Another financial crisis coming?

Growing warnings of another financial disaster

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25 March 2015

Global financial markets are on the road to another crash, with consequences even more serious than the collapse of September 2008. There have been a series of dire warnings from within the ruling class itself that present monetary policies have created massive financial bubbles with devastating consequences.

In an interview with the Financial Times, James Bullard, the head of the Reserve Bank of St Louis, and a non-voting member of the Federal Open Market Committee, said the Fed had to start normalizing interest rate policy as soon as possible. Continuing the present near-zero rate would feed into an asset price bubble which would “blow up out of control.”

Bullard and others are pointing to what has now become an obvious fact, that the combined effects of quantitative easing (i.e., printing money) and interest rate cuts by central banks are powering a feeding frenzy in global equity and bond markets.

Last week, an analysis of the S&P 500 Index from the Office of Financial Research, attached to the US Treasury Department, concluded that the US stock market had entered a situation comparable to patterns seen in 1929, 2000 and 2007. That is, a major downturn, if not a crash, was looming. Entitling his report “Quicksilver Markets”, the author noted: “Quicksilver markets can turn from tranquil to turbulent in short order.”

There are growing fears of a “liquidity crunch” if all the major investors and speculators, which operate on basically similar financial models, try to make an exit at the same time, only to find that there are no buyers.

According to a report in the Financial Times on Tuesday, some fund managers have warned “not since the collapse of Lehman Brothers in September 2008 and the freezing of money markets in August 2007 has there been such widespread concern over the structure of fixed income [i.e., bond] markets.” It said that prices of bonds had risen appreciably as investors had “gorged” on the cheap money provided by the low-interest rate regime of central banks and warned that there could be a “liquidity crunch” if they “collectively run for the exits.”

The same situation has developed in corporate and government bond markets, which have surged ahead on cheap money, making commonplace the previously extremely rare phenomenon of negative yields. (The price of the bond moves in the opposite direction to the yield.)

Negative yields mean that investors are in effect paying governments for the privilege of lending them money. The phenomenon is the result of a situation in which, despite the fact that bondholders would make a loss if they held the high-priced bond to maturity, they can still make a capital gain because the outflow of central bank finance will push bond prices still higher. They can simply sell the bond to another investor, who is himself operating under the assumption that he can do the same.

In effect, corporate and bond markets have been turned into a giant Ponzi scheme where profits can continue to be made so long as money continues to pour in. In other words, the modus operandi of what started as a criminal venture in the US during the 1920s has now become the central operating principle of the global multi-trillion dollar financial markets.

The official justification for this system advanced by its promoters is that these measures are necessary to stimulate economic growth. Such claims are refuted by facts and figures. The world economy as a whole is characterized by growing deflationary trends coupled with stagnant or low growth rates.

Yesterday it was announced that in Britain consumer prices for February had failed to show a rise for the first time in 55 years, a sure indicator of economic contraction. At the same time, a key indicator of manufacturing activity in China fell to an 11-month low. Decreases occurred in the key areas of new orders, export orders, employment and output prices.

The day before in Europe, projections prepared by the European Central Bank found that its quantitative easing program, aimed at pumping more than €1 trillion into financial markets over the next 18 months, would do virtually nothing to boost employment. The jobless rate will continue to remain at above 10 percent even after the program has been completed.

The main effect of the QE measures has been to boost European stock markets, which so far this year have risen at a faster rate than in the US, even as European economic output still remains below where it was in 2007, with investment in the real economy down by more than 25 percent on pre-crisis levels.

While the corporate and financial aristocracy continues to enrich itself, the conditions for the working class are subject to an unending austerity drive. The dictates of the financial oligarchy with respect to Greece are the consummate expression of what is a global program: the forcible impoverishment and starvation of ever-wider sections of the population.

In the aftermath of the devastation of the Great Depression of the 1930s, the political representatives of the ruling classes—desperately fearful of socialist revolution—claimed that they could regulate the worst effects of the profit system through so-called Keynesian measures based on government spending to simulate growth and secure a return to “normalcy.”

For a very short period, in historical terms, these policies seemed to bring success. However, they rested on the strength of US capitalism and the boost that its more productive methods provided for the global economy as a whole.

The situation today has been completely transformed. The US economy is no longer the center of economic expansion but is the headquarters of global parasitism. The central position in the world economy is no longer occupied by corporations such as Ford and General Motors, but by Goldman Sachs, JPMorgan Chase and their equally parasitic counterparts internationally, which are not engaged in the creation of new wealth but in its appropriation, often through outright criminal methods.

The utter bankruptcy of the entire profit system is exemplified by the policy debate now taking place in ruling financial and economic circles. It is between those who maintain that the cheap money policies of the central banks must be continued lest a disaster result, and those who insist the taps have to be turned off, and the system purged, if necessary through bankruptcies and financial collapses, in order to try to prevent an even bigger catastrophe.

The various defenders of the profit system, in the media, academic circles and in pseudo-left organisations such as Syriza in Greece, maintain that the perspective of a planned world socialist economy is not possible and therefore the only alternative is to try to “save capitalism from itself”.

