The Honduran Coup: A Beacon for Reaction?

Reposted from an editorial I wrote for SalvadorAllende.org, a web journal dedicated to a thorough analysis of democracy and socialism within the Americas.

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In a truly bizarre turn of events, President Barack Obama condemned the June 29^th Honduran coup d’état, which deposed President Manuel Zelaya, and refuses to recognize the new provisional government formed by the Honduran military. Though his statement came later than that of Venezuela’s President Hugo Chavez or Ecuadorian President Rafael Correa, its influence was duly noted by an array of pro-West organizations that followed suit and denounced the coup leaders. A long history of imperialist intervention in Latin America by the United States made the new administration a prime suspect in this heinously anti-democratic action but as of right now, it seems as though intervention has not been direct.

Regardless of whether or not Obama had a hand in Monday’s events, the coup was disturbing testament to the long-lasting effect of Western imperialism in Latin America, even amidst the growing relevance of leftist leaders in the region like Chavez and Correa. The general leading the coup, Romero Vasquez, was trained at the notorious US military institute, the School of Americas, which has assisted right-wing paramilitary organizations throughout Latin America for decades. Vasquez and his actions are simply the most recent development in a long lineage of interference and anti-democratic military operations, both outright and via proxy, by the United States against leftist leaders.

The hard right wasted no time siding with the Honduran military’s deft blow to democracy. The Wall Street Journal’s own editorial board flaunted its credentials as America’s finest ruling class paper by coming out in support of the coup a few days after by claiming that Zelaya posed a despotic threat to the Honduran Constitution, the last iteration of which was written in 1982 by a military junta. The document’s constitutional procedure was proxy-crafted by Washington and curtailed forms of popular sovereignty. Since the Constitution was not created entirely by the Honduran people, the ruling classes’ latest appeal to tradition loses every shred of credibility.

In contrast to past Latin American coups, now known to have been prompted by the CIA, the ruling class media organs like CNN Español have mobilized around the Honduran example as a template for what they hope will happen to Chavez in Venezuela. The political situation in Honduras, with two branches of government and the military against the now-deposed leftist President, proved much more fertile ground for fomenting a reactionary movement than Venezuela did in 2002, though the imperialists have been dying to try at it again ever since.

If the CIA didn’t have a hand directly in the Honduran coup d’état, it most certainly knew that it would take place. Obama’s condemnation of this anti-democratic movement is encouraging but his actions must be placed in the appropriate context. The first official statement made by the President that explicitly criticized the ousting of President Zelaya came after a meeting with neo-liberal Colombian President Alvaro Uribe, who has lobbied the US hard for the ratification of the Central American Free Trade Agreement. To ignore the broader implications that this coup, and the subsequent American response, have for the spread of American capitalism into the Southern Hemisphere is to knowingly evade both the history and reality of US/Latin American relations.

Consumer Advocacy

A friend of mine is currently engaged in a dispute with Point West Apartments in Gainesville, Florida. Prior to his leasing of this property, he was assured and advertised to by the staff that the area was extremely safe and crime was low compared to other similar complexes. A few months later, his motorcycle was stolen and the Point West staff expressed general apathy in helping his plight. Combined with the frequent presence of roaches and other pests on the property, he gave the owners a month notice and subsequently broke the lease.

Given the generally poor treatment of this client, it would seem outlandish to hear that Point West would take any retaliatory action.. But that's exactly what they've done. My understanding of the situation is that this individual has been subjected to intimidation with the threat of a lawsuit for the lease payments he didn't make, totalling $3,400.

The organization Ripoff Report, although a for-profit company, is seemingly providing an excellent service to dissatisfied customers like my friend free of charge. The dissatisfied party writes a report on their experience with the hopes of pressuring the company in question into dropping their demands or threats, which in his case cross the line into absurdism given his treatment while staying at the property and the deceptive advertising campaign promoting local safety.

See the report described here.

Iranian Unrest: Who is leading it and where is it going?

I. Iranian Elections: A Peculiar Institution

While I believe there is convincing evidence that the June 12 electoral event was rigged in the favor of President Mahmoud Ahmadinejad, I take issue with the Western media's characterization of this political event as an "election". The Worker-Communist Party of Iran, which along with nearly every other working class party in Iran has been banned and brutally suppressed, takes this nuanced line on the recent Presidential "election":

"‘Elections’ are not the real issue at hand. Everyone knows that in Iran elections are neither fair nor free. There are no basic political freedoms and no right to organise. Candidates are selected by the Supreme Leader and Guardian Council and are chosen from amongst pillars of the regime. Mousavi now branded a ‘reformist’ was prime minister and head of government for several years during the 80s when thousands were executed and hundreds of thousands arrested." (1)

Whether fraud occurred or not is almost immaterial. A May 20 article from Agence France-Presse presents the scenario: "A total of 475 Iranians [that] had registered as prospective candidates -- 433 men and 42 women.

All were screened by the Islamic republic's powerful 12-member Guardians Council, six clerics selected by supreme leader Ayatollah Ali Khamenei and six jurists proposed by the head of the judiciary.

