Eight billionaires control as much wealth as the bottom half of the world’s population

Oxfam issues report on eve of Davos conference

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17 January 2016

Eight billionaires, six of them from the United States, own as much combined wealth as the bottom half of the world’s population, some 3.6 billion people, according to the latest report on global inequality from the British-based advocacy group Oxfam.

The report was released Monday, on the eve of the annual World Economic Forum in the mountain resort of Davos, Switzerland, at which many of the ultra-rich will converge this week. The Oxfam document contains a range of figures that highlight the staggering growth of social inequality, showing that the income and wealth gap between a tiny financial elite and the rest of the world’s people is widening at an accelerating rate.

New data made available to Oxfam reveals that wealth is even more concentrated than the organization had previously believed. Last year, Oxfam reported that 62 people controlled as much wealth as the bottom half of humanity. In its latest report, the charity notes that “had this new data been available last year, it would have shown that nine billionaires owned the same wealth as the poorest half of the planet.”

Oxfam writes that since 2015, the richest 1 percent of the world’s population has owned more than the rest of the world put together, and that over the past quarter century, the top 1 percent has gained more income than the bottom 50 percent combined.

“Far from trickling down, income and wealth are being sucked upwards at an alarming rate,” the report states. It notes that the 1,810 dollar billionaires on the Forbes 2016 rich list own $6.5 trillion, “as much wealth as the bottom 70 percent of humanity.”

Over the next 20 years, some 500 people will hand over to their heirs more than $2.1 trillion, an amount larger than the gross domestic product of India, a country of 1.3 billion people.

Oxfam cites recent research by the economist Thomas Piketty and others showing that in the United States, over the past 30 years the growth in incomes of the bottom 50 percent has been zero, while the incomes of the top 1 percent have risen by 300 percent.

The same process is taking place in the world’s poorest countries. Oxfam notes that Vietnam’s richest man earns more in a day than the country’s poorest person earns in 10 years.

The report points to the systematic character of the siphoning of global wealth to the heights of society. The business sector is focused on delivering “ever higher returns to wealthy owners and top executives,” with companies “structured to dodge taxes, drive down workers’ wages and squeeze producers.”

This involves the most barbaric and criminal practices. Oxfam cites a report by the International Labour Organisation estimating that 21 million people are forced labourers, generating $150 billion in profits every year. The world’s largest garment companies all have links to cotton-spinning mills in India that routinely use the forced labour of girls.

Small farmers are also being driven into poverty: in the 1980s, cocoa farmers received 18 percent of the value of a chocolate bar, compared to just 6 percent today.

The extent of corporate power is highlighted in a number of telling statistics. In terms of revenue, 69 of the world’s largest economic entities are now corporations, not countries. The world’s 10 largest companies, including firms such as Wal-Mart, Shell and Apple, have combined revenue greater than the total government revenue of 180 countries.

Although the authors avoid any condemnation of the profit system per se, the information provided in their report amounts to a stunning verdict on the capitalist system. It highlights in facts and figures two central processes delineated by Karl Marx, the founder of modern socialism.

In Capital, Marx explains that the objective logic of the capitalist system, based on the drive for profit, is to produce ever greater wealth at one pole and poverty, misery and degradation at the other. In the Communist Manifesto, he explains that all governments are but the executive committee for managing the affairs of the capitalist class.

This is exemplified in the tax policies and other “business-friendly” measures undertaken by governments around the world. The Oxfam report notes that technology giant Apple is alleged to have paid a tax of just 0.005 percent on its European profits.

Developing countries lose around $100 billion a year as a result of outright tax dodging and the exemptions granted to companies. In Kenya, $1.1 billion is lost to government revenue every year because of exemptions, an amount nearly twice the country’s annual health budget.

Government tax policies work hand in hand with tax dodging and criminality. The report cites economist Gabriel Zucman’s estimate that $7.6 trillion of global wealth is hidden in offshore tax havens. Africa alone loses $14 billion in annual revenues because of the use of tax havens: enough to pay for health care that would save the lives of four million children and employ enough teachers to ensure that every African child went to school.

There is one significant omission from Oxfam’s discussion of accelerating inequality. It makes no mention of the critical role of the policies of the world’s major governments and central banks in handing over trillions of dollars to the banks, major corporations and financial elites through bank bailouts and the policies of “quantitative easing” since the eruption of the global financial crisis in 2008.

A discussion of these facts would raise uncomfortable political issues. The report opens by favourably citing remarks by US President Barack Obama to the UN General Assembly in 2016 that a world in which 1 percent of the population owns as much as the other 99 percent can never be stable.

But the very policies of the Obama administration have played a key role in creating this world. After rescuing the financial oligarchs from the results of their own criminal actions with massive bank bailouts, the Obama administration and the US central bank ensured their further enrichment by providing a supply of ultra-cheap money that boosted the value of their assets.