In fact, the perspective of international socialism is the only viable and realistic answer to the historic crisis of capitalism.

Nick Beams

 

http://www.wsws.org/en/articles/2015/03/25/pers-m25.html

Poor fetishes, poor critiques: gentrification as violence

By Gloria Dawson On March 23, 2015

Post image for Poor fetishes, poor critiques: gentrification as violenceHating on hipsters is not the answer to gentrification. If we want to reclaim our cities, we should organize for genuinely affordable housing in common.
Recently, ROAR published an article entitled The Poor Fetish. The piece argues that in cities like London, bored and alienated middle-class people working in ‘bullshit jobs’ are driving gentrification because they pursue and participate in the commodification of ‘working-class’ and minority cultural pursuits and spaces. While I agree that this process of commodification exists, I want to counter some of the ways in which the author uses general observations about class and culture to draw incorrect conclusions about the social and cultural exclusions and enclosures that occur in major cities today.As someone who researches and organizes around the displacement and immiseration of those of us on low incomes, I think that at least a basic understanding of the political economy of cities is essential for the effort of formulating an appropriate answer to gentrification and displacement.

Hating on hipsters

The article, like several others that have been doing the rounds recently, follows some of the common themes of what I call the ‘hating on hipsters’ critique of gentrification, according to which it’s the consumption patterns of individuals that are ultimately to blame for the displacement of working class communities. I don’t have any substantial dispute with the claim that people often practice a form of cultural tourism (while at the same time trying to keep other cultures at arm’s length) or that for most people in the cities of the Global North work is emotionally demanding, demeaning and pointless. However, a critique of forms of consumption and affective labor doesn’t get us very far in correctly and powerfully understanding the violence of gentrification.

It is true that people who are not poor get off on poverty chic and it is also true that that this appropriation can be hurtful if you happen to be poor (and I mean poor in many senses, rather than just having little money). It is also true that people make money from that desire for a certain kind of consumption; this is a form of commodification. But we should avoid the assumption that we profess to despise: that there is somehow an ‘authentic’ culture which can only be produced and consumed by the poor, people of color, and the underclass. The logical extension of some of these arguments can be fairly damaging.

For example, alongside some persistent, intersectional and effective organizing around social and private rents in Berlin (another hotspot for both cultural appropriation and gentrification), there have been attacks on middle-class students and foreign workers in the name of ‘anti-gentrification’. These incomers represent a ‘hipster’ dweller resented by those who see themselves as ‘indigenous’ and authentic to the area, and rightly or wrongly see their claim to that area under threat. Here we see that even in the multicultural cities of the Eurozone, culture-based analyses of gentrification can lead to xenophobia.

In another example, a recent US blog on gentrification in West Coast cities recommended its middle-class, incomer reader to combat gentrification in their neighborhood by shunning culturally appropriative spaces like chic lo-fi coffee bars and instead stick to ‘mom and pop’ shops that had existed in the neighborhood before they moved in.

The problem is that a consumption-based analysis of gentrification leads people to attempt to preserve the ‘authentic’ nature of a particular area. If only all of us had lived long enough to understand that in no meaningful way are cities everlike they were before. As this excellent piece on aesthetics and gentrification puts it, “the failure to challenge the formal identity between aestheticisation and commodification makes any attempt by first-wave gentrifiers to somehow ‘stay true’ (on an aesthetic level) to the spirit of the areas they are gentrifying seem ludicrous, if not… downright offensive.”

The urban middle class: privileged or precarious?

My main issue, however, is with the author’s claim  that “with intimate knowledge of how the other half live comes an ugly truth: that middle-class privilege is in many ways premised on working class exploitation. That the rising house prices and cheap mortgages from which they have benefited create a rental market shot with misery.”

Here, the author equates ‘middle-class’ with ‘property-owning’. Yet many fully middle-class professionals on higher than median wages can only ever dream of buying property, especially in London and the South-East. On the other hand, many older working-class people own their own homes. Indeed, the ‘right to buy’ council housing has been a specific policy driven by the ideology that cities must be ‘regenerated’ — in other words, placed in the hands of private (individual and business) ownership — in order to promote and expand the ‘home-owner’ class.

The class analysis of the article thereby manages to exclude practically everyone I know. The author claims that “never will they [the middle-class consumer] face the grinding monotony of mindless work, the inability to pay bills or feed their children, nor the feeling of guilt and hopelessness that comes from being at the bottom of a system that blames the individual but offers no legitimate means by which they can escape.” With the growing precarization of even previously stable forms of ‘middle-class’ labor (medicine, law,  teaching, especially in higher education), few of us are really immune from these anxieties and risks. Yet according to this piece, the middle-classes never suffer wage repression, retaliatory eviction, redundancy, battles with the JobCentre, and so on.