The Guardians Council approved only four. In the 2005 election won by Ahmadinejad, eight candidates of the 1,014 who registered were approved, and eventually just seven stood." (2)

Although the quick release and the inspecificity of the results, along with the astounding margins of victory, are quite specious, anyone interested in a series analysis of Iranian "democracy" needs to go back a few steps in the electoral process. There was never an election in Iran. The ruling theocracy chose four male, homogeneous candidates that were all sympathetic and loyal to the Islamic state--the frontrunners being the current repressive President and the former prime minister who presided over the execution of nearly 30,000 political dissidents. (1) An Iranian woman has never been allowed to run for office and though the Guardian Council has dubiously hinted at the possibility of it, the actions of the anti-democratic theocracy in the candidate selection process indicate the reactionary nature of the government and the farce that they called "elections".

This realization is vital to the protest movement's continuation because the demands raised by the Iranian people cannot simply be for "electoral justice", a "recount", or a new election altogether. So long as this repressive state apparatus remains intact, Iranian democracy will not exist. The movement that has taken root must transcend supporting candidates like Mir-Hossein Mousavi, who arguably has a worse track record than the incumbent President in regards to human rights, and instead aim to bring down the theocracy altogether and finish what Iranian workers started in the 1979 revolution.

It's encouraging to read reports like this by the Worker-Communist Party of Iran indicating that this re-focusing is beginning to take place. "Slogans at demonstrations clearly show an opposition to the Islamic regime that goes beyond the regime’s infighting and the ‘election’ results though this is not reflected in the mainstream media’s coverage of the protests. Slogans include: ‘down with dictator;’ ‘Seyed Ali Pinochet, Iran won’t become Chile;’ ‘We don’t want an Islamic republic;’ ‘Coup d’etat government, resign, resign,’ ‘tanks and guns have no more use’…" (1) Sustaining this movement demands the escalation of this anti-theocratic trend because only by critically examining the structures put in place to oppress the Iranian people can revolutionary changes be realized.

II. Mousavi: An Accidental Leader

Former prime minister Mir-Hossein Mousavi, dubbed unequivocally the "reform" candidate by the Western media and sectors of the Iranian media, has found himself with a movement behind him that will not benefit from his ascension to power. Some Western leftist organizations like the Party for Socialism and Liberation have sought to denounce the fallout protests because of their student-based nature and the link to Mousavi. Though they are wise to be cautious, a greater analysis of the uprising's social roots reveals a far more involved conflict that must be supported.

Alan Woods of the International Marxist Tendency explains that "At present, the nominal leader of the movement is Mir Hussein Mousavi, but this is only a historical accident and it will not last." (3) Mousavi's platform of privatization and increased libralization of trade doesn't stand to benefit Iranian workers or students. However, the miscalculations of the ruling theocracy, headed by Ayatollah Ali Khamenei, proved to be the proverbial spark that started the prairie fire. Decades of repression at the hands of a ruling theocracy wielding the iron-cast sword of Sharia has spawned a movement of angry dissidents.

Woods's prediction of Mousavi's temporary centerplace in the movement continues to ring true as dozens of labor organizations, both legal and illegal, express solidarity with and join the protests. The Khodro autoworkers, a part of the largest automobile factory in Iran, demonstrated in support of the dissidents by walking out of work for 30 minutes on June 18. (4)

Two days later, the Autobus Workers Union of Iran released a statement condemning the brutal response of the state and pledging solidarity with the movement. Additionally, they declared June 26 "the international day of support for imprisoned Iranian workers as well as for the institution of unions in Iran." They continue: "We want that this day be viewed as more than a day for the demands of labor unions to make it a day for human rights in Iran and to ask all our fellow workers to struggle for the trampled rights of the majority of the people of Iran." (5)

The Free Trade Union of Iranian Workers raised a series of demands in a statement released today that reads:

"Therefore, we workers, under the present conditions, when social protests have taken the form of a mass and huge movement that has come on the scene to achieve its demands, it is our right to turn the leaflet with the demands of our fellow working class people, into our banner and to raise it. These demands are as follows:

1- Immediate increase in the minimum wage to over 1 million tomans [$1010] a month.
2- An end to temporary contracts and new forms of work contracts.
3- The disbanding of the Labour House and the Islamic Labour Councils as government organisations in the factories and workshops, and the setting up of shoras [councils] and other workers’ organisations independent from the government.
4- Immediate payment of workers’ unpaid wages without any excuses.
5- An end to laying-off workers and payment of adequate unemployment insurance to all unemployed workers.
6- The immediate release of all political prisoners including the workers arrested on May Day, Jafar Azimzadeh, Gholamreza Khani, Said Yuzi, Said Rostami, Mehdi Farahi-Shandiz, Kaveh Mozafari, Mansour Osanloo and Ebrahim Madadi, and an end to surveillance and harassment of workers and labour leaders.
7- The right to strike, protest, assemble and the freedom of speech and the press are the workers’ absolute right.
8- An end to sexual discrimination, child labour and the sacking of foreign workers." (6)

As more demands are raised by workers during this period of unrest, the likelihood of untethering the movement from thoroughly reactionary figures like Mousavi and channeling the outrage and frustration into revolutionary action increases significantly. The Iranian theocracy has a long history of repressing labor organizations, despite the central role that workers played in the 1979 revolution. Labor must take control of this movement and, along with students, raise demands and couple them with action against the Iranian state.

