Saturday, May 15, 2010

Greek government announces major pension cuts

Greek government announces major pension cuts

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On Tuesday, the Greek government announced a massive cut in pension benefits. The bill was prepared in consultation with International Monetary Fund (IMF) and European Union (EU) officials in a cabinet meeting the night before.

The measure is the latest in a series of cuts carried out by Prime Minister George Papandreou’s social democratic government, following the outbreak of the Greek debt crisis. It comes on the heels of a nationally televised May 2 announcement of a €30 billion austerity plan, including massive wage cuts, sales tax increases, and privatisations, in exchange for a joint IMF-European bailout.

The law raises women’s retirement age from 60 to 65, to match the age for men, and raises the required pay-in period to receive a full pension from 35 to 40 years. It institutes a 6 percent pension cut penalty for every missing year. The government aims to raise the effective average retirement age from 61.4 currently to 63.5 by 2015, while still allowing the government to assess penalties for early retirement.

The basic state monthly pension is to be cut 10 percent, from €400 to €360 (roughly US$450 at current exchange rates). Retirees often supplement the state pension with savings organised through their workplaces, though several of these pension funds have gone bankrupt and have been taken over by the state. The 13 pension funds now run by the state will be merged into 3 by 2018 to “generate savings,” that is, cut pensions.

Pension benefits will also be reduced by basing them on pensioners’ average pay over their working life, as opposed to their final pay at retirement—which is typically much higher.

Starting in 2014, pension benefits are to be indexed to Gross Domestic Product (GDP)—that is, the country’s economic growth. With Greece’s economy in a profound slump, and facing the impact of huge wage and job cuts, this is a recipe for further massive cuts.

Other measures include limiting the list of “arduous” professions that allow early retirement and toughening guidelines for disability pensions. Unmarried or divorced daughters of deceased civil servants, bank employees and military staff will lose their pensions at the age of 18—a measure affecting 40,000 women.

The government plans to save a further €3 billion through the existing pension freeze, by increasing taxes on pensions of more than €1,400 a month by 5-10 percent, and by cutting holiday bonuses.

As the law was announced, Papandreou spoke at an event of the Hellenic Federation of Enterprises (SEV) in Athens, defending his government’s collaboration with the IMF and EU. He said, “A basic precondition for Greece to exit the crisis is for all of us to work together. We all have the opportunity to leave behind the Greece of yesterday, of parasitism, underdevelopment and of social injustice.”

Papandreou addressed the business leaders just 24 hours after he attended an all-party “national council” on the economic crisis. The meeting was also attended by the New Democracy opposition and the right-wing Popular Orthodox Rally.

As social discontent increases in opposition to the brutal austerity measures imposed by the Papandreou government, sections of the Greek media are becoming more vocal in their calls for more authoritarian forms of rule. Writing in the Eleftherotypia newspaper on Wednesday, commentator Tassos Telloglou proposed a new government that would suspend the constitution and basic democratic rights.

He wrote, “This government has to have emergency powers. To put it more simply, the country would be in a state of emergency without dictatorship, but certain articles of the constitution would have to be taken out or interpreted appropriately. The ability must be there for demonstrations such as those of [Communist Party-linked trade union] PAME in Peiraeus to be declared illegal straight away through court proceedings, the right to strike must be curtailed but also the right for protests that cut across sensitive areas…. Papandreou is inappropriate to lead such a government.”

In Kathemerini, Stavros Lygeros doubted that the conservative opposition New Democracy represented a reliable alternative to PASOK. Lygeros wrote: “Popular discontent is continually intensifying, threatening to sweep away the political system. New Democracy does not constitute an alternative solution.” However, he added, “there is the possibility of initiative outside the political system. For a long time, business magnate Andreas Vgenopoulos has been expressing his political views. Even though he denies it, there are many who say that he is preparing the ground for his entrance into the political arena.”

Vgenopoulos is the chairman of the Marfin Investment Group. On May 5, three employees were killed in an unexplained firebombing of a Marfin Egnatia bank in Athens. Vgenopoulos is also a major shareholder of the Panathinaikos football club and the chairman of Olympic Air. He is estimated to have a net wealth of €800 million. He recently made a statement to the effect that “politicians” are “responsible for country’s bankruptcy”.

At the same time, the various middle class organisations in Greece are carrying out a historic betrayal of the working class by cementing their support for Papandreou as he slashes the living standards of the working class. Their main concern is to prevent any independent political mobilisation of the working class against the cuts.

Renewal Wing, a faction of SYRIZA (the Coalition of the Radical Left), is calling for the party to enter into a partnership with the Papandreou government. A report in SYRIZA’s newspaper, Avghi, stated that the leadership of SYRIZA had discussed the proposals of the Renewal Wing at a recent meeting. Spyros Lykoudis said that SYRIZA would not oppose the line of the Renewal Wing, stating, “We refuse to go back to being a monolithic party.” Avghi commented that the consensus at the meeting was also that there should be no public statements made on the issue.

Sections of ANTARSYA (Anticapitalist Left Cooperation for the Overthrow) are also spreading claims that various establishment politicians will support workers’ interests. In a Tuesday interview with the British Socialist Workers Party newspaper Socialist Worker, Panos Garganas—a leader of the Greek Socialist Workers Party and editor of the Greek paper Workers’ Solidarity—said the political establishment was “cracking.”

He said that elements within PASOK had taken up a struggle against the cuts and called on workers to support them. He added, “A political crisis is developing. Two of the PASOK MPs that were expelled are left-wing and popular—Yiannis Dimaras and Sofia Sakorafa.”

Not content with sowing illusions in PASOK, Garganas maintained that there were also forces within the right-wing opposition party New Democracy, in whom the working class could also put their faith: “Most people believe there are many other MPs who feel the same way. And there is also a split in the right-wing New Democracy Party, which opposes the measures. Dora Bakoyannis, a leading figure and former foreign minister, voted for them and was expelled”.

Capitalist crisis is spreading

Capitalist crisis is spreading

Workers must unite to fight bankers’ attacks

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The big message that the working class should take away from the latest European bailout and the stock markets’ ups and downs is that capitalism is failing as an economic system and the time for workers to open a struggle is now.

European capitalist governments and the International Monetary Fund just had to pledge to put up $980 billion to keep the governments of Greece, Portugal and Spain financially afloat. Fears of imminent government default in Greece and threats of future default by Portugal and Spain prompted the emergency meeting of European finance ministers and strong intervention by Washington.

Sixteen countries use the euro, which is controlled by the European Central Bank, as a common currency. That bank agreed to make or guarantee $575 billion in loans. The larger 27-nation European Union pledged an additional $80 billion, and the IMF agreed to put up $325 billion. This is supposed to cover government deficits of the three southern European countries and other endangered government debt for the next three years.

Gov’t bailout is a bank bailout

The real aim is to make sure that these governments can pay their debts to the banks. So the government bailouts are also bank bailouts, aimed at preventing a global financial collapse of the type that almost took place when Lehman Brothers failed in the U.S. in September 2008.

European banks and insurers are holding $193 billion in debt due from the Greek government. But they also have $240 billion in government debt from Portugal and $832 billion from Spain. Big European banks also have investments in Greek banks that are in danger.

Much of this debt was incurred during periods of economic expansion. Though the capitalist economic crisis has reduced the tax base of the governments, the banks still want their pound of flesh, even if it takes cutbacks in services, wages of government workers, pensions and benefits. Southern Europe is experiencing budget crises and cutbacks similar to those taking place in California, Michigan, Rhode Island, Illinois and many other states in the U.S.

