The UAW’s corporatist alliance with Trump

17 March 2017

On Wednesday, United Auto Workers (UAW) President Dennis Williams joined with President Donald Trump and the CEOs of the Big Three US automakers to promote a reactionary program of extreme economic nationalism, corporatism and war.

The event was a campaign-style speech by Trump before UAW bureaucrats and a section of workers bused in by the auto bosses to the decommissioned Willow Run auto plant in Ypsilanti, a suburb of Detroit.

Trump reprised the fascistic themes of his inaugural address, with a heavy emphasis on the unity of workers, employers and the state in defense of the “national interest” and in opposition to foreigners. “That is how we will succeed and grow together—American workers and American industry side by side,” the president declared. “Nobody can beat us, folks. Nobody can beat us. Because whether we are rich or poor, young or old, black or brown or white, we all bleed the same red blood of patriots.”

Trump, Dennis Williams and Ford CEO Mark Fields [Credit: Reuters]

As a matter of fact, during the Vietnam years, Trump was able to take advantage of the political connections of his millionaire father to stay out of the military and make sure that none of his “red blood” was spilled in an imperialist war that cost the lives of 58,000 Americans—mostly poor and working class—and upwards of 3 million Vietnamese.

Trump made explicit the warmongering essence of his corporatist ideology, which fraudulently claims that the corporations, the capitalist state and the working class have identical interests. He hailed as the model for today the united effort of the auto companies, the UAW and the state in producing the B-24 bomber at the now-closed plant during World War II.

“At peak production,” Trump said, “listen to this—it’s not the country that we’ve been watching over the last 20 years—they were building one B-24 every single hour. We don’t hear that. We don’t hear that anymore, do we?”

Alluding ominously to his plans for a massive military buildup, he continued, “We’ll be back. We’ll be back soon.”

The head of the UAW signaled his support for these policies by appearing on a panel with Trump and the auto bosses prior to the president’s speech. Williams was tellingly seated between the ultra-right-wing billionaire Trump and Ford CEO Mark Fields.

The UAW president declared his support for Trump’s trade war agenda against China and Mexico last month and announced that the UAW was reviving its “Buy American” campaign. “He’s the first president that has addressed this issue,” Williams said. “I have to give him kudos for that.”

AFL-CIO President Richard Trumka, who sits on Trump’s Manufacturing Jobs Initiative panel, promised to partner with Trump in promoting economic nationalism and attacking immigrant workers.

The UAW’s last “Buy American” campaign in the 1980s and 1990s included union officials banning Japanese- and European-built cars from union parking lots, bashing in the windshields of foreign-made cars, and whipping up such hatred that Vincent Chin, a Chinese-American worker in Detroit, was murdered by a Chrysler foreman.

The results of the UAW’s previous efforts to promote American nationalism can be seen in the closed factories and devastated former auto-producing cities across the Midwest. Under the corporatist banner of union-management “partnership,” the union collaborated with the companies in imposing plant closures, mass layoffs and wage cuts so as to promote the competitiveness of American automakers against their overseas competitors.

Wednesday’s event underscored a basic reality: The ultra-right-wing nationalist ideology of Trump and his chief strategist, ex-Breitbart News chief Stephen Bannon, is the ideology of the UAW, AFL-CIO and official unions as a whole. They are all seeking to divert the social anger of workers over deindustrialization, inequality and the ravaging of their living standards along the lines of xenophobia and militarism.

The unions, in lockstep with Bannon, insist on the necessity for national unity, so that American business can dominate its foreign rivals. This requires the suppression of the class struggle. The union leadership misdirects workers by promoting the lie that their problems are caused not by capitalism, but by immigrant workers and the theft of American wealth by foreign powers (and workers) benefiting from unfair trade policies.

This UAW’s embrace of corporatism is not a new development. It is the outcome of a protracted process that has extended over the course of many decades.

Leon Trotsky warned of the danger of the incorporation of the unions into the state at the very outset of the CIO in the late 1930s and early 1940s, just as the antisocialist bureaucratic leadership was tying the new industrial unions to President Franklin Roosevelt and the Democratic Party.

“The intensification of class contradictions within each country, the intensification of antagonisms between one country and another, produce a situation in which imperialist capitalism can tolerate (i.e., up to a certain time) a reformist bureaucracy only if the latter serves directly as a petty but active stockholder of its imperialist enterprises, of its plans and programs within the country as well as on the world arena,” Trotsky wrote in 1940.

During and after World War II, UAW President Walter Reuther played a particularly reactionary role in the anticommunist evolution of the union. He promoted and signed a no-strike pledge and guaranteed the union’s collaboration with the war effort in return for the dues checkoff and the institutionalization of the unions by the state. After the war, the union bureaucracy carried out a vicious purge of left-wing union militants while actively supporting US imperialism and the Cold War. The CIO’s merger with the AFL in 1955 established the defense of capitalism and imperialism as the official policy of the union.

The development of union corporatism accelerated along with the decline in the global economic position of American capitalism and the rise of European and Asian rivals to the Big Three auto companies. The establishment of a host of joint union-management bodies, along with various slush funds, was part of an effort to obliterate class consciousness and totally subordinate workers to the demands of the corporations and the government.

During the 1980s, every form of resistance was crushed with the collaboration of the unions. A major turning point was Ronald Reagan’s firing and blacklisting of the PATCO air traffic controllers in 1981, whose bitter strike was broken with the assistance of the AFL-CIO and UAW bureaucracies. PATCO was followed by a series of bitter and often violent strikes, including Phelps Dodge, Continental Airlines, Greyhound, Hormel and AT Massey Coal, all of which were isolated and betrayed by the union leadership. The bureaucrats argued that strikes and work actions had to be suppressed in an era of globalization in order to ensure the profitability of American corporations.

Analyzing the 1984 UAW-GM contract, which established the legal and technical foundations for the direct collaboration of the union bureaucracy with the corporations and the state, the Workers League, the forerunner of the Socialist Equality Party in the US, wrote: “The practice of anti-communism is a corporatist alliance with the auto bosses against the auto workers, the abandonment of any defense of the gains made by the union in the past 50 years, the surrender of jobs, wages, benefits and work rules. It is a total sellout and betrayal of the independent interests of the working class, in order to defend the capitalist system.”