III. Global Impacts: Ruling Class Divisions and It's Implication on Imperialism

The supremely undemocratic nature of the 2009 Iranian election isn't a novel event. The Guardian Council has, since its creation after the revolution, always had the final word on candidacies--stricter some years more than others--in order to insure near homogeneity in its figurehead of state. What has made the 2009 election year more contentious and what event has sparked these dramatic protests over a nearly inconsequential election?*

Within the ruling theocracy of Iran, two differing views on managing the affairs of the nation have arisen: the more traditionalist, conservative view espoused by Ayatollah Khamenei and a neo-liberal view taken up by former Iranian President Akbar Hashemi Rafsanjani. In January 2007, a BBC article laid out this central conflict:

"Now the former president, Hashemi Rafsanjani, has voiced public criticism of President Ahmadinejad's tendency towards a highly centralised state-controlled economy.

Mr Rafsanjani, who is a capitalist, has invoked the supreme leader, suggesting the leader was pained by the very slow pace of privatisation under Mr Ahmadinejad's government." (7)

Rafsanjani, who sits on the Assembly of Experts that choose the Supreme Leader, has been a vocal supporter of Mousavi and his pledges to pursue greater privatization of the economy, particularly within the energy sector. When his daughter and several other relatives were detained and arrested shortly after the first wave of protests, the ideological debate within the conservative government came to the forefront.

To see this conflict as an election dispute between Ahmadinejad and Mousavi is to ignore its root altogether. Both of these figureheads are props, providing a face to the conservative ideological war between Ayatollah Khamenei and Rafsanjani, representing theocracy and neoliberalism respectively. On one hand, the hard right wing of the theocracy seeks to preserve the same Sharia state apparatus that established control in 1979. The "reformist" wing seeks greater international trade and the further development of Iranian capitalism. Thus, the ruling class of Iran finds itself at a crossroads with factions pitted against each other to determine which direction the state will take.

The Obama Administration finds itself in a similar crossroads position. All indication suggests that President Obama anticipated dealing with reformists like Mousavi over the issue of nuclear weapons, which would have likely been met with less opposition than the hard right government of Ahmadinejad. However, the moderate success in engaging Tehran in recent months caused an unusually silent response by this administration that had made a speech at Cairo University to the "Muslim world" just weeks before. Though Obama undoubtedly expected the reformists to win out over the theocrats, he could not have predicted that a Mousavi loss would be so sloppily dealt out by the state.

Obama's end goal in preventing Iran's acquisition of nuclear weapons largely coincides with the vision of capitalists like Rafsanjani to open the Iranian economy, especially within the petroleum industry, to U.S. corporate business ventures. The liberalization of the Iranian oil market would represent Obama's greatest act of service to Western capitalism and can only be accomplished through solving the nuclear question.

At the present moment, revolution on the part of the working class, backed by student protesters, represents perhaps the greatest threat to Obama's foreign policy. Should the Iranian theocracy under the Ayatollah be toppled and a new revolutionary government be raised in its place, the assurance of dealing with a known regime will be erased. Resistance to imperialism and neoliberalism by workers could significantly compromise the end goal of accessing Iranian markets and resources. Though he has denounced the violence towards protesters today, it's hard to imagine a similar response in the case of a more militant general strike.

IV. Standing With the Iranian Workers, Students, Women, and Minorities

The bravery displayed by student protesters, feminist activists, minority groups, and workers in challenging the theocracy is inspiring and must be supported by progressives and revolutionaries internationally. One can support the revolutionary cause of the Iranian people without playing into the neo-conservative line that supports Mousavi and denounces the government in Tehran. Answers to Ayatollah Khamenei's brutal repression will not come from neo-liberals like Mousavi or Rafsanjani whose end goal means the greater subjugation of the working class. Iranian liberation will come from the grassroots struggle of the oppressed people against the ruling theocratic state.

Organizations like the Worker-Communist Party of Iran, that have committed themselves to a truly democratic, secular Iranian state, ought to be supported in the coming weeks as they attempt to build a broader movement of workers and students. Rumors have circulated about the possibility of a general strike that would deal a crushing blow to both the theocrats and the neo-liberals. This movement must transform into a full assault on the theocratic state; a task that falls to the Iranian working class.

Our cry, in solidarity, should be loud and unequivocal: "Another 1979!"

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* The locus of executive power in Iran rests with the Supreme Leader; at present, Ayatollah Khamenei. Within discussions on the Iranian government, there is a general consensus that the President of Iran has little capacity to pursue domestic or foreign policy that digresses from the Ayatollah's general view.

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1. Worker-Communist Party of Iran, June 16, 2009, "Iran: Protests go beyond the regime's infighting", http://worker-communistpartyofiran.blogspot.com/2009/06/iran-protests-go-beyond-regimes.html

2. Agