Inevitable Inflation?

The new inflation goes beyond all markets, turning them into art forms or play grounds for economic playboys. - Marshall McLuhan, 1974

If food, fuel and housing are all increasing in price, why isn't it called inflation?

The Consumer Price Index (CPI) compiled by the US Bureau of Labor Statistics (BLS) measures these things, but inflation figures are usually reported as excluding costs of essentials, such as food and fuel.

The CPI uses a fixed-weight Laspeyres index to determine prices changes over time, with the base period reseting every two years (more on the CPI index). The scope the CPI measures is the price of a "basket" of goods purchased by a typical "urban" consumer. Items included in the CPI fall into a number of categories including food, housing appeal, transportation, and medical, among others (CPI Q&A).

We know that fuel, education and medical costs have been skyrocketing in recent decades, at the same time that inflation is supposedly staying at 2-3% per year. This has justified keeping wages stagnant for the majority of workers. Why the statistical disconnect?

The answer is that, since 2000, the Federal Reserve system (the Fed) consistently focuses on something called the core-CPI or the CPIX (also core inflation, core index, or core rate). CPIX is a price index which excludes certain items, such as food and fuel.

According to the Federal Reserve Bank of Cleveland, core-CPI is measured as:

CPI excluding food and energy. The most commonly used measure of core inflation is the CPI excluding food and energy, published by the BLS. [The term "core CPI" is often used to refer to this measure.] This measure of core inflation systematically excludes food and energy prices because, historically, they have been highly volatile. More specifically, food and energy prices are widely thought to be subject to large changes that often fail to persist and frequently represent relative price changes.

Cleveland Fed

So the idea is that, there are many ways to measure CPI, and the Fed has picked one that paints the rosiest picture for capitalists. The problem is that it is an incomplete picture which does not reflect reality. Even worse, this neoliberal econometric mechanism has been foisted onto all of the other major economies, including China and the Eurozone, in recent years.

The net effect has been a distortion of the money supply at an unprecedented level in history, which has led to the biggest credit bubble, in terms of capital and breadth, of all time.

What are the results?

In China, consumer price inflation in October reached 6.5%, matching the 11-year highs tapped in August, as the cost of staples foods such as pork and vegetables vaulted.

Pork prices jumped 55%, and vegetable prices surged 30% after a 12% gain during September.

The data are expected to spur further action from Beijing to rein in spiraling prices.

Analysts speculated a further tightening could be imminent, with Beijing poised to lift interest rates for a sixth time this year after the data's release. China's central bank lifted the reserve-requirement ratio for banks for a ninth time this year on Saturday in an attempt to cool lending growth.

"Today's CPI release is likely to persuade the government to closely monitor prices and, in our view, supports our forecast that the PBoC will raise the benchmark one-year lending and deposit rates in the near term," said Yan Zheng, an economist at Barclays Capital, in a note to clients.

Credit Suisse economist Dong Tao added persistently high food prices were a particular worry for the authorities because they signaled broad-based inflationary pressures may be taking hold throughout the economy.

"If the cost of food at the dinner table continues to hold at high levels, people will demand higher wages," Tao added.

English breakfast, mou-shou, baguette prices rise. Market Watch. 13-Nov-2007.

From Marxists.org:

Inflation is the situation wherein the prices of all commodities of whatever kind are subject to a steady and more or less uniform increase in price over time. The term dates from 1838.

Given that price expresses the ratio between a given quantity of a commodity and its equivalent in money, it is self-evident that inflation manifests the falling value of money, rather than the increasing value of all other commodities. Thus, the reasons underlying inflation need to be sought in factors which may be undermining the value of money.

In Capital (Vol I, Chapter 25) Marx discusses inflation and its relationship to the crisis of capital.

Thus, when the industrial cycle is in the phase of crisis, a general fall in the price of commodities is expressed as a rise in the value of money, and, in the phase of prosperity, a general rise in the price of commodities, as a fall in the value of money. The so-called currency school concludes from this that with high prices too much, with low prices too little money is in circulation. Their ignorance and complete misunderstanding of facts are worthily paralleled by the economists, who interpret the above phenomena of accumulation by saying that there are now too few, now too many wage-labourers. Marx, Karl. Capital, Volume I, Chapter 25. 1867.

Inflation has always been blamed by classical economics on the increase of workers wages. The logic being that, the more workers get paid, the more money is in the system, and therefore the less value the currency has vis-a-vis goods and services.

However, history has shown that in fact repeated financial bubbles lead to crisis in capital through boom-and-bust cycles which are the prime drivers of inflation. Again, from Marxists.org:

The most common cause of the loss of value of money is the creation of “Fictitious capital”, i.e., the creation of money or credit exchangeable for money without the creation of commensurate value in the form of goods and services, thus undermining the value of all forms of money and credit: for example, the excessive printing of paper money by the government to finance public works, the creation of fictitious value by banks through unsecured loans, the declining exchange rate of a country's currency, causing prices of all imports to increase, and so forth.

Does this sound familiar? Does this sound like a good description of what has been happening in our economy? First the dot.com fueled stock market bubble, then the housing fueled mortgage crisis credit bubble, both examples of "fictitious capital."

Clearly workers wage increases are not to blame for inflationary economic cycles. It is inherent in the crisis prone capitalist system. The increasing financialization of capital only exacerbates and intensifies the crises.

The greed based capitalist economic system must be replaced by a rational system based on sound principles designed to meet human needs. A move towards 21st century socialism is required to face the challenges of the future and to reverse the ravages of capital.

What other bloggers are saying about core-CPI:

• Inflation: CPI, Core Rate, Inflation ex-Inflation. The Big Picture. 04-Oct-2007.
• What is the core for? Economics and... 01-Oct-2007.
• Pro-forma CPI, or let's pretend there's no inflation. Gold Eagle. 18-May-2005.
• Speechless on Core Inflation. The Big Picture. 27-Sep-2007.
  