Secondly, even if this class delineation were correct, the power over property ownership in cities like London does not primarily lie in the hands of middle or higher-income workers, but in the hands of private developers, large-scale landlords, and government itself. Gentrification, as Rachel Brahinsky puts it, is “capitalism playing out in the landscape. It is essentially our economy’s urban form.” It is a process involving time, land and rent, and it cannot occur without a planning and governmental framework to support it. The root of gentrification is the ability of landlords to command higher and higher rents after a ‘rent gap’ has been established in an area that has experienced less investment than other areas (or, in London, just that it’s not as expensive as everywhere else).

It’s capitalism, stupid!

Gentrification is therefore complex and cyclical, and undoubtedly the presence of coffee shops allows landlords to charge more to (housing and business) tenants. It also concurrently involves wholesale privatization of public spaces, especially retail. But if poverty and culture are sometimes commodified, buildings and land always are. The Poor Fetish article identifies gentrification as “different kinds of shops opening up,” but apart from its odd presentation of the significance of property ownership, it doesn’t actually talk about housing. Espresso Bars are symptoms of gentrification far more than they are the underlying causes.

The problem, of course, is that the causes of gentrification are hard to spot — by the time the coffee shop has opened, or the big art gallery, or the enormous utopian hoarding has gone up, a lot of its processes have already taken root in the area. Contracts have been signed. Money has moved. Investment funding has been leveraged. Visible and objectionable as they may be, cultural appropriation or ‘fetishisation’ is not what’s violently displacing low and middle-income people in the capital; it’s capitalism, stupid!

In my work on traditional retail markets and city center regeneration, I see how the consumption and culture-based analysis of gentrification I am critiquing here quickly becomes an argument about changing consumption preferences. This argument is then repeatedly used as a reason to privatize, reduce and displace small businesses, despite them being popular and profitable. In other words, local government and the private sector use the very arguments made by ‘hating on hipster’ critics to entrench socio-economic divisions and displace low-income businesses and consumers.

Yet even as a critique of retail gentrification, the piece fails, because it pins consumption patterns on the preferences of individuals and cultural groups, and not on the way in which regeneration and commercial rents are largely controlled by state and private actors. Indeed gentrification (in its guise as ‘regeneration’, which usually involves retail, business, leisure, other amenities and housing destruction and redevelopment) is often at its most vicious and comprehensive when conducted by these actors in the name of ‘regeneration’ and ‘renewal’.

The Elephant and Castle regeneration scheme in South-East London, a partnership between a large local authority and a large international property developer, is perhaps the most outstanding example of this in London at the moment. Have a look at wonderfully comprehensive web archives like HeygateWas Home or Ward’s Corner Community Coalition and tell me whether you still think it’s the art students shopping at small businesses and markets and entrepreneurs opening up coffee shops who are the problem here.

Reclaiming our cities as commons

Perhaps the most unhelpful aspect of articles like this one (and they are, as I have indicated, all too frequent) is that they give no indication that this situation can be changed. In the ‘hating on hipsters’ vision of gentrification, the middle classes are bound to live boring lives and their escape from these boring lives is fundamentally doomed. The working class, meanwhile, can only look on in horror as their authentic culture is destroyed. No one has any agency. Indeed the article itself, like the system it identifies, serves mainly to blame the individual while offering no legitimate means by which they can escape.

For few years now I have been working on, organizing around and thinking about how we can reclaim and rebuild cities that are, for want of a better phrase, held in common; and I see a great deal of inspiring action and a very effective push-back against these gentrification phenomena, especially in London. Thanks largely to committed, cross-tenure, networked organizing, condemned social housing is being re-occupied, tenants are staying in their homes, community-led regeneration plans are receiving planning permission, and some local authorities (mainly due to the pressure from below and their appallingly long housing lists) are actually building social rented housing.

Networks of organization around the principles of the right to the city are forming, recognizing that we are all people who live, work and purchase things and experiences. There is not always a simple class struggle in this process, but there are alliances and commonalities around the principles of displacement, community and the public housing system which bring together huge numbers of people who are realizing what they share. Those who stand in the way of these commons are now being named: large private developers, politicians and unelected council officers, and complex multi-actor mechanisms known as Private Finance Initiatives (PFI).

The answer to gentrification is not agonizing over where you sip your coffee, snort your coke (if you must) or choose your cauliflower. If we actually want to build a city for everyone, we should support and participate in those organizing efforts against displacement, against privatization, for housing held in common and at rents everyone can afford. Those of us writing about the misery-inducing phenomena produced by capitalism have a constant responsibility to understand and explain these issues in terms that allow us the possibility to destroy, re-form and transcend them.

Gloria Dawson is a writer and researcher, focusing on housing (particularly precarious and temporary housing) regeneration and social movements. Originally from London, she now lives in Leeds, UK. She blogs attrespassingassemblies.tumblr.com.

 

http://roarmag.org/2015/03/gentrification-critique-structural-violence/

 

BLOGGER COMMENT:

The gentrification problems, the terrors of displacement and cultural annihilation, are directly attributable to the forces of “free markets.” libertarian excess, or what we currently call “capitalism.” Hard to define the system these days — oligarchy? — but the forces of capital in the hands of a few — venture capitalists, real estate investors, and, in San Francisco at least, the tech corporations — have created an imbalanced social structure that begs for redress.Personally, I don’t blame individuals, tech workers, wealthy “hipsters” and the like, for creating the problems. The anger should be directed at big, voracious corporations like Google, Apple, and FaceBook as well as the overvalued “unicorn” corps.

