Archive

economy

Book review: Jeffreys, Diarmuid, “Hell’s Cartel. IG Farben and the making of Hitler’s war machine.”  Metropolitan Books, New York, 2008

IG Farben defendents

The biggest corporation in Europe solidly backed the Nazis during the time they were taking power. During the ensuing war, the big chemical company was more and more deeply involved in Nazi warmaking and ethnic cleansing.

The book begins and ends with the trial of several top company officials. In between, it details the history of the conglomerate from the time that it supplied poison gas during World War I through the trials that ended in 1948. In both wars, they provided much of the vital expertise and materials.

IG Farben established and ran its own slave labor camp as part of the Auschwitz complex. The abuse and murder of tens of thousands of slave laborers was carried out in Farben facilities just as in the other death camps. One of their small but very successful product lines was Zyklon-B, the death gas.

Working people usually say that we do the bidding of “whoever signs our checks.” Have you ever wondered who signed the checks for Nazi doctor Josef Mengele, who killed hundreds of people with torture and outrageous medical experiments? IG Farben.

The company executives received light sentences and early parole. They went on to continued successful careers in European industry.

Books and movies about Nazi Germany have poured out in an endless stream since the end of WWII. We are fascinated with the horror of it and with the questions that are never quite satisfactorily answered, “How could this have happened? Why didn’t somebody do something?”

This book supplies part of the answer, if readers are ready to accept it. Hitler came to power essentially because wealthy Germans, like the officials at IG Farben, preferred the Nazis to the Communists. Even after the war, even during the trials at Nuremberg 1947-48, the main distraction from justice was fear of rising communism.

–Gene Lantz

I’m still on KNON 89.3FM radio in Dallas at 9 AM Central Time on Saturdays. If you want to know what I really think, check out my personal web site.

 

 

A big change is coming in international relations.

war2

It may seem that the whacky international news is only being caused by our whacky president and his whacky ways, but there are several underlying real trends pointing the United States toward starting a new war.

The most obvious one, which I have written about before, is that the Republicans and Donald Trump are looking at some major election losses in November unless they do something drastic. The most recent shifting of posts in the White House is definitely in that direction.

Another reason is more long-term and has to do with trade balances and history.

Looking Back

Nearly all of us living today are products of post-World-War-Two thinking. The “American Century” that began in 1945 put the United States at the head of all nations both militarily and economically. Historically, it was a most unusual situation for the world and for America, but most of us think of it as “normal” because it’s the only situation we have ever experienced. It isn’t normal at all, and it can’t last.

U.S. military domination continues, but is severely challenged right now in Afghanistan, Iraq, Syria, and Yemen. U.S. economic domination continues but is severely challenged by the European Union, new alliances in South America, and, most of all, by China.

U.S. economic domination is no longer based on our industrial productivity. A great deal of our industry has been shut down. Our agricultural production is still very strong, but also faces challenges. If anything, U.S. economic domination is based on finance, especially on borrowing.

An interesting article from CBS News says, “Why China won’t dump its huge U.S. Treasury bond Hoard.” They say it won’t happen, but they wouldn’t have written the article if people weren’t worried about it. Apparently, China holds about $1.2 trillion in U.S. Treasury bonds. They buy them every year, but they slowed down their purchases last year, the article says. It was just an incremental change, the article says.

The Nature of Change

Most change is incremental. It happens so slowly that we hardly notice it until some statistician points it out. These are quantitative changes. But quantitative changes can accumulate and, eventually, create giant qualitative changes that seem to happen all at once and come out of nowhere. Think of a stock market collapse, an earthquake, or a sinkhole. Think of a war.

Why Have a War?

Competition, not cooperation, is the natural behavior of capitalist economies. War is a natural consequence of capitalism. Even in the “American Century” so far, U.S. armies have been engaged over and over again. Even when the armies were not engaged, the U.S. has employed proxy armies such as the “Contras” in Nicaragua, the Kurds in Syria, or the Saudis in Yemen.

What passes for “diplomacy” is actually based on war or the threat of war. Witness the current expulsion of diplomats from Russian embassies, for example.

Why NOT Have a War?

Like any other enterprise, war depends on the cooperation of the people carrying it out. If we refuse, if we mobilize against it, no one can force us into the next big war. But we need to get started.

-Gene Lantz

I’m still on KNON.org 89.3 FM in Dallas at 9 AM Central Time every Saturday. Programs are podcast for two weeks and can be found under the “events” tab of the home page. If you are interested in what I really think, check out my personal web site.