Soldiers in silent revolt in Iraq

"A bayonet is a weapon with a worker at each end." - Vladimir Ilyich Lenin

What is the Iraq war all about again? Why isn't this getting covered in the corporate controlled media? What happens when Turkey invades Kurdistan? Is it patriotic to support the war? If so, what does that mean and why? Isn't it more "patriotic" to support the people who are forced to fight in the war? Or maybe patriotism is a useless concept? Who's interest does patriotism serve?

British and US troops are turning away from confronting the Iraqi resistance – despite the rhetoric from Gordon Brown and George Bush that they are “winning” the war.

Revelations from both British and US troops show that morale has plummeted and that soldiers are avoiding all encounters with anti-occupation forces.

A senior British commander told the Sunday Telegraph that since they withdrew from Basra this summer they have not once returned to the city. They patrol around their base at the airport, with the occasional forays to the Iranian border.

He admitted that the military and the resistance have struck a deal not to attack each other. The oil rich southern Iraqi city is now in the hands of rival resistance organizations.

One senior British officer said, “We are tired of firing at people. We would prefer to find a political accommodation.”

Other soldiers said they saw little point in fighting on. One captain admitted, “If we went into the city every night, we would still be doing it in ten years’ time.

“There is nothing the military can do any more without the backing of politicians, and no politician wants to touch Iraq with a barge pole. Having the military out here without political backing is pointless.”

If the British military is “officially” pulling back from the war, US troops are doing so unofficially.

In an echo of the Vietnam War, US troops told independent journalist Dahr Jamail that they run fake patrols and send false reports as part of a strategy of “search and avoid”.

One soldier, who had recently returned from Iraq, admitted, “Morale was incredibly low. Most men in my platoon in Iraq were just in from combat tours in Afghanistan.

“We were hit by so many roadside bombs we became incredibly demoralised, so we decided the only way we wouldn’t be blown up was to avoid driving around all the time.

“So we would go find an open field and park. Then we would call our base every hour to tell them we were searching for weapons caches in the fields and doing weapons patrols and everything was going fine.

“All our enlisted people became very ­disenchanted with our chain of command.”

Another soldier said, “We’d go to the end of our patrol route and set up on top of a bridge and use it as an over-watch position. We would just sit with our binoculars and observe rather than sweep. We’d call in radio checks every hour and say we were doing sweeps.”

“It was a common tactic, a lot of people did that. We’d just hang out, listen to music, smoke cigarettes and pretend.”

A third soldier told Jamail, “One of my buddies is in Baghdad right now and we email all the time. He just told me that nearly each day they pull into a parking lot, drink soda, and shoot at the cans.

“They pay Iraqi kids to bring them things and spread the word that they are not doing anything and to please just leave them alone.”

Soldiers in silent revolt in Iraq. Socialist Worker. 30-Oct-2007.

Unions on the offensive

This election cycle is the most positive for unions in the US in recent memory. Candidates for president, notably John Edwards, are actively courting unions:

An effort to unionize dealers at Foxwoods Resort Casino got a boost Monday from members of Connecticut's congressional delegation and top elected officials.

They attended a rally at the state Capitol to back the United Auto Workers, which has petitioned the National Labor Relations Board seeking an election to form a union for about 3,000 dealers at Foxwoods Resort Casino.

[...]

"Isn't it great to be on the offense again?" Rep. Christopher Murphy, D-Conn., asked participants at the rally.

Elected officials endorse UAW organizing drive at casino. The Advocate. 23-Oct-2007.

Columbia University and the evil dictators

An excellent post by Louis Proyect on September 25, 2007:

I don’t think there is anything that I hate more than sanctimoniousness and there was plenty of it on display when Lee Bollinger’s sandbagged Mahmoud Ahmadinejad yesterday. As the NY Times reported, “Mr. Bollinger praised himself and Columbia for showing they believed in freedom of speech by inviting the Iranian president, then continued his attack.” Bollinger was also praised by the ultra-right media, starting with Rush Limbaugh:

Rah-rah, way to go! I apologize for being critical of you, Mr. Bollinger. I really do. But, on the other hand, where’s this been for five years?

One can only wonder whether Columbia University’s moral compass has been broken in years past since its aversion to evil dictators seems to be rather selective.

Full post

Oh, and guess what - heir to the 21-year dictator of Turkmenistan Saparmurat Niyazov, described as bizarre, brutal and self-obsessed, president Gurbanguly Berdymuhamedov, was speaking at Columbia on the same day - and completely avoided Bollinger's ire.

Come on People

At the beginning of this month, Rochester NY activist James Slater was allegedly murdered by two teens in his community seeking to relieve him of his iPod and other gadgets. The murder rate in poor communities in the United States is endemic. Bill Cosby and Harvard professor Dr. Alvin Poussaint have recently released a book titled "Come On People" which combines personal stories of people overcoming extreme challenges in their lives and a call to community action to change the systemic cycle which exploits and degrades the poor of America.


The link below is to a talk Cosby and Poussaint gave at, of all places, Borders in Boston. Although the forum is certainly hack-ish, the topic and what they have to say is not. I encourage you to view the video. Also note the host's continued insistence on people taking personal responsibility and not getting the case the authors are making for collective responsibility.

http://www.bordersmedia.com/shows/adviceforliving/cosby.asp

Viva Che!

Remembering Che Guevara on the anniversary of his death as a true hero. Che had a deep love of the masses coupled with hatred for those who callously exploit them. In Latin America, now as then, the class divide is markedly visible. It is no wonder that this is the terrain where 21st socialism is gaining ground.

A previous post on this blog from 2005 titled Che's Ride offers a review of the Motorcycle Diaries, a semi-biographical film about Che.

Following is an edited excerpt from an article by Peter Taaffe on Socialistworld.net this month, October 2007.

[...]

Like millions throughout the world, we [Marxists] hailed his heroic efforts in combating capitalism and imperialism. Che Guevara was and remains an enduring symbol of implacable resistance to a destructive and wasteful system, and the inevitability of a revolt against it by its victims. What a contrast between Che Guevara and the politically bankrupt and cowardly misleaders of the labour movement today!