The credit agencies have downgraded Greek government bonds to “junk bond” status, and the credit ratings of Portugal and Spain are falling. That means the bankers and other financial loan sharks of the capitalist world either will no longer lend money to these governments or will charge such high interest rates that the governments can no longer afford to borrow.

But the governments have to borrow in order to pay off debts to the banks that were incurred from previous borrowing. So they are caught in a debt trap that could lead to defaulting on their loans. That is why what is happening in Europe is, at bottom, a bank bailout.

High stakes for Wall St. and Washington

Wall Street and Washington also have a big stake in this affair. The administration put on a full-court press to put together the trillion-dollar bailout. President Barack Obama was on the phone with German Prime Minister Angela Merkel, pressuring her to give up opposition to the bailout. German capital will have to be a major lender under the plan.

Obama was also on the phone with French President Nicolas Sarkozy. Vice President Joseph Biden met with Spanish Prime Minister José Zapatero. Treasury Secretary Timothy Geithner lobbied the finance ministers, while the Federal Reserve Board promised to supply dollars to various European central banks in currency swaps so they could make payments in dollars, if needed.

The urgency behind Washington’s intervention flowed from the fact that U.S. banks have $3.6 trillion in exposure to European banks, including $1 trillion to France and Germany and $200 billion to Spain, according to the Bank for International Settlements. A string of defaults set off by the default of Greece and other governments would jeopardize U.S. banks and bring a renewed financial crisis on Wall Street.

Furthermore, an economic collapse in Europe could hit U.S. corporations that export to those countries. More than a quarter of the profits of the Standard & Poor’s 500 top corporations come from exports — much of them to Europe. So the Obama administration’s pressure for this bailout was not to save Europe but to save Wall Street and the big U.S. industrialists.

At the end of this financial chain are the workers. The banks have been bleeding the governments of southern Europe. This means bleeding the workers who create the wealth and value that goes into government treasuries and ends up being paid out in interest. The capitalist governments are conduits to transfer wealth from the workers to the bankers.

Now that the governments are in a position of unsustainable debt, the bankers want the governments of Greece, Portugal and Spain to cut back even further on the working class as a price for the bailout.

While the banks in Europe and the U.S. rake in hundreds of billions in profit, in Greece unemployment is officially around 10 percent. It is the same in Portugal and around 20 percent in Spain. This is official unemployment, meaning that, as in the U.S., the figure is far below real unemployment. This is a crisis for the working class — and the bosses want to make it worse.

That is what is driving the heroic and intransigent resistance of the Greek working class, which has taken to the streets to stop the attacks on their pensions, retirement age, wages and general living conditions.

In fact, the Greek bailout was meant to stop the “contagion” of financial default and economic meltdown. But it was also meant to guard against the contagion of class struggle, which could easily grow among the militant working classes of southern Europe.

The Greek working class fought against Nazi occupation and British-backed counterrevolution after World War II. When Portugal’s African and Asian colonies were fighting for and winning their freedom, the working class in Portugal itself had a revolutionary uprising that came to the edge of a proletarian revolution in 1974. Workers in the Spanish state fought the fascist Franco regime and carried out heroic underground organizing for decades.

These three countries constitute the poorest, most class-conscious, militant parts of Europe. A spreading struggle in the south could easily expand to the north, where the workers have been under constant pressure from the German, French and British ruling classes.

Capitalism depends on life support from state

What this latest crisis shows is the complete dependence of the capitalist class in Europe, the U.S. and Japan upon the state as the fundamental prop to keep the system going. The capitalist states have to go to their mints and print money to loan banks and weakened governments just to temporarily stave off catastrophic crises that bring devastation to the workers and the oppressed.

But going to the printing press does not create any value. Only workers create value. The European Union, the European Central Bank, the U.S. Federal Reserve System and the Treasury Department can print money to loan out to save the banks on a temporary basis. But capitalist overproduction, slow growth and economic stagnation are choking the system and creating long-term mass unemployment. Furthermore, the system is always standing on the brink of collapse, as the recent crisis in Europe shows.

Debunking the ‘jobs recovery’

The government and the big business media in the U.S. were hyping the great “jobs growth” numbers just as the European crisis came to a head. That sobered everyone up about the “recovery” of the system.

There were great cheers for the supposed creation of 290,000 U.S. jobs in the month of April. A more sober assessment of these numbers brings little solace to the workers. Of the 290,000 jobs, 62,000 were short-term census work. According to the government, 150,000 new workers enter the workforce every month. So of the 290,000 new jobs created, that leaves just 80,000 jobs for the unemployed.

This doesn’t even put a dent in the number of workers who are unemployed, underemployed or have become discouraged from looking for work and dropped out of the workforce. This figure, called total unemployment or U6 by the Bureau of Labor Statistics, stands at 30 million. In fact, the regular unemployment rate went up from 9.7 percent to 9.9 percent last month, and, more importantly, total unemployment went up from 16.9 percent to 17.1 percent.

There may be a recovery of capitalist profits and business, but it is not bringing the millions of workers back to work. Furthermore, the prospect of a massive rebound of capitalist production and employment is off the historic agenda.

Instead the system is lurching from crisis to crisis. The only way out for the workers is to follow the lead of the Greek working class and refuse to allow the bosses and the bankers to put their crisis on our backs.

The workers should refuse to be enslaved to the capitalist “jobs market,” where they have to sell their labor to some boss every day or face rejection and unemployment. A job should be a right, a political right. If the capitalists cannot give the workers jobs, then the government should guarantee a job or income to everyone who needs it — a job with dignity and living wages.

If capitalism cannot do that, then it is time to get rid of the system.

How Big Oil Bought the Interior Department

How Big Oil Bought the Interior Department

The Salazar Quotient

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Big oil and coal interests seemed to have reached their high point with the re-election of George W. Bush in 2004. He was a well-heeled oil man, as firmly committed to the military seizure of the world’s oil spigot, as he was hostile to the kind of science that spoke about anti-business notions such as global warming. However, the time of big energy was supposed to have faded with the election of Barack Obama to the presidency. Obama hailed the beginning of a new age of political sanity, where the US would be brought into line with global opinion about pressing issues such as carbon emissions and the transition to clean energy sources. Then, a humble Coloradan, with a cowboy hat that seemed permanently affixed to his head, named Ken Salazar ambled to the microphone to accept Obama’s nomination to be the new Secretary of the Department of the Interior (DOI). Somewhere in the Gulf of Mexico, a bird shuttered as the future of its habitat was being sealed by putting big energy back in charge of the one part of government capable of reining it in.

The Early Clashes

Salazar had a long record of clashes with environmental activists while serving as the Attorney General for the State of Colorado in the 1990s. One case with particularly ominous tones, given the current BP-oil spill cleanup, involved Salazar botching the Summitville Mine Superfund cleanup. The then Attorney General claimed that the Canadian-based Summitville Consolidated Mining Corp. would be made to pay for all of the environmental damage caused by their gold mining operation. In the end, Salazar’s inept negotiations and unwillingness to legally prosecute the company meant that millions of dollars in public funds were expended during the cleanup (Counterpunch, 12/18/2008). Salazar allowed Summitville to cut and run.