 

 

The Economic Policy Institute recently ran a couple of good studies about wages.

hitlerquote

Factory Workers Earn More Money

EPI says, “…manufacturing workers still earn 13.0 percent more in hourly compensation than comparable private-sector workers. This manufacturing premium, however, has declined by about one-fourth (3.9 percentage points) since the 1980s, when it was 16.9 percent.” So why do manufacturing workers make more money than “comparable” people? And why is the margin diminishing?

Here’s another question that bugs the heck out of my friends who work in aerospace but are members of the Auto Workers Union: “Why do auto workers get much better contracts than aerospace workers?” We work just as hard and have had as much or more training. We have the same national union leaders, the same history, and the same intentions, but our wages and conditions have never been as good as theirs. Why?

It’s Not the Work, It’s the Organizing

Manufacturing workers are easier to organize than other workers. There are more of them in one place. They work closer together. They live closer together, They have more of the same interests. Contrast, for example, techies. Techies are notoriously hard to organize, even though they may really want a union. They live all over the place. They work almost entirely alone. Some of them actually work at home. They tend to travel for work. They don’t usually advance within the same company, but move from one company to another for advancement. It is very hard to organize techies.

The easier we are to organize, the more likely we are to have a union and thus get better wages.

Aerospace workers can cuss the auto workers all they want, but the fact is that auto workers were easier to organize. Assembly line production calls for the highest levels of cooperation among workers. Take just a few of the workers off an assembly line, and it has to shut down!

Airplanes, for the most part, aren’t made on assembly lines. It’s hard to win a strike in aerospace, but it’s much easier in auto. Better organizing, better contracts!

Why Is the Gap Decreasing?

EPI says that the gap between [organized] factory workers and everybody else is decreasing since 1980. I almost laughed when I saw that date. 1980 is the year that American government set new anti-worker policies and elected its best enforcer —
Ronald Reagan. So the question answers itself.

Unionism in America has atrophied beneath the government assault, and the advantage of unionism is not nearly as widespread as it was pre-Reagan. We fell from 35% of the workforce to the present 11%. Union workers still make way more money than non-union workers doing comparable work, but there just aren’t that many union workers left to bring up the statistics.

Whose Wages Are Rising?

The other interesting article from EPI said, “States with minimum wage increases between 2013 and 2017 saw faster wage growth for low-wage workers compared with states without any minimum wage increases (5.2 percent vs. 2.2 percent).”

Last month, Wall Street had a minor panic when it was announced that wages were rising for the first time in recent history. They were barely rising, but they were slightly higher than inflation for that same period. Since then, economists and political pundits have been saying that wages will continue to rise and that the government will have to take steps, such as raising interest rates, against the trend.

Capitalists may say otherwise, in fact they do, but they do not want wages to rise.

But wages did, statistically, rise a little bit in February, 2018. The reason was that some local and state governments, responding to political pressure from working people, were beginning to raise their minimum wages. An increase for low-wage workers has a profound effect on statistics, because there are so many low-wages workers. Also, all wages tend to rise when they are pushed up from the bottom.

Nineteenth century writers Karl Marx and Frederich Engels noted that workers would tend to benefit themselves more by organizing politically than they would by fighting the bosses one company at a time. It’s not a new idea; it’s just a true one.

Crossing the Line

There are a lot of references to “the line” in literature. There’s the “red line,” there’s the “line in the sand,” and there’s the “picket line.” If you want to get someone to answer the question “Which side [of the line] are you on?” just ask them if they support increasing the minimum wage. It cuts through a lot of verbiage.

Even though unemployment is statistically low, and the time is ripe for organizing, your own wages aren’t likely to rise much until you actually organize. Either organize a union on the job or organize politically to raise wages. That’s the road to success!

–Gene Lantz

I’m still on KNON.org 89.3FM in Dallas every Saturday at 9 AM Central /Time. If you want to know what I really think, check out my personal web site.

 

Republicans are driving the national debt to unprecedented heights. Are they really “deficit hawks” as they always claim?

mitbuyinggovt72The whole idea that politicians have some kind of guiding principles or ideology is nonsense. What they actually have is material incentives to do what they do, vote the way they vote.

If the very wealthy people who direct most politicians want more spending on the military, or on tax cuts for themselves, that’s what they get. There isn’t some principle or ideology involved.

One thing that really upset Republicans during the Obama Administration was what they called “sequestration.” Under it, they had limits on what they could spend. Republicans wanted it, but only as long as it applied to spending to benefit the people. What galled them was that it also applied to the military. They’ve now broken that restriction and they are once again free to spend the money they want to spend to dominate the world.

When it comes to Medicare, Medicaid, Social Security, education, health care — anything that benefits working people and has to be partially paid for by taxation from the wealthy — they will still claim to be deficit hawks. It would be a funny joke if it weren’t so horrible.

How Long Can They Borrow?

