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

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 

Obama’s legacy of war, repression and inequality

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10 January 2017

US President Barack Obama’s “farewell address to the nation,” scheduled for tonight, has been preceded by a concentrated media buildup on the theme of Obama’s legacy. This has included fawning tributes portraying the president as a brilliant orator, progressive reformer, visionary and man of the people.

Seeking to mold the narrative of Obama’s presidency, the White House put out a video over the weekend featuring comedians Ellen DeGeneres and Jerry Seinfeld, actors Leonardo DiCaprio and Tom Hanks, former basketball star Michael Jordan and other celebrities extolling the “historic moments that prove, yes, we can create progress.” Such absurd and nauseating effusions testify not to the qualities or accomplishments of the 44th president, but to the intellectual, political and moral debasement of the American cultural establishment.

For Obama and the privileged social layers that surround the Democratic Party, a legacy can be crafted with honeyed phrases and clever marketing. Millions of people, however, will judge the administration by its actions.

It would take far more space than is available here to outline in detail the real record of the Obama White House. However, any objective appraisal of the past eight years would have to include the following elements:

1. Unending war

Obama is the first president in American history to serve two full terms in office with the nation at war. This includes the continued bloodletting in Afghanistan and Iraq, the bombing of Libya, the six-year-long war for regime change in Syria, and support for the Saudi-led destruction of Yemen. A recent survey reported that in 2016, US Special Operations forces were deployed in 138 nations, or 70 percent of the countries of the world.

The “wars of the 21st century,” begun under Bush and expanded under Obama, have killed more than a million people and driven millions more from their homes, producing the worst refugee disaster since the Second World War. Obama’s “pivot to Asia” has inflamed tensions from the South China Sea to India and Pakistan. The current president will leave the White House as NATO troops deploy to Eastern Europe in the midst of an anti-Russia war hysteria stoked by the media and the Democratic Party.

Obama is the “drone” president, supervising the killing of some 3,000 people in Pakistan, Yemen, Somalia and Libya by means of unmanned aerial vehicles, along with several thousand more in Iraq and Afghanistan.

2. Democratic rights

At least three of the individuals killed in drone strikes were US citizens. The declaration of the Obama administration in 2011 that the president has the authority to assassinate anyone, including US citizens, without due process sums up the attitude of the former constitutional law professor to basic democratic precepts.

The US detention and torture center in Guantanamo Bay, which Obama pledged on his inauguration day to close, remains open. Chelsea Manning, who courageously exposed war crimes in Iraq, is serving a 35-year prison sentence at Fort Leavenworth, Kansas, and the Obama White House has prosecuted more whistleblowers for espionage than all previous administrations combined. Edward Snowden was forced into exile in Russia under threat of prosecution or worse, while WikiLeaks founder Julian Assange remains trapped in the Ecuadorian embassy in London.

The massive spying programs of the National Security Agency exposed by Snowden remain in place, and not a single individual has been prosecuted for clearly illegal and unconstitutional activity. Proclaiming the need to “look forward, not backwards,” Obama gave a free pass to Bush administration officials who institutionalized torture, with some of them, including current CIA Director John Brennan, finding top posts in Obama’s administration.

Obama has expanded the militarization of police departments and intervened in court to uphold police abuses that violate the Constitution.

3. Social inequality

Obama came into office in the immediate aftermath of the 2008 economic crisis, and the focus of his administration has been to restore the wealth of the financial aristocracy. Since their low point in March of 2009 (two months after Inauguration Day), stock values—fueled by the “quantitative easing” policies of the US Federal Reserve—have more than tripled, with the top one percent the overwhelming beneficiary of this new orgy of speculation. Aggregate quarterly corporate profits rose from $671 billion at the end of 2008 to $1.636 trillion in 2016, and the wealth of the richest 400 Americans increased from $1.57 trillion to $2.4 trillion.

At the other pole, eight years of the Obama administration have produced declining wages, rising living costs and growing indebtedness. Nearly 95 percent of all jobs added during the Obama administration’s “recovery” have been temporary or part-time positions, according to a recent study by Harvard and Princeton, with the share of workers in temporary jobs rising from 10.7 percent to 15.8 percent. Obama presided over the bankruptcy of the auto companies early in his administration (imposing an across-the-board 50 percent cut in wages for new-hires). He supported the bankruptcy of Detroit and slashing of city workers’ pensions. In the name of education “reform,” he oversaw a wave of public school closures and attacks on teachers, who were laid off in the hundreds of thousands.

As for Obama’s principal domestic initiative, the Affordable Care Act, its intended and actual outcome has been the shifting of health care costs from corporations and the state to individuals, with corporations slashing coverage and workers forced to pay exorbitant prices for substandard care. One statistic sums up the consequences: For the first time since the height of the AIDS epidemic in 1993, life expectancy fell in the US between 2014 and 2015 due to rising adult mortality from drug overdoses, suicides and other manifestations of social distress.