Under Obama, the decades-long growth of inequality accelerated, along with the descent of the ruling class into parasitism and criminality. He paved the way for the financial oligarchy to directly seize the reins of power, embodied in the imminent presidency of casino and real estate billionaire Donald Trump, to whom Obama will hand over the keys to the White House on Friday.

The overriding motivation behind the Oxfam report is fear of the political consequences of ever-rising inequality and a desire to deflect mounting anger over its consequences into harmless channels. It advances the perspective of a “human economy,” but maintains that this can be achieved on the basis of the capitalist market, provided corporations and governments change their mindsets.

The absurdity of this perspective, based on the long-discredited outlook of British Fabianism, which has dominated the thinking of the English middle classes for well over a century, can be seen from the fact that the report is directed to the global financial elites gathered at the Davos summit this week, with a call for them to change their ways.

The bankruptcy of this outlook is demonstrated not only by present-day facts and figures, but by historical experience. A quarter century ago, following the liquidation of the Soviet Union, the air was filled with capitalist triumphalism. Freed from the encumbrance of the USSR, and able to dominate the globe, liberal capitalist democracy was going to show humanity what it could do.

And it certainly has, creating a world marked by ever-rising inequality, the accumulation of wealth to truly obscene levels, oppression and anti-democratic forms of rule, criminality at the very heights of society, and the increasingly ominous prospect of a third world war.

This history brings into focus another anniversary: the centenary of the Russian Revolution. Despite its subsequent betrayal at the hands of the Stalinist bureaucracy, the Russian Revolution demonstrated imperishably, and for all time, that a world beyond capitalism and all its social ills and malignancies is both possible and necessary. Its lessons must inform the guiding perspective for the immense social struggles that are going to erupt out of the social conditions detailed in the Oxfam report.

Nick Beams

WSWS 

US Millennials face higher unemployment, lower income than parents’ generation

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By Shelley Connor
16 January 2017

A report released by Young Invincibles last week outlines key areas in which so-called Millennials—Americans between the ages of 18 and 34—face unprecedented financial difficulties.

The brief, which compares the financial health of Millennials to that of Baby Boomers in the 1980s, demonstrates that wages and home ownership have declined significantly within a generation. The authors measured five factors of Millennials’ financial health against that of young adults in the 1980s: income, assets, net wealth, home ownership and retirement planning.

The discrepancies in income alone are shocking; wages have declined by 20 percent from 1989 to the present, with Millennials earning about $10,000 less than Baby Boomers did as young adults. In 1989, a high school graduate earned about the same income as a college graduate with a degree today. The report also notes that an astounding 1 million young adults experienced long-term unemployment during the Great Recession of 2008-09.

The report’s authors maintain that, although income declined across all education levels for Millennials, a college degree remains a worthwhile investment. According to the Young Invincibles’ analysis, “intergenerational declines in income were steepest for those with no degree.” Nevertheless, years of deep cuts to state education budgets force today’s college students to contend with ever-rising tuition costs and increasing amounts of student loan debt.

The Young Invicibles’ report acknowledges that “student debt blunts some of education’s benefits,” which stands out as an impossibly sanguine understatement in light of the numbers they present. By their own analysis, median assets declined at a rate of 71 percent for college graduates with student debt, in contrast to a decline of 45 percent for college graduates without student loans.

Student debt is at an all-time high, with 42 percent of all 18-29 year olds reporting that they bear student loan debt. In addition, the average debt burden for students has nearly doubled within a single generation, with Millennials owing an average of $37,000 upon graduation.

In years past, a college degree was regarded as an important aspect of preparing for a career and gaining enough wealth to own a home and retire comfortably. The economic burdens of today’s college graduates, however, demonstrate that the economic downturn has cut deeply throughout all educational levels for working and lower-middle class youth.

When Baby Boomers graduated college, those with outstanding student loans earned an average of $68,000 annually. Student borrowers today, by contrast, can expect to earn an average of $51,000—a 25 percent decrease.

Another cornerstone of financial security for Americans, home ownership, has declined by about eight percent between the Baby Boom and the Millennial generations. When separating out those without college degrees, however, the decline is a much steeper 22 percent. College graduates with student loan debt are also less likely to own their homes.

Only half of today’s young adults own their own homes, according to Young Invincibles, and the authors point to studies that show an estimated 2.8 million 25- to 34-year-olds contend with severe rental burdens.

Housing accounts for over 60 percent of assets held by the middle class; it represents about 15 percent of gross domestic product. Given that fewer than half of today’s young adults can attain home ownership, while many others cannot afford to rent, the implications for the economy as a whole are sobering.

This is a particularly strong indicator of the depth of economic decline. Last year, a study by the Pew Research Center revealed that, for the first time since 1880, young adults between the ages of 18 and 34 were more likely to live with a parent than in any other living arrangement. Pew’s researchers pointed to an anemic job market, where 5.7 percent of men between ages 25 and 34 are unemployed. On top of this, rental costs have risen disproportionately to wages since 2008.