On a more existential level, however, I think much of the negative class conflict in SF arises from the arrogance and elitist attitudes of many of the tech workers towards those who have less than they, or who are not members of the tech class.

 

Wall Street bonuses at highest level since 2008 crash

wall-street-vs-avg-worker

By Shannon Jones
18 March 2015

The average bonus paid out to employees in New York City’s financial industry hit $172,860, the highest level since the 2008 financial crash, according to figures released last week by the New York State Comptroller. Even after adjusting for inflation, the average Wall Street bonus is five times greater today than it was in 1987.

The bonus pool for Wall Street financial firms rose by some 3 percent in 2014 to reach the astronomical sum of $28.5 billion.

In a report published last week, the Institute for Policy Studies notes that the total bonuses handed to Wall Street employees amount to double the total annual pay for the 1 million US workers employed full time at the federal minimum wage of $7.25 per hour.

The typical Wall Street bonus is three times the annual US median income and almost four times the annual pay of a typical US worker. The report notes that the Wall Street bonus pool was 27 percent higher than in 2009, the last time Congress raised the minimum wage.

According to the New York Post, the average total pay on Wall Street including bonuses is now $355,900—five times the private sector average in New York City.

After several years of decline, total securities industry employment rose to 167,800 in 2014, an increase of 2,300. The securities industry in New York City accounted for 21 percent of all private sector wages paid in the city last year even though it accounts for less than 5 percent of private sector jobs.

The rise in bonus payouts on Wall Street comes despite a 4.2 percent decline in security industry profits. That makes the bonus pool 170 percent of total profits and 40 to 50 percent of total revenues. 2014 was the second year in a row that bonuses have risen despite a decline in profits.

Meanwhile, banking industry CEOs continue to collect massive pay packages. Goldman Sachs chief Lloyd Blankfein received a cash bonus of $7.3 million, up $1 million from the year before, out of a total compensation of $24 million in 2014.

JPMorgan Chase CEO Jamie Dimon received a $4.7 million cash bonus out of total pay of $20 million. Morgan Stanley CEO James Gorman received restricted shares valued at $4.5 million. This is part of a pay package that will reportedly exceed $18 million.

Swelling salaries in the financial sector are part of a broader trend of rising executive pay nationally. This week, US Steel announced that CEO Mario Longhi’s 2014 compensation doubled to $13.2 million, compared with $5.6 million in 2013. The pay of Coca-Cola CEO Muhtar Kent shot up 23 percent last year, hitting $25.2 million.

Meanwhile, Boeing said that its CEO, Jim McNerney, got a 24 percent rise in pay last year to $28.9 million. In 2014 McNerney, with the collaboration of the International Association of Machinists, scrapped the defined benefit pension plan for its unionized employees. That was followed by the freezing of pensions for 68,000 non-union employees and the transition to a 401(k) style plan.

The continued growth of Wall Street pay takes place in a city that is already one of the most economically unequal in the United States. New York City is home to the most billionaires of any city in the world.

For New York State as a whole, the average income of the top one percent of wage earners is $2.1 million, compared to an average income of $44,049. In part due to the concentration of the financial sector in metropolitan New York, both New York state and neighboring Connecticut have the largest gaps between the average income of the top 1 percent and the bottom 99 percent, with a ratio of 48 to 1.

A study authored by the Urban Institute found that 21.4 percent of New York City’s population lived in poverty in 2012. Out of that total, 3.8 percent were in “deep poverty,” meaning they had incomes less than one-half the official poverty level.

According to a report by the National Association of Realtors, the average New York City resident pays 60 percent of their income in rent, leaving only 40 percent for other basic needs such as food, clothing and medical care. According to the same report, rents in New York have risen faster than in any other American city since 2009.

Homelessness is at an all-time high in New York City, with nearly 60,000 people per night depending on the city’s emergency shelter system. Meanwhile, there is a construction boom in the city for residences for the ultra wealthy. A Manhattan penthouse recently set a new record by selling at more than $100 million.

 

http://www.wsws.org/en/articles/2015/03/18/wstr-m18.html

Paul Krugman: Netanyahu Has Used Iran to Conceal Israel’s Economic Disaster

netanyahu1

Israel’s prime minister is trying the hide a big problem.

The real reason behind Israeli Prime Minister Benjamin Netanyahu’s recent anti-Iran speech to Congress had nothing to do with foreign policy, Paul Krugman opines in Monday’s column. Insulting the president is not the way to go about that. No, Netanyahu has a serious problem at home and polls suggest that he may well get the boot in Tuesday’s election. That problem might sound familiar—Israel has become almost as unequal as America, and there is widespread economic discontent in the country that once was built on the socialist ideals of the kibbutz syztem.