Staffed and run by right-wing bureaucrats, the unions are today a savage industrial police force that works with the government and corporations to suppress the class struggle. They are the direct enforcers of cuts in wages, pensions and health benefits. The income of the top bureaucrats and their aides, which can reach well into six figures, is entirely dependent on this parasitic arrangement.

The UAW has not called a single national strike in nearly 40 years. Once considered a fact of daily life, strikes and walkouts have all but disappeared from the scene. Limited and deliberately isolated strikes are called on occasion to divide the working class and wear down and starve militant workers into submitting to company demands. Not surprisingly, a drastic decline in union membership has accompanied the unions’ ever more direct and open collaboration with the corporations to cut living standards and shut down factories.

Williams’ appearance with Trump is only the latest confirmation of the far-sighted analysis of the trade unions made by the Socialist Equality Party.

The reality is that workers are totally without any form of representation in their fight for decent wages and working conditions. The unions’ role as an industrial police force and their open alignment with the fascistic policies of the Trump administration raise sharply the need for the building in every workplace of democratic rank-and-file committees, which can take the struggle in defense of jobs and living standards out of the hands of the bureaucracy and place the initiative back in the hands of the working class.

This industrial fight must be combined with an independent political strategy, based on a break with the two-party system of American big business and the building of a mass socialist movement of the working class.

Niles Niemuth

 

Noam Chomsky Makes a Prediction for the U.S. Economy No One Can Afford to Dismiss

ECONOMY
The legendary linguist and philosopher warns the Trump bump won’t last.

Photo Credit: Jeremy Danger/Flickr

Legendary linguist Noam Chomsky has a warning for Donald Trump’s supporters; the Trump bump in the market is waning.

“Anti-establishment is kind of a joke,” Chomsky concluded. “Take a look at Trump and take a look at who’s appointed for the cabinet.”

Treasury Secretary Steve Mnuchin, for example, “comes from Goldman Sachs, a major investment firm where he was for almost 20 years,” Chomsky observed.

“What’s anti-establishment?” he asked. “This [cabinet] is drawing from the billionaire class, largely financial institutions, and military and so on; in fact, take a look at the stock market, that tells you how anti-establishment he is.”

“As soon as Trump was elected, and since, stock values in financial institutions escalated to the sky,” he said. Investors are “delighted he’s going to eliminate regulations, let them make more profit; of course, it’ll lead to another crash, but that’s somebody else’s problem. The taxpayers will take care of that.”

Chomsky is not the only one predicting a market crash. Even the right-leaning Wall Street Journal reported Thursday that “a revival in fortunes for hedge funds that trade across global assets, sparked by Donald Trump’s election victory, has hit trouble.”

“Wall Street hailed Trump’s triumph on November 8 as the dawn of a pro-business, growth-spurring revolution,” Shawn Tully, Fortune Magazine’s senior editor-at-large, explained earlier this week.

Vowing to roll back regulations, slash taxes and invest big in infrastructure, Trump created a rare post-election bull market.

However, Tully also warned that “given the high levels where stock prices stood pre-election, and the astounding run-up since then, investors have raised the bar for corporate performance so outrageously high that even if Trump does deliver on what he has promised, rich returns may still be out of reach.”

Watch:

US ruling elite moves to repeal the 1960s


14 March 2017

The repeal of Obamacare, which began last week with the introduction of legislation drafted by Republican House Speaker Paul Ryan, working in conjunction with the Trump administration, has become the vehicle for a much wider program of social reaction.

The new legislation, which will cut off health coverage for 24 million people, will essentially put an end to Medicaid, one of the major social reforms of the 1960s, a program that has funded health care for tens of millions of poor, blind or otherwise disabled people, as well as nursing home care for the low-income elderly. It sets the stage, as Ryan has indicated, for even more sweeping legislation that will undermine and eventually destroy Medicare, which has provided health coverage for most elderly people in the United States for more than 50 years.

The major social gains of the 1960s–the last period of significant social reform in American history–are in the final stages of liquidation. This is the culmination of a protracted historical process that began almost as soon as the American ruling elite made its decision, driven by the breakdown of the post-World War II economic boom, to shift from policies of relative class compromise to ruthless class warfare. The initial steps were taken as long ago as the Democratic administration of Jimmy Carter (1977-81), which began to curb social welfare spending and targeted striking coal miners for government intervention under the Taft-Hartley Law.

The attacks were accelerated greatly under Republican Ronald Reagan, who smashed the PATCO air traffic controllers strike, giving the green light for a decade of corporate union-busting and wage-cutting, and slashed federal social spending to fuel a record military buildup. Reagan set the pace for further attacks on the programs established in the 1960s and even in the 1930s, from Clinton’s abolition of Aid to Families with Dependent Children to Bush’s targeting of aid to public education with his “No Child Left Behind” legislation, co-authored by Democrat Edward Kennedy, and the first steps towards the privatization of Medicare.

The Obama administration did not mark a reversal of this decades-long process, but rather its intensification. Obamacare was not an expansion of the welfare state, as its apologists claimed, but a reactionary effort to shift the cost of health care from employers and the government to working people. The all-out support of the Democrats for this legislation, worked out in collaboration with the insurance industry and the drug monopolies, testifies to the rightward evolution of the Democratic Party over the past 40 years.

The eight years of the Obama administration–begun with promises of “hope” and “change” and filled instead with endless war, attacks on jobs and living standards, and the steady erosion of social services such as education and health care–created the conditions for the Republican takeover of Congress and finally the victory of Donald Trump.

The ideologues of capitalism claim that the “free market” will work wonders if only the restraints placed upon its operations by past social reforms are removed. These “restraints” include every social benefit won through the struggles of the working class over more than a century. Now, every one of Great Society liberalism’s “big four,” as one historian described the laws enacted in a six-month period from April to October 1965, is targeted for destruction.