As Tony Saunois's analysis published recently on socialistworld.net demonstrates, Che Guevara was not a 'plaster saint'; he made mistakes. But he was also capable of reassessing his actions and learning from them.

[...]

Che Guevara, at the time of his death, was an increasingly vocal critic of Stalinism, which he began to reject after he had visited the 'Eastern bloc'. He read Trotsky and had a book by Trotsky in his belongings when he was murdered. Moreover, the charge of 'wanting a nuclear holocaust' because he supported nuclear missiles being installed in Cuba is false to the core. Does every capitalist government that supports nuclear weapons for 'defence' do this because they want to unleash a nuclear holocaust? Merely to pose the question shows how absurd is the charge that [some] has levelled against Guevara.

The Cuban revolution from the outset was besieged by imperialism. It had just experienced the CIA-sponsored 'Bay of Pigs' invasion. It was, therefore, entirely understandable for Fidel Castro and Che Guevara to seek to defend, through the acquisition of arms, the gains of the revolution.

There is a discussion to be had as to whether it was tactically wise for Fidel Castro and Che Guevara to support the installation of nuclear weapons in Cuba. They honestly believed it was necessary for the defence of Cuba but the real ultimate defence of the Cuban revolution was in the mass support in Latin America and worldwide.

[...]

The tragedy of Che Guevara is that he was assassinated while he was still developing his ideas. We supported this heroic figure in his combat against imperialism. But, at the same time, we pointed to some of the deficiencies in his 'guerrillaist' strategy, counter-posing to this the social role of the mass working class of Latin America.

The reprinted article below shows the consistent attitude of Marxism towards Che Guevara, not ex-post facto, but at the time of his death and since.

Taaffe, Peter. Latin America - Marxism or Guerrillaism? Socialistworld.net, 2007 (reprinted article c. 1968).

Germany calls for return to Democratic Socialism

The Wall Street Journal just cannot understand the resurgence of the SDP:

[...]

The introduction to the Social Democrats' new draft party program hails a commitment to the "proud tradition of democratic socialism." Ironic, since only yesterday Germany celebrated the 17th anniversary of the fall of the original "democratic socialist" republic, East Germany.

This push back to the future is partly a reaction to the rising popularity of the Left Party, an amalgam of post and not-so-post East German Communists and disgruntled West German Social Democrats. The Left Party's solution of more welfare and taxing the rich is particularly popular in the East, where unemployment is twice as high as in the West.

Full story...

The backlash is happening and it will accelerate as the vehicle of capitalist power, the US imperial military machine, looses strength. Already it is quite clear that among the popular classes in the developing world (Venezuela, Bolivia, Ecuador) and Europe (Germany, Spain, Italy) and even in the United States, the proponents of neo-liberal globalization have lost their credibility. Even the political classes are beginning to voice their uncertainty (see this and this).

They have had their chance to prove that naked capitalism is an effective system for the betterment of the world. They have failed and the people know it. The war machine combined with the police state is all they have that is left to enforce their corrupt doctrine.

Popular power is the essence of full democracy

From Venezuela Analysis today (Oct 11, 2007):

Chavez Outlines Proposed Social and Economic Structure for Venezuelan Socialism

"With the approval of the Constitutional Reform, with the power that it will give to the people, we will break from this straightjacket that the colonial model imposed upon us," said Chavez on Sunday from the Humboldt Hotel on the mountain above Caracas.

Chavez spent much of his show this week explaining what he calls "the new geometry of power," which will reorganize the political, territorial, and economic structure of the country. Chavez has said that these changes will be fundamental to the planned transition to a socialist system in the country.

The president explained the proposed territorial distribution, which will be made up of states, federal districts, municipalities, communes, federal territories, and island districts. Chavez has explained before that organized communities will unite to form communes throughout the country, which will basically be self-governing entities.

As for political organization, the communities will exercise power through the communal councils, workers councils, and farmer and producer councils. Chavez emphasized that in this way the communities will have increased decision-making power with regards to the administration of public resources and public works.

"It's not bringing power closer to the people, but rather giving power to the people," emphasized Chavez.

The national government will be assigning a total of Bs. 3.2 trillion (US$ 1.4 billion) to communal councils in 2008, according to Chavez. He said that the money would be progressively administered to the communities over the next year as they get organized.

"For next year, once we have popular power included in the constitution, the government will be ready to transfer resources, duties and responsibilities to the communes, starting in January of 2008," said Chavez.

He went on to explain the proposed economic configuration that will set up productive units under the management of communes and in the form of socialist enterprises and cooperatives. Chavez emphasized that the economy would be centered on satisfying the needs of the Venezuelan communities and decreasing inequality in the population so that "there are not such extreme differences among Venezuelans."

"Popular power is the essence of full democracy, of socialism, of socialist democracy. Only in socialism can we achieve it," he said.

Full story...

IMF Warns of Serious Crisis

Kevin Depew of Minyanville, quoting from the Financial Times, today offers:

1. IMF Warns of "Serious Crisis"

Rodrigo Rato, outgoing managing director of the International Monetary Fund, warned that the credit squeeze was a “serious crisis” that was not over yet and would curtail growth worldwide, the Financial Times reported.

• “Policymakers should not think that the problems will stay at the desk of the bankers,” Rato told the FT.
• “Problems are going to come to the real sector, come to the budgets – that is something we keep telling people.”
• The outgoing IMF chief said many of the big emerging markets are growing rapidly, but “to what extent they will keep that momentum will depend on how long the slowdown is in the US and Europe."
• Wait a minute, did we say, "outgoing" IMF director?
• Indeed we did, which admittedly takes some of the sting out of Rato's warnings.
• It's a bit like when you take a new job, get drunk at your celebratory party, and blab to everyone about how your old firm is horrible and will probably collapse into bankruptcy without your genius to rely on anymore.

2. But Wait, There's More

Outgoing IMF Director Rodrigo Rato also told the Financial Times the U.S. dollar is now “undervalued” on many measures, a statement which the FT gushed is "an unusually bold assessment."

