disarray. But Alexis Tsipras and the Syriza Party proved capable of welding over a dozen organizations, splinter parties, and groups into a single united front, which then went from 4% of the votes to 27% in the course of two elections. Syriza now leads the opposition, based on a program of fighting class-based demands similar to the one advocated here. The current US vacuum in anti-establishment politics could make a similar regroupment even more rapid in the United States over the next six months. It is time to mobilize to seize this opportunity.

See you in New York City on October 27!

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