However, a good track record on environmental issues was not the new administration’s primary criteria as suitable candidates for Secretary of the DOI were considered. Political expediency was the guiding principle in this Obama appointment. Salazar fit the bill. He was likely to fly through confirmation hearings by bringing together an odd coalition of energy corporations and Republican senators preparing to make war against the new administration and big-name environmental groups. What ensued was one part political theatre – the backwoods, cowboy hat wearing Senator with rural sensibilities comes to the capital – and one part pure Washington power politics – yet another example of big corporations installing their representative into a position of decision-making power.

The Appointment

Love-fests during confirmation hearings should immediately raise suspicions. Salazar fulfilled all of Obama’s expectations as the hearings proceeded, winning over even the most obstinate Republican critics of the new administration. Senator Ron Wyden (D-Ore.) neatly summarized the event as, "a full-fledged bouquet-tossing festival" (Denver Post, 1/15/2009). Even Jim DeMint, the politically paranoid Republican Senator from South Carolina, took time off from his campaign to “save freedom” from Obama’s “socialist agenda” to praise Salazar. At first, DeMint was convinced that Salazar was the front man for Obama’s grand scheme to “…cut off America's energy supply,” but he left the hearing convinced that “we're pretty much on the same page" (LA Times, 1/16/2009). Big-ticket environmental groups, such as the League of Conservation Voters and the Sierra Club, also joined the festivities, giving Salazar a score of 100% for his record as a Senator.

Outside of the hearings, things were less cordial. Environmental groups, such as the Center for Biological Diversity (CBD), who had overwhelmingly supported the Obama presidential campaign, viewed Salazar as a “disappointing choice.” Salazar claimed that he wanted “to clean up the mess” left by the scandal-ridden, anti-science Bush administration DOI, but the CBD thought otherwise, viewing his record of having, “…fought against federal action on global warming, against higher fuel efficiency standards, and for increased oil drilling and oil subsidies” as a serious liability.

However, these were the heady days of Obama-mania. Valid criticisms of Salazar from the left were subsumed under the pomp and circumstance of the “anybody but Bush” and “Change We Can Believe In” hysteria. Surely, the thinking went, the new administration would mark a critical break from the Bush regime and a rational energy policy would be one part of the new consensus developing in the now Democratic Party controlled White House. However, as Obama’s Colorado cowboy headed to the DOI, BP had already set up shop in the Gulf of Mexico.

The Contributors

A more critical review of Salazar’s record would have revealed direct links to the oil and coal sector. Since embarking on his career as a public official in 1989, his campaign contribution record is littered with funds from the energy sector including a $4,500 payment from BP (Center for Responsive Politics - CRP). However, Salazar has had two clear monetary benefactors since 1989 – the law firms Sherman & Howard and Brownstein, Hyatt, Farber and Schreck (BHFS). The two have contributed $140,138, a figure that easily dwarfs the next largest donation of $57,652 made by Moveon.org.

Why would two law firms have such an interest in Salazar? A quick look at their client list reveals some answers. Formed in 1892, Sherman & Howard claims to be the oldest law firm in Denver, Colorado. They represent a wide variety of corporations, but the Westmoreland Coal Company (WCC), is of special interest to Salazar’s position at the DOI. WCC is a big coal company that operates five surface coal mines in North Dakota, Montana and Texas and coal fired power plants in North Carolina that generate 230 megawatts of energy.

It’s no surprise that, at his confirmation hearing, Salazar gushed about an innovative energy source that would move the country away from dependence on foreign oil – “clean” coal. "The challenge,” Salazar told Congress, “is how we create clean coal. I believe that we will move forward with the funding of some of those demonstration projects so we can find ways to burn coal that don't contribute to climate change" (Reuters, 2/11/2009). Arch Coal CEO Steve Leer praised Salazar’s “balanced approach” and stated that, “we often worked with him on natural resource issues” (Reuters, 2/11/2009). Arch Coal had also paid the price of admission by passing on a $2,000 campaign donation to Salazar in 2006.

Big oil was not to be outdone by big coal. BHFS offers lobbying as well as legal services to their clients. Delta Petroleum Company contracted BHFS in 2005 and has, since then, spent $960,000 to lobby elected officials on the issue of offshore oil drilling (Center for Responsive Politics). Delta also successfully sued to defend their lease claims to drilling sites in Federal waters off the Pacific coast (Amber Resources Company et al. v. United States). These sites had been leased to the company during the first term of the Reagan presidency, but the company had been blocked from oil exploration by the Federal government and the State of California. When, in 2005, it appeared Delta would finally be able to exercise its drilling rights, a lawsuit was filed by the State of California and several environmental groups claiming that Delta had not filed sufficient impact analysis reports. The suit delayed the exploration, and Delta was eventually compensated for its lease claims as they continued to press their right to offshore drilling via BHFS lobbying efforts.

Enter Ken Salazar. With most of the remaining lawsuits filed by environmental groups during the Bush administration now settled, in March 2010, Salazar and Obama announced a radical expansion of offshore drilling projects all along the Eastern seaboard and in Alaska. This maritime equivalent to “Drill, Baby Drill,” was presented by the DOI Secretary as a “middle-ground” compromise between oil companies and conservationists. For Delta Petroleum, it was lobbying money well spent, as a completely new terrain for exploration was opened because of their political pressure and campaign generosity.

The Lawsuits

Eventually, the malaise of Obama-mania wore off. Then, the lawsuits began. Some of the initial lawsuits suits sought to force Salazar and the DOI to protect one or another endangered animal. First, it was the rapidly dwindling Colorado River Cutthroat Trout. Then the prairie songbird, the Sprague's Pipit, who had been endangered by the degradation of grasslands in the middle of the country and was being disregarded by the DOI. As the lawsuits piled up, environmental groups became accustomed to meeting an Obama administration displaying remarkably similar amounts of hostility to conservation as its predecessor with opposition.

Eventually, the legal action began to target the core of the administration’s environmentally hostile energy policy. On November 16, 2009, the Center for Biological Diversity, the Grand Canyon Trust, and Salazar’s former backers at the Sierra Club filed suit to challenge Salazar’s approval of re-starting uranium mining at a closed mine in the Grand Canyon. The challenge failed and the mining of uranium proceeded in January 2010. Eventually, in May 2010, the Environmental Protection Agency (EPA) was forced to act on the issue and ruled that the mine was being operated in violation of the law since its operator, Denison Mines, failed to notify the agency that it had resumed operations (Associated Press, 5/4/2010). The EPA will issue daily fines but needs action from the DOI to shut down the mine.

The Powder River Basin that links Wyoming and Montana became the next setting for a legal challenge to the DOI. The region had become a hunting ground for coal companies seeking to grab one of the 21 leases offered by the DOI’s Bureau of Land Management (BLM) over the past 20 years. Because of this, the region now accounts for 42% of all the coal produced in the US and 13% of all carbon dioxide emissions. Under Salazar’s watch, the BLM now plans to extend 12 new coal leases in the region. However, as the group Wildearth Guardians pointed out in its lawsuit against Salazar, the region is not certified as a “Coal Producing Region,” which means that the coal companies can escape the normal procedures that require environmental impact analysis reports. The lawsuit remains in the court system while the coal operators continue to mine and pollute the region. Salazar continues to allow them to operate outside of the law (Wildlife Guardians v. Salazar and Abbey, 4/21/2010).

Meanwhile, in the Gulf of Mexico, a Halliburton worker puts on the final additions on the job of cementing BP’s Deepwater Horizon Oil Drilling rig to the ocean floor. A mere 20 hours remain before the rig explodes, creating one of the largest environmental disasters in history.

The Spill

Much has been made of the massive campaign contributions provided to the Obama campaign by BP. Indeed, the CRP reports that at more than $70,000, Obama’s campaign take from BP nearly doubles the next highest recipient. Yet, the criminal act of releasing millions of gallons of oil into the ocean is about more than just following the campaign cash. It is, instead, about how such contributions help to facilitate the gutting of environmental laws, the skirting of regulations and the continuance of a regulatory regime that empowers multinational corporations over and above the needs of the American people and the environment. Ken Salazar is at the center of this.

In April 2009, the DOI’s Mineral Management Service (MMS) provided BP with a “categorical exclusion” from impact studies mandated by the EPA. BP was not alone. A DOI spokesperson told the Washington Post that the agency routinely grants 250 to 400 waivers per year. Much like he had the coal companies in the Powder River Basin, Salazar allowed BP and other offshore drillers to operate outside of the law. Instead of an independent study, the agency relied on BP’s self-assessment, which was heavily colored by the company’s desire to continue production, that the likelihood of a major spill was “minimal or non-existent” (Washington Post, 5/5/2010). In addition, no notice was taken that BP had contracted Halliburton to cement the rig while the company was under investigation for a faulty cementing job that led to a spill in the Timor Sea in 2009.

In the days prior to the spill, BP was using its ample lobbying muscle to push the MMS to extend its waiver, thereby avoiding a new environmental impact study. This proposal would have undoubtedly been accepted by a DOI that, under Ken Salazar’s direction, had been reduced to rubber stamp for big oil and big coal.

The Fallout

In the coming weeks, the Obama administration will, undoubtedly, search for a fall guy to lay off the blame for the BP oil spill. Ken Salazar is a likely and deserving candidate for such a role. Yet, as the oil continues to flow and the ecology of the Gulf region suffers irreparable harm, an accounting must be taken of the process set into motion by the White House itself. BP’s oil spill may be a watershed moment for Obama – an event that so exposes the bankruptcy of an administration that it permanently severs the confidence of the people it aims to govern.

When corporations rule the world, they do so to ensure their own self-preservation through the accumulation and exploitation of natural resources. People get hurt and ecosystems are destroyed, but this is just the collateral damage of the business model. Two simple concepts may offer an alternative to madness of this system – democracy and justice. For democracy to be exercised, new voices, those outside of mainstream politics must make themselves heard at the protest marches and at the ballot boxes – not just in lawsuits. For justice to reign, Salazar, Obama, BP and Halliburton need to be brought before something like the International Climate Tribunal proposed at last month’s alternative Climate Summit in Bolivia. Only then, will a full accounting be made of the damage that decades of capitalist production has done and a new road toward ecological harmony be mapped out.

Taking Back Homes from the Banks: Exercising the Human Right to Housing

Taking Back Homes from the Banks: Exercising the Human Right to Housing

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May has seen an upsurge in local organizations exercising their human rights to housing. Most people recognize that international human rights guarantee all humans a right to housing. With the millions of homeless living in our communities and the millions of empty foreclosed houses all across our communities, groups have decided to put them together.

Organizations across the US are engaging in "housing liberation" and "housing defense" to exercise their human rights to housing. Here are a few examples.

Madison

In Madison Wisconsin, the grass-roots organization Operation Welcome Home helped Desiree Wilson, 24, a mother with small children to move into a vacant house, hook up utilities and change the locks, according to nbc15.com in Madison. The home was vacant due to foreclosure. Bank of America owns the home now. "It's not against the law, "said Ms. Wilson. "This is above the law. It's just so much bigger than me. Housing is a human right."

Operation Welcome Home held a press conference criticizing the billions of dollars in bailouts to mortgage lenders. "We're asking them to turn over the property to the community whose tax dollars are funding what they are doing." One of the spokespersons for the group, Z!Haukness, reminded people that "housing is a human right, no matter what income, no matter what rental history." The group plans more "liberations" of other vacant property.

A local land trust, Madison Area Community Land Trust, says if the activists convince the bank to donate the home the trust can find the resources to turn it into affordable housing. Taking over the vacant foreclosed property is "a brave move" says Michael Carlson of the Madison trust. Carlson told the Madison Cap Times "They're compelling the citizens of Dane County to confront the very real contradictions in the way we provide housing - massive surpluses in the market that led to a collapse in credit and simultaneously people without shelter and permanent affordable housing."

Toledo

A Toledo, Ohio, factory worker, Keith Sadler lost his home of 20 years at a foreclosure sale for $33,000. When it came time to be evicted, Keith had had enough. According to the toledoblade.com, he and 6 friends barricaded the house up to resist the foreclosure eviction. All were all members of the Toledo Foreclosure Defense League. After 5 days the house was raided by the local SWAT team and all were arrested on misdemeanor charges and released.

Portland

In Portland, Oregon, a local group, Right 2 Survive, seized control of vacant land in front of an abandoned school. They set up tents for the un-housed. "This is a celebration because we are taking our rights back, " Julie McCurdy told Take Back the Land. "What we're doing is coming up with the solutions tailored for our community. We are tired of waiting for city hall to come up with revised plans and rehashed ordinances that do not meet the needs of un-housed Portlanders."

Sacramento, Philadelphia, Chicago, Atlanta

A faith-based group has been moving families into vacant homes in Sacramento. The Poor People's Economic Human Rights Campaign moved a family into a vacant home in Philadelphia. The Chicago Anti-eviction Campaign marched to protect a family from eviction and the Malcolm X Grassroots Movement protested auctions of family homes on the county courthouse steps of Atlanta. Other community actions across the country are expected during the rest of May.

Housing as a Human Right

Housing is a human right recognized by a number of international human rights laws. For example, the Universal Declaration of Human Rights, adopted after the Second World War, promised "Everyone has the right to a standard of living adequate for the health and well-being of himself and his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood."

Still, the National Coalition for the Homeless estimates of the number of homeless people in the US range from 1.6 to 3.5 million.

Foreclosures are soaring. Some housing experts say 4 million foreclosures are possible in 2010. There were 3.4 million homes which got foreclosure notices, auction sale notices or bank repossessions in 2009. In the first quarter of 2010, RealtyTrac reported there were 932,000 foreclosures. Auctions were scheduled on 369,000 homes in the same time. Banks repossessed 257,000 homes during that time

Organizations working to exercise peoples' human rights to housing include Take Back the Land and the US Human Rights Network. Both are working with local community organizations to support their campaigns.

Third of plants and animals 'at risk of extinction'

Third of plants and animals 'at risk of extinction'

One third of plant and animal species are now at risk of extinction, a UN report is expected to conclude this week.

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The world's biodiversity is threatened by the economic growth of countries like China, India and Brazil, the study will say.

While Western countries are increasingly aware of the need to protect endangered species, the developing world's appetite for raw materials is destroying vulnerable ecosystems, the report's authors will warn.

Population growth, pollution and the spread of Western-style consumption are also blamed for hitting plant and animal populations.

Species at risk include the fishing cat, as its wetland habitats in India, Pakistan and southeast Asia are converted for agriculture. Maritime ecosystems are under particular threat, with the south Asian river dolphin among the species whose numbers have plummeted due to damming and overfishing.

The latest report – the third edition of the UN's Global Biodiversity Outlook – is based on data obtained from studies in more than 120 countries across the world.

It builds on recent work for the International Union for Conservation of Nature (IUCN) which showed that 21 per cent of all known mammals, 30 per cent of amphibians and 35 per cent of invertebrates are threatened with extinction.

Speaking in advance of the report, Ahmed Djoghlaf, who heads the Convention on Biological Diversity, said that countries had failed to honour pledges to reduce the rate of biodiversity loss.

He said: “The magnitude of the damage [to ecosystems] is much bigger than previously thought. The rate of extinction is currently running at 1,000 times the natural historical background rate of extinction.”

He added: “It’s a problem if we continue this unsustainable pattern of production and consumption. If the 9 billion people predicted to be with us by 2050 were to have the same lifestyle as Americans, we would need five planets.”

BP Releases Oil Spill Video After Pressure From White House and Media

BP Releases Oil Spill Video After Pressure From White House and Media

Clues about what caused oil rig blast emerge as BP releases video of oil leak.

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The video shows the black plume of the oil and a white plume which industry experts said was natural gas escaping into the water.

BP said the video was released only today because the it had not received a request for the video until Monday. In fact, ABC News and other news organizations made numerous requests over the past few weeks for the video. When ABC News reporters were allowed into the BP command center last week, the monitors showing the video had been turned off.

Requests for the video to the White House and the Coast Guard had been referred to BP, because as a Coast Guard officials told reporters today, "the video is BP's."

White House and Coast Guard officials rejected suggestions that they had ceded too much control of the oil spill to BP. "In this case, the Coast Guard encouraged BP to make (the) video responsive to requests available to the press and today they did," the Coast Guard said in a statement to ABC News.

But control of the video, and its powerful images, remained in the hands of BP, under rules agreed to by federal officials over the last several years.

Earlier Wednesday, the initial phase of a Congressional investigation into the massive oil rig explosion and spill in the Gulf of Mexico uncovered new evidence that showed a critical device meant to prevent a disaster had leaks and lacked sufficient force to seal off the well.

Shin Bet blackmails al-Quds students

Shin Bet blackmails al-Quds students

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The Shin Bet is reportedly trying to entice Palestinian medical students to join the Israeli intelligence service by promising entry permits to al-Quds (Jerusalem).

The spying agency allegedly tried to blackmail two fifth-year medical students at al-Quds University who are pursuing internships in Palestinian university hospitals in the city, Israel's English-language Haaretz newspaper said on its website on Wednesday.

A "Captain Biran" who introduced himself as the Shin Bet agent responsible for monitoring the university told the two to report on other students and their activities as a condition for renewing their entry permits, Haaretz reported.

The medical faculty of the university -- located in the village of Abu Dis near East al-Quds -- is affiliated with some of the oldest and largest hospitals in al-Quds and have up to 200 students of medicine, nursing and physiotherapy who need entry permits to enter the occupied city.

Hospital officials file requests to authorities al-Quds' Civil Administration in the settlement of Beit El who at the discretion of the Shin Bet issue permits valid for between three and six months.

One of the two Palestinians in question encountered the recruitment request in mid 2009 after his entry permit into al-Quds was not renewed following his pilgrimage to Mecca. He was then told by the Civil Administration to meet with a Shin Bet coordinator.

In his meeting with Biran, the agent allegedly threatened the student that the Shin Bet could "interfere with your ability to finish your studies," but that if he acceded to "help" him monitor other students, the agency would even grant him entry to the prestigious Hadassah medical center.

The other student met Biren in March, days after his entry permit to al-Quds was confiscated at Zeitim checkpoint outside East al-Quds. He was told that his entry permit had been seized because "some illegal things were found in your bag" and was similarly instructed to report to the Shin Bet about students traveling abroad.

The Palestinian students said they were effectively prevented from choosing a residency specialty and continuing their medical training when they both refused to spy on their peers.

The Shin Bet said in response that the entry permits for the two students had not been renewed for security reasons, but did not comment on the blackmail claims.

Iran says it warned off US plane near manoeuvres

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Iran's military warned off a US reconnaissance aircraft trying to approach Iranian naval manoeuvres, the semi-official Fars News Agency said on Tuesday.

The incident involving the two old adversaries happened on Monday, it quoted the armed forces chief as saying.

Iran's navy last week launched eight days of exercises in the Gulf and the Gulf of Oman, a region crucial for global oil supplies.

"A US reconnaissance aircraft which had intended to approach our operational war games left upon the timely warning of our air defence forces," Fars quoted armed forces commander Ataollah Salehi as saying.

He was speaking to reporters as the military test-fired two surface-to-sea missiles in the Gulf of Oman, it added.

There was no immediate US comment on the report.

Pieter Wezeman, a researcher on military issues at the Stockholm International Peace Research Institute (SIPRI), said similar incidents had happened before and did not necessarily signal an escalation in tension.

"To me it sounds like standard behaviour from both sides," he said by telephone from the Swedish capital. "I recall a number of them over the years."

Earlier this month, Iran revealed that one of its military planes had photographed a US aircraft carrier, suggesting that the US ship's crew had objected to the Iranian action.

US Defence Secretary Robert Gates said last week Iran was challenging US naval power in the Middle East with an array of offensive and defensive weapons.

The US military is present in most Gulf Arab countries and has expanded land- and sea-based missile defence systems in and around the Gulf during a protracted nuclear stand-off with Iran.

Iran's manoeuvres coincide with rising tension between Iran and the West over Tehran's uranium enrichment programme. Western officials suspect it is aimed at developing nuclear weapons capacity. Iran says it is only for electricity generation.

The United States is lobbying for a fourth round of UN sanctions on the Islamic state over its refusal to halt sensitive nuclear activities and open up to UN inspections.

Iran often announces advances in its military capabilities and tests weaponry in an apparent attempt to show its readiness for any strikes by Israel or the United States.

Israel, widely believed to have the Middle East's only nuclear arsenal, has described Iran's nuclear programme as a threat to its existence and has not ruled out military action.

In exercises held in the Gulf and the Strait of Hormuz last month, official media said the elite Revolutionary Guards tested missiles and a new speedboat capable of destroying enemy ships.

Iran, a predominantly Shi'ite Muslim state, has said it would respond to any attack by targeting US interests in the region and Israel, as well as closing the Strait of Hormuz.

About 40 percent of the world's traded oil leaves the Gulf region through the strategic narrows.

Salehi said: "It's past the epoch when America would change the regime in a country by just dispatching a warship."

Iran is "very serious about the protection of its interests", the armed forces chief added.

Military awards massive KBR Iraq contract without competition

With eye on exit, military awards massive Iraq contract without competition

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The U.S. Army is under fire for reversing a decision to have three companies compete for more than $500 million worth of work in Iraq, and instead keeping it under an existing contract without any bidding.

The $568 million contract for support work in Iraq stayed with contracting giant KBR under the existing sole-source contract - known as Logistics Civil Augmentation Program III (LOGCAP III) - after the Army initially requested bids from KBR and its main competitors, Fluor Intercontinental and DynCorp International, under a competitive contract system known as LOGCAP IV.

The contract work, covering everything from cleaning laundry to preparing food and providing fuel for troops and contractors in Iraq, would be done between September 1, 2010 and December 31, 2011, as the U.S. military begins a massive draw down of troops in Iraq.

KBR won the LOGCAP III contract under competitive bidding in 2001 and military commanders worried about the effects of changing an already existing set-up to another company's set-up.

"Theater commanders expressed concern about transitioning the base life support services to LOGCAP IV during the time of massive draw-down operations in Iraq," said Daniel Carlson, a spokesman for the Army's Sustainment Command, which manages the LOGCAP contracts.