The Elementary and Secondary Act of 1965: This legislation provided the first extensive federal support for local public schools, which had become politically possible following the legal abolition of segregated public schools in the South. Funds were allocated to improve public schools in poor communities, expand libraries and take the first steps in what became known as “special education.” The law established the pre-school program Head Start as a permanent federal program.

Republican Congressman Steve King of Iowa has introduced legislation that would rescind the Elementary and Secondary Act and bar the Department of Education from funding any educational program except state-controlled vouchers that could be used for charter or religious schools or for home schooling.

Medicare and Medicaid, established through the Social Security Act of 1965: This bill for the first time provided government-backed health insurance for those over 65, half of whom had no coverage in 1965. Medicare covered hospital care (Part A) and medical and nursing fees (Part B), but did not pay for vision, dental or prescription drugs. Medicaid covered the poorest sections of working people, including children, the disabled and the blind, as well as long-term nursing home care for the poorest elderly.

The Obamacare repeal legislation would put an end to Medicaid as an entitlement program beginning in 2020, when grants to the states would be capped, forcing them to ration care to the poor and disabled. Medicare was already significantly undermined through Obamacare itself, which cut $700 billion in reimbursements over 10 years, and the repeal legislation will set the stage for even larger cuts, based on Ryan’s plan to convert the program from an entitlement to a voucher program.

The Voting Rights Act of 1965 was the most radical democratic measure enacted by a US Congress since post-Civil War Reconstruction. It targeted those states, mainly in the Deep South, where denial of the franchise to minorities was widespread. Before its passage, few blacks were allowed to register and vote in southern states from Texas to Virginia. Afterwards, voter participation among African-Americans rose sharply, as the federal Justice Department continued to oversee state electoral policies to block any efforts to discriminate.

The US Supreme Court gutted the Voting Rights Act by a 5-4 decision in 2013 in Shelby vs. Holder, ruling that the targeting of the southern states for federal intervention could no longer be justified, despite repeated renewal and extension of the law by Congress, most recently in 2006. This decision was part of a wider effort led by Republicans in state after state to enact voter ID laws and other measures whose purpose was to resurrect discriminatory practices against minority and poor voters.

The Immigration and Nationality Act of 1965, also known as the Hart-Celler Act after its leading Senate and House sponsors, abolished longstanding restrictions on immigrants from Asia, Africa and the Middle East, and ended the preference for immigrants from Northern and Western Europe over those from Southern and Eastern Europe. It also allowed unlimited immigration of family members of US citizens and residents, encouraging the growth of immigrant communities.

Trump’s travel ban on visitors from six majority Muslim countries directly violates the 1965 law, which prohibits the use of national origin as a test for restricting immigration. His executive orders on immigration as well as the proposed wall along the US-Mexico border represent an effort to turn the clock back to the period of the exclusion laws that barred Asian immigrants and the bracero program that allowed Mexican immigrants only as semi-slave labor in the fields.

There are other reforms of the 1960s, from the establishment of the National Endowment for the Arts and the National Endowment for Humanities, to the Clean Water Act and dozens of other anti-pollution laws, which led ultimately to the creation of the Environmental Protection Administration. All these are under attack by the Trump administration and the Republican Congress.

The Democratic Party has collaborated in one attack after another on the social reforms with which it was once identified. The Democrats have spearheaded the attacks on public education, introduced major cuts in Medicare funding as part of Obamacare, and did not lift a finger to restore enforcement after the Supreme Court gutted the Voting Rights Act. They oppose Trump, not in defense of social services, but on behalf of sections of Wall Street and the military-intelligence apparatus, attacking the new administration over its supposed softness towards Russia.

Even in the 1960s, Democratic Party liberalism was not a challenge to capitalism, but rather an effort, at the height of the post-World War II economic boom, to make American capitalism more palatable to the masses, and therefore safer for the capitalists, under conditions of growing mass struggles over civil rights, against the Vietnam War, and for better wages and working conditions. The measures of Lyndon Johnson’s “Great Society” were far less ambitious than the welfare states built up in Western Europe during the same period.

As historian James T. Patterson wrote of that period: “The Great Society programs were… quintessentially liberal, not radical. Except in the area of race relations–a major exception–they made no serious effort to challenge the power of established groups, including large corporations. In no way did they seriously confront socio-economic inequality or seek to redistribute wealth.”

Today, under conditions of the protracted historical decline of American capitalism, exacerbated by the impact of the 2008 financial crash and the massive transfer of wealth from working people to bail out Wall Street, no section of the American ruling class can or will defend any of the social gains of the 1960s.

The supposed Democratic resistance to Trump’s program in Congress is merely for show. The Trump administration and the Republican Party will get nearly everything they want, while the Democrats wage a phony war and call on the victims of Trump’s attacks to wait until the 2018 elections.

The Democratic Party does not represent the popular opposition to Trump and the Republicans, as congressional Democrats and political charlatans like Bernie Sanders and Elizabeth Warren claim. Rather, its function is to serve as a brake on the actual resistance to Trump, from the working class, which will take on an increasingly explosive and politically radical form.

The working class must take the lead in the struggles to defend health care, education, environmental protection, the rights of immigrants and all basic democratic rights. It must answer the capitalist program of social counterrevolution with the working class alternative of social revolution. Workers must build a mass political movement independent of and opposed to the twin parties of big business, fighting on the basis of a socialist program.

Patrick Martin

http://www.wsws.org/en/articles/2017/03/14/pers-m14.html

How Uber Could End Up As Silicon Valley’s Most Spectacular Crash

ECONOMY

Lately, the curtain is being pulled back to reveal a rotten culture and troubled CEO.

Photo Credit: Prathan Chorruangsak / Shutterstock.com

Just a year ago, Uber reigned as the tech industry’s awe-inspiring, all-powerful Wizard of Oz. But lately, the curtain is being pulled back to reveal a guy who’s more like an angry drunk frantically yanking levers while taking roundhouse swings at the Tin Man and propositioning Dorothy.

Uber is in a whole lot of bad right now, and there’s growing concern that it’s about to melt down like a haywire nuclear reactor, which would leave a crater in the heart of Silicon Valley. Uber gave us on-demand transportation. Countless people all over the world love this new kind of service. The category is only going to get bigger. But it’s possible it will do that without Uber.