Economic happiness is not the usual mainstream story we hear about Israel. The country is a high-technology powerhouse and its economy has grown rapidly, barely affected by the worldwide recession starting in 2008. But the spoils of that growth have gone disproportionately to Israel’s own version of the one percent. According to Krugman, since the early 1990s,

Israel has experienced a dramatic widening of income disparities. Key measures of inequality have soared; Israel is now right up there with America as one of the most unequal societies in the advanced world. And Israel’s experience shows that this matters, that extreme inequality has a corrosive effect on social and political life.

Consider what has happened at either end of the spectrum — the growth in poverty, on one side, and extreme wealth, on the other.

According to Luxembourg Income Study data, the share of Israel’s population living on less than half the country’s median income — a widely accepted definition of relative poverty — more than doubled, to 20.5 percent from 10.2 percent, between 1992 and 2010. The share of children in poverty almost quadrupled, to 27.4 percent from 7.8 percent. Both numbers are the worst in the advanced world, by a large margin.

And when it comes to children, in particular, relative poverty is the right concept. Families that live on much lower incomes than those of their fellow citizens will, in important ways, be alienated from the society around them, unable to participate fully in the life of the nation. Children growing up in such families will surely be placed at a permanent disadvantage.

At the other end, while the available data — puzzlingly — don’t show an especially large share of income going to the top 1 percent, there is an extreme concentration of wealth and power among a tiny group of people at the top. And I mean tiny. According to the Bank of Israel, roughly 20 families control companies that account for half the total value of Israel’s stock market. The nature of that control is convoluted and obscure, working through “pyramids” in which a family controls a firm that in turn controls other firms and so on. Although the Bank of Israel is circumspect in its language, it is clearly worried about the potential this concentration of control creates for self-dealing.

The widening inequality in Israel, like that in the U.S. is the result of policy decisions, not just some naturally occurring phenomenon that free marketeers like to claim. Shockingly, according to Krugman, “Israel does less to lift people out of poverty than any other advanced country — yes, even less than the United States.” Now that is saying something. And those living in poverty are not just Israel’s oppressed Arab population and ulta-Orthodox Jews.

Israel’s oligarchs, like Russia’s, managed to gain control of businesses that were privatized in the 1980s. That control enables them outsized influence on policy. Works every time. Netanyahu is a big advocate for policies that keep them sitting pretty, and like New Jersey’s Chris Christie, the Israeli P.M. enjoys sitting and traveling pretty himself, often on the taxpayer’s dime.

There are serious signs that Israeli’s are sick of it, and that Netanyahu’s bombast in the U.S. Congress did nothing to fool them.

City of Austin Braces For Massive Influx of Nerds

The city of Austin has begun bracing for the arrival of what experts are predicting will be a record-breaking number of nerds. Residents have grown accustomed to the annual migratory patterns of nerds, particularly the mid-March influx, which most attribute to the South by Southwest festival. But what has baffled locals of late is the sheer diversity of the strains of nerd infiltrating the Texan capital.

Studies have found that what was originally identified as a homogeneous nerd population has now split into several distinct subspecies. A lead researcher explained, “What were once typical nerd signifiers—thick glasses, an obsession with gadgets, a certain loveable gawkiness—are no longer reliable markers. While all nerds originate from the same family (Nerdus loserus sapiens), they now display a wide range of character traits.”

One of the most prominent breeds, the music nerd, has long thrived in Austin. At times mistaken for a cool person, the music nerd is identifiable by the speed at which he or she informs you that SXSW “used to be about the music, man.” One such music nerd was found outside of the Spotify House wearing a made-to-look-vintage Talking Heads tee purchased in 2012. “It’s just a damn shame, you know?” she said, ashing her cigarette. “South-by was our oasis from all of the mainstream bullshit out there, a place where we could celebrate raw sound. I mean, people who don’t know the history don’t even realize that John Mayer was discovered here.”

Yet music nerds have faced challenges at SXSW following the rise of their natural enemy, the tech nerd. Tech nerds tend to exhibit fewer traditional nerd characteristics as they amass more wealth than other nerds could ever imagine. Outside the convention center, one tech nerd struggled to untangle his badge from his new Apple Watch, pausing to say, “Obviously the Apple Watch isn’t out yet, but I’m basically boys with Tim Cook.” He later followed up on LinkedIn: “Hey, if you plan on quoting me in your piece, please specify that I was wearing the expensive kind of Apple Watch, not the one for poors.”

One of the fastest-growing yet most difficult-to-classify types of nerd is the corporate-brand nerd. A relative newcomer to the Nerdus family, the corporate-brand nerd hides in plain sight, wearing expensive denim and Oxford shirts in whimsical colors, like salmon. Typical traits include a love of harnessing the power of human emotion and leveraging data to drive interactions. Asked how it felt to represent corporate-brand nerds at SXSW, one individual replied, “I actually reject the ‘nerd’ characterization. The personal brand that I’ve cultivated for myself is more that of an avant-garde tastemaker, or #AvanTastemaker. Do you need me to spell that?”

This year, Austin city officials have assured the public that they are taking extra precautions to keep the nerds contained. Authorities have already instituted fines for the overuse of words such as “disrupt,” “drones,” and “passionate storytellers” in public spaces. Later this week, anti-nerd task forces will begin to roll out their most drastic initiative—random WiFi outages.

Yet even with these preëmptive measures in place, new strains of nerd are expected to crop up every day at SXSW. One of the most dangerous types is already multiplying rapidly along Sixth Street: the dad nerd. Long thought to be extinct in these parts, dad nerds most successfully reach maturation in a cage of familial obligation and conference calls. When allowed to roam freely in new pastures, dad nerds are famous for going out too hard and overdoing it. Asked how he was enjoying Austin, one dad nerd exclaimed, “I loooooooooooove SXSWALDSJFASLKDJRELKDCCKKFRD!”

 

http://www.newyorker.com/humor/daily-shouts/city-of-austin-braces-for-massive-influx-of-nerds?mbid=nl_031415_Daily&CNDID=22625076&mbid=nl_031415_Daily&CNDID=22625076&spMailingID=7583307&spUserID=MjY0MzU4Nzc0MDMS1&spJobID=641196267&spReportId=NjQxMTk2MjY3S0

Police killings and the collapse of democracy in America

TonyRobinson

10 March 2015

It is becoming increasingly clear that in working-class communities across the United States, the police function as virtual death squads, beating and killing people with legal impunity.

This reality was once again demonstrated Friday with the killing of 19-year-old Anthony Terrell Robinson in Madison, Wisconsin. On Monday, some 1,500 people, including hundreds of high school students, massed inside the state capitol building to protest the killing.

Matt Kenny, a twelve-year veteran of the Madison Police Department, forced his way into the house where Robinson was staying and fired multiple bullets into the unarmed teenager. The officer, who subsequently claimed Robinson had assaulted him, shot and killed another man in 2007 but was exonerated and even received a service commendation.

Robinson had just graduated from high school and was preparing to attend Milwaukee Area Technical College to study business.

Every day, millions of workers and young people in America face threats, intimidation, beatings and even murder at the hands of cops, whose badges give them a license to kill. Arbitrary police violence and terror are facts of life, alongside chronic mass unemployment, worsening poverty and dwindling educational opportunities.

Robinson is the 192nd person to be killed by police in the US so far this year. In the three days since his death, there have been five more victims. According to official statistics, the number of Americans killed by cops in 2013 was the highest in decades.

Robinson’s mother said the young man spoke about police brutality “constantly” and was deeply affected by last summer’s protests against police violence in Ferguson, Missouri.

The de facto state sanction for police killings was demonstrated only days before Robinson’s death when the Obama administration announced that it would not file charges against Darren Wilson, the Ferguson police officer who shot and killed 18-year-old Michael Brown, another unarmed African American youth, in August.

Speaking before students at a town hall event in Columbia, South Carolina on Friday, the same day Robinson was killed, Obama defended the Justice Department decision to clear Wilson, who pumped at least six bullets into Brown in broad daylight. Obama praised the police for doing their jobs “fairly” and “heroically.”

“Officer Wilson,” Obama declared, “like anybody else who is charged with a crime, benefits from due process and a reasonable doubt standard. And if there is uncertainty about what happened, then you can’t just charge them anyway just because what happened was tragic.”

This is a staggering falsification of due process as defined by the US Constitution, the practical result of which is to virtually preclude the prosecution of cops, no matter how brutal their crimes. Obama ignored the fact that Wilsonwas not charged, and justified this travesty of justice by substituting the standard of proof required to convict a criminal defendant at trial, guilt beyond a reasonable doubt, for the much looser standard, probable cause, for filing criminal charges.

There was more than ample “probable cause” for charging Wilson with murder, including multiple eyewitness accounts, as there was for charging the New York cop who was videotaped choking Eric Garner to death, and was similarly allowed to go scot-free.

The White House has extended to the police the de facto immunity that applies to higher operatives of the capitalist state, such as CIA torturers and their superiors, and those, including Obama himself, who order the extrajudicial assassination of alleged terrorists, including American citizens. This above-the-law status also applies to the Wall Street criminals who plunged the US and the world into economic slump and have used the disaster of their own making to cheat and steal with even greater abandon, growing still richer in the process.

While Obama demands virtual certainty of guilt to charge police killers, their victims have absolutely no rights. The Declaration of Independence’s eloquent invocation of “life, liberty and the pursuit of happiness” is rendered meaningless in a society where police operate as judge, jury and executioner, free to snuff out the life of a youth like Tony Robinson, secure in the knowledge that they will not be called to account.

That police in large swaths of America function as the equivalent of paramilitary counterinsurgency and occupation forces was indicated by the Justice Department’s own report on systematic police abuse in Ferguson, released the same day as the announcement that officer Wilson would not be charged.

The report declared that “officers violate the Fourth Amendment in stopping people without reasonable suspicion, arresting them without probable cause, and using unreasonable force.” It noted that “people are punished for talking back to officers, recording public police activities, and lawfully protesting perceived injustices.”

The report cited the example of police siccing a dog on a fourteen-year-old boy, then “[striking] him while he was on the ground, one of them putting a boot on the side of his head,” and laughing about the incident afterward.

Contrary to Obama’s claim that the regime of terror in Ferguson is not “endemic” to America, the federal government itself has issued similar reports over the past year on the police departments in Cleveland and Albuquerque, New Mexico. The same conditions prevail in New York, Chicago, Los Angeles, Detroit and every other city in the country.

What accounts for the growing wave of police violence and murder? Attempts to attribute the situation to a few “bad apples” or even mere corruption are derisory. A phenomenon of such virulence and on such a scale must reflect objective factors deeply rooted in the structure of society. Even if one wished to put the primary blame on the homicidal tendencies and social backwardness, including racism, of individual cops, the question that would have to be answered is: Why are such forces recruited in such numbers into the country’s police departments?

The United States is riven by social and class contradictions that can no longer be contained within the framework of bourgeois democratic procedures. First and foremost is the ever more virulent growth of social inequality. This goes hand in hand with escalating military violence and aggression internationally, as the American ruling class seeks to offset its economic decline by means of war and plunder.

Endless war and militarism abroad fuel the militarization of society at home. The American ruling class looks upon the American working class as its greatest enemy. It lives in perpetual fear of the emergence of mass social opposition to inequality, war and repression. Hence the militarization of the police at home and the increasing use of the counterinsurgency methods of murder and repression employed in Iraq, Afghanistan and other countries against workers and youth within the borders of the United States.

Madison, the state capital of Wisconsin, was the scene of mass protests by workers and young people in 2011 against the drive by Republican Governor Scott Walker, who is now seeking his party’s nomination for US president, to slash social spending, cut public employee pensions, and strip workers of their right to bargain collectively.

Last month, Walker, referring to the US war against ISIS, declared, “If I could take on 100,000 protesters, I could do the same across the world,” implicitly drawing an equal sign between working-class demonstrators and terrorist groups targeted by the US for annihilation.

Walker’s statement reflected the real state of class relations in America. It pointed to the fact, deliberately obscured by the singled-minded focus on race on the part of the political establishment and the media, as well as their pseudo-left appendages, that the essential division in American is between the working class and the capitalists.

While racism certainly plays a role in police violence, the attempts to present the issue as primarily one of race serves to block the working class from recognizing that the root cause of repression and poverty is the capitalist system.

 

Andre Damon

 

 

http://www.wsws.org/en/articles/2015/03/10/pers-m10.html

Selma and the legacy of the US civil rights movement

Martin Marches

9 March 2015

Over the weekend, President Barack Obama headed an official 50th anniversary commemoration of “Bloody Sunday.” On that day, March 7, 1965, hundreds of civil rights marchers demanding the right to vote were set upon and beaten by police as they marched over the Edmund Pettus Bridge from Selma, Alabama, heading for the state capital, Montgomery.

Obama’s ceremony was a political farce, a state-sanctioned exercise aimed at sanctifying a corrupt apparatus with the blood of those who made great sacrifices—in many cases, the ultimate sacrifice—as part of the civil rights movement. While many thousands of ordinary people attended, the commemoration was presided over by representatives of the corporate and financial elite, including 100 members of Congress of both parties, as well as George W. Bush, who left office the most despised president in US history.

The event was designed to obscure the significance of Selma, the civil rights movement as a whole, and the trajectory of American politics during the five decades since.

The repression meted out on “Bloody Sunday” was one episode in a campaign of police violence aimed at crushing protests against the system of Jim Crow segregation in the American South. Southern blacks faced a raft of discriminatory measures, such as the poll tax, that effectively disenfranchised them.

While the specific aim of the civil rights movement was to end racial discrimination, it was part of a wave of social conflict that engulfed the United States during the 1960s and 1970s. It came only a few decades after the explosive battles out of which the industrial unions were formed in the 1930s. It was followed by powerful workers’ strikes in the late 1960s and early 1970s, the urban rebellions against discrimination and poverty, and the mass protest movement against the Vietnam War.

American capitalism was in deep crisis. The underlying momentum for the civil rights movement was imparted by the immense social struggles of the working class. The masses of workers and youth, black and white, who participated in the civil rights struggle saw it as one component of a broader social movement, carried out in the face of bitter resistance from the ruling class and its political representatives.

The form the struggle took was complicated, however, by the abstention of the AFL-CIO trade unions, politically aligned with the Democratic Party and American imperialism. The Democrats, based at the time on an alliance between northern liberals and southern racists, worked for a protracted period to undermine all attempts to end legally enforced racial segregation. The unions avoided any actions that would disrupt their political alliance with the Democrats, including blocking efforts to organize black workers in the south.

In the face of the social upheavals of the period, however, the American ruling class reluctantly moved to grant legal reforms, including those enshrined in the Civil Rights Act of 1964 and the 1965 Voting Rights Act, signed by President Lyndon B. Johnson five months after Selma. A number of significant social reforms were also enacted during this period, including Medicare and other anti-poverty programs.