Housing is not the only area in which Millennials lag behind Baby Boomers. Young adults in the 1980s owned twice the amount of assets as young adults in 2013. Research highlights the impact of student debt on this decline; non-borrowers amongst this cohort own over three times the assets of borrowers. In 1989 college graduates with student debt enjoyed a median net wealth of $86,500; by 2014 the same cohort had a median net worth of only $6,600.

On its face, retirement seems to be the one area in which Millennials are on stronger footing than Baby Boomers; retirement plan ownership increased by 150 percent between 1989 and today. However, beneath the surface of this seemingly hopeful number lies the virtual disappearance of pension plans, which decreased from 27.1 million in 1989 to 15.2 million in 2013.

The Young Invincibles’ report was notably released amidst a storm of pageantry surrounding President Barack Obama’s exit from the White House. The New York Times, which pumps out wholesale lies and half-truths on a daily basis, published an editorial in its Sunday edition praising Obama’s “optimism.”

The Times heralded Obama’s ascension to the White House as a surprising victory over racism and greed and compares him to Abraham Lincoln, insinuating that he has made America a more equitable and prosperous country.

The Times also praised Obama’s stimulus plan, which they assert staved off another Great Depression, and hailed the federal investment in General Motors and Chrysler. This move, they claim, preserved more than a million jobs. They casually ignore the fact that the investment was predicated upon stripping autoworkers of their hard-earned pensions and dramatically cutting wages. Autoworkers today are forced to work grueling hours and face hazardous working conditions for poverty wages.

“Even now,” the Times’ chides, “…stubborn biases and beliefs… have blinded many Americans to their own good fortune, fortune that flowed from policies set in motion by this president.” The startling numbers quoted by the Young Invincibles—declining home ownership, disappearing pensions, rent that outstrips earning, and crippling student debt—give the lie to this offensive statement.

http://www.wsws.org/en/articles/2017/01/16/mill-j16.html

How Diversity Makes Us Smarter

Being around people who are different from us makes us more creative, more diligent and harder-working

Credit: Edel Rodriguez

IN BRIEF

  • Decades of research by organizational scientists, psychologists, sociologists, economists and demographers show that socially diverse groups (that is, those with a diversity of race, ethnicity, gender and sexual orientation) are more innovative than homogeneous groups.
  • It seems obvious that a group of people with diverse individual expertise would be better than a homogeneous group at solving complex, nonroutine problems. It is less obvious that social diversity should work in the same way—yet the science shows that it does.
  • This is not only because people with different backgrounds bring new information. Simply interacting with individuals who are different forces group members to prepare better, to anticipate alternative viewpoints and to expect that reaching consensus will take effort.

The first thing to acknowledge about diversity is that it can be difficult. In the U.S., where the dialogue of inclusion is relatively advanced, even the mention of the word “diversity” can lead to anxiety and conflict. Supreme Court justices disagree on the virtues of diversity and the means for achieving it. Corporations spend billions of dollars to attract and manage diversity both internally and externally, yet they still face discrimination lawsuits, and the leadership ranks of the business world remain predominantly white and male.

CONTINUED:

https://www.scientificamerican.com/article/how-diversity-makes-us-smarter/

Trump’s Agenda Is a Threat to Protections the LGBTQ Community Has Spent Decades Fighting For

The incoming administration is already targeting laws protecting basic civil rights.

Photo Credit: Ted Eytan / Flickr

Many are called but few are chosen during any presidential transition. That’s why it’s illuminating to consider who Donald Trump has chosen from the parade of possibilities for his transition team and senior administration appointments so far— and what they may portend for LGBTQ people.

The Christian Right, with few exceptions, backed the Trump ticket, with over 80 percent of White evangelicals voting for him, and now they’re being rewarded with traditional forms of political patronage. They’re scoring major appointments and have won a say in personnel and policy decisions on a scale far surpassing anything seen since the movement first arrived in Washington with the Reagan administration in 1980.

Since Trump himself has never held the kinds of values or displayed the kind of personal behavior prized by conservative Christians—and barely passes as any kind of a Christian at all—he and his backers needed a theological rationale for the Christian Right’s support. They found justification in biblical examples of God-anointed leaders who were ungodly themselves but who nevertheless delivered for God’s people. Christian Right leaders presented Trump in this way, it was broadly accepted by their followers, and Trump is now evidently making good on the deal.

Let’s look first at two early warnings from which all the rest flows.

The first is an important campaign promise affecting LGBTQ people. In November 2016, Trump told 60 Minutes that he was “fine” with gay marriage; at the Republican National Convention he described himself as “a supporter” of the LGBTQ community, and said he considers marriage equality a “settled” matter. But none of those statements amount to promises to LGBTQ people, to whom he is sending mixed messages He has also promised the Christian Right he would consider appointing justices who would overturn Obergefell v. Hodges, the decision that guarantees same-sex couples the right to marry.