Rotten Culture, Bad PressAt the heart of Uber’s trouble is its culture, which seems to have been born from a one-night stand between John Belushi’s crude Bluto in Animal House and Ayn Rand’s hypercompetitive Hank Rearden. That culture got put on public display in February, when former engineering employee Susan Fowler published a blog calling out Uber’s rotten treatment of women and its general dysfunction. The place is so cutthroat, she wrote, “it seemed like every manager was fighting their peers or attempting to undermine their direct supervisor so that they could have their direct supervisor’s job.”

If anyone thought Fowler was a lone whiner, a few days later tech industry legend Mitch Kapor and his wife, Freada Kapor, who is an expert in workplace mores, published an open letter to Uber’s board. The Kapors were early investors in the company, and they were unhappy about Uber’s tepid response to Fowler’s post and fed up with Uber’s “destructive culture,” to use their term. “We are speaking up now because we are disappointed and frustrated; we feel we have hit a dead end in trying to influence the company quietly from the inside,” they wrote.

A week later, while riding in an Uber, CEO Travis Kalanick was captured on video berating the driver, who dared to complain about cuts to his income because Uber keeps reducing fares. “I’m bankrupt because of you,” the driver told Kalanick, who then erupted. After Bloomberg obtained and published the video, Kalanick found himself in the all-too-familiar position of publicly apologizing. He posted on Uber’s site, “I must fundamentally change as a leader and grow up.” Duh.

Negative publicity keeps battering Uber. The company ran afoul of the protesters who flocked to airports after Donald Trump’s travel ban, then had to fend off a #DeleteUber movement. (Some estimates say 200,000 people deleted the app in the days after the hashtag went viral.) About six months earlier, Uber took a $3.5 billion investment from Saudi Arabia’s Public Investment Fund, a move that made Uber look as if it was buddies with a government that won’t let women drive and puts gay men in jail.

One Uber investor said to Fortune about the deal, “It goes to the heart of who Travis is. He just doesn’t give a shit about optics. Ever.”

Now Uber is being painted as a technology thief by Google’s parent, Alphabet. Last year, Uber bought a company called Otto for a reported $680 million. Otto develops autonomous driving technology. A bunch of people who work there came from Alphabet’s autonomous car subsidiary, now called Waymo. Alphabet alleges that some of those people stole technical data from Waymo, and Alphabet is suing to stop Uber from using it. Uber has often stated that its future rests on having a fleet of self-driving cars—so, of course, it won’t have to share revenue with those pesky human drivers. If Alphabet wins its case, Uber would pretty much have to start building the technology all over again or pay a ton of money to buy someone else’s.

Dissatisfied Drivers, Bleak Financials. While Uber is counting on a hazy future of self-driving cars, in the meantime it has to keep its 160,000 drivers happy, and they are not, as Kalanick’s video encountered showed. Drivers want the Uber app to allow tips; Uber won’t do it. Uber has fought court cases brought by U.S. drivers asking for employee benefits. It settled a suit for $20 million for posting ads that were misleading about how much its drivers can earn. Rival Lyft has been running ads lampooning Uber’s treatment of drivers, hoping to lure away Uber drivers—and convince conscientious riders they should prefer a company that treats its drivers better.  Strategically, Kalanick and his team seem guilty of constant overreach. Does anybody ever order a falafel from UberEats? Who at Uber thought it was a good idea to take on Seamless? Not only did Kalanick buy Otto to get into self-driving cars, but in February he hired a former NASA scientist to develop flying cars. Trump likes to say we always lose to China—well, Uber proved him right by going into China ill-prepared. Last summer, Uber cut a deal with China’s Uber clone, Didi Chuxing, to leave China in exchange for 17.5 percent of the Chinese company and a $1 billion investment by Didi. Is that setting up Didi to eventually beat Uber worldwide? Trump will have a seizure if the day ever comes when U.S. riders no longer say they’re going to “Uber” somewhere and instead say they’re going to “Didi.”And then there is Uber’s financial picture. The company is private, but some of its numbers have been leaked. Bloomberg reported that Uber lost $800 million in the third quarter of 2016. Some speculate Uber may have lost $3 billion last year. Uber is a costly business to run. To serve more customers, it needs to bring in and pay more drivers, so the company can’t take advantage of economies of scale. It has little pricing power because it still faces competition from Lyft and taxis and other newcomers including Maven, which is a unit of General Motors. In order to have the cash to fund operations and expansion, Uber has brought in round after round of private investment, pumping up the valuation of the company to nearly $70 billion. That would make Uber worth more than GM. Raise your hand if you think that makes sense.

The sky-high valuation may be haunting Uber. Kalanick has famously refused to take Uber public, even though the company, at eight years old, is in the sweet spot of when many tech companies do an initial public offering. He makes his stance sound like a maverick’s declaration of independence from public markets, but whispers now are that Uber’s finances might not justify an IPO at a valuation high enough to make current investors happy. If that’s true, Uber is in a hole. It won’t be able to raise money from anyone who has passed sixth-grade math.

If Uber stalls, it isn’t going to be saved by a loyal consumer fan base. There is no stickiness to Uber. It has no frequent-rider program. It has no social component. It prevents users from forming bonds with drivers. No one gets a heightened sense of self by identifying as an Uber rider versus some competitor. We’ll stick with Uber as long as it continues to get us where we want to go at a price we like. Someone else comes along with a better service or lower price, we’ll use it.

Drexel of the 2010s?It’s hard to imagine the devastation that would come with an Uber collapse. Its dozens of investors range from venture capital companies to individuals like Kapor and companies such as Microsoft and Citigroup. The company employs 11,000 people (excluding drivers), mostly around Silicon Valley, and is in the process of spending $250 million on new offices. The blow to Silicon Valley’s ego might be up there with the pain the Democratic Party has been feeling lately.

Uber has done amazing work in its short life. It created, defined and has so far dominated a new market of on-demand transportation, changing the way we do things today and profoundly changing the way we think about the future of urban transportation. It is a historically important company. No one will ever take that away from Kalanick and his crew. But Uber has proved to be a flawed company. To find a business tragedy that’s an appropriate warning for Uber, go back to Drexel Burnham Lambert in the 1980s, when Kalanick was in grade school. (He is, believe it or not, 40 years old.) Drexel, led by investing legend Mike Milken, defined and dominated junk bonds as a category of finance. This changed Wall Street and business forever. Drexel was a superstar. But the company had a flawed culture of insane pressure to perform, so employees took sketchy risks that ultimately led to criminal charges. Within a couple of years, the company fell from the pinnacle of Wall Street power to filing for bankruptcy. Milken went to prison for securities fraud.

The category Drexel created lives on. Today, junk bonds are a $1 trillion market, without Drexel.

The Kapors are pushing Kalanick to reinvent Uber’s culture so it can become an enduring company. It would be awesome if Uber can fulfill its promise and stand next to companies like Apple and Amazon. But as Uber’s bad days pile up, it often looks as if Kalanick has built the Drexel of the 2010s.

Kevin Maney is a best-selling author and award-winning columnist.

 

The Deep State and the Dark Arts

There’s a superb scene in the movie Syriana where CIA bureaucrats distance themselves from one of their agents, Bob, played by George Clooney, who has become a troublesome asset for the agency. Terry, the pack leader, begins to extemporize a narrative to his subordinates. With cool detachment, he tells them: “Put some space between us and Bob. Bob has a long history of entrepreneurial operations. We haven’t really had a handle on Bob for years. After 9/11, some people got a lot of leeway, let their emotions get the best of them. These are complex times. There’s already an active investigation into Bob’s activities in…help me out here.”

At this point, the group flesh out the details of how they’re going to burn the agency’s connection to Bob, painting him as an agent gone rogue, slipping the net of agency supervision, defying protocol, and ultimately selling himself to unsavory elements that want a U.S. asset killed. In this way, the leviathan spits out a loyal servant, rendering him obsolete with a fable and a slander, sanctified by the imprimatur of the officialdom.

We should note the importance of the media in all this storyline, albeit fictional. The dark arts of propaganda aren’t overtly mentioned, but they are the pivotal tools that will animate the destruction of Bob’s career. All sound strangely familiar? It should. It’s pretty much the script the intelligence community uses as its modus operandi when it needs to deal with an inconvenient public servant.

Theater of the Absurd

With rumors of detente crackling through the ether, the imperialist machinery of anti-Russian foreign policy has cranked into high gear, leveraging leaks and the press to mute Trump’s overtures of peace. Leaks to the The Washington Post were leveraged in last month’s excommunication of National Security Advisor Michael Flynn. Flynn was rather easily vanquished by a leak from within the American intelligence community outing him as a confabulator and, in pundit spin, a man vulnerable to blackmail by the Kremlin.

After Flynn’s unceremonious ouster, Attorney General Jeff Sessions was the next target, pilloried by Democrats for his contacts with the Russian ambassador Sergey Kislyak, something he declined to mention in his confirmation hearings. A third interaction has now been surmised, with tantalizing rumors Sessions was in the same room as Kislyak during a cocktail party. Did they conspire over canapes? Smuggle thumb drives wrapped in prosciutto? Exchange piquillo peppers stuffed with nuclear codes? The possibilities blossom like a mushroom cloud. Can you feel the frisson of treason?

Of course, the FBI has been investigating more mundane contacts between the Trump team and Moscow, a project that will either result in Trump’s impeachment for some manner of treason or his complete and utter subjection to the foreign policy whims of the foreign policy establishment. A Times article reported that the Obama administration furiously laid the foundation for this investigation by disseminating innuendo that Trump was under Russian influence during the peace laureate’s last days in office. Typically, the unofficial commentariat in the comments thread praised Obama’s patriotism, as though this wanton Wall Street servant was doing anything other than performing last-minute janitorial services for his venal party.

A few weeks ago, a Congressman (Rep. Darrell Issa) obscurely called for the appointment of a special prosecutor. But now Lindsey Graham has embraced the call, suggesting one be named if contact between Trump aides and Moscow were found, regardless of the content of that contact. It reminds one of the proverb that Caesar’s wife must be above even unfounded suspicion, let alone actual wrongdoing. In any event, Graham and his monomaniacal bedmate, John McCain, continue their lurid press junket, now looking to subpoena intelligence agencies for wiretaps of Trump phone calls, though former Director of National Intelligence (DNI) James Clapper refuted the wiretap rumor, as did FBI Director James Comey, albeit by the oblique means of asking the Justice Department to do so. In any event, the banishment of Flynn, the tarring of Sessions, and the net of suspicion cast over the Trump administration are fierce warnings from a rattled foreign policy community, a modern equivalent of the severed heads of Roman soldiers set on pikes as a message from Visigoth hordes.

The enveloping of the president in a cacophony of innuendo is likely a collaborative effort between the Justice Department, the National Intelligence Agency, the CIA, and crucially, the mainstream press. Beyond the corridors of the Capitol Hill, civil-society organizations like the George Soros-funded MoveOn.org and Barack Obama’s robust Organizing for Action (OFA) are turning up the heat on the streets, creating the visible signs of unrest, sometimes violent, that have capsized governments from Venezuela to Ukraine at the behest of Western oligarchs.

In recent weeks, President Donald Trump’s appointment of delusional hawk H.R. McMaster as National Security Advisor, a call for an unnecessary $54 billion dollar expansion of the military budget, his sudden demand for the return of Crimea to Ukraine, his fulminant echoes of Bush administration hysteria over Iran, among other hawkish developments, can be read as an unsettled president’s efforts to appease a foreign policy establishment that is ruthlessly using the media to undermine, and reign in, a wayward steward of empire.

Full-Spectrum Dominance vs. Clear-Headed Detente 

But why is Russia such a perennial target of Washington’s? Why are peaceful overtures toward Moscow so scorned? As the Trump administration found out, de-escalation is a no-no in Washington. Russia, along with China, are the leading targets of American long-term foreign policy. They represent the only two nations that might seriously rival the U.S. in Eurasia, which is considered the fulcrum of the 21st century global economy. Preventing the rise of new rivals is long-standing U.S. policy, most explicitly articulated by Paul Wolfowitz on behalf of the Clinton administration in early 1990s.