The American government can go on borrowing — selling bonds — as long as they can find someone to buy them.  They sold a lot of them since the 2008 crisis, and there was nothing to back them. We didn’t have any more gold, or any more treasure of any kind. America just sold bonds, and people, especially people in other nations, bought them.

Theoretically, that could go on forever. When another nation, say China, invests in United States Treasury Bills, as they often do, they are committing to a continuation of world economic stability based on the U.S. Dollar and United States economic domination. Otherwise, they wouldn’t get their bond money back.

It would be interesting to examine the cost of debt servicing now that the American debt is shooting up over $20 trillion dollars. I found a number: $174,800,239,416.18 that is supposed to represent the service cost for the last year. That’s $175 billion.  https://www.treasurydirect.gov/govt/reports/ir/ir_expense.htm

The amount goes up or down depending on the interest rates. But if people, especially people in other nations, become more reluctant to buy bonds, and if America keeps selling them, as they must, then the interest rates will necessarily go up. The cost of servicing the debt will go up, too.

This brings me back to the question of military spending. If the United States can still destroy any other nation, then it isn’t likely that any of them will stop cooperating with the worldwide economic system as it is. So, how long can America borrow? As long as it can find lenders.

–Gene Lantz

I”m still on KNON radio 89.3 FM in Dallas at 9 AM Central Time every Saturday. If you are curious as to what I really think, check out my personal web site

 

World stock markets nosedived for a fourth day running on Tuesday, having seen $4 trillion wiped off from what just eight days ago had been record high values.

–NBC News

dark_money600x350px

Just the week before, Oxfam America announced their analysis of all the world’s wealth created in 2017. Eighty-seven percent of it went to the upper 1%!

I’m wondering if that same wealthy 1% took 87% of the $4 trillion loss? 

Probably not. The investors that took a bath this week aren’t the pros. They aren’t the ones with computers and experts doing their trading for them. They wouldn’t even know how to “sell short” like the big-time investors who are making fortunes from the downturn.

Once, before the implosion, I visited Moscow. They had a lot of fine museums made from the palatial buildings created in tsarist days. One of them had been the stock market. The Soviets, I was told, were running their economy without a stock market.

The Chinese, I understand, do have a stock market. It’s careening downward as this is written, just as other markets are around the world. The purpose of a stock market is to facilitate the flow of capital. Unfortunately, it also provides a giant gambling den where professional sharks swallow their competitors.

I’ve listened to several experts talk about the present downturn, and they are unanimous in saying that it’s just a correction and does not really reflect the basic world economy, which is sound. It seems to me that they nearly always say that during sharp downturns, because they don’t want investor panic to add to the problem, and they are nearly always right. But not always.

The experts go on to say that the selloff began when statistics were revealed showing that workers were beginning to get paid a tiny bit more. Wages, they said, were rising at the 3% rate. That’s a little bit more than inflation so, though tiny, it’s on the positive side for workers.

Why is good news for workers such bad news for capitalists?

–Gene Lantz

I’m still on KNON radio 89.3 FM in Dallas at 9 AM Central Time every Saturday. If you want to know what I really think, check out my personal web site

I talk to the young folks, they don’t understand,

‘A thing this old man has to say…”

–from the song “I Wish I Was 18 Again” as sung by Jerry Lee Lewis

storyteller

I would tell young people that they are going to have to win their rights all over again. I would also tell them not to settle for what their parents had. I would tell them to figure out what needs to be done to get things right, even if it takes some time and experimentation, and then to do it!

False Roads Are Almost the Only Roads

I suppose that everyone is entitled to their own mistakes. In my 50 years of activism, Almost everything I ever did turned out to be mistaken, so I certainly have no right to expect young people to do any better than my own sorry example. Nevertheless, I have to try to warn you.

You Will End Up Working for the Man

Almost all of us want to choose a career that will actually make things better than they are. That’s why there are so many college students in the arts and in social studies. They want to do something meaningful while earning their living. It sounds reasonable but it’s nonsense.

In this system, we work for the people who have money and power. We perform the duties laid out by the people who sign our paychecks. The people with money and power are not the people who want change, no matter how they may sugar-coat it. If we want to make a living, we have to please them. So don’t waste your time trying to find a job as a progressive change agent, you will, sooner or later, be disappointed. A better career choice is one where you can make as much money as possible with as little of your time as possible. Look for a job with a union or one that can be organized into a union.

When In Doubt, Choose Democracy

When you are confronted with a decision about how to best employ your resources in the struggle for a better world, democracy makes a good guideline. In general, the political system democracy is in opposition to the economic system capitalism. Democracy pushes for equality. Capitalism has to have inequality.

Study Our History

Their history tells us that George Washington overcame British autocracy, that Lincoln freed the slaves, and that Martin Luther King Jr ended discrimination. Without taking anything away from these outstanding people, we need to acknowledge the masses of people who did the work before them.

Take, for example, the civil rights movement. It didn’t start in Montgomery in 1954. It was well underway before slaveholder George Washington’s time. There were great people who made great sacrifices to win the degree of racial equality that we have presently attained. Some of them were preachers, teachers and wonderful orators, but, in the final analysis, Black people in America freed themselves!

The union movement is responsible for bringing economic and social advancement for workers. There were some wonderful leaders that we know of. But the union movement, by its very nature, consists of and relies on the rank and file members. Workers in America, to the extent that we are free, freed ourselves!

The War Continues

We sometimes win a battle against our bosses; we sometimes lose one. But the war will continue as long as they are in charge. Every advance that we make will have to be won again, sooner or later.

So, my young friends, you will have to win everything that was won before. I’m hoping you’ll go further.

–Gene Lantz

I’m on KNON radio every Saturday at 9 AM Central Time. If you want to know what I really think, check out my personal web site

 

2018 stretches before us like a blank canvas. Economists and Republican politicians are painting a gorgeous festival on it. Democrats are using only one color: black.

fat-famine

Predictions Take the Safe Road

Nearly all predictions are just linear projections of trends currently underway. For example, American production has been rising slightly so the prediction is that it will rise even more. Unemployment has been low, so the prediction is that it will stay low. I saw one prediction saying that wages will go up in 2018, even though they have been going down since the 1970s.

For A Few, Everything Looks Great!

The disastrous “Tax and Jobs Bill” that just passed the Congress shows what is intended. It is a gigantic giveaway to the rich at the long-term expense of the poor.  This is not a new trend. It has been going on clearly since American domination of the world began to diminish in the late 1970s. It is reasonable safe, therefore, to predict that the rich will continue to get much richer and the poor much poorer in 2018. Inequality will worsen.

Using the same linear projection approach, one would have to conclude that democracy will continue to ebb and the environment will get even less hospitable.

Politics May Get Messy

The last poll before the Republicans passed their big giveaway, conducted by NBC News, said that only 24% of the American people supported the legislation. Republicans say that people will start liking it as soon as they see tiny improvements in their paychecks beginning in January. Democrats say that support for “trickle down” will fall even further as people see what was actually in the bill.

As 2018 begins, Republicans and their only legislative accomplishment are extremely unpopular. President Trump has the lowest ratings in history. Does that mean that they are going to take a mighty hit in the November elections? Are the Democrats going to take charge and bring back the rosy Obama days?

We should be skeptical. Republicans are backed by an awful lot of money, and money wins elections. Also, they hold state power. Who is to say how they might use their money and their power before November?

They might, for example, start another war. They’ve been talking up war with North Korea for months and they have the ability to start such a war just at the time when they consider it most propitious for their election prospects. It worked for both Bush Presidents, who had low ratings before invading Iraq and high ratings afterward. Sure, lots of people would die, but Republicans might well benefit at the polls!

Before deciding that the Democrats will surely make a comeback in November, remember that they have problems of their own. They robbed Bernie Sanders of the 2016 presidential nomination and, by now, everybody knows it. Deputy Democratic Party  Chairman Keith Ellison is touring America right now to try to bring all the Bernies back into the fold, but it’s safe to say that some of them won’t come. The Democrats would have to be really sloppy to not make some gains in 2018, but will they actually turn things around?

In summary, the safe set of expectations for 2018 is that it will be great for the great, but not for us.

What to Hope For

A lot of really good  things could happen in 2018. Low unemployment and high consciousness are requisites for an organizing boom. If unions and the other types of organizations presently underway aggressively take advantage of the situation, we could see some real organizational strength develop for working people. Then (and only then) we might expect to see a reversal in the steady decline in our American wages, benefits, and living standards.

There must be half a dozen organizations expecting to take over the Democratic Party, end all corruption, end its dedication to capitalism, and make it a workers’ party. There are others who believe they can create a workers party — perhaps from the Greens or from the Working Families Party — or from scratch. Conditions for a workers party have never been better because of the high educational levels and consciousness of the American people.

The progressive movement is a giant in America. The Women’s March on the day after Trump took power put more people on the streets than ever before in American history. They are planning another one in January 2018.

Even though very few Americans even know what a political strike is, they are becoming common in other parts of the world. With modern communications and the high level of consciousness among people, especially among young people, we may see major changes in America that come from outside the electoral system.

Expect the worst. Hope for and work for the best!

–Gene Lantz

I’m still on KNON radio, 89.3FM in Dallas, at 9 AM Central Time every Saturday. If you want to know what I really think, check out http://lilleskole.us