Secondly, Trump has also positioned himself in the camp of establishing dangerously broad religious exemptions from all laws aimed at ensuring LGBTQ civil rights. He promised he would sign the First Amendment Defense Act (FADA) if it reached his desk. FADA, which was first introduced in 2015 and now has substantial support in both houses of Congress, would legalize discrimination in the name of “religious belief or moral conviction,” requiring nothing more than someone’s say so. The scope of the Act appears to primarily affect government departments and agencies, and federal contractors and grantees, including entities that may require federal accreditation or licensing, such as universities and hospitals. And maybe more.

Under FADA, denial of service could take many forms beyond matters of wedding cakes, flowers, and photographers, to include allowing hospitals to refuse treatment to LGBTQ people (or their children), businesses to refuse health benefits to a same-sex partner, and child welfare workers to keep a child in foster care as opposed to placing them with a loving and qualified same-sex couple. If that’s not enough, FADA exempts non-profit organizations and businesses from non-discrimination standards. The proposal’s implications go well beyond issues of direct discrimination. FADA might allow federal employees to refuse being involved in processing federal benefits and rights claims to which they conscientiously object, such as any involving married same-sex couples. The bill exempts “any person regardless of religious affiliation, including corporations and other entities regardless of for-profit or nonprofit status” from following non-discrimination codes on the basis of religious beliefs.

If this is the benchmark approach to policy (regardless of the immediate future of the legislation itself) the federal government will be leading efforts to reverse historic gains of recent decades—attacking the basis for LGBTQ freedom and the dignity and rights of everyone else for whom a religious justification for denying service can be made.

But there’s more.

Trump’s selection of Mike Pence as his vice president was a transformational moment in the campaign, and arguably in American history. Pence may be best known for his theocratic political identity, proudly explaining at the 2010 Values Voter Summit in 2010, for example, that he is “a Christian, a conservative, and a Republican, in that order.” Donald Trump, via his son Donald Jr., reportedly called an aide to his first choice for veep, Governor John Kasich of Ohio, and told him that a president Trump would put Kasich in charge of both foreign and domestic policy, while the president himself would be in charge of “making America great again.” Pence hasn’t said whether he got the same deal, but his role as chair of the transition team suggests that he is already among the most powerful vice presidents in American history.

This does not bode well.

Pence’s tenure as governor of Indiana was marked by his signing a version of the Religious Freedom Restoration Act, a law that would make discrimination against same-sex couples legally defensible. Pence signed the Act in the company of his state’s Christian Right leadership, marking him as a movement leader himself. Following national outcry, the legislature passed an amendment that explicitly stated that such discrimination was not the intent of the law.

Unsurprisingly, given both Trump and Pence’s history and views, much of the Christian Right agenda, particularly with regards to anything that affects LGBTQ people, will probably come wrapped in the flag of religious freedom. Some leading indicators of the direction the administration will take in this regard are visible in the transition team that’s proposing staff for the new administration and the appointments and nominations that have resulted from their work so far.

Ken Blackwell heads domestic issues for the transition team. A longtime Christian Right pol from Ohio, he is Senior Fellow for Human Rights and Constitutional Governance at the Family Research Council, the leading Christian Right lobby in Washington, D.C. Blackwell also serves on the board of the Becket Fund for Religious Liberty, a Christian Right legal group that promotes religion based exemptions from the law.

Ed Meese leads the transition team for the Office of Management and Budget. He is one of the architects of FADA and served as Attorney General in the Reagan administration. He is joined by Kay Cole James, the former dean of the Pat Robertson School of Government at Regent University and a former head of the federal Office of Personnel Management. These figures know how the federal government works and how to ensure their people are well represented among the 4,000 positions that need to be filled in the West Wing of the White House, and throughout the federal government over the course of the Trump administration and beyond.

Ken Klukowski serves on the part of the transition team focusing on executive authority, responsible for “protecting constitutional rights.” He is the senior counsel for the Texas-based First Liberty Institute (formerly the Liberty Institute), a leading Christian Right legal group focused on religious exemptions from the law, especially LGBTQ rights. He is also the senior legal editor for Breitbart News.

Dr. Ben Carson is one of twelve vice-chairs of the transition team and Trump’s nominee for Secretary of Housing and Urban Development (HUD). Carson is a Christian Right leader and anti-LGBTQ ideologue known for harsh rhetoric in support of his beliefs. Carson has associated being LGBTQ with polygamy, pedophilia, and bestiality. He thinks that transgender people are “the height of absurdity” and he claims that marriage equality is a Marxist plot that may lead the country to go the way of the Roman Empire. He has characterized the kind of public housing he would oversee at HUD as “communism” and as Secretary he could undermine if not reverse the Obama administration’s efforts to curb discrimination against LGBTQ people in housing.

Sen. Jeff Sessions (R-AL) is a vice-chair of the transition team and Trump’s nominee for Attorney General. A senior member of the Senate Judiciary Committee, Sessions is also a co-sponsor of FADA. The Huffington Postheadlined an article about his nomination, “Pick Any LGBTQ Rights Issue. Jeff Sessions Has Voted Against It.” His Senate chief of staff, Rick Dearborn, is the executive director of the transition team.

Rep. Tom Price (R-GA) is nominated to be Secretary of the Department of Health and Human Services (HHS). Price’s House voting record received a 0% rating from the Human Rights Campaign. He is a co-sponsor of FADA and supports a constitutional amendment to overturn Obergefell v. Hodges.

Betsy DeVos, Trump’s nominee for Secretary of Education, is a longtime financier of Christian Right projects, particularly in the area of school privatization. Politico reports that DeVos has said her work in education is intended to “advance God’s kingdom.” She and her family, heirs to the Amway corporate fortune, have a long record of underwriting Christian Right and anti-LGBTQ projects and organizations for the same reason. They have donated hundreds of thousands of dollars to organizations that believe in “conversion therapy”; they are major backers of Focus on the Family, whose founder, James Dobson, called the battle against LGBTQ rights a “second civil war.” (Liberty University president Jerry Falwell Jr., who steadfastly supported Trump through the campaign, was Trump’s first choice for secretary. Falwell said he declined in order to attend to other obligations.)

President-elect Donald Trump’s transition team and top level appointments should be taken as clear indicators of the direction of the Trump administration with regard to the dignity and civil rights of LGBTQ people. And if past is prologue, what Mr. Trump says may not be nearly as important as what he does. Continued vigilance regarding what his appointees do in his name will be vital.

 

Frederick Clarkson is a senior fellow at Political Research Associates and a member of the Public Eye editorial board. He is the editor of Dispatches from the Religious Left: The Future of Faith and Politics in America, and the author of Eternal Hostility: The Struggle Between Theocracy and Democracy.

http://www.alternet.org/lgbtq/trumps-agenda-threat-protections-lgbtq-community-has-spent-decades-fighting?akid=15112.265072.qavF5g&rd=1&src=newsletter1070542&t=8

Trump press conference: The oligarchy rules

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12 January 2017

Donald Trump’s press conference Wednesday morning was an hour-long demonstration of oligarchic arrogance and contempt for democratic principles that has no parallel in modern American history.

The occasion for the press conference was the president-elect’s announcement of plans to put the Trump Organization, his main business entity, under the management of his two sons, Donald Jr. and Eric. The senior Trump would step down from all formal management roles while retaining his status as the principal owner.

These arrangements have been denounced by former government ethics officials as a travesty of longstanding norms: every US president in the modern period, no matter how wealthy, has been compelled to place all his assets in a blind trust to prevent overt conflicts of interest.

The event was dominated, however, by the issue of alleged Russian hacking of the Democratic National Committee and the Clinton campaign during the 2016 elections, with many questions relating to a document containing unverified allegations that the Russian government collected compromising material on Trump with an eye to future blackmail.

While the Democratic Party has chosen to center its critique of Trump on material provided by its allies in the CIA, the real assault on the public embodied in the incoming administration was visibly demonstrated at the news conference.

A significant portion of the event was given over to Trump’s legal advisor, who declared that the “business empire built by President-elect Trump over years is massive,” and proceeded to explain why conflict-of-interest statutes do not apply to Trump. She assured the American people that Trump “is not exploiting the office of the presidency for his personal benefit.”

Trump aides piled up hundreds of manila folders allegedly comprising documents showing the various arrangements to be made with respect to the Trump Organization. While the president-elect boasted of his wealth and success, he reiterated that he is exempt from conflict-of-interest rules (due to an obscure 1978 law passed to retroactively legitimize the free pass given to billionaire Nelson Rockefeller when he was appointed vice president by Gerald Ford in 1974).

Trump was not just citing a legal technicality. He was declaring the complete immunity of the capitalist oligarchy from the laws and regulations that apply to the general population. All laws and democratic principles are subordinate to oligarchic privilege.

Insisting that he had the right to do whatever he wanted, Trump at one point declared: “As president, I could run the Trump organization, great, great company, and I could run the company—the country. I’d do a very good job [at both], but I don’t want to do that.”

The Freudian slip, mixing up “company” and “country,” was the most revealing moment in the press conference. For Trump, the “country” and the “company”—and, more broadly, the oligarchy—are one and the same.

Particularly significant during the news conference was Trump’s menacing of the press. He flatly refused to take a question from CNN reporter Jim Acosta, accusing the network of being “fake news” because it was the first news outlet to report on the document claiming that Russia had obtained compromising material on him. Trump also made an ominous threat against the Buzzfeed website, which published the document online, declaring, “They’re going to suffer the consequences. They already are.”

There was a heavy-handed atmosphere of bullying throughout the event, which had a fascistic smell to it. There is no question that the administration is prepared to use extreme levels of violence abroad and within the United States against what it perceives to be its main threat, the working class.