None of this should come as a surprise. Consider what was at stake. At the macro level, the entire program for global hegemony is under threat. Outlined over decades by foreign policy luminaries such as George Kennan, Allen Dulles, Wolfowitz, and Zbigniew Brzezinksi, the general plan is for full-spectrum dominance, meaning control of land, sea, air, and space, on a planetary basis, with a special emphasis on “Eurasian landmass,” as the ghoulish McMaster called it in a recent anti-Russian speech.

If history is any guide, it is unacceptable for a U.S. president to thaw relations with Russia unless that thaw consists of Russia capitulating to American demands. Mikhail Gorbachev’s trusting dismantling of the Soviet Union and the Warsaw Pact led to a decade of Western looting of Gorbachev’s country. Vladimir Putin has since restored a measure of Russia’s economic and military strength. Where Gorbachev was exploited, Putin is proving resistant to such entreaties, except on the economic front, where he appears to have bought into some of Western neoliberal policy.

Instead, Putin is posing a threat to the forward progress of Washington’s neoconservative foreign policy. He has actively promoted a variety of pipeline projects that would speed Russian oil and gas to Western Europe, undercutting profits of Western multinationals and addicting NATO nations to the energy teat of the Russian Federation. And he has conducted a few military maneuvers that have enraged the Washington elite, which are used to being conciliated by effete comprador elite in developing nations. This is different. A nuclear nation that can’t be overrun or bombed into submission. And it shows.

After successfully dismembering Yugoslavia, Congo, Afghanistan, Iraq, Libya, Yemen, the West-led spread of chaos across the Middle East stalled in Syria. After happily expanding NATO throughout Eastern Europe with little opposition, expansion hit a wall in Ukraine. In both instances, it is Moscow behind the holding action preventing the American project of global dominion from advancing. That’s why Putin has replaced Hugo Chavez as the West’s most demonized public figure.

Worryingly for covetous D.C. schemers, there’s a lot of new economic activity afoot in Eurasia, little of it involving the U.S. This activity includes plans for a Eurasian Union headed by Russia, a metastasizing Shanghai Cooperation Organization (SCO), and the rapidly advancing One Belt, One Road vision of the Chinese. The latter would effectively be a New Silk Road stretching from Vladivostok to Lisbon, animating Chinese and Russian economic influence across the Asian and European continents, and lifting countries like Kyrgyzstan, Kazakhstan, Tajikistan, Turkmenistan, and Uzbekistan. This is Washington’s nightmare scenario, since no serious geo-strategist believes global hegemony is feasible short of dominion in Central Asia. This understanding fuels the underlying animus toward Moscow and Beijing. It has nothing to do with ceaseless repeated lies about Russian aggression in Eastern Europe and Chinese aggression in the South China Sea. And it has nothing to do with lies about Moscow rigging the election for Donald Trump or Michael Flynn lifting sanctions in a nefarious quid pro quo.

The Deep State vs. the Nation State

Long-time Congressional staffer Mike Lofgren refers to the murky agencies at work to ensure this planetary plan stays on track as the “deep state,” in his book of the same name. He writes that it includes key elements of the national security state, which ensure continuity of policy despite the superficial about-faces from one administration to the next. The deep state is effectively a warlike oligarchy, hell-bent on full spectrum dominance, driven by a lust for wealth and power, and anxious to inscribe its name in history. Specifically, Lofgren says, the deep state includes the Department of Defense, the State Department, the National Intelligence Agencies, Wall Street, the defense industry, and the energy consortium, among other major private players. They share common agendas, operate a revolving door of employees, and have a collective distaste for democracy, transparency, and regulation. The deep state is the link between military interventions and trans-pacific trade deals, between sanctions and IMF loans. All of these tools, be they arms or loans or legal structures, serve a single purpose: the overarching control of world resources by a global community of corporate elites. One can also see how these three instruments of policy and power all do tremendous damage to a particular entity, the nation-state. It is the nation-state that is considered by elites to be the sole remaining barricade between populations in nominal democracies and their unfettered exploitation by multinationals, although one might reasonably argue that the state more often abets exploitation rather than deters it.

The Dystopia to Come

So where is this all headed? Aside from the theatrics of the Trump presidency and its sequestration or removal. What would full-spectrum dominance look like? Probably something like a one-world market, populated by enfeebled states, ruled by a worldwide raft of interlocking investor rights agreements that allowed private capital to plunder natural resources free of state restraints, such as labor safeguards, environmental protections, reasonable tax regimes, capital controls or border tariffs. Faceless multinationals would pillage the planet, their anonymous appointees manning the joysticks of power behind the reflective glass of their cloud-draped spindles, unreachable and unelected by the armies of the destitute that prowled the wastelands below. The amalgamated forces of corporate elitism would coolly play labor arbitrage across continents, threaten and destroy defiant economies through currency flight and commodity manipulation, and continue to consume an outsized percentage of the world’s resources. This would fulfill the hegemonic dreams of former State Department Director of Policy Planning Kennan, who once argued that we must dispense with humanitarian concerns and “deal in straight power concepts,” the better to control and consume an outsized portion of the world’s resources, presumably a privilege reserved for elite whites, and a selection of mandarins from other ethnicities with special clearances.

A criminal corporate commonwealth, supported by a fiat dollar as global reserve currency enforced by threat of war and economic collapse, will be deaf to protest from below, its weaponized satellites aimed at populations like sunlit magnifiers at a column of ants. Currency itself would be wholly digitized. This move would be sold as a positive advance as it would provide better tax accountability and therefore fund future programs of social uplift. Rather it will be employed as a means of totalitarian financial control over populations. Their wealth will be institutionalized. The concept of withdrawal will fade along with the fiction of ownership.

Terrorism will become the chosen tool of this elite power (insofar as it isn’t already). Surgical strikes, be they military, economic, or news-driven, will “keep the rabble in line” as all societies become subservient to the portents of war, the fear of inaccessible funds, and the black smears of an amoral media. The ‘deep state’ will become an obsolete term, as the nation-state will recede in memory as a relic of a strife-ridden dark age.