"The decision to continue with KBR on LOGCAP III was based on input from theater commanders, the anticipated cost of the transition and contractor performance. We remain proud of our work and we are humbled to support our troops," said Mark Williams, president of KBR Infrastructure, Government and Power.

An industry official who did not want to be named to prevent any recourse against his company by the military said "We were disappointed in the decision and frankly thought the new contracting system made a fair game for all of the companies in this industry."

The bi-partisan heads of the Senate Homeland Security subcommittee, which oversees contracting for the Department of Defense, wrote to Defense Secretary Robert Gates last week about the Army's decision.

"Given the significant progress made in the last year toward increased competition, oversight and accountability... we are dismayed by the prospect of the Defense Department forgoing these potential gains," Sens. Claire McCaskill, D-Missouri, and Scott Brown, R-Massachusetts, said in the letter dated April 30.

Carlson said the Army's Sustainment Command "concluded that continuing LOGCAP III support provided the best solution for our men and women in uniform as well as the U.S. taxpayers.

"Operational requirements, cost, and contractor performance were key to our decision," Carlson said in an email to CNN.

He said the Army briefed members of Congress about the decision last week.

Pentagon press secretary Geoff Morrell said the senators' letter to Gates was forwarded to the Army for a response.

The Army says keeping the contract with KBR would save as much as $77 million that it would not be able to recoup if another company transitioned in and took over the support process.

Contracting industry officials were surprised by the actions.

Keith Stephens of Fluor Intercontinental said his company offered a "competitive bid for the work in Iraq with an achievable transition schedule designed to produce significant savings for taxpayers."

He said the Army has not yet spoken to the company about the decision, but their bidding paperwork was returned to them last week, indicating they did not win the contract.

The other company that put in a bid, DynCorp, declined to comment when asked by CNN.

The senators' letter to Gates also expressed concern about KBR's recent legal problems surrounding its work with the military.

"We are particularly concerned about the Army's continued reliance on LOGCAP III in light of the Justice Department's recent decision to bring a civil action against KBR for improper billing of security services under LOGCAP III," according to the letter.

The Justice Department brought the fraud suit against KBR April 10, alleging the company improperly charged the government for $103.4 million for unauthorized security services in Iraq in 2007 and 2008.

Additionally, the Justice Department announced last week it had joined a lawsuit against KBR alleging that KBR transportation department employees received unlawful kickbacks from two freight forwarders doing business with KBR.

"We are aware of Department of Justice announced actions against KBR. The government and KBR have made significant improvements in operations and oversight of LOGCAP III and we have safeguards in place to protect the government's interest," Carlson said.

Since 2001, the LOGCAP III program has given KBR $35.7 billion worth of work, according to Army statistics.

Fluor and DynCorp beat out KBR under a LOGCAP IV contract in 2007 for other support services in Iraq. That contract has so far been worth $2.4 billion.

Afghan war costs now outpace Iraq's

Afghan war costs now outpace Iraq's

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WAR EXPENDITURES


The monthly cost of the war in Afghanistan, driven by troop increases and fighting on difficult terrain, has topped Iraq costs for the first time since 2003 and shows no sign of letting up.

Pentagon spending in February, the most recent month available, was $6.7 billion in Afghanistan compared with $5.5 billion in Iraq. As recently as fiscal year 2008, Iraq was three times as expensive; in 2009, it was twice as costly.

The shift is occurring because the Pentagon is adding troops in Afghanistan and withdrawing them from Iraq. And it's happening as the cumulative cost of the two wars surpasses $1 trillion, including spending for veterans and foreign aid. Those costs could put increased pressure on President Obama and Congress, given the nation's $12.9 trillion debt.

"The overall costs are a function, in part, of the number of troops," says Linda Bilmes, an expert on wartime spending at Harvard University. "The costs are also a result of the intensity of operations, and the number of different places that we have our troops deployed."

Obama made clear Wednesday that the U.S. role in Afghanistan would remain long after troops are withdrawn, a process planned to begin in July 2011. "This is a long-term partnership," he said during a news conference with Afghan President Hamid Karzai.

Continued American support will be crucial as U.S. troop levels and costs in Afghanistan escalate:

•The number of U.S. servicemembers in Afghanistan has risen to 87,000, on top of 47,000 from 44 other countries. At the same time, the number of U.S. servicemembers in Iraq has dropped to 94,000. By next year, Afghanistan is to have 102,000 U.S. servicemembers, Iraq 43,000.

•Afghanistan will cost nearly $105 billion in the 2010 fiscal year that ends Sept. 30, including most of $33 billion in additional spending requested by Obama and pending before Congress. Iraq will cost about $66 billion. In fiscal 2011, Afghanistan is projected to cost $117 billion, Iraq $46 billion. To date, Pentagon spending in Iraq has reached $620 billion, compared with $190 billion in Afghanistan.

•Costs per servicemember in Afghanistan have been roughly double what they are in Iraq since 2005. That is due to lower troop levels, Afghanistan's landlocked location, lack of infrastructure, high cost of fuel and less reliable security. "The cost just cascades," says Todd Harrison of the Center for Strategic and Budgetary Assessments. "That's always been an issue in Afghanistan."

"Iraq, logistically, is much easier," says Lawrence Korb of the Center for American Progress. "You get the stuff to Kuwait and just drive it up the road."

"Drop Dead Economics": The Wealthy Won’t Pay Their Taxes, So Labor Must Do So"Drop Dead Economics": The Wealthy Won’t Pay Their Taxes, So Labor Must D

"Drop Dead Economics": The Financial Crisis in Greece and the European Union

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Riddle: How are the Greek rioters like America’s Tea Party movement?

Answer: Both reject government being taken over by the financial oligarchy to shift the tax burden onto labor.


The difference is that the Tea Partiers have lost faith in government. This is just what the financial oligarchy wants, of course. Giving up hope of gaining electoral control to pursue a fair fiscal agenda, the Tea Partiers have abandoned the centuries-long fight for reform to make governments better by giving them the power to check predatory finance and wealth. Sliding to the right wing of the political spectrum and acting mainly out of frustration, they have succumbed a utopian desire simply to shrink government that they see acting adversely to their interests.


Financial lobbyists are using the Greek crisis as an object lesson to warn about the need to cut back public spending on Social Security and Medicare. This is the opposite of what the Greek demonstrators are demanding: to reverse the global tax shift off property and finance onto labor, and to give labor’s financial claims for retirement pensions priority over claims by the banks to get fully paid on hundreds of billions of dollars of recklessly bad loans recently reduced to junk status.

The Greek bailout should be thought of as a TARP for German and other European bankers and global currency speculators. Almost $1 trillion is being provided by governments (mainly Germany, at the cost of its own domestic spending) into a kind of escrow account for the Greek government to pay foreign bondholders who bought up these securities at plunging prices over the past few weeks. They will make a killing, as will buyers of hundreds of billions of dollars of credit-default swaps on the Greek government bonds, speculators in euro-swaps and other casino-capitalist gamblers. (Parties on the losing side of these swaps now will need to be bailed out as well, and so on ad infinitum.)