• Is it? Is it really an "unusually bold assessment"?
• We're not so sure.
• First, the U.S. dollar index is down more than 2% in the past 30 days alone, and down nearly 6.5% year-to-date.
• Over the past 18 months it's down 14%.
• And now we're seeing the inevitable stories rushing to embrace the decline as positive for business.
• Bloomberg boasts "Weak Dollar Boosts Growth Without Fueling Inflation."
• "The dollar is in a quasi-sweet spot,'' Joseph Quinlan, chief market strategist at Bank of America (BAC), told Bloomberg.
• "It's dropped enough that it's creating an earnings upside for U.S. multinationals, while I expect many foreign companies to hold the line on prices they charge U.S. consumers.''
• Too bad those those are two different and unrelated things: earnings upside for multinationals, and domestic pricing power.
  

Meanwhile, I'm reading Sweezy & Magdoff's "The Irreversible Crisis" (Monthly Review Press). They offer an incredibly compelling framework for understanding exactly what the heck is going on in the world economy. Best 10-bucks you'll ever spend, irregardless of your politics.

Working Class Defined

So, what is the official definition of "working class"?

Roget's New Millennium™ Thesaurus
Main Entry: plebeian
Part of Speech: adjective
Definition: lower-class
Synonyms: banal, base, coarse, common, conventional, humble, ignoble, low, lowborn, lowly, mean, ordinary, pedestrian, popular, proletarian, traditional, uncultivated, unrefined, unsophisticated, unwashed*, vulgar, working-class
Antonyms: aristocratic, cultivated, refined
Source: Roget's New Millennium™ Thesaurus, First Edition (v 1.3.1)
* = informal or slang

Makes you wonder what the ignoble lowborn who wrote this entry for Roget was thinking, eh? Mind was fixed on pelf and place (see this, and this) perhaps.

Ken Loach - Which Side are You On?

The Rochester Labor Council and the George Eastman House's Dryden Theater (http://dryden.eastmanhouse.org/) have been running a series of labor films this fall. Laura and I went to see Ken Loach's (biography/filmography) "Which Side Are You On" - an account of the 1984 UK miners strike that lasted for over one year. For me the film was quite moving.

The miners and their families were fighting for their jobs as Thatcher proceeded with completely destroying the entire coal industry in the UK. At least 190,000 (one hundred and ninety THOUSAND) jobs were lost in under 5 years time. Hundreds of communities were destroyed, schools closed, towns and factories demolished and, of course, the lives and futures of over a million people ruined.

Loach tells the story through the songs and poems of the people who were affected, the mining families themselves. He also captured on film the brutal police actions against the 100% legal pickets with many strikers being beaten with clubs and subjected to massive police terror tactics. One scene shows hundreds of police occupying a small village night and day with shields, and clubs on the ready. Every bit of pavement was covered by police.

Other scenes show the police breaking up pickets to let scabs into coal pits. Every tactic was used to incite riot. To the credit of the miners there was little hostility form their quarter. Nevertheless they had to suffer brutal attacks, terrorism and even cavalry charges.

The film was made all the more poignant since many of the miners and their families were so hopeful of victory, even as they lived in poverty, faced eviction from their homes, had their belongings repossessed by creditors, and were eating most of their meals at soup kitchens.

Still they put on a brave face. Ultimately they all lost their jobs, the industry was dismantled, and the union destroyed.

(scene pictured in the photo appears in the film, the policeman doesn't miss; it is displayed here courtesy of libcom.org)

When all was said and done, Prime Minister Thatcher had declared a victory over socialism in the UK. But it was a very narrow victory indeed:

The Tories later admitted that it cost nearly £6bn to win the dispute, which they saw as a political attempt to break the power of the National Union of Mineworkers (NUM). In the ten years following the end of the strike, the continued war against the miners cost a further £26bn in redundancy and benefit payments, keeping pits mothballed and lost revenue from coal.

Margaret Thatcher and her cabinet were desperate for victory and prepared to go to any lengths. For the first time in a post-war national strike the police were openly used as a political weapon. Agents provocateurs and spies were deployed and the state benefits system used to try and starve the miners back. Former Tory chancellor Nigel Lawson subsequently admitted that preparations for the strike were, "just like rearming to face the threat of Hitler in the 1930s". Evidence emerged – after the event – about the role of MI5, MI6, the CIA and ultra-right wingers like David Hart and Tim Bell, who advised Thatcher during the dispute.

Yet despite the extraordinary lengths the Tories went to, by October 1984, six months into the strike, the future of Thatcher’s government hung in the balance. The proposed strike by the pit supervisors’ union, NACODS, threatened to close down all working pits in the Midlands – when there were less than six weeks’ coal stocks.

03/04: Socialism Today: Miners strike revisited

The Dryden will be showing a number of Ken Loach's films over the next few weeks including Cathy Come Home and the US premier of Its a Free World, both on October 10th. Ken Loach also released an excellent film in 2006 called The Wind the Shakes the Barley.

Note: Anarchist pop-group Chumbawamba was actively supportive of the miners strike as were other groups. A tribute album to the miners is available here.

Ron Paul Wins Landslide!

Ron Paul today won by a landslide in an Oregon straw poll. From the LRC Blog today:

Writes Scott Sutton: "Here are the results from today's straw poll in Portland -- yet another landslide victory for Dr. Paul.

Ron Paul 77 votes, 67%
Mitt Romney 18 votes, 16%
Fred Thompson 12 votes, 10%
Mike Huckabee 5 votes, 4%
Rudy Giuliani 2 votes, 2%
John McCain 1 vote, 1%

"Kyle Saners, a member of the Salem Meetup group and an OR National Guard member who served in Afghanistan, gave a tremendous speech on behalf of Ron Paul."