After all, the laissez faire cult of the beltway actually believes the planet would prosper sans nation-states. As another scene from Syriana reminds us, elite capital has a very different worldview from the majority of labor, who continue to believe the state has a role to play defending their interests. At one point in the film, Texas oil man Danny Dalton lectures lawyer Bennett Holiday on the true definition of corruption, “Corruption!? Corruption is government interference in market efficiencies in the form of government regulation. That’s Milton Friedman! He got a goddamn Nobel Prize!” The U.S. already practices free-market militarism, refusing to recognize borders, legal constraints, or geostrategic jurisdiction. Why not free-market finance and trade?

The good news is that, if you can clamber into the top one percent of the U.S. population, for instance, serving as a parasite on the grizzled hide of the corporate beast, you might yet partake of unimaginable luxuries, high in the clouds, sipping Mimosas as you transit between the ring-fenced metropoles of the world, where stateless elites intermingle.

Jason Hirthler is a veteran of the communications industry and author of The Sins of Empire: Unmasking American Imperialism. He lives in New York City and can be reached at jasonhirthler@gmail.com.

http://www.counterpunch.org/2017/03/10/the-deep-state-and-the-dark-arts/

The Snap IPO: Trump agenda fuels an orgy of speculation

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3 March 2017

Shares of Snap Inc., the maker of the Snapchat messaging app, surged 44 percent Thursday after its initial public offering (IPO). The firm, which has a miniscule number of employees, has never turned a profit and lost $514.6 million last year, is now valued higher than the retailing giant Target, which employs over 300,000 people.

Within seconds of trading in the stock getting underway, an hour and a half or so after they had rung the opening bell, the wealth of each of the company’s two co-founders, Evan Spiegel and Bobby Murphy, was boosted to $5.3 billion as the shares jumped from an initial price of $17 to more than $24—a leap of 44 percent. They rose even further during the course of the day before falling back slightly at close of trading. Others also benefited, including the venture capital firms Benchmark Capital and Lightspeed Venture Partners which made $903 million and $613 million respectively.

The explosion in the value of Snap shares is illustrative of two interconnected processes. It is a further demonstration of the rise of parasitism at the heart of the US economy and financial system. At the same time, it is another graphic endorsement by Wall Street and US financial elites of the policies of the Trump administration aimed at setting loose the “animal spirits” of capitalist money-making, free from any government control or regulations.

The fact that Snap Inc. has warned that it may never turn a profit did not prevent a rush for the stock. Speculators salivated not so much on the prospect that Snapchat’s 158 million users, sending more than 2.5 billion images and messages every day and concentrated in the 18- to 34-year-old demographic, could be a lucrative source of revenue. Rather, the stampede was motivated by the very short-term prospect, measured in minutes or even seconds, that there were huge immediate gains to be made on a rise in its share value.

The response to the Snap launch was hailed on Wall Street as a sign that the downturn in IPOs in the past two years was coming to an end and that further massive fortunes could be made if other firms such as ride-hailing service Uber and rental service Airbnb decide to list publicly.

The Snap IPO took place in the midst of a market surge that began with the election of Donald Trump four months ago. Since Election Day, the market has risen by 15 percent and on Wednesday the Dow Jones index hit a new record high of 21,000 after passing the 20,000 mark on January 25.

The IPO took place the same week as Trump announced plans to increase US military spending by a massive $53 billion, offset with cuts to social spending and foreign aid, and as his administration presided over a massive round-up of undocumented workers.

As Trump noted in his address to Congress this week, since his election victory, more than $3 trillion has been added to share values. The driving force of this process is not the prospect of a genuine revival of the US economy—growth continues to trend below 2 percent—but rests on the belief that the administration is going to scrap legal and administrative constraints on profit-making.

In short, the type of economic and financial arrangements that have characterised Trump’s business career, based on speculation, swindling, low wages, and business malfeasance, are now going to hold even greater sway in the American economy as a whole.

This perspective has been articulated by Trump’s chief strategist, the fascistic ideologue and economic nationalist Stephen Bannon, who has insisted on the scrapping of what he calls the “administrative state.”

The Snap IPO is an expression of this general process. This is a company which makes nothing, which has very few employees and whose valuation is based on the belief that it is a vehicle through which money will simply be able to beget more money via financial operations.

That such speculation now increasingly assumes the first place in wealth accumulation is expressive of the rot at the very heart of American capitalism. It results from the fact that trillions of dollars are unable to find a productive outlet in the real economy and investors increasingly seek returns through financial manipulations.

The same phenomenon is visible elsewhere. One of the chief drivers of the share market rise has been the escalation in the value of bank shares, particularly of Goldman Sachs, former executives and employees of which have assumed prominent positions in the Trump administration.

The rise in bank share values is not the result of expectations of a surge of lending for productive activities, but flows from the belief that the Trump Administration intends to dismantle financial regulations, including the extremely limited measures introduced under the Dodd-Frank Act in response to the financial crisis of 2008.

Likewise, the surge in the shares of companies, such as Caterpillar, involved in infrastructure projects is not based on any genuine public initiatives—notwithstanding Trump’s declaration in his address to Congress that crumbling infrastructure will be replaced by new roads, bridges, tunnels, airports and railways, “gleaming” across the land. Rather, it is grounded on the understanding that at the centre of the $1 trillion so-called infrastructure program will be tax concessions and write-offs for major firms.

Armaments firms and defence contractors are also enjoying a surge because of Trump’s commitment to increase military spending at the cost of vital social services. And adding fuel to the fire is the promise of major tax cuts, both at the personal and corporate level.

The prospect that the very heights of American society, already wallowing in obscene levels of wealth, are going to be further richly rewarded under the Trump administration is the essential content of the Snap IPO frenzy.

The election of Trump marks a new stage in the social counter-revolution initiated under Obama, the aim of which has been to massively enrich the financial oligarchy through the impoverishment of workers, the dismantling of social services, and the elimination or non-enforcement of financial, environmental, occupational health, and other business regulations.

This is the outcome of the capitalist system, which, beset by economic, geopolitical, and social crisis, sees no solution to its internal maladies outside of dragging society back over a hundred years to the age of the robber barons.

Trump’s reactionary social and economic agenda, which has already given rise to the largest mass protests in US history, will set the administration on a collision course with the working class. If workers are to fight back, they must understand that Trump does not act as an individual—a blot on the otherwise healthy capitalist system—but rather expresses its innermost essence: parasitism, dictatorship, and militarism.

The struggle against the Trump administration is the fight against the social class he represents—the American financial oligarchy—and the capitalist system. It requires the working class to adopt a socialist strategy, aiming to overturn capitalism and replace it with public ownership and control of the means of production.

Nick Beams

http://www.wsws.org/en/articles/2017/03/03/pers-m03.html

Wall Street, media celebrate Trump’s address to Congress

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2 March 2017

Wall Street celebrated Donald Trump’s Tuesday speech to a joint session of Congress—in which he promised massive tax cuts for business and the virtual elimination of government regulations—with a record-breaking surge in stock values. And the US media, for its part, entered a phase that might be described as “learning to love the Donald.”

Almost universally, the major media outlets—many of which were denounced only last week by Trump as “the enemies of the people”—presented Trump’s speech as a tour de force, a truly “presidential” address that marked a “pivot” for his administration. Trump’s language and tone in the address were interpreted as a signal that he is serious about getting Congressional approval for his right-wing, pro-corporate measures, that he will not let factional infighting get in the way of showering Wall Street with riches.

The stock markets followed suit, with the Dow-Jones Industrial Average rising more than 300 points Wednesday to end above 21,000 for the first time ever. Financial stocks led the rally, with JPMorgan Chase, Bank of America and Citigroup up more than 3 percent in one day. ExxonMobil and Boeing gained more than 2 percent, as did American Express and Travelers. The broader S&P 500 index, the Nasdaq Composite Index of mainly tech stocks, and the Russell 2000 index of smaller firms all closed at record levels.

As Trump boasted in his speech, since his election victory last November 8, the Dow has soared nearly 3,000 points, as part of a stock market boom that has added an estimated $3 trillion in value to the shares of American banks and corporations.

Wall Street had plenty to celebrate even before the speech in which Trump laid out his pro-corporate agenda. The first six weeks of the Trump administration have featured a series of executive orders loosening regulations on corporate polluters, particularly in the fossil fuel industries, and on banks, hedge funds and other swindlers whose operations led to the 2008 financial crash.

Trump has reiterated his support for major tax cuts for US corporations and for wealthy individuals. He has also pledged a major increase in military spending that will benefit the giant defense contractors and an infrastructure program to funnel hundreds of billions into the coffers of private construction companies and manufacturers like Caterpillar.

These themes were spelled out in Trump’s address to a joint session of Congress Tuesday night, to general enthusiasm from Republicans, near-universal praise from the media and significant backing from congressional Democrats. Trump also pledged to wage war against public education, intensify the brutal assault on immigrant workers, slash social programs and otherwise further redistribute wealth to the financial aristocracy.

For the media, the consensus reaction to the speech appeared fully-formed within seconds of the end of the speech.

On CNN, one of several outlets deliberately barred from a briefing at the White House by press secretary Sean Spicer last week, every panelist declared the speech at least a relative success. Van Jones, a former Obama White House aide and Bernie Sanders supporter, declared that Trump’s crass exploitation of the death of Navy SEAL William Owens, in the closing section of his speech, was “one of the most extraordinary moments you have ever seen in American politics, period” and that it was the moment Trump “became president of the United States.” This was only the most grotesque prostration before Trump on the part of the media.

The Democratic response to Trump, both in the hall and afterwards, spoke volumes about the reactionary and politically bankrupt character of the so-called opposition party. Senator after senator applauded the speech: Bernie Sanders clapped for Trump’s profession of economic nationalism; Tammie Baldwin cheered his reference to Harley-Davison motorcycles, built in her state; Debbie Stabenow applauded his support for the auto industry; Amy Klobuchar praised his pledge to reduce the cost of prescription drugs.

Wall Street watched it all, and liked what it saw. The stock exchange has long known it can count on Senate Democratic Leader Charles Schumer—the biggest single recipient of Wall Street campaign contributions. The newly cooperative “tone” struck by Trump, and responded to in kind by the Democrats, is of greatest importance to finance capital, since some of most important policy changes promised by Trump, especially tax cuts for business and the wealthy, require significant Democratic support.

Divisions remain within the ruling class, centered on foreign policy. In its editorial commenting on the speech, the New York Times, a mouthpiece for the Democratic Party, focused criticism on Trump’s failure to spell out a policy “to deal with an increasingly aggressive Russia, which the Pentagon considers America’s No. 1 threat, or China, which has become more assertive in the South China Sea.” The newspaper brought up again what it called Trump’s “murky ties to Russia” to explain what dominant sections of the military-intelligence apparatus consider to be an overly accommodative attitude toward Putin.

Yet the dominant tone, including from the Times, was one of celebration of what unites the ruling class. The perspective of the financial aristocracy is that the twentieth century was one big mistake. Corporate America was compelled to make concessions to working people, because of fears provoked first by the Russian Revolution of 1917, then by the upsurge of the labor movement in the 1930s, and the extended struggles for civil rights and social gains in the 1960s. All this is to be taken back, in a rampage of reaction in which the watchword is that American corporations can do whatever they want.

Whom the gods would destroy, they first make mad. The American financial aristocracy is gripped by the delusion that they can roll back history without paying any price, counting on the role of the Democratic Party, the trade unions, and other instruments for the disorganization and disorientation of the working class.

The working class in the United States, and internationally, faces a deadly threat to all of its social gains and democratic rights. It is in the working class that enduring and genuine opposition to the Trump administration will develop. Every effort must be devoted to the building of a mass movement of working people, independent of and opposed to the Democratic Party, and based on a socialist and internationalist program.

Patrick Martin

http://www.wsws.org/en/articles/2017/03/02/pers-m02.html