The reforms wrenched from the ruling class during the 1960s, however, marked the last gasp of liberal reformism in the United States. The American ruling class responded to the deepening crisis of the capitalist system with a two-pronged strategy. Beginning in the 1970s and escalating in the 1980s, it carried out an unrelenting assault on the working class. Jobs were destroyed, living standards were driven down, public services were slashed.

To better carry out this offensive, the ruling class worked deliberately to integrate a small minority of the African American population into positions of power and privilege. Particularly after the 1968 assassination of Martin Luther King, Jr.—who, while remaining within the framework of the Democratic Party, had begun to focus his attention increasingly on the issues of social inequality and war—a section of the civil rights establishment was brought into the apparatus of state power. This included the likes of Andrew Young, Jesse Jackson and John Lewis, now a congressman, who was among the leaders of the 1965 Selma march.

During his 1968 election campaign, Richard Nixon called for giving a section of the African American population a “piece of the action.” As president, he initiated a program of “black capitalism.” He signed an executive order to form the Office of Minority Business Enterprise in March 1969, declaring that its aim was to “demonstrate that blacks, Mexican Americans, and others can participate in a growing economy on the basis of equal opportunity at the top of the ladder as well as on its lower rungs.”

Affirmative action, promoted by the Republican Nixon and then adopted as a central plank of the Democratic Party program, was aimed at bringing forward—in business, the military, local government, the police and academia—a privileged layer that would identify with American capitalism and facilitate the assault on the working class as a whole. Black nationalism became an ideological means for the restructuring of class rule on the basis of identity politics.

What have been the consequences of these policies? While the system of Jim Crow segregation was ended, the social position of the majority of black workers today is worse today than 50 years ago. According to official statistics, a third of African Americans live in poverty and hunger. Unemployment and underemployment are pervasive, in the northern states as much as, or even more, than in the south.

These conditions are fundamentally an expression not of racism, as claimed by the Democrats and their periphery, when they acknowledge the social crisis at all, but of class oppression.

This is evident in Selma itself. The town’s population has fallen sharply over the past 50 years, while median income is a shocking $22,418, one half of the already low figure for the state of Alabama as a whole. Even by the government’s own insultingly low threshold for poverty, 41.9 percent of Selma falls below it.

All of this is overseen by an African American mayor and police chief, and a City Council and school board that are overwhelmingly African American in composition.

Selma is hardly unique. The poverty rate in the city of Detroit, which has lost almost two-thirds of its population in recent decades, is even higher than in Selma. The city has been run by a predominantly African American political establishment for decades. A similar dynamic is repeated in city after city throughout the United States.

Obama, the first African American president, represents something of a culmination of these processes. The lies and demagogy in Obama’s Selma speech cannot conceal the huge class gulf between the government he heads and the self-sacrificing workers and youth who led the fight for civil rights. They fought for equality. He represents privilege.

In his remarks, Obama quoted the immortal words from the Declaration of Independence, “All men are created equal,” but he presides over a level of inequality previously unheard of in American history.

While Obama spoke of the need to “honor the courage of ordinary Americans willing to endure billy clubs and the chastening rod, tear gas and the trampling hoof,” he stands at the apex of a military-intelligence-police apparatus of immense brutality, which carries out a virtual reign of terror against working class youth of all races.

Just last week, the Obama administration announced its decision not to charge the police officer who killed Michael Brown, an unarmed black teenager, in Ferguson, Missouri last August. Over the weekend, another unarmed young man was shot dead in cold blood by police in Madison, Wisconsin.

In his Selma speech, Obama noted the abysmal turnout of one-third or less of eligible voters in recent elections. “What’s our excuse today for not voting?” he asked.

He did not, and could not, answer, but there is a powerful “excuse.” Through bitter experience, millions of workers are beginning to conclude that there is no difference between the two big business parties, nor, for that matter, between the big business politicians of whatever skin color.

Perhaps the biggest lie of all is Obama’s claim, echoed by the many liberal and “left” organizations orbiting the Democratic Party, that the “unfinished business” of the civil rights movement is defined by race.

At the time of the Selma marches, systematic, state-sanctioned racism was a major factor of American political life. Even then, however, racism was subordinate to, and a product of, class rule. It was used as a means of dividing workers and preventing a unified struggle against the capitalist system.

In relation to the explosive class battles of the time, the trade unions, the civil rights establishment, the array of middle class organizations worked to obscure the fundamental class issues and maintain the political domination of the ruling class and its political representatives. The basic question then was the need to forge a revolutionary leadership to unite the working class against the root cause of repression, inequality and war—the capitalist system itself.

Fifty years later, the fundamental class questions are all the more evident. While racism still exists and plays a role in American life, it is now accompanied by the state-sanctioned identity politics that serve a similar purpose: to pit workers against one another and block a united movement of the working class. As we enter a new period of working class upsurge, the burning question remains that of leadership. The “unfinished business” of Selma is the building of the revolutionary leadership of the working class needed to carry out the socialist reorganization of society.

Fred Mazelis and Joseph Kishore

 

http://www.wsws.org/en/articles/2015/03/09/pers-m09.html

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