LewRockwell.com Blog: Ron Paul Wins Oregon Straw Poll

I'm not surprised. He is the only Republican candidate who doesn't pander to the fascist right. I have been consistently impressed by his position on the war (see my post Giuliani vs Kucinich). The media is starting to take notice. ABC New reported today:

Republican presidential candidate Ron Paul announced this week that he raised more than $5 million in the third quarter, a figure that put him in the orbit of Arizona Sen. John McCain ($6 million) and far ahead of Mike Huckabee ($1 million). [The former is considered one of the leading contenders for the Republican nomination, and the latter was identified by former President Bill Clinton as the only "dark horse that's got any kind of chance" for the GOP nomination.]

Not bad for a guy who has generally been treated as a fringe candidate whose only impact on the race would be as a punching bag for more legitimate candidates looking to score political points. For example, in one of the early Republican debates, former New York Mayor Rudy Giuliani attacked Paul for saying extremists "attack us because we've been over there."

Paul is far from a typical Republican presidential candidate: He has been against the war in Iraq from the outset and embraces a libertarian platform that includes dismantling the Department of Education. His support is largely Internet-based, with 70 percent of his donations coming online, according to Paul's communications director, Jesse Benton. His passionate supporters regularly bombard online news stories with comments on why Paul is the only candidate worth considering in the GOP field.

06-Oct-07, The Ron Paul Factor, ABC News

There has been a consistent and vocal group in the grassroots of the Republican that has been pushing for common sense and a more liberal outlook. Ron Paul is their standard-bearer. If he continues with this momentum, it will be very interesting to see how these people react when the RNC crushes Paul's campaign. My guess is that it will create a mass-exodus from the party to the Democrats. Hillary will present the strong, common-sense candidate they are looking for who is solidly center-right.

If Ron Paul stays a blip, however, the trend will be slower as the more rabid right-wingers in the RNC continue to cannibalize themselves and alienate their base.

Either way its bad news for the RNC leadership. They should be especially troubled by the coming investigations into computerized election fraud. They certainly have a lot to worry about over the next decade...

But obviously there is still very little choice for the voter. An interesting thought experiment is to imagine Ron Paul running against Hillary Clinton. Here we would have essentially a liberal Republican running versus a conservative Democrat. This goes to show the fundamental problems with the two-party system - namely that it is corrupt and only serves the interests of capital, while marginalizing any voices of dissent.

Anyone who wants to have a chance of a political career must operate within the machinery of the parties, where their ideals are wrung out of them. The conservatives have seen this with the Bush administration. They thought they were getting a conservative Christian into office who would enact radical social change according to their agenda.

In fact all they got was a capitalist tool who's every single decision was based on servitude to oil and military supplier interests, domestic and foreign. This being in accordance with the traditional role his family has played geopolitically for over 50 years.

The two party system is rigged and must be ended. A true democracy, a direct democracy, where dialog between political parties elected by and for the people is our right. Decisions must be made, not by small circles of the rich and powerful controlling vast the machinery of the two-party system, the bureaucracy and the media, but by people's parties in dialog with each other to reach compromises that meet everyone's diverse needs.

As a socialist I believe in radical democracy, an everyday participatory democracy in which we all engage. In America, we have democracy once every two years if we are lucky, for the several minutes we spend in the voting booth. Is it any wonder our government is so foul?

New Diner Blog

To any who are interested, I've launched another blog focusing on diners in the Rochester, New York area. Its going pretty well so far, with the launch story getting quite a few hits. Please take a look!

http://dinermite.blogspot.com

Jammie Thomas vs RIAA

From Tim Worstall's blog:

Jammie Thomas has lost the first case against music file sharing to actually come in front of a US court.

A single mother has been ordered to pay $220,000 (£110,000) to the music industry after losing a test case trial in which she had illegally downloading songs from the internet.

A jury in Minnesota ordered Jammie Thomas, 30, to pay an alliance of six major record companies $9,250 for each of 24 songs for which they sought damages. They could have awarded damages as low as $750 per song.

Thomas, a Native American and mother of two, made legal history by becoming the first of 26,000 people sued by the Recording Industry Association of America over alleged use of filesharing software to take the case to court.

05-Oct-2007 : Tim Worstall, Jammie Thomas

A great of example of how the crime doesn't fit the punishment. Why go after a single user who may have had Kazaa installed versus going after pirate rings that manufacture and sell CDs for profit? The laws need to be changed. Anyone who distributes content without gaining financially should be exempt from this RIAA witch-hunt.

Giuliani vs Kucinich

Which side you on, boys, which side are you on?

"This attempt to foment a war is really against the best interests of America, it is against the spirit of the country, it is against the economic interests of the people." - Denise Kucinich, 2002

The New York Times "Election Guide 2008" lists the views of the candidates on a variety of topics. Specifically I was interested in the candidates' take on the war against Iraq. The opposite poles turn out to be Dennis Kucinich and Republican Ron Paul on one side, with Rudy Giuliani and John McCain on the other.

How anyone in their right mind can claim that Giuliani or McCain are moderates is beyond me. In fact, reading Giuliani's take on things, I am pretty convinced he has gone mad. All this guy thinks about is the "War on Terror."

Want an expanded police state? You can't do better than voting for Giuliani, thats for damned sure!

Meanwhile, Kucinich running what has become his expected protest campaign (but among the candidates, he easily wins in the hottest wife category), is right on the money and consistent over time. It is sad that neither the interests of the corporate media nor our government are not in alignment with those of the masses.

Only when the power is taken from the hands of the few and restored to the collective will of the many will peace prevail. We must end arrogant capitalist rule and the vanity of nationalism. Only a socialist reordering of society will bring about an end to war and the lies that lead to them.