No account of the legacy of Obama would be complete without noting two additional statistics. Since 2009, approximately 10,000 people have been killed by police in the United States, while the Obama administration has deported about three million immigrants, more than any other US administration in history.

Then there is the man himself. What is most striking is Obama’s emptiness. From his first major speech, at the 2004 Democratic National Convention, the media has hailed Obama as a great orator. Yet over the span of 12 years in political office at the federal level, including eight in the White House, Obama leaves behind not a single sentence from a speech or interview that will be remembered.

Everything about Obama, who came into office having been named “Marketer of the Year,” is false and contrived. The only thing he consistently conveys is indifference, a strange remoteness, a man without qualities.

The personality is related to the function. More than anything else, Obama has been the president of the intelligence agencies. His political convictions appear to extend no further than his CIA briefing books. To those who care to look more closely into the background, there always seemed to be hands guiding his way to the White House.

For the ruling class, Obama’s particular function was to fuse in his person and his administration identity politics with the absolute domination of Wall Street and the military-intelligence apparatus. The “change” Obama was to represent was in the color of his skin, not the content of his policies.

The nominally liberal and pseudo-left organizations of the upper-middle class that surround the Democratic Party hailed his election as a “transformative” event, seizing upon the elevation of an African-American as an opportunity to abandon their oppositional pretenses. However, his tenure has merely demonstrated that it is class, not race, that is the decisive social category.

Amidst all the commentary on Obama’s “progressive” legacy, no one seems capable of explaining why it is that eight years of the Obama White House paved the way for the election of Donald Trump. Yet the bitter realities of social life, the widespread anger and disappointment, led to a collapse of the Democratic Party vote amidst a general feeling of disillusionment with the entire political establishment.

Obama now bequeaths to the world a ferocious conflict between two right-wing factions of the ruling class: The Trump administration, which is preparing an authoritarian and militarist government of the oligarchy, and its critics, furious that he is reluctant, for the present, to proceed with their preparations to wage war against Russia.

The record of the Obama administration and the character of the individual himself speak, in the end, to the structure of American politics—an ossified and reactionary political establishment that lacks any broad base of support, standing atop a cauldron of seething social tensions. The true legacy of Obama is the deepening of the crisis of American capitalism and the emergence of a new period of social and revolutionary struggles.

Joseph Kishore

Why Millennials Aren’t Afraid of Socialism

 

It’s an old idea, but the people who will make it happen are young—and tired of the unequal world they’ve inherited.

On Wednesday, November 9, at 9:47 am, BuzzFeed News sent out a push notification: “Trump is leading a global nationalist wave. The liberal world order is nearly over and the age of populism is here.” This, from a publication better known for listicles than sweeping political pronouncements. If even BuzzFeed felt it necessary to ring the death knell for the “liberal world order,” then liberalism must be really, really dead.

But what, besides global nationalism, can replace it? The answer is clear if we look at the 2016 election from its inception. The race we should be remembering is not just Clinton versus Trump, but Sanders versus Clinton. For nearly a year, millions of Americans supported an avowed socialist, and many of those people were young—like me.

This new New Left renaissance isn’t confined to the United States: Our British neighbors witnessed a similar wave of enthusiasm for Jeremy Corbyn. It’s kind of funny, if you think about it: The two most prominent politicians to galvanize young people in the United States and the United Kingdom over the last year are old white dudes. Sanders and Corbyn both look like my dad, except even older and less cool.

And it’s not just them—their ideas are old too. Or so it would seem to anyone who came of age before the fall of the Berlin Wall. Socialism, the redistribution of wealth, providing vital benefits and social services through the mechanism of the state—people were talking about this in the 1960s. And in the 1930s. And in the 19-teens. And now Sanders and Corbyn are recycling those hoary ideas (or so the argument goes), their only concession to the 21st century being the incorporation of racial-, queer-, and climate-justice rhetoric. (We can argue about how earnest they are and how successful that’s been).

And yet, in the 2016 primaries, Sanders won more votes from people under 30 than Clinton and Trump combined. Bernie pulled in more than 2 million of us; Clinton and Trump trailed far behind, with approximately 770,000 and 830,000, respectively.

Corbyn’s signature achievement thus far has been nearly tripling the size of the UK Labour Party. With over 550,000 members, it’s the largest political party in Western Europe. Though Corbyn’s supporters are not as strikingly youthful as Sanders’s—the influx of new members has barely changed the party’s average age—the youngest among them have a similar enthusiasm.

If you spent last year wondering why all these young people (“millennials,” as the headlines love to shout) have flocked to dudes even older and less cool than my dad, consider this: I’m 22. I was born in 1994. Bill Clinton was president. It was the era of the New Democrats in the United States and New Labour in the UK. Five years earlier, Francis Fukuyama had famously declared “the end of history,” and neither September 11 nor the global financial collapse had yet shaken that sense of security. My birth, and that of my generation, coincided with a huge geopolitical shift: For the first time in 50 years, the world wasn’t split in two along the familiar capitalist/communist lines of the Cold War. Seemingly, it had become whole.

George W. Bush was president for most of my childhood. My parents were Democrats in a red state, and at that point primarily defined their politics as being against the Iraq War and for same-sex marriage. Things like class, exploitation, and inequality were never mentioned, let alone a systematic way—like socialism—to think about them. I took up these anti-Republican positions with righteous gusto. In fact, I was co-president of my high school’s Young Democrats chapter, where I organized a screening of Jesus Camp and led discussions about the hypocrisy of the right’s “family values” agenda. Those were my politics.

The first president I voted for was Barack Obama, in 2012. By then, the shiny hope-and-change stuff had worn off a bit. I vaguely knew that drones were bad and that those responsible for the financial catastrophe a few years earlier had gotten off easy, but I didn’t think about it much. I was too busy binge-drinking in sweaty college basements—and hey, I’d voted for a Democrat. That was chill, right?

A child of the ’90s, I knew only neoliberalism. Socialism was brand-new.

It was during Obama’s second term that I began to understand how bad the financial crisis was and who was responsible (hint: the financial sector). Occupy Wall Street started to seem less like agenda-less rabble-rousing, as I had thought when I was co-president of the Young Democrats, and more like people confronting wealth and power in an unprecedented—and incisive—way. Thomas Piketty published his neo-Marxist tome, and its introduction alone fundamentally changed the way I understood economics. There was that viral video, based on a 2011 academic study of Americans’ perceptions of inequality, that used stacks of money to illustrate the wealth gap in United States. I must’ve seen it 30 times.

Four years later, as I finished college, Bernie Sanders shuffled onto the national political stage and offered an analysis: Poverty isn’t a natural phenomenon; it exists because a few people own far more than their fair share. He also offered a solution: The government could act on behalf of those of us just barely treading water. The government’s role, Sanders argued, is to correct the rampant inequality in this country by taxing the rich and using that money to offer real social services.

The erasure of socialist ideas from serious political discourse throughout most of my life wasn’t a historical fluke. The West’s victory in the Cold War—liberal democracy for everyone!—came at the price of iconoclasm, much of it celebratory. In Prague, there used to be a giant socialist-realist statue of Stalin and other communist leaders standing in a line on a hill overlooking the city from the north. Czechs called it the “meat line,” a joke about the long lines they had to wait in to get groceries. Now kids skateboard on the platform where the dictator once kept watch. To visit Prague now—or Budapest, or Sofia, or Bucharest, or Berlin—you might think that communism never happened. All that’s left are a few tacky museums and somber monuments.

So communism was killed, and along with it went any discussion of socialism and Marxism. This was the world of my childhood and adolescence, full of establishment progressives who were aggressively centrist and just as willing as conservatives to privilege the interests of capital over those of labor: think of the reckless expansion of so-called free trade, or the brutal military-industrial complex. For most of my life, I would have been hard-pressed to define capitalism, because in the news and in my textbooks, no other ways of organizing an economy were even acknowledged. I didn’t know that there could be an alternative.

It occurred to me recently that my peers and I will come of age in the era of Trump. It’s a bleak generational landmark, and not one I anticipated, but ideological capitulation and despair are not the answer. In the 1930s and 1940s, many of the most dedicated antifascists were communists. The antidote to radical exploitation and exclusion is radical egalitarianism and inclusion.

So we will be the opposition—but we’re not starting from scratch. The Fight for $15, organized in part by Socialist Alternative, went from a fringe dream to a political reality that has thus far spread to at least 10 cities and two states. Heterodox economists like Ha-Joon Chang, Mariana Mazzucato, and Stephanie Kelton are reshaping their discipline. And while Trump has dominated the headlines, there is still plenty of momentum around the socialist ideas that Bernie used to inspire America. Our Revolution is working hard to take the fight to the states; there it will be joined by groups like the Working Families Party and the Democratic Socialists of America, whose membership has grown by more than 50 percent since November 8. That’s more than 4,000 new members.

When I heard Bernie say, out loud, that the billionaire class was ruthless and exploitative, that sounded groundbreaking. Not only did he name the right problem—inequality, not poverty—he named the culprit. I didn’t know you could do that. To me, and to hundreds of thousands of my peers, Sanders’s (and Corbyn’s) socialism doesn’t feel antiquated. Instead, it feels fresh and vital precisely because it has been silenced for so long—and because we need it now more than ever.

My dad—slightly younger and slightly cooler than Sanders and Corbyn—picked me up from the airport the day before Thanksgiving. In the car, he confessed: “I liked a lot of the things Bernie had to say, but I just didn’t think he could get elected.” He sighed, ran a hand through his white hair, and pushed his glasses up his nose. “I thought Hillary had a better shot, but she couldn’t pull it off. Maybe Bernie could have… Wisconsin, Michigan, Ohio…”

My dad sounded humble. Trump’s election, which to so many of us feels like a tragedy, prompted him to consider a new way of thinking. Maybe socialism isn’t a lost cause after all. Maybe it’s our best hope.