The personnel of Trump’s cabinet shows—in such figures as billionaire asset stripper Wilbur Ross, multi-millionaire fast food magnate Andy Puzder, former Exxon Mobil CEO Rex Tillerson, and billionaire heiress and charter school advocate Betsy DeVos—that the new administration will be one of unrelenting war against the working class, destroying jobs, social services such as education and Medicare, and any remaining restrictions on the exploitation of labor.

Behind it all is an overpowering element of decay, nepotism and social filth—a new low, even by the tawdry standards of American capitalist politics. It represents the establishment in the United States of government of, by and for the financial oligarchy.

The new occupant of the White House is the personification of what has been developing over decades: an ever-increasing concentration of wealth at the very top of American society, and the crystallization of a semi-criminal ruling class whose wealth is derived from financial manipulation, not the development of the productive forces.

The Democratic Party bases its opposition to Trump not on the social character of the new administration as a government of the oligarchs, but on disputes over foreign policy, in which the Democrats happily embrace the opportunity to adopt a neo-McCarthyite anti-Russian stance and align themselves closely with the military-intelligence apparatus.

This is because the Democratic Party too is a political instrument of the billionaires, a different variant on the same theme. Indeed, everything that Trump will implement has been prepared by the Obama administration.

There is deep and growing anger among workers and youth. According to the latest poll figures, Trump—the most unpopular president-elect in history—now has a favorable rating of only 37 percent, with the majority of the population viewing him unfavorably. This is before he even takes a single action as president of the United States. Masses of people are in for a shock beyond anything they are prepared for.

There must and will be mass opposition. It will come from the working class, the vast majority of the population that is completely excluded from official political life. To prepare for these struggles, the working class must be politically organized and mobilized, and armed with a revolutionary and socialist perspective.

Patrick Martin

WSWS

Obama’s farewell address: One last round of clichés and lies

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By Niles Niemuth
11 January 2017

President Barack Obama capped his eight years in office with a vacuous and hypocritical farewell address Tuesday night delivered at the McCormick Place convention center in downtown Chicago.

The first-ever presidential farewell address delivered outside of Washington, DC had the atmospherics of an overblown, cheap spectacle. Obama strode onto the stage like a rock star, flanked by oversized American flags, a massive illuminated presidential seal and an introductory soundtrack by the rock band U2.

As with every address Obama has delivered over the last eight years, his speech in Chicago was full of clichés, his rhetoric padded with empty phrases and delivered with a false gravitas, signaled by his trademark pursed lips and affected whisper.

The speech was rife with contradictions, the starkest being the juxtaposition of Obama’s boasting of the great social progress achieved by his administration and his warning of threats to American democracy arising from ever-growing social inequality and economic insecurity.

The president declared: “If I had told you eight years ago that America would reverse a great recession, reboot our auto industry, and unleash the longest stretch of job creation in our history… if I had told you that we would open up a new chapter with the Cuban people, shut down Iran’s nuclear weapons program without firing a shot, and take out the mastermind of 9/11… if I had told you that we would win marriage equality, and secure the right to health insurance for another 20 million of our fellow citizens—you might have said our sights were set a little too high.

“By almost every measure, America is a better, stronger place than it was when we started.”

He made no attempt to explain why, given this impressive record of social progress and foreign policy success, his party was routed in the elections and the billionaire demagogue Donald Trump was preparing to succeed him in the White House.

A basic component of the answer, of course, is the grotesquely false rendering of his record and the state of American society as he leaves office. Hardly a week goes by without a new report on signs of extreme social crisis or ever-more obscene levels of wealth among the financial elite. Just in the past month, studies have been published showing the first decline in US life expectancy in 23 years, plunging pay for young adults, a 72 percent surge in deaths from synthetic opioids, and home ownership rates at historic lows for young people.

Other surveys have documented a $237 billion increase in the wealth of the world’s richest 200 billionaires, driven largely by the US stock market boom under Obama, and an acceleration of the transfer of wealth from the bottom half of the US population to the top one percent.

In boasting of presiding over a record number of consecutive monthly job increases, Obama neglected to mention that 94 percent of the new jobs created in the last eight years have been either part-time or temporary.

Noticeably absent from Obama’s remarks was any mention of the social conditions in the city where he was speaking, which is ravaged by high levels of poverty and unemployment, an epidemic of police killings and violence, and a skyrocketing homicide rate.

He lamented in general terms the growth of social inequality and the dangers it poses to American democracy—that is, the threat of a social explosion in the United States.

“While the top one percent has amassed a bigger share of wealth and income, too many families, in inner cities and rural counties, have been left behind—the laid-off factory worker; the waitress and health care worker who struggle to pay the bills—convinced that the game is fixed against them, that their government only serves the interests of the powerful—a recipe for more cynicism and polarization in our politics.”

As always, he spoke as if none of these social ills had anything to do with the policies pursued by his administration, including severe cuts in social spending on the one side and the bailout of the banks and flooding of money into the stock market on the other.

Another piece of monumental hypocrisy was Obama’s pose of fighting to defend democracy when he has done more to destroy it than perhaps any other US president.

“Democracy can buckle when we give in to fear,” he declared. “So just as we, as citizens, must remain vigilant against external aggression, we must guard against a weakening of the values that make us who we are. That’s why, for the past eight years, I’ve worked to put the fight against terrorism on a firm legal footing. That’s why we’ve ended torture, worked to close Gitmo, and reform our laws governing surveillance to protect privacy and civil liberties.”

This is from a president who has personally authorized the assassination of American citizens and thousands of others around the world with drones-fired missiles, protected and promoted those in the CIA responsible for torture, kept the prison at Guantanamo Bay open, persecuted journalists and jailed whistleblowers, militarized the police, and expanded the illegal surveillance of electronic communications.

Obama also used his farewell address take parting shots at Russia and China, lumping the war against ISIS with efforts to counter both countries, and arguing that aggressive action against the world’s second- and third-largest nuclear-armed powers was the only way to avoid war.

“[T]he fight against extremism and intolerance and sectarianism are of a piece with the fight against authoritarianism and nationalist aggression,” he said. “If the scope of freedom and respect for the rule of law shrinks around the world, the likelihood of war within and between nations increases, and our own freedoms will eventually be threatened.”

Obama spent his eight years in office waging war abroad and war on the working class at home. With Tuesday’s speech, he passed the reins to Trump with a shrug.

WSWS

Economic nationalism and the breakdown of the post-war order

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11 January 2017

In contrast to 2016, the new year has opened with relative stability in global financial markets. A year ago, markets experienced considerable turbulence in the context of the US Federal Reserve’s decision to lift interest rates by 0.25 percentage points, a sharp downturn in the price of oil, and a plunge in bank shares.

Thus far in 2017, it has been all quiet on the financial front, with US markets continuing to hover around the record highs they reached in December in the surge triggered by Donald Trump’s victory in the US presidential election.

Behind the appearance of relative calm, however, major shifts have taken place that will have far-reaching consequences, not just for financial markets, but for the world economy more broadly.

One of the most significant features of 2016 was the rise of economic nationalism and the growth of right-wing nationalist and populist movements. The turn to economic nationalism is reflected in many areas of the world, but has found its sharpest expression in the “America First” policies espoused by incoming President Trump and the appointment to his cabinet of figures who openly advance this agenda, with China designated as one of the central targets.

The shift in orientation by the US ruling class has profound historical significance. One of the lessons drawn by the American ruling elites following the disasters produced by the decade of the 1930s, when the division of the world economy into currency and trading blocs led to World War II, was the need to base the post-war order on free trade, with protectionism eschewed at all cost.

What was called the “liberal” trade agenda was itself based on, and underwritten by, the unchallenged global economic dominance of American capitalism, which emerged relatively unscathed from the carnage of the Second World War, in contrast to the devastation of Europe and much of Asia. The war amplified the already dominant position of US industry and finance. American capitalism sponsored the establishment of a set of institutions and programmes—the dollar-based Bretton Woods monetary system, the General Agreement on Tariffs and Trade, the Marshall Plan—to stabilise and pry open the world market to its exports and investments and facilitate the profit-making of US corporations.

Today, after decades of protracted decline, US economic hegemony is a thing of the past and American capitalism finds itself threatened by the rise, in particular, of China. This is fundamentally what underlies the breakdown of the post-war economic order and the turn of the American ruling class to unbridled economic nationalism.

This has given rise to considerable concern about where the global economic system, and with it the entire system of political relations on which the stability of world capitalism has rested, is now headed.

Fears about the new US orientation were voiced in a column by Financial Times economics correspondent Martin Wolf published on January 6. It was headlined “The long and painful journey to world disorder.”

“It is not true that humanity cannot learn from history,” Wolf began. “It can and, in the case of the lessons of the dark period between 1914 and 1945, the west did. But it seems to have forgotten those lessons. We are living, once again, in an era of strident nationalism and xenophobia. The hopes of a brave new world of progress, harmony and democracy, raised by the market opening of the 1980s and the collapse of Soviet communism between 1989 and 1991, have turned to ashes.”

What lies ahead, he asked, for the US under a president who repudiates permanent alliances and embraces protectionism, and a battered European Union facing “illiberal democracy” in the east, Brexit, and the possibility that Marine Le Pen could be elected to the presidency in France?

Financial Times columnist Gideon Rachman also devoted his first piece of the year to the same processes. Before Trump promised to “Make America Great Again,” he wrote, China, Russia and Turkey had already turned to what he called “nostalgic nationalism.” In Japan, Prime Minister Shinzo Abe was leading an energetic campaign for “national revival,” while in India, Prime Minister Narendra Modi was combining a push to “modernise India” with an appeal to “Hindu pride.”