From the New York Times:

Dennis Kucinich, Democrat

VOTED NO IN 2002, STILL OPPOSED
This attempt to foment a war is really against the best interests of America, it is against the spirit of the country, it is against the economic interests of the people.
-- In an Interview, Sept. 21, 2002

OPPOSED TO TROOP INCREASE
This escalation means a continuation of the occupation, more troop and civilian casualties, more anger toward the US, more support for the insurgency, more instability in Iraq and in the region, and prolonged civil war at a time when there is a general agreement in the world community that the solution in Iraq must be political not military. What is needed is a comprehensive political process. And the decision is not President Bush's alone to make.
-- In a Speech, Jan. 8, 2007

DE-FUND AND WITHDRAW NOW
I think it's inconsistent to tell the American people that you oppose the war, and yet you continue to vote to fund the war, because every time you vote to fund the war, you're reauthorizing the war all over again.
-- At the Democratic Candidates Debate, April 26, 2007

Rudy Giuliani, Republican

SUPPORTIVE OF DECISION TO INVADE
I think it's quite appropriate to go back and explain, 'Well, I might have done it this way, or I might have done it with more troops, or I might have done it some other way.' But here's the reality of it: We're at war. And we're at war because they're at war with us. They want to come here and kill us so we've got to put Iraq in the context of a much broader picture than just Iraq.
-- On " Hannity and Colmes", Feb. 6, 2007

IN FAVOR OF TROOP INCREASE
I support what the president asked for support to do and what General Petraeus has asked for support to do, not because there's any guarantee it's going to work. There's never any guarantee at war. But if we can come out with a correct solution or a better solution in Iraq, it's going to make the whole war on terror go better.
-- On " Hannity and Colmes", Feb. 6, 2007

MAINTAIN TROOP LEVELS
I detect in the Democrats a kind of attempt to go back to a pre-September 11 mentality in which we're not anticipating. And I also believe that they would not have made the mistake of wanting to force us to give our enemies a timetable of our retreat I've never heard of an army in the history of the world being required, if it's going to retreat, to give its enemy a timetable of that retreat..
-- On " Fox News Sunday", May 14, 2007

Productivity and the Crisis of Capital

It is truly telling when even capitalist wonks are making the same critiques (with some of the same conclusions) of the financialization of capital as Marxists have been all along. The fellows at Minyanville fall into that category and have these interesting posts over the past two days:

Kevin Depew:

Eric Weiner in an article published in Tuesday's LA Times (Use time wisely -- by slacking off) writes, "Attitudes toward work differ not only across time but also place. Corinne Maier's appropriately slim volume, "Bonjour Laziness: Why Hard Work Doesn't Pay," advocated that workers resort to "active disengagement" at the office. It was a bestseller in France but didn't resonate on these shores."

• Yes, when it was published a year ago, Maier's book advocating laziness didn't resonate on these shores.
• But that is already changing.
• Weiner writes in the Times:
  "In his essay, "In Praise of Idleness," British philosopher Bertrand Russell proposed reducing the workday to four hours, convinced that "the road to happiness and prosperity lies in an organized diminution of work." I agree. So be creative, be happy and waste some more time. Read this article again and again. Try reading it backward. E-mail it to co-workers. Translate it into Mandarin, then back into English. Then grab a coffee and enjoy some down time."
• What is the connection with financial markets?
• Think back for a moment to the Greenspan Productivity Miracle.
• Well, the former Fed Chairman was certainly right about that.
• The U.N.'s International Labor Organization recently issued a report that found that the U.S. leads the world in worker productivity -- and by a wide margin, Weiner notes.
• So why would it change?
• Productivity, like most "financial virtues," is the products of positive social mood trends.
• As social mood transitions to negative, we can expect to see less and less "virtue" in hard work.
• Think about it: real wages are virtually stagnant, so it's not as if people have experienced real reward for their work.
• What has been experienced is an unconscious and shared herding impulse trending upward; a shared optimistic mood finding "joy" and "happiness" in work and denigrating the sole pursuit of leisure, idleness.
• If social mood has, in fact, peaked, we can expect to see a different attitude toward work and productivity emerge.
• Note that Weiner's article doesn't simply value leisure - it values "slacking off."
• The phrase itself carries negative connotations:
• Slacking - loosening, becoming less tight, less taut
• Off - disengaging, dropping, deflating
• These are not accidental connotations.
• Within a positive social mood regime this might instead be called "pursuit of leisure."

13-Sep-2007: Minyanville, Five Things You Need to Know

And later:

Prof. Depew,

I think you've hit on one of the major causes of the productivity backpedaling when you point out that workers have long been receiving deteriorating real compensation. I think that as credit dries up, they will be left to face the impact of this lack of real income growth. Credit has simply masked that impact for years (indeed, the deteriorating real incomes have probably spurred the very same runaway consumer credit growth).

But I think there is another side to the drop in productivity, which I also expect to continue in force: the business world in general seems to have forgotten how to create progress at its financial core (wisely financing innovation). If too much malinvestment predominates, then you have entire enterprises of people running around to no profitable end, regardless of how "hard" they work. Ultimately, the debt tied to malinvestment does not get paid back, at which point it effectively subtracts from the GDP, and shows up as lower bulk productivity in the economy.

In a series of mass economic bubbles, such as those which have come to dominate the U.S. economy, you have a rolling pool of malinvestment, which remains even if the current bubble changes. The bubble sucks millions of people into fictitious bubble jobs, all of which are essentially malinvestment. Just think of the hundreds of thousands of pointless and unnecessary jobs and trillions of dollars of fictitious wealth created in the housing finance bubble (ignoring the companion home building bubble).

I would place the number of such jobs in our economy at at least 5 mln, including the housing bubble, the (overpriced) health care bubble, and the Homeland Security bubble. That's a lot of productivity decline baked into the cake...

14-Sep-2007: Minyanville, Malinvestment Behind the Return of the Slacker

Pretty amazing stuff. Of course, these guys are very faithful to their religion, and believe strongly that allowing the "free-market" to work without interference from central banks (such as the Federal Reserve) or from the governments would solve all the ills of the world. They believe that the crisis is an exception to the rule, rather than the rule itself.

This is plain wrong. The financialization of capital is a natural outcome, predicted by Marx, of the capitalist system rooted in the M-M¹ circuit of money capital.