This windfall is to be paid by taxpayers ­ ultimately those of Greece (in effect labor, because the wealthy have been untaxed) ­ to reimburse Euro-governments, the IMF and even the U.S. Treasury for its commitment to predatory finance. The ³sanctity of debt ­ sacrificing the economy to pay bondholders ­ is to be used as an excuse to slash Greek public services, pensions and other government spending. But what is sanctity and religion, after all, without sacrifice. The question is, who is being sanctified, and to what god? In this case it seems to be Mammon, not Jesus. Self-immolation is to become a model for other countries to impose similar austerity as governments run up budget deficits in the face of economic shrinkage and falling tax collections.

Meanwhile, the financial sector is to be enriched by the translation of junk economics into international policy. Living in the short run is the financial sector¹s time frame ­ while distracting the attention of indebted populations from calculations that Wall Street understands quite well: the debts cannot be paid in the end.

But they can be paid in the short run, with promises to pay someday ­ as if any economies ever have been able to grow by imposing austerity! It is all junk economics, of course. But it buys time for the bankers to pay themselves yet more bonuses this year. By the time the financial system collapses, they presumably will have put their money into hard assets.

Bank lobbyists know that the financial game is over. They are playing for the short run. The financial sector’s aim is to take as much bailout money as it can and run, with large enough annual bonuses to lord it over the rest of society after the Clean Slate finally arrives. Less public spending on social programs will leave more bailout money to pay the banks for their exponentially rising bad debts that cannot possibly be paid in the end. It is inevitable that loans and bonds will default in the usual convulsion of bankruptcy.

Greek labor is not yet so pessimistic as to give up the fight. What it recognizes that its American counterparts do not is that somebody will control the government. If labor – the demos – loses its spirit, power will be relinquished to foreign creditors to dictate public policy by default. And the more the bankers’ interest is served, the worse and more debt-burdened the economy will become. Their gain is bought at the price of domestic austerity. Scheduled payouts by Greek pension funds and government social spending programs must be to replenish German and other European bank capital.

This worldview already has been delivered to Europe’s northernmost periphery, where it has elicited a fiscal masochism that banks hope to see in Greece. Having fallen on their swords, Baltic governments would be jealous and even resentful to see Greece rescue its economy where they themselves failed to repudiate arrogant creditor demands. “Seen from the eastern rim of the European Union, the looming austerity drive in crisis-afflicted Greece reads like old news,” writes Nina Kolyako.[1] “For almost two years, the Baltic states of Lithuania, Latvia and Estonia have brought in repeated draconian measures, slashing public spending and hiking taxes to try to dig themselves out of a hole. ‘We learned the lessons very painfully, heavily and effectively, that you need to look after the fiscal situation very carefully,’ Lithuanian Prime Minister Andrius Kubilius told AFP in a recent interview. ‘We understood very clearly that fiscal consolidation was the only way for us to survive.’”

Capitulating in a classic Stockholm syndrome (literally to Swedish banks in this case), Lithuania’s government dutifully tightened to screws so much that GDP plunged by over 17 percent. A similar plunge occurred in Latvia. The Baltics have slashed public-sector employment and wages, imposing poverty rather than the Western European levels of prosperity (and progressive taxation to foster a middle class) that was promised after the Baltics achieved their independence from Russia in 1991.

After Latvia’s parliament imposed austerity in December 2008, popular protest in January brought down the government (as a similar protest did in Iceland). But the result was merely another neoliberal “occupation regime” run on behalf of foreign banking interests. So what is unfolding is a Social War on a global scale – not the class war envisioned in the 19th century, but a war of finance against entire economies, against industry, real estate and governments as well as against labor. It is happening in the usual slow motion in which great historical transitions occur. But as in military conflicts, each battle seems frenetic and spurs wild zigzagging on the world’s stock and bond exchanges and currency markets.

All this is great news for computer program traders. The average commitment of funds lasts only a few seconds these days as financial markets are buffeted up and down by vast credit waves blown by the storms sweeping today’s financially overheating planet.

The coming economic dystopia

The Greek crisis shows how far the “European idea” has shifted from 1957 when the six-member European Economic Community (EEC) was formed. At U.S. prodding, Britain and Scandinavia created the rival seven-member European Free Trade Association (EFTA) Even so, the promise of Euroland – at least before Maastricht and Lisbon – was to elevate labor to middle-class prosperity, not to impose IMF-type austerity programs of the sort that devastated Third World countries. The message to indebted economies is stark: “Drop dead.” And they are obediently committing economic suicide (emulating Japan in the 1985 Plaza Accords) to endorse the Washington Consensus – the class war of finance against labor and industry.

Political, social, fiscal and economic power is being transferred to the EU bureaucracy and its financial controllers in the European Central Bank (ECB) and the IMF, whose austerity plans and related anti-labor programs direct governments to sell off the public domain, land and subsoil wealth, public enterprises, and to commit future tax revenues to pay creditor nations. This policy already has been imposed on “New Europe” (the post-Soviet economies and Iceland) since autumn 2008. It is now to be imposed on the PIIGS (Portugal, Ireland, Italy, Greece and Spain). No wonder there are riots!

For observers who missed Iceland and Latvia last year, Greece is the newest and so far the largest battlefield. At least Iceland and the Baltics have the option of re-denominating loans in their own currency, writing down their foreign debts at will and taxing property to recapture for the government the revenue that has been pledged to foreign bankers. But Greece is locked into a European currency union, run by unelected financial officials who have inverted the historical meaning of democracy. Instead of the economy’s most important sector – finance – being subject to electoral politics, central banks (the designated lobbyists for commercial and investment bankers) have been made independent of political checks and balances.

In truly Orwellian fashion, right-wingers in Europe and the United States (such as Fed Chairman Ben Bernanke) call this the “hallmark of democracy.” It actually is the stamp of oligarchy, stripping away control over the economy’s credit allocation – and hence, forward planning – while giving high finance a stranglehold over public spending programs.

Iceland, Latvia and now Greece are the opening shots in the resulting global campaign to roll back the great democratic reform program of the 19th century and the Progressive Era: taxation of land and the “unearned increment” of price gains for real estate, stocks and bonds, and subordination of the financial sector to the needs of economic growth under democratic direction. This doctrine was still being followed by the post-1945 era of progressive taxation that saw the 20th century’s greatest rise in living standards and economic growth. But most countries have reversed the fiscal trend since 1980.Tax collectors have “freed” income from public obligation only to see it pledged to banks for higher loans to bid up property prices.

Houses, office buildings and entire companies are worth whatever banks will lend. So populations (and corporate raiders) have responded to the pro-financial tax shift by borrowing to buy houses (and companies) before prices recede even further out of reach. And taxes on labor now are about to be jacked up to pay off the public debts resulting from the asset-price inflation and financial wreckage that property tax cuts have helped cause. This is the cause of national debts. Governments have run into debt as a result of un-taxing the wealthy in general, not just real estate.

Following Western governments in shifting the fiscal burden off property and finance onto labor over the past few decades, Greece’s government is politically unable or unwilling to tax the wealthy, or even well-to-do professionals. But neoliberals blame it and other debtor governments for not selling off enough public land and enterprises to make up the gap. Tax-deductible interest charges make privatizations on credit tax-exempt, so governments will lose the user fees they formerly received – while populations pay higher “tollbooth” charges for hitherto public services.

Just as the U.S. Government has done, it has issued bonds to finance the deficit resulting from these tax cuts. The buyers of these bonds (mainly German banks) are demanding that Greek labor (and now German taxpayers as well) should bear the burden of tax shortfalls. German and other European banks and bondholders are to be repaid at the social cost of drastic cutbacks in pensions and social spending – and if possible, by more privatization sell-offs at distress prices.

The riots in Greece have erupted because labor understands what most journalistic reporting shies away from confronting. Growth in real wages has slowed (and has stopped cold in the United States since about 1979). Home ownership has been achieved at the cost of new buyers taking on a lifetime of mortgage debt. And the post-Soviet economies won their political freedom from Russia, only to find themselves insolvent today, dependent on IMF and EU direction of their economies to obtain the loans to pay their foreign bankers that have loaded down their housing, public enterprises, industry and families with debt.

Bondholders and financial speculators have ganged up to demand EU, IMF and US support for them to take their gains before the financial game crashes. The grab can be done most quickly by shrinking economies under IMF-style austerity plans. Unemployment is to rise while driving economies even further into debt – not only public debt as shrinking markets lead to falling tax revenue, but also foreign debt as import dependency increases.

Creditors are to be paid by letting them appropriate the economic surplus, in the form of debt service at the expense of new capital investment, infrastructure spending, public social spending and rising living standards. Economically, the Greek uprising is a revolt against the policy of sacrificing prosperity to pay foreign creditors in this way.

At the political level the fight is to save Greece from being turned into an anti-state. The classical definition of a “state” or government is the ability to levy taxes and issue money. But Greece has relinquished its fiscal authority to the EU and IMF, which are telling it to violate what political theorists list as the Prime Directive of any government: to act in the long-term national interest. The Greek government is being directed to act on behalf of bank capital, and indeed, that of foreign countries to engage in asset stripping, not to promote long-term growth.

At issue is whether nations will be run by creditors or by popular aims to reap the benefits of economic growth. An oligarchic push for IMF-EU loans to bail out foreign banks and bond speculators at the expense of Greek labor (the intended taxpayers of the future) aims at making labor rather than finance capital take the loss of government arrears resulting from un-taxing wealth. The aim is to enable foreign banks to avoid having to pay the price for acting as enablers in draining the domestic market. Government policy is to be taken out of the hands of voters and subordinated to the IMF and EU acting as instruments of international finance.

This creates a state of affairs in which neither Greece nor the EC are “states” or “governments” in the traditional political sense. The EU and IMF bureaucracy is not elected. And at the point where their foreign-dictated financial plan succeeds, the economy’s capital will be stripped and social democracy will collapse.

On Sunday, May 9, German voters expressed their anger at the government’s role in bailing out German bankers (euphemized as bailing out “Greece”) at the expense of German taxpayers. The European Central Bank [ECB] is not creating free euro-money but is billing national governments). the Social Democrats overtook Chancellor Angela Merkel’s Christian Democratic Union party in North Rhine-Westphalia. Winning only a bit over a third of the vote – a bit less than the Social Democrats (and down over 10 percentage points from the last election, of which 4 points were lost just in the last week when the bailout package was promoted by Ms. Merkel) – the CDU lost its majority in Germany’s upper house.

Many German voters may have wondered whether taxing the poor to pay the rich to engage in usury was really as “Christian” as the party claimed to represent. Or maybe they were concerned that Germany’s tax collector is to pay nearly $30 billion as its share in the bailout of bankers – not all of whom are beloved in Germany, even when they are German. And some no doubt saw the game as a financial deception by the banking sector’s compliant politicians.

The deception

Europe’s financial lobbyists used the crisis as an opportunity to promote a broad series of bailouts. For Swedish and Austrian banks, the EU approved a €60bn extension of the balance-of-payments facility already put in place to help Hungary, Romania and Latvia keep current on their debts to Austrian and Swedish banks respectively. To circumvent the Eurozone’s no-bailout principle, this special bailout law is based on Article 122.2 of the EU treaty permitting loans to governments in “exceptional circumstances.”[2]

If we give Ms. Merkel credit for understanding the economics at work, then we must accuse her of lying through her teeth. The Baltic debt problem is chronic and structural, not “exceptional.” Ms. Merkel also must know that she is being deceptive in pretending to help Latvia by extending loans that the EU limits explicitly to support the lat’s exchange rate, not for domestic development. The foreign exchange is to cover the cost of Latvians paying mortgages in euros to Swedish banks, and of Latvian consumers buying food and manufactures that EU governments subsidize while leaving the Baltics in a state of economic and financial dependency.

Latvia thus is being victimized, not helped. The aim is to give Swedish banks a little more time to keep collecting payments on loans that are going to go bad in due course. Foreign exchange spent in facilitating private debt service to foreign banks becomes a national debt, to be paid by Latvian taxpayers. This EU loan thus is an exercise in naked neo-colonialism.

Will the belated shift of German voters to back the Social Democrat red-green coalition with the Green and Left parties do much to stem matters? Probably not. Greek President Papandreou acquiesced in the cave-in despite being head of the Socialist International. So the question is whether Greece really is checkmated, destined to see its public spending, pensions, health care, schooling and living standards rolled back in the way that the Baltics have experienced. They have been an experiment in neoliberal central planning. If they are an example of what the future is to bring, the world will soon see a wave of Greek emigration, Baltic-style.

That evidently is what stock markets around the world anticipated when they soared on Monday morning at the news of Europe’s trillion-dollar bailout. What really was bailed out is the principle that economies should be stripped so that finance capital may rule. But the fight surely is not yet over. It will escalate for the remainder of the 2010s, because it is nothing less than an attempt to roll back the history of the 19th and 20th century’s struggle to replace the power of vested property and financial interests with principles of progressive taxation and public enterprise.

Is this where Western civilization really is supposed to be leading? Confronted by parliaments controlled by aristocracies, the 19th-century reformers sought to take them over on behalf of democracy. Classical political economy was a reform program to tax away the “free lunch” of land rents, monopoly rents and financial interest extraction. John Maynard Keynes celebrated this program in his gentle term, “euthanasia of the rentiers.”

But the vested interests have fought back. Calling social democracy and public regulation “the road to serfdom,” They are trying to set Europe’s economies on the road to debt peonage. Making an end-run around national elected governments to impose the Washington Consensus IMF and EU institutions have gained fiscal and economic control over governments and their tax policies to cut taxes on wealth – and borrow from it to finance the resulting fiscal deficits.

America’s Tea Partiers and anti-tax rebels have given up the fight to reform governments. Squeezed by debt from which they see no escape, they demand lower taxes – and are willing to see the highest brackets become the major beneficiaries in an even more regressive tax shift. Faced with the corruption of Congress by lobbyists acting on behalf of the vested interests, they reject government itself and seek safety in local gated communities. They see Congress and parliaments throughout the world losing autonomy to the IMF, the EU and other Washington Consensus organizations seeking to impose austerity and shift the tax burden onto labor and industry, off property and off predatory finance.

The only way to prevent a regressive tax shift and debt squeeze is gain control of governments on behalf of the spirit of classical economic and Progressive Era reforms. At least, that is what Greek labor is rioting for. Someone must control government, and if democratic forces withdraw from the fight, the financial sector will tighten its trip.

Last week is still only the beginning of how this drama will play out. The response by the post-Soviet economies, which have retained their own currencies, is to come this summer and autumn.

Notes


[1] “Austerity drives are old news for Baltic States,” Baltic Course, May 10, 2010. http://www.baltic-course.com/eng/analytics/?doc=26683)

[2] Ben Hall, “Governments to control loan guarantee scheme,” Financial Times, May 10, 2010, http://www.ft.com/cms/s/0/dd695f76-5c19-11df-95f9-00144feab49a.html.