There was also a strong appeal to nationalism in the Brexit referendum, with the Leave campaign’s stress on a “Global Britain,” an attempt to appeal to “memories of the time when the UK was a dominant world power, not just a member of the club of 28 European nations.”

Rachman noted that it was somewhat difficult for any party in Germany to openly campaign on the slogan “Make Germany Great Again.” But while the slogan might be absent, at least to this point, similar forces are at work there—above all in key foreign policy, military and academic circles, where the assertion is heard repeatedly that Germany cannot simply function as a power within Europe, but must exercise its influence on a global scale.

The turn to economic nationalism is not rooted in the personality or psychology of Trump, Le Pen or any of the other political leaders. Nor is it simply a device by various politicians to exploit seething popular dissatisfaction with the existing economic and political order and use it for their own political advantage.

Such calculations are present, of course. But underneath the political manoeuvres and propaganda, profound objective forces are at work. These forces can be identified by reviewing the course of the world economy since the eruption of the US-based global financial crisis of 2008. This, as the World Socialist Web Site stressed at the time, was not a conjunctural downturn, but a breakdown in the functioning of the world capitalist economy.

At their first meeting in 2009, the leaders of the G-20 group of nations, representing 85 percent of the world economy, in confronting the most severe financial crisis since 1929, recognised the inherent dangers of a return to the conditions of the 1930s. From the outset, and at all subsequent meetings, they pledged to avoid protectionist and trade war measures. But the contradictions of the capitalist economy have proven to be more powerful than the pledges of capitalist politicians.

The policies enacted in response to the financial meltdown and the ensuing Great Recession were based on so-called quantitative easing, under which the world’s major central banks—the US Fed, the Bank of England, the European Central Bank and the Bank of Japan—pumped trillions of dollars into the financial system. These measures were accompanied in China by a massive stimulus package, based on government spending and the rapid expansion of credit.

The policies of the major central banks averted a total financial meltdown, while the Chinese stimulus provided a significant boost for commodity-exporting countries, from Latin America and Africa to Australia. For a brief period, this created the illusion that the so-called BRICS countries—Brazil, Russia, India, China and South Africa—could provide a new base of stability for world capitalism. That prospect proved to be short-lived.

The unprecedented injection of money into the financial system did little or nothing to promote real economic growth in the major economies, on which the BRICS countries are ultimately dependent, but simply enriched a global financial oligarchy, while the broad mass of the working class were forced to pay for the financial largesse through cuts in real wages, social programmes and living standards, amid a rise in social inequality to record levels.

In the years following the financial crisis, the central bankers and capitalist politicians insisted that the financial measures they had enacted would eventually bring about an economic recovery. But this fiction has now been well and truly exposed. Investment, the key driver of the economy, remains persistently below pre-crisis trends. Productivity is falling. Deflation has become widespread. And, most significantly, world trade growth has slowed markedly. Last September, the World Trade Organisation (WTO) noted that in 2016, the growth in world trade would fall below the rate of growth in global gross domestic product, only the second such occurrence since 1982.

The overall situation is graphically depicted by the fact that the world economy as a whole is one sixth smaller than it would have been had pre-crisis growth trends been maintained.

In response to this situation, the past year has seen, as the WTO noted, the increased use of protectionist measures, especially by the major economies, notwithstanding all the pledges to the contrary. It is within this broad economic context that Trump and his “America First” agenda, and the turn to such economic nationalist policies by other major powers, must be placed.

In the final analysis, they are the response by the ruling elites to their inability to devise any measures to promote sustainable economic growth. Consequently, the world market is increasingly becoming a battleground—a development that will become ever more apparent in the coming year.

There are striking historical parallels here. In the aftermath of the economic breakdown that led to World War I, there were numerous efforts in the decade of the 1920s to devise measures to revive the belle époque that had preceded the war. All of them failed, and the major powers responded to the contraction of the world market with a war of each against all, leading ultimately to World War II.

There are many differences between the situation today and that of 90 years ago. But the basic trends remain the same. In fact, the basic contradiction between the development of an interdependent global economy and its division into rival and conflicting nation-states has intensified.

This is reflected in the lamentations of bourgeois economic commentators such as Martin Wolf over the breakdown of globalisation. Just over a century ago, the international capitalist elites implemented their response to the breakdown of the nation-state system, unleashing on mankind the horrors of world war. Three years later, the international working class, through the conscious leadership provided by the Bolshevik Party, led by Lenin and Trotsky, gave its response to the crisis—the 1917 October Revolution in Russia, the first shot in the world socialist revolution.

There are, indeed, lessons of history that must be drawn. If mankind is to avert another catastrophe, the deepening social hostility to the present economic and political order must be transformed into a conscious struggle by the working class for the programme of international socialism, not as some kind of distant hope, but as the only viable and practical programme of the day.

Nick Beams

WSWS