So we have:

The monetary crisis referred to in the text, being a phase of every crisis, must be clearly distinguished from that particular form of crisis, which also is called a monetary crisis, but which may be produced by itself as an independent phenomenon in such a way as to react only indirectly on industry and commerce. The pivot of these crises is to be found in moneyed capital, and their sphere of direct action is therefore the sphere of that capital, viz., banking, the stock exchange, and finance.

Capital Vol. I, Ch. 3, Karl Marx, 1967

and:

It is to finance-capital that the capitalist future belongs. But this, both in the international struggle of competition and in the internal class struggle, means the most brutal and violent form of capital.

Finance-Capital and Crises, Karl Kautsky, 1911

The best solution is to overturn the system itself and replace it with a socialist system based on the logic of human need, as opposed to the exploitive capitalist system which is only interested in profit.

Who Manufactured Bin Laden?

A 50-year old web designer who works from her home in South Carolina!

Suprised? Today the Washington Post reports that "Laura Mansfield" has been behind the release of many Bin Laden videos since 9/11/2001.

From an article by Joby Warrick:

Early yesterday morning, a South Carolina Web designer who works at home managed to scoop al-Qaeda by publicly unveiling its new video, a feat she has accomplished numerous times since 2002. Within hours, cable news stations were broadcasting images of Osama bin Laden commemorating the Sept. 11, 2001, terrorist attacks, and crediting the 50-year-old woman, who uses the pseudonym Laura Mansfield.

9/12/07 Washington Post: Bin Laden, Brought To You By...

How did she do it? The article reports that she and others like her scoure the internet network of terrorist web sites to find the video images, scooping the rest of the media, especially the sluggish "MSM".

One of these spooks, Ben Venzke, says "It's not about bragging rights, it's about the mission." Of course, the money probably doesn't hurt either. But his statement begs the question - what is the mission?

Doing some biographic research on Mansfield shows that she has been involved in Middle Eastern operations since the 1980s. According to her website, she was in Beirut working at the embassy when the terrorist bombing hit the Marine barracks.

But it seems likely that she is a plant and her entire story is made up. At this point I would not even be suprised if she or those she works for actually manufactured the videos.

Do the research and judge for yourself.

Union Busting USA

As union membership in the United States declines, support for unions continues to rise. A recent Gallup Poll shows that although union membership has declined to 12% of the working population in the US, 60% of Americans support unions and would join one given the chance (Unions garner public approval, Randolf Heaster, Kansas City Star).

Although a paradox to the capitalist press, it seems quite obvious why this is so. More people than at any time in the past 35 years need unions, but aggressively anti-union tactics in the private sector have taken away or suppressed worker's rights to organize. This process has been greatly assisted by a mass media which is extremely hostile to organized labor across the board (newspapers, magazines, television, radio and movies). Finally, the linking of liberal and Democratic Party causes to organized labor has made labor's political agenda subservient to these other forces.

The private sector has a low 7.4% of workers organized (compared with 36.2% in the public sector). This is a direct result of the private sector routinely breaking labor laws, using intimidation tactics and firings, and all with a blind eye from the so-called Department of Labor - more of a joke than ever under the Bush administration.

From an article by Cosmo Garvin in Union Review:

As a rule, they don't shoot workers in the fields and at the loading docks anymore [as long as they are white Americans, workers in the US and throughout Latin America are frequently beaten, forced to live in labor camps, held in slave-like conditions, and even murdered - RiR]. This Labor Day, we can all be thankful for that. But trying to form a union can make your life miserable still.

Just ask Gene Esparza, a forklift driver who’s been with Blue Diamond, the international almond exporter headquartered here in downtown Sacramento, since 1969. That’s 38 years. Esparza makes $15.45 an hour, and he pays $500 a month for health insurance for himself, his wife and his two kids.

Esparza is among the workers trying to organize a union at Blue Diamond. “We’re not trying to hurt the company,” he says, “but I’ve got a family to raise. My kids want milk in their cereal. I need to put gas in the car.” He said he hadn’t gotten a raise for 15 years, until the International Longshore and Warehouse Union started helping workers organize a union in 2004. For Esparza and other plant workers, unionization is a no-brainer. But the campaign has been bitter.

The company sends out regular anti-union memos and makes attendance to meetings with supervisors about the union mandatory. Bosses constantly dog workers to make sure they aren’t talking about union business, Esparza claims. “I’ve had bosses come up to me and ask me who I was talking to, how many minutes I was talking to them for. Every time that happens I whip out my little notebook and I say 'I feel you are harassing me right now.’

“There are a lot of people who aren’t very happy. The morale is low. And some people won’t talk to me anymore because they are afraid they are being watched,” Esparza said.

Union Review: Holding All the Cards

With the structural crisis in capital coming to a head over the housing crisis, it is only a matter of time before workers will turn to themselves and form unions to protect their interests.

Its time to fight for union rights now and to break the stranglehold capital has on our work and our lives.

Its time to force the government to enforce its own good labor laws and repeal the bad ones (such as the egregious Taylor Law in New York State, a favorite of Democratic governor Elliot Spitzer).

Its time for a socialist alternative, a true friend of labor, instead of the two-headed capitalist duopoly of the Democrats and Republicans, which has worked tirelessly and brutally to deny the rights of working people for over 150 years.

Subprime Plot Thickens

I found out about Minyanville today, a website by investing guru Todd Harrison. He is hardly a progressive, but he writes with candour and wit, both rare commodities in the financial journals.

Part of a recent article of his is posted below; in it he covers the past few months of financial machinations connecting the dots and it is is well worth the read.

If you have any retirement whatsoever, READ IT.

As for me, I'm moving everything into cash and bonds (see Strategies for a Bear Market) until things shake out. It seems very clear that this going to be much worse than the dot.com bubble burst.

David Walker, the U.S. comptroller general, proclaimed that the U.S government was on a "burning platform of unsustainable policies with fiscal deficits, chronic health-care underfunding" and "chilling long-term stimulations" as he mapped the parallels between modern-day society and the fall of the Roman Empire.

These are not my words. They come from a nonpartisan figure in charge of the Government Accountability Office, which is often described as the investigative arm of the U.S. Congress.

"I'm trying to sound an alarm and issue a wakeup call," he said in the midst of his 15-year term, which began during the Clinton administration. "The U.S is on a path toward an explosion of debt."

Excerpt of the article by Todd Harrison:

NEW YORK -- They say that if you're playing poker and don't know who the sucker is, chances are it's you. For those currently holding trading cards, the stakes have never been higher.

Over the past few weeks, as risk chips stacked around the table, investors have been forced to call the bluffs of some of the savviest players in the global game.

The winners will walk away with a royal flush of profits, smiling all the way to the casino pool. The losers? They'll self-loathe and second-guess themselves on the hitchhike home, hungry for redemption and wanting for more.

Let's review the series of seemingly inconsistent hands we've been dealt during what was supposed to be a quiet stretch on the summer deck.

At the beginning of the summer, when "collateralized debt obligations" and "subprime mortgages" were first introduced into the mainstream vernacular, Treasury Secretary Hank Paulson was quick to assure us that the problems were "contained."

To be fair, Mr. Paulson wasn't alone. In fact, he was in very good company. See Minyanville article. San Francisco Fed President Janet Yellen, Federal Reserve Chairman Ben Bernanke, Dallas Fed President Richard Fisher and Federal Reserve Governor Fredric Mishkin were unanimous in their assuring voices that we had nothing to fear but fear itself.

Fast forward a few months. That's when things really started getting strange.

[...]

Two days after the FOMC meeting, BNP Paribas, France's largest bank, halted withdrawals from three funds because it couldn't fairly value holdings tied to the stateside subprime mess.

IKB Deutsche Bundesbank confirmed that it was holding special meetings to discuss
its "financial situation."

The U.K. issued a statement that its subprime crisis might be worse than the one in the U.S.

Those concerns, on the margin, were disconcerting. But as actions speak louder than words, the sequence of events that followed offered a more telling view that strange things were afoot at the Circle-K.

The European Central Bank, in an "unprecedented response to a sudden demand for cash," injected $130 billion into the financial machination. The U.S., Japan and Australia also stepped up to the plate with piles of dough, upping the ante to more than $300 billion.

Even Canada -- Canada! -- chimed in to "assure financial-market participants that it will provide liquidity to support the stability of the Canadian financial system and
the continued functioning of the financial markets."

MarketWatch: If the wheels fall of the financial wagon, you were warned

Weeping Man

From an article by author Steve Ryals:

President Harry Truman said that, "a weeping man is an abomination." Truman was president from the close of World War II into the early 50s. I saw this quote
just the other day, and was reminded of my grandfather, Oren Ryals. Oren was my
father's father, and when I was a boy I idolized him. He ran a chicken farm on a
seven acre spread near McMinnville Oregon in the 50s and early 60s. I got to go
down and spend time working there just about every summer between 1956 and 1963.

Oren loves his grandchildren very much and I'm sure from his perspective
he spoiled us rotten. He built a bunkhouse out of the bar and stayed out there
with my brothers and I we came to visit. He told us tall tales of Bigfoot and
other legends, and we had great time. He taught me the value of working hard and
enjoying the fruits of my labor. It seemed as though he could fix anything from
repairing a building to repairing a truck or a tractor. He also worked hard on
his chicken farm, establishing an egg route in Portland as a market for the
14,000 or 15,000 eggs the chickens is produced every week.

When I was quite young, before the age of 10 and remember grandpa being quite affectionate. However, at the conclusion of a trip my mom, my brothers and I had taken to visit with grandma and grandpa, I was deeply shaken by the way he said goodbye. We were standing in the train station in Portland. It was the summer of 1960, and here was heavy with diesel fumes and sticky heat. I remember the massive engine throbbing just behind us as though breathing. I loved trains, and was so excited to be heading home to Seattle on one.

There we were, say goodbye to grandma and grandpa. Grandma hugged everybody of course, and grandpa of my younger brothers. I thought he was saving me for last because I was his favorite, but think that was just a fantasy I had. The conductor's voice rang out, calling everyone to board. I stepped towards grandpa and put my arms out to get out just like I always had, but he stuck his hand out to home raise and shoved against my chest, stopping me cold. Shock shuddered through me and I
wondered what I might have done wrong.

I looked up into his face, tears welling, and he said rather roughly, "big boys don't cry, and they don't hug either. Men shake hands." With that, he stuck out his hand for me to shake. Numbly, fighting back tears, I shook his hand, then turned without another glance and climbed into the train. My brothers and I settled into our seats, and I looked out the window. Grandma and grandpa waved to us, smiles on their faces, as though nothing had happened.

I sat there feeling crushed. I sniffed once or twice as I wiped away the remnants of my tears. I vowed then and there never to cry again. If grandpa said it wasn’t okay to cry or hug him, then that must be okay. I would just have to get over my hurt. It would be six long years before my tears again graced my cheeks.

I tell you this story because, as I read, President Truman's words that I quoted you at the beginning of this essay, I was reminded of my grandpa. He turned 50 years old in 1952, and I realized that this was the reality that my grandpa lived in. He really did think that a weeping man was an abomination, and he was trying to protect me from being thought of it that way. He was just doing his best. Today I picked up my grandpa with great affection and love. He taught me so much, and he really did love me the very best way he knew how.

Tears flow easily for me now. I consider them sacred. I know in my heart, the tears are not a sign of weakness. Instead, they are a sign of strength. I honor them in myself and in others. My heart breaks open for all of the people who do not feel as though they can afford to cry. Part of my mission is to teach people that feeling is healing, that any feeling fully felt shifts. It took me a long time to learn to laughter
is connected to tears just as rain is connected flowers. One enhances the other, creates a context, provides perspective. Tears are healing. Trust your tears, and trust your heart.

A Weeping Man

So basically Truman and all the other Cold Warriors and their ilke (NeoCons anyone?) were assholes. Sure he did some good stuff, but really, no big surprise eh?