The world’s richest 22 people own more than Switzerland produces

By Pete Dolack

The wealthy are wealthy because they work harder than you: So goes a favorite parable. Many wealthy people undoubtedly do work hard; at least those who amassed it themselves rather than inheriting it.

But is it really possible that 22 people could work harder than the entire population of Poland? Or Switzerland?

It safe to assume there are millions of Poles and Swiss who work diligently at their jobs. Yet the gross domestic products of Poland, Switzerland and most other countries of the world is smaller than the wealth amassed by 22 people.

The top of an extraordinarily steep pyramid is in the stratosphere. There are 22 people in the world who possess US$20 billion or more of assets, according to the 2012 edition of Forbes magazine’s annual list of the world’s billionaires. Those 22 people have a combined total of $675 billion in assets. You read that correctly: two-thirds of a trillion U.S. dollars. There are only 18 countries in the world with a gross domestic product of more than $675 billion, according to World Bank calculations.

So, yes, 22 people have more than is produced by the entire country of Switzerland — one of the world’s richest countries — and more than the 38 million people of Poland, one of the European Union’s biggest countries.

The corollary of the wealthy supposedly working harder than the rest of us is that they really don’t have that much, and taxing them would be useless in terms of reducing government deficits. When we peer into the numbers, however, that mantra has no more basis in reality than the idea that 22 people work harder than entire countries or that U.S. chief executive officers work 340 times harder than their employees.

The “World Wealth Report 2012” just issued by consultancy Capgemini and Royal Bank of Canada, intended for financial-industry professionals, contains some interesting facts about the people the financial industry reverently calls “high net worth individuals.” These fortunate folks are those with at least US$1 million at their disposal for investment — a sum that does not include the value of personal assets and property such as primary residences, collectibles and consumer durables. (Therefore, this report does not include all accumulated wealth, as the Forbes list does.)

What do we find? That there are 11 million people in the world who qualify as a “high net worth individual” and these 11 million people have a combined investable wealth of US$42 trillion. Because it is impossible to imagine a number that large, think of it this way: That total is equal to two-thirds of the world’s gross domestic product. Those 11 million people represent not the one percent, but the top 0.16 percent of Earth’s population.

Let’s tease out one more number from the Capgemini report. In the United States and Canada, there are 3.4 million “high net worth individuals” — quite close to constituting North America’s one percent — and they have disposal income for investment totaling US$11.4 trillion. The economist Richard Wolff, in his Economic Update radio show, points out that if only these people were taxed 10 percent for this portion of their wealth — their fixed assets such as mansions, yachts and collectibles such as works of art would remain untouched — the entire yearly U.S. government budget deficit would be eliminated.

There is nothing unique about the U.S. A British economist, Michael Roberts, writes that the wealth of the 1,000 richest people in Britain has increased by £315 billion in just the past 15 years, and taxing only those gains at Britain’s capital-gains tax rate of 28 percent would cover 70 percent of the government’s total deficit.

As has been noted before, such people would prefer to loan governments money, with interest, rather than pay taxes. And then they complain that the government is borrowing too much and demand austerity be imposed. Theoretically, they could use their accumulations of wealth for productive investment, which would at least create jobs. But, thanks to austerity — and the high unemployment and reduced wages that result from it — demand is stagnant. If there is too much productive capacity and/or corporations can’t sell the products they already produce, then there is no economic rationale to invest in new production. Thus U.S. corporations are sitting on $2 trillion of cash and the wealthy pour their immense income into speculation because they have more than they can possibly spend, there being too few investment opportunities, and speculation is more profitable than production.

When too much money is chasing too few assets, a financial bubble inflates. But the bubble always bursts. And the bigger the bubble, the bigger the fall.

When the bubble bursts, the banks are bailed out and the rest of us are sold out, as the saying goes. The net result is a still greater concentration of wealth and more people pushed into or toward poverty, forced to rely on government assistance. But that puts more strain on governments, which become more reliant on the wealthy to loan them money, more desperate to give corporations giveaways in the hopes of a few more jobs being created locally, and progressively weaker in relation to corporations. Corporate dominance intensifies, and executives and speculators are able to increase the wealth they extract from the corporations they control and reduce their tax bills. Round and round it goes until a mass movement reverses a downward spiral.

Just what is it that the wealthy do to accumulate so much? Let’s return to the tip of the tip of the pyramid: Those with $20 billion or more in total wealth. Eleven of the 22 who have accumulated this fantastic level of wealth are residents of the United States. Who do we find? Four members of the Walton family (heirs to the Wal-Mart fortune); the Koch brothers (who inherited their oil and gas empire from their father); a financial speculator who crashed more than one currency; two software moguls (taking advantage of a technology created by the U.S. government); an owner of casinos; and one highly successful investor, Warren Buffett.

Wal-Mart’s leading role in the race to the bottom is well documented. Wal-Mart is extraordinarily ruthless in cutting its costs — not uniquely bad, merely the company most efficient — and has done more than any other entity to cause production to be moved to Chinese sweatshops. Wal-Mart is a company notorious for its hatred of unions and pays so little that new employees are handed application forms for food stamps.

Taxpayers thus are subsidizing Wal-Mart’s profits; sweatshop workers are brutally exploited; jobs in advanced capitalist countries are eliminated; and communities ravaged as local mom-and-pop businesses are forced to shutter. In all these ways, more money is funneled upward into the Wal-Mart central office, and away from local communities. That is how the Walton family accumulated its fantastic wealth — the four members are each individually among the richest 11 people in the U.S.

The Koch brothers are becoming well known for their attempts to create an ideological monopoly within the United States. Their father was one of the leaders of the John Birch Society, an extremist group that was the “tea party” of the mid-20th century, going so far as to denounce Dwight Eisenhower as a “communist”! The sons have learned well, bankrolling the tea party movement of the extreme Right, funneling huge sums on money into a variety of extreme Right causes and institutions, funding libertarian ideology, and directing the policies of, among others, Wisconsin Governor Scott Walker and his anti-union, anti-government austerity program.

The two Koch brothers have $50 billion between them — so they can afford to donate millions of dollars to cultural organizations to “greenwash” their image without losing the ability to impose their agenda. Thanks to their lucky birth, they are tied for fourth place on the list of richest U.S. citizens, and they are going to make certain they are not dislodged.

Then we have Microsoft founder Bill Gates and Oracle founder Larry Ellison. We are supposed to believe that Silicon Valley moguls created vast wealth. They did — for themselves. But they did so by taking advantage of what others created. Amidst all the celebrations of newly minted computer billionaires, it is easy to forget none of it would have been possible without government research. The Internet is a creation of the U.S. Department of Defense, which had a strong interest in creating a decentralized means of communication that could not be knocked out at a stroke; many universities, including public universities, helped in the Internet’s creation; and the world wide web is a product of CERN, the European intergovernmental research institution.

Many other industries exist due to government funding — the Internet is merely one example of public investment converted into private profit. Microsoft was accidentally handed a monopoly on personal-computer operating software by International Business Machines before IBM had any inkling of how ubiquitous PCs would one day become, and Microsoft’s billionaires have cashed in by leveraging the company’s monopoly without innovating any products as mythology would have us believe.

Even Warren Buffett has profited nicely from financial legerdemain. He is the largest shareholder of one of the three main credit-rating agencies, Moody’s. Those agencies played a critical role in the housing bubble by giving sterling ratings to high-risk bundles of mortgages and other speculative financial products, and those agencies continue to play their role within the world of finance capital by repeatedly downgrading the ratings of governments, forcing higher payments of interest to the wealthy who loan money to governments instead of paying taxes.

The rest of the tip of the pyramid seem not so impressive compared to the tip of the tip, although we need not shed tears for them. Last October, the Swiss financial company Credit Suisse published its “Global Wealth Report 2011,” which also revealed interesting information. For instance, the world’s most wealthy one percent own 44 percent of the world’s wealth, while the bottom 50 percent collectively own one percent. Nor is the further concentration of wealth we have experienced since the rise of neoliberalism at the start of the 1980s in your imagination. Credit Suisse’s report states:

“Available evidence suggests that household wealth in mature economies was a fairly constant multiple of income for much of the 20th century until 1980, after which the wealth-income ratio has trended upwards. … Financial assets in [Group of Seven] countries also show little change relative to income up to 1985, when a regular pattern of growth began.”

In plain English, what the report is saying is that the accumulation of wealth by “high net worth individuals” is outstripping gains in income — wealth is becoming more concentrated. It takes money to make money, the old saying goes. And it is more effective than working.

David and Charles Koch can create a network of institutions and bankroll a national movement that promotes their business interests. Bill Gates, the Walton family and an allied billionaire can personally direct the thrust of education toward a narrow training in technical skills shorn of courses that teach independent thinking, and work to replace public schools with corporate-controlled “charter” schools. Their peers can fund an overwhelming bombardment of ideology to suit their elitist agenda.

Wouldn’t it be better for decisions in education and all the other fields important to the public be made by the public through democratic, accountable institutions? Wouldn’t democracy be better than plutocracy?

You can vote as bankers dictate, but is that democracy?

By Pete Dolack

Voters in Greece sort of voted as they were ordered to by European financiers and banking officials. Or least enough voters did so for them to declare victory.

The stability that financiers and banking officials cherish, however, appears elusive. Greece will have a new austerity government although anti-austerity parties won a majority of votes. For, to put it in the current Greek terminology, the pro-“memorandum” parties earned only 42 percent of the vote between them. Yet those two parties, New Democracy and Pasok, won a majority of seats in Greece’s parliament.

Those parties, along with coalition partner Democratic Left, will govern for now, but they will not rule.

The 50-seat bonus given to the first-place finisher, a peculiarity of Greek electoral law, did what it is intended to do — make the formation of a government easier. Without the bonus, there would have been too much fragmentation and the likelihood of a third election in as many months. As it is, the June 17 re-vote provided a vivid illustration of a bitterly divided country, although the vote was more consolidated than was the May 6 vote.

New Democracy, Greece’s major party of the Right, won 30 percent of the vote this time as opposed to 19 percent a month ago; Syriza, the Coalition of the Radical Left, won 27 percent of the vote as opposed to 17 percent a month ago. At bottom, such consolidation probably reflects more than any other factor the relentless pressure applied by officials of the European Central Bank, the European Union apparatus, the Bundesbank (Germany’s central bank) and finance capital in general. They quickly served notice that the pressure is not off when they demanded the formation of a government to their liking.

Before the results were official, the finance ministers of the countries using the euro as their common currency (referring to themselves as the “Eurogroup”) issued a statement that declared the election “should allow for the formation of a government that will carry the support of the electorate to bring Greece back on a path of sustainable growth. … The Eurogroup therefore looks forward to the swift formation of a new Greek government that will take ownership of the adjustment programme to which Greece and the Eurogroup earlier this year committed themselves. The Eurogroup expects the [lending] institutions to return to Athens as soon as a new government is in place to exchange views with the new government on the way forward and prepare the first review under the second adjustment programme.”

European Union officials were said to be insisting on the largest possible coalition, although New Democracy and Pasok, Greece’s discredited parties who formerly alternated in government, do have a majority of seats by themselves thanks to New Democracy’s 50-seat first-place bonus. Double-talk promises by the two parties that there is no alternative to continuing with the “memorandum” (as the agreement with the European Commission, European Central Bank and International Monetary Fund is called in Greece) was paired with their insisting they would negotiate new terms.

In essence, New Democracy and Pasok said, “Vote for us and we’ll get more loans and better terms.” But let’s parse the finance ministers’ statement above. The key passage is their “expectation” that the “Greek government that will take ownership of the adjustment programme,” making sure to note that Greece has “committed” itself. Minor tinkering with the details aside, that means stick with the (austerity) plan. Considering the highly politicized state of Greeks these days, the number who voted for one of the two austerity parties out of fear induced by the daily warnings of economic armaggedon must surely be higher than those who believed the unrealistic promises. The statement given by the finance ministers isn’t any different from what they, and the financiers whom they represent, had repeatedly delivered in the five weeks between elections.

Banking officials realize they have to “reward” Greeks for voting as they were told, and will make minor concessions, mostly likely by extending some repayment periods. The basic program, however, is not going to change, as German Chancellor Angela Merkel made clear in a proclamation at the Group of 20 summit a day after the election: “There can be no loosening of the reform steps.”

The translation of Chancellor Merkel’s statement is that the “markets” — financiers in the form of investment bankers, bond traders, hedge-fund managers and other speculators — will be making the decisions. That is consistent with her insistence that further “relief” from mounting debt depends on a willingness to subordinate further to financiers and central banks. Chancellor Merkel is not a stubborn holdout nor obsessed with Weimar-era inflation as she is often portrayed; she is simply reminding other national political leaders that any eurozone harmonization will conform to the tightest policy among them and Germany has that tightest policy. The “markets” insist on it.

The choice facing not only Greeks but all peoples living in eurozone countries is to accept the logic of capitalist development or to mount a coordinated, cross-border fightback. Accepting the logic of E.U. capitalism is to accept that financiers and central bankers will continue to impose austerity and the inevitability of relinquishing the power to make political decisions to them so that decisions are made by unaccountable bureaucrats in a supra-national governing structure rather than by national governments subject to elections.

Not that elections are currently decisive. The new Greek government will govern, but it will not rule. That was made clear last year, when former Prime Minister Georgios Papandreou dared to suggest a popular referendum on austerity plans. The Guardian reported at the time that Chancellor Merkel and then-French President Nicolas Sarkozy “summoned” the Greek prime minster to a meeting to inform him there would no referendum. There wasn’t. What did happen was a dictated revision to the Greek constitution mandating that repayment of debt would supersede any other government spending.

Markets aren’t voted upon. But, again, markets are the amalgamation and distillation of the most powerful big capitalists, and it is those interests that will not be put to a referendum. New Democracy and Pasok had already submitted to this power and, having made their commitment, can do nothing other than go on submitting to it.

There are far from the first. Here are two quick examples. When the Sandinistas stood for re-election in 1989, Nicaragua had endured several years of debilitating terrorism and economic sabotage from the Contras and their U.S. organizers. There was no ambiguity here: the United States told Nicaraguans to vote out the Sandinistas or the war will continue. Weary Nicaraguans voted to end the war and for a coalition that dangled promises of U.S. aid in exchange for voting as they were told. The war did end, but no more than a tiny fraction of the promised aid was delivered. Nonetheless, the anti-Sandinista coalition, having made its commitment, carried out the dictated privatization that was a windfall to foreign capitalists because the state properties were sold well below market value — the price for what aid did arrive.

A second example is South Korea. Austerity was imposed on that country as the dissident leader against military dictatorship, Kim Dae-jung, became South Korea’s first opposition president at the end of 1997. Speculators had fueled construction booms and stock-market bubbles across Southeast Asia in the mid-1990s, causing an inflation in the local currencies until it was no longer profitable to speculate on the exchange rates. At that point, speculators pulled their money out, causing the value of those currencies to plunge and triggering the region’s 1997 economic collapse. Countries such as Thailand had to impose harsh austerity, including widespread layoffs, in exchange for loans needed after the collapse. President Kim took office two weeks after South Korea accepted loans with similar conditions, and although the United States had failed in its effort to defeat him, “market discipline” did more to neutralize him and demoralize his supporters than direct U.S. political pressure could have done.

No single country can stand outside the forces of capitalism. Syriza, had it finished first and been able to form a government, could not simply delink Greece. Syriza’s voters unambiguously sought an end to austerity, an end to immiserating an entire country to maintain financiers’ profits and the renouncement of the memorandum including a halt to debt payments. A Syriza-led government could do those things, but would still be forced to maneuver within the parameters of the world capitalist system.

It is estimated that the Greek government is owed 45 billion euros in unpaid taxes. On top of that total, many wealthy Greeks and some middle class Greeks who work in the private sector pay little or no taxes. Greece’s most powerful industrial sector, the shipping industry, pays no taxes and has its tax-free status enshrined in the constitution. New Democracy’s base is the wealthy and others who don’t pay taxes. The party’s backers would not tolerate a change and have a network of links with international capitalists intertwining their interests.

Syriza and the other Left parties in Greece could require them to pay taxes, but the ease with which the wealthy can move their assets and bank accounts to other countries would greatly diminish the effect. Inevitably, nationalization of key industries would move on to the agenda, and that would bring to the fore a serious questioning of the capitalist system.

That system can’t be challenged by any one country, certainly not one as small as Greece. A credible challenge can only be a multi-national challenge. And a challenge to austerity, or the larger system that imposes it, will not take place in the ballot booth.

For the past several weeks, Greece had been on a knife edge, a political Schrödinger’s cat. Accepting the memorandum, rejecting the memorandum. The latest election gives the appearance of acceptance at the same time more voted to reject. A stalemate. But that is not any more stable. Greece can not accept and reject simultaneously. If the choice, finally, is to reject, then the rejection can only be an international rejection. The world’s financiers and industrialists are united across borders; the rest of us must be as well.

We may be Greek working people, British working people, U.S. working people, Argentine working people, and so forth, but we share a common humanity — the basis on which to join together. It is Greece today but it will be you tomorrow.

Wisconsin’s recall election proves no substitute for a social movement

By Pete Dolack

Walking home on election night in 2008, my partner and I waded into a street celebration. Young people, primarily, had taken over an entire block to joyously celebrate Barack Obama’s trouncing of John McCain. Veteran activists that we are, we talked to many of the celebrants, cautioning them that the work of progressive change had only begun: If there is no strong pressure from President Obama’s supporters, he would be taken off the hook and feel himself free to not do what he said he would do.

Neither of us believed the president-elect would follow through on most of his campaign platform, and the fact that the strong anti-war movement that mushroomed during the Bush II administration had been silenced by United for Peace and Justice’s deft channeling of it into the John Kerry presidential campaign and its unwillingness to work with any coalitions to its Left should not have been far from activist minds. The hopes of Obama voters for an end to wars waged for imperialist plunder and for meaningful “change” soon met the traditional graveyard of U.S. social movements, the Democratic Party.

And so it was in Wisconsin last week. Yet again, an energetic, grassroots movement, motivated by a sense of urgency, was diluted, rendered “respectable” and converted by political and union leaders into an election campaign. And thereby lost their biggest battle. Are they to lose the war, too?

Before we tackle that question, let’s analyze the battle. Given the legitimate questioning of electronic voting machines that do not print records that can confirm the results, it is understandable that some question who really won the Wisconsin recall vote. But it is necessary to point out that the 53 to 47 percent victory of Scott Walker over Tom Barrett, although wider than expected, does fall within the margin of error of the many polls that consistently had Walker ahead. We should accept the result as legitimate, and analyze seriously a bitter defeat for all working people.

Union leaders’ fear of Madison’s energetic resistance

One of the groups critical to the uprising in Madison, the Wisconsin state capital, were graduate students organized into the Teachers Assistants’ Association. The TAA is centered on the University of Wisconsin’s main campus, located blocks from the Wisconsin capitol building. Already anticipating cuts to the university system, the TAA had begun mobilizing for a February 2011 protest. When details of Governor Walker’s draconian program of deep cuts to education and social programs coupled with union-busting measures became known, the sense of urgency increased.

Mike Ludwig, writing in Truthout, has described the birth of a movement that quickly had the world’s eyes on it:

“A public hearing on the legislation was scheduled the next day and the TAA organized a massive turnout. At such hearings, each member of the public is given up to two minutes to speak, and thanks to the tireless TAA and allied groups, a continuous stream of testimonies prevented the bill from going up to a vote. It was the birth of an occupation that would take over the Capitol and stall Walker’s union-busting bill for more than three weeks.”

Teaching assistants and teachers came to that first legislative hearing prepared to stay overnight. An early attempt to evict the Capitol occupiers backfired, solidifying their public support. Demonstrations in numbers that sometimes exceeded 100,000 outside the capitol building were regular occurrences. Support for the capitol occupiers was exemplified in a continual stream of well-wishers from outside Madison phoning in pizza orders to be delivered to the occupiers. Crowds lined the streets of Madison when a procession of farmers riding tractors drove down one of the city’s main streets to the capitol. African-American and Hispanic high school students from Wisconsin’s biggest city, Milwaukee, and people from small towns across the state were on board.

Sadly — but not surprisingly — union leaders saw this inspiring solidarity as a threat to be contained.

Talk of a general strike was in the air — something that has not happened in the United States since the 1930s. Although some organizers believed that there was too little infrastructure in place for a general strike to be realistic at the time, there were other steps that could have been taken to ratchet up the pressure on Governor Walker and his Big Business funders.

Matthew Rothschild of the Madison-based monthly magazine The Progressive, who participated in many of these events, said the co-optation of the movement began early:

“Actually, it began to disintegrate the moment the leaders (and who were they, exactly?) decided to pour everything into the Democratic Party channels rather than explore the full potential of the power that was latent but present in the streets back in February and March of 2011. … Procedurally, decisions were made (again, who made them?) in a very undemocratic way. Here we had 100,000 people storming the square but there was no effort to include them in any meaningful — or even symbolic — decision-making process. … We gathered at noon every day, we gathered every night, and we massed on the weekends, but then the decision was made (by whom?) to stop marching and essentially to go back to our home districts and throw all our energies into recalling state senators. I remember being at a protest and being told to do so from the podium.”

Local activist Allen Ruff, quoted in a Truthout analysis written by Arun Gupta and Steve Horn, confirmed that state-level Democrats actively demobilized the movement:

“One got up in the middle of the [capitol building’s] Rotunda when there were a few thousand people present and asked them to walk out to show we are willing to compromise and around 1,200 people left the Capitol with him. At the last big rally in March, with more than 200,000 people present, Democratic [state] Senator Jon Erpenbach, said ‘I don’t want to see you people back here. Go back to your home communities and work on the recall.’ ”

Briefly, the intensity of the movement had driven Wisconsin Democrats to take their lead from the masses of people in the streets; the party’s state senators fled the state in an ultimately failed attempt to block a vote on Governor Walker’s bills. But soon enough, Democratic Party and union leaders asserted leadership, and steered the movement’s energy into the usual directions. People deferred to those party and union leaders, who were afraid of the power of people on display, afraid of a movement that had blossomed out of their control and afraid that they would not look “respectable” in the eyes of establishment power brokers and the corporate mass media. Union leaders, once again, mobilized their memberships to elect Democrats without asking for anything ahead of time.

That channeling involved not only tactics, but message. The early message of linking fightbacks against the entire panoply of neoliberal attacks became narrowed into messages tailored to appear “safe” to Wisconsin’s suburban middle class.

Bruce A. Dixon, writing for the Black Agenda Report, wrote:

“When would-be movements sideline the youthful risk-taking initiative and egalitarian core values that might have sustained them to become political campaigns, they generally don’t even run good campaigns. The crowds on the sidewalks and parking lots in Madison were conducting anti-racism seminars and study groups. But the electoral campaign the whole thing was turned into, even though they had a whole year to plan, neglected to do the labor-intensive ground game of massive voter registration in poor and minority communities. They spent their relatively scarce dollars on media instead, and pursued the easy consultant-class strategy of pursuing the “frequent voters” alone. They didn’t talk about the poor and renters, of which there are many in Milwaukee. They only talked about the middle class. They didn’t talk much about mass incarceration either, even though Wisconsin and Milwaukee consistently have the highest rates of Black imprisonment in the U.S. … They came up with a black candidate for lieutenant governor. But mostly they went from hundreds of thousands of people shivering in the cold, standing outside the people-proof, democracy-proof cages of elite consensus and two-party politics and beginning to feel their own power to decide what to do next to folks campaigning for the candidate and the slate that sucked less.”

The slate that “sucked less” and its union backers may have been eager to “compromise,” but the billionaire funders opposed to them were not.

A money deficit, yes, but an uninspired recall campaign

As a matter of strategy, organizers of the signature-gathering campaign to get the recall vote on to the ballot intentionally avoided naming a candidate. Brendan Fischer, writing in AlterNet a month before the election, reported:

“Their strategy was to make it clear that signing a petition was a choice to recall the governor, rather than a vote in favor of any particular challenger. But that move left Walker opponents without a candidate when signatures were handed in on January 16.”

That decision gave Governor Walker a huge head start. The unions’ preferred candidate lost in a primary to Milwaukee Mayor Tom Barrett, whom the governor defeated in 2010. By the time Mayor Barrett began raising money, Governor Walker had already spent 20 million dollars, according to Mr. Fischer. The challenger had only a month to make his case, but although the recall election inevitably was based on the personality of the governor, Mayor Barrett had not only already been defeated a year and a half earlier, he stood for “austerity lite” instead of providing a clean alternative.

During his 2010 gubernatorial campaign, the centerpiece of Mayor Barrett’s campaign was a 67-page document called “Put Madison on a Diet.” He advocated layoffs, cuts to benefits and cuts to wages as the main routes to trimming more than one billion dollars in state spending per year. This time around, he avoided drawing attention to such plans, but also avoided saying anything of substance. In a June 2, 2012, commentary published in the Milwaukee Journal-Sentinel, he offered platitudes but no concrete programs. Instead he offered a general critique of Governor Walker and issued bland declarations such as “My priority is Wisconsin.” Had somebody though his priority Saskatchewan?

He did, however, offer a hint of his previous program in a debate when he said, “The real test of leadership is whether you can say no to your friends.” That, perhaps, was less than inspiring to those whom he needed to get to the voting booth.

Whatever else can be said of the Republican Party, it does not boast of “standing up” against its base. But nor does the Democratic Party wish to offend its corporate benefactors, without whom it could not survive. We square the circle here: Mass movements are the only possible alternative to corporate power and money (especially as that money and power holds a tight grip on both major parties), but such movements are precisely what Democrats fear most. Union leaderships have become so removed from their rank-and-file members and so entangled with party politics that they are unable to critique the dead end of giving support to Democrats with no demands, hoping that some crumbs will fall their way.

When you guarantee unconditional support, when you keep your mouth shut when you are forgotten after the election, when you desperately suppress any independent mass movement, when you are so comfortable in your bubble that you can’t conceive of doing anything different, when you are unable to differentiate between a crumb and a loaf, you will lose. And you will keep losing.

Union households who voted for attacks on themselves

An analysis of the recall vote is not complete without examining the eyebrow-raising exit-poll finding that 38 percent of union-household members voted for Governor Walker. In 2010, he earned 37 percent of that vote — no substantial change.

More than one-third endorsed a direct assault on their ability to maintain their standard of living. How do we account for that?

In part, answering that question is partly dependent on knowing the breakdown of those voters between public-sector and private-sector union households, a breakdown that does not appear in the results of the exit poll conducted by Edison Research. Governor Walker generally directed his anti-union rhetoric at government workers, although the fierce attack on public-sector unions are an opening gambit — corporate antipathy toward unions does not differentiate. Such attacks are the tip of a well-honed spear aimed at breaking down solidarity among working people.

Capitalist ideology furiously promotes individuality in an effort to atomize society and to justify extraordinary disparities in wealth. We are constantly bombarded with messages that declare you, too, could be rich if only you worked as hard as the chief executive officer does. Many CEOs undoubtedly work hard, but 340 times harder than the average worker? The reality is that only a handful can be rich, because being rich means accumulating money and capital through paying employees much less than the value of what they produce. Therefore, most people are going to struggle economically. How can that be if you work hard every day?

Scapegoats are provided as the answer — not that the is system stacked against you and always will be, nor is the answer that the capitalism system is undergoing a serious structural crisis that is the logical outcome of its highly competitive nature and need for ever more accumulation. A favorite scapegoat are always a society’s minorities or immigrants, and when that line loses effectiveness, the scapegoat becomes public-sector workers. Thus we have the sad spectacle of the current Big Business-led war on teachers, waged across the United States. Government workers in general are demonized as lazy and the recipients of unwarranted largesse.

Another critical strand of capitalist ideology is to foster jealousy. This is a crucial piece of ideological campaigns, in part to create atomization of society (crucial to blocking ideas of solidarity and common economic interests from taking root) but also to facilitate the scapegoating. Carefully targeted, the jealousy is never against the executive or speculator who makes millions of dollars off other people’s hard work, but rather the jealousy is carefully fanned against other working people who have something somebody else does not.

Because government workers — and unions — were the designated scapegoats, their pensions became easy targets. Republican Party operatives went to rural counties and made sure to play up the fact that most people no longer have pensions, while government workers do. Mike McCabe, the executive director of the watchdog group Wisconsin Democracy Campaign, argues that Wisconsin Republicans have forged a “rich-poor alliance” of suburban and rural areas:

“Republicans ask people in places like [rural] Clark County if they have pensions, and the answer is invariably no. ‘Well, you are paying for theirs,’ they tell them. ‘Do you have health insurance? No. Well, you are paying for theirs. Are you getting pay raises? No. Well, you are paying for theirs.’ For years now Democrats have not plausibly made the case that they will deliver better health or retirement security or higher pay to all. Only the state’s few government workers have so benefited from the Democrats’ toil.”

Exit polling seems to back up these claims. Residents of cities with at least 50,000 people voted by a close to 2-to-1 margin in favor of Mayor Barrett, but all other areas voted by wide margins for Governor Walker.

Notice, however, how the question is framed by conservatives: “Why does someone have something you don’t have” (a pension), instead of “Why do you not have something that you should be entitled to but don’t have.” Once the question is framed that way, and anti-government rhetoric is wrapped around it, then it is a short path to making pensions indistinguishable from excessive government spending.

An analysis in the Wisconsin State Journal newspaper contained a noteworthy quotation from the district attorney and Republican Party chairman (the same person holds both posts) of another rural county, Green County. This official had his district-attorney pay cut but, considering his other post, not surprisingly backed Governor Walker. “I was also able to see the other side of the equation. Taxpayers, businesspeople and retired citizens had just as strong feelings about the necessity to control state spending and require state employees to ‘pay their fair share,’ ” the official said.

Once again: Why do those people have something I don’t when I work hard? Nor can such sentiments simply be waved off by virtue of party — one-sixth of Governor Walker’s voters intend to vote for President Obama, according to the exit poll.

Capitalist ideology permeates every every institution. Not simply the corporate mass media, but churches, schools, think tanks, militaries and a host of others incessantly carry similar messages: We “deserve” what we get. The generally unspoken but nonetheless inferred coda to that message is that if what we “deserve”  is not as much as we need in a time of scarcity and cutbacks, then then someone else must not be deserving, either, so we should take away from them. Take it away from them, not have it for ourselves and our neighbors, too.

If you’ve heard this before, you are not hallucinating

There is nothing unique about Wisconsin. Or about the United States. Government workers are the brunt of attacks in Greece. If it is true (I don’t know myself) that the Greek government is over-staffed, government workers there nonetheless have to pay their taxes because their employer certainly isn’t going to fail to collect them, while it is Greek corporations, the wealthy and even some middle class private-sector workers who don’t pay taxes, a significant factor in Greece’s financial crisis.

Voters in two California cities, San Diego and San Jose, one a conservative military town and the other a liberal Silicon Valley town, voted last week by 2-to-1 margins to cut the pensions of public workers despite the fact that those pensions are subject to collective bargaining. In New York, there has been the odd revelation that leaders of a group of construction-worker unions donated half a million dollars to the “Committee to Save New York.” That is odd, because the committee has been bankrolled by millions of dollars by corporate donors and is the leading ally of Governor Andrew Cuomo’s drive to impose layoffs, pay cuts and pension reductions on government workers. That drive continues despite the government workers already agreeing to cuts.

The capitalists pushing the anti-union agenda must be delighted to have unions of private-sector workers joining their attacks on public-sector workers. Talk about short-sighted: Private-sector unions will become targets if public-sector unions are disabled, and construction unions are already routinely scapegoated as responsible for high construction costs. Never mind that real estate is a fantastically profitable business for developers and landlords in and around New York City, where most of the population of New York state resides. Non-union labor has become a more common sight on city construction jobs, but you should not hold your breath waiting for rents or sale prices to be reduced on account of resulting lower labor costs.

All these agendas do not fall from the sky. A handful of billionaires bankrolled Governor Walker’s victories in Wisconsin, and there are plenty of other capitalists who are happy to free-ride on their largesse. Austerity may come in several flavors, but, ultimately, from one source. If so-called leadership offers only austerity-lite “me, too,” the alternative is to become our own leaders.

NAFTA and European Union: Different sides of the Atlantic but same function

By Pete Dolack

The logic of the multi-national euro currency is tighter economic integration and loss of popular sovereignty. Unless the eurozone breaks up and its users return to their own national currencies, pressure will be built by the “markets” for further centralization and harmonization of rules. In plain language, tightened control by big capitalists.

The eurozone, functionally, is much the same as the North American Free Trade Agreement across the Atlantic. NAFTA makes corporate profiteering paramount by eroding the ability of the governments within it to enforce regulations; places decision-making in the hands of unaccountable and undemocratic arbitration boards convened by either the commercial arm of the United Nations or the World Bank; and elevates the interests of large corporations and financiers above all other human considerations.

(There are the occasional conspiracy-mongers who claim that NAFTA is a precursor to the dismantling of the United States in favor of some “North American republic” and that the dollar will be eliminated in favor of a regional currency, but besides the fact that these feverish Right-wing conspiracies are laughable on their face they completely ignore the fact that U.S. capitalism needs U.S. military might, that the world capitalist system needs a center with the requisite financial and military clout to act as the enforcer, that the U.S. relies on the dominance of its national currency to be able to run budget and trade deficits, and that the nationalistic U.S. public would rise up, in arms if necessary, against any such idea.)

The key NAFTA provision is Chapter 11, which codifies “equal treatment” in accordance with international law and enables corporations to sue over any regulation or other government act that violates “investor rights,” which means any regulation or act that might prevent the corporation from earning the maximum possible profit. Thus we have had the spectacle of a corporate parcel-delivery service suing Canada in attempt to have the Canadian postal system dismantled and chemical companies suing because a chemical they produce has been banned because it is poisoning water supplies.

The idea that safe drinking water is considered a trifle next to the maximization of profits, sadly, is not a mordant joke. Any company that has its shares traded on stock exchanges is legally required to maximize its profits for shareholders, to the exclusion of all else — under capitalism, safe drinking water is unimportant. (Except, of course, for the bottled-water companies that drain aquifers to supply their products.)

Although Canada, which has the most stringent regulations of the three NAFTA countries, has won five decisions before the arbitration boards, three of them were on technicalities in which the merits of the cases were not ruled upon. Only twice has the Canadian government won a clean victory in the dozens of cases brought against it. Just this week, The Globe and Mail newspaper of Toronto reported that Exxon Mobil Corp. won a Chapter 11 arbitration case against the province of Newfoundland and Labrador because Exxon and a partner company were required to conduct research before commencing projects.

A U.S. watchdog group, Public Citizen, summed up the rules of NAFTA and other trade treaties in this succinct fashion:

“This ‘investor-state’ enforcement mechanism elevates private firms and investors to the same status as sovereign governments, effectively privatizing the right to enforce public treaties’ expansive new investor rights. There is no such private enforcement for labor rights or environmental standards. … The [free-trade] pacts provide firms a way to attack other countries’ domestic public interest laws and skirt their court systems.”

If readers in Canada, the United States or Mexico have no recollection of voting on any of this, there is good reason.

Similarly, the financiers who dominate European Union policy are not subject to any democratic accounting, either. And under the rubric of not allowing a perfectly good crisis to go to waste, the ongoing eurozone crisis is being used as leverage to install an ever harsher régime. Doing so is completely logical within the imperial construct of the European Union, which is a supra-national institution to impose corporate domination on a reluctant population. National governments are not insulated from popular opinion, but a supra-national structure can impose dictates on those governments, which can then tell citizens that is has “no choice” but to adhere to them so that the country can remain “part of Europe.”

Concomitantly, European capitalists desire the ability to challenge the United States for economic supremacy, but cannot do so without the combined clout of a united continent. This wish underlies the anti-democratic push to steadily tighten the E.U., including mandatory national budget benchmarks that require cutting social safety nets and policies that are designed to break down solidarity among wage earners across borders by imposing harsher competition through imposed austerity.

The E.U., in its current capitalist form, is a logical step for business leaders who desire greater commercial power on a global basis: It creates a “free trade” zone complete with suppression of social accountability while giving muscle to a currency that has the potential of challenging the U.S. dollar as the world’s pre-eminent currency.

A difficulty for E.U. business elites is that nationalism tends to act as a disorganizing force within the E.U., whereas nationalism is a potent unifying force in China and the United States. But nationalism, as always, has its uses: Instead of uniting on their common interests across borders, all too many Europeans are attacking one another on a national basis. Nationalism, ordinarily an easily manipulated ethos used to provide a unifying glue within countries that are otherwise consciously atomized by capitalist pressures and individualist propaganda, becomes a divide-and-conquer tool par excellence in a supra-national context. And so we have the dispiriting spectacle of venomous attacks on “lazy Greeks,” “arrogant Germans” and the rest of the assortment of tired clichés.

Nationalism is fine for working people, but an impediment for business elites who are increasingly bold in calling for economic policy to be directed by Brussels. In the past week, an assortment of E.U. officials, joined by national leaders elected and unelected, said the E.U. must be bound together more tightly. Arrogant and hypocritical as they may be, these officials are simply enunciating the logic of E.U. capitalism. The most prominent tangible form of these calls are for the issuance of “euro bonds” — government bonds to finance debt issued by the European Central Bank in place of bonds issued by individual national governments.

The new French government has endorsed the issuance of “euro bonds,” adding to the momentum. The proximate cause of pleas for the creating of “euro bonds” is that too many eurozone governments can’t afford to borrow at the high interests rates demanded by financiers and the rich who buy bonds (in lieu of paying taxes, which would end the need for selling bonds in such large amounts). The price of pooling together the risk of all E.U. governments by issuing such bonds is much closer economic integration. And what that means is financiers controlling policy to an even greater degree than they already do.

Financiers, that is, as an international interest group; not German bankers or Germany as a country. The corporate news media continues to cover the ongoing crisis and its slow-motion developments as a contest of wills between Germans (or Chancellor Angela Merkel) and the Southern rim of the E.U. with France as a buffer in between. But, as I have previously written, it is German industrialists, not German working people, who are the beneficiaries of German government policy.

Germany has become reliant on exports as German workers have absorbed a decade of wage cuts, leaving domestic demand inadequate to soak up German production or to pick up the slack when export markets soften. German exports have become more competitive on the backs of German employees, making it more difficult for other eurozone countries to remain competitive because, by not having their own currency that they can devalue, they can’t use that route to give their exports a boost. Thus, German industrialists have prospered through the widespread adoption of the euro, which has “locked in” their competitive advantages.

German, French and other bankers earned fat bonuses because the euro also made it easier for them to make loans to the Southern rim, which also enabled those countries to buy more German products. In turn, deficits mount and production is shuttered in countries such as Greece (where the shipping industry, the rich and even many private-sector middle class people don’t pay taxes), and the price for more loans is more harsh austerity.

But the money doesn’t go to the Greek budget, it goes right back to the banks. The 130 billion euro bailout of Greece is used almost exclusively to service the interest on Greece’s debt — not even to pay down the principal! The so-called “troika” — the European Central Bank, the International Monetary Fund and the European Commission — wire Greece the money, which is almost immediately sent right back. Most of the small amount that is retained by the Greek government is used to bail out Greek banks. The price for this? An unemployment rate of 22 percent and rising, pay cuts of 40 percent for those still employed and large numbers of small businesses closing.

The troika went so far as to demand that the Greek government change its constitution to ensure that banks are paid back before there is any spending on social programs. That is a taste of what will be experienced across Europe if more power is concentrated in the hands of unelected and unaccountable officials at the European level. A de facto financier dictatorship, although one to benefit big industrialists as well as financiers, because financiers are dependent on big industrialists to generate the profits that are poured into speculation (nor is there a neat separation between the two). For working people across Europe, the program can be summed up in two words: permanent austerity.

And not even German workers, who have acquiesced to their unions agreeing to a decade of wage cuts in exchange for job security, will be immune. German workers’ living standards are slowly eroding, and when German exports slow or decline because buyers in other advanced capitalist countries buy fewer of their their products because of austerity and buyers in developing countries like China buy less because they can no longer sustain the pace of investment in infrastructure and industrial capacity, austerity will hit Germans. The route to German industrialists maintaining their profits under these future conditions will be either deeper cuts to wages, an end to job security, export of production to places with much lower wages or a combination of these.

The alternative to harmonizing economy policy among the eurozone countries (harmonizing with the tightest policy among them) is for the eurozone to break up, and countries to resume using their own currencies and setting their own policies, which would at least be subject to elections, and provide space for policies other than neoliberal austerity.

It is no surprise, then, that centralizing economic policy is the preferred route for European business elites. The arguments among them are over details — Chancellor Merkel is not a stubborn holdout nor obsessed with Weimar-era inflation; she is simply reminding other national political leaders that the harmonization will conform to the tightest policy among them and Germany so happens to have that tightest policy. None of the eurozone’s national leaders are in any sense reducible to “puppets,” but their perceived national interests are distorted by whatever consensus their capitalists arrive at, which in turn are determined by larger market forces. Big industrialists and financiers dominate their societies through control of the mass media and a range of other institutions to the point that their preferred policies become, through repetition, the dominant ideas across society and the ideas adopted by the political leaders who become dependent on them.

Similarly, “markets” seek regulatory harmonization within NAFTA countries at the level of the weakest regulations. Governments must respond because capitalists can move production at will, leaving everyone else at their mercy.

Such is the logic of “markets,” which are not the disembodied forces of nature so often portrayed but are simply the interests of the most powerful capitalist elites. It is futile to expect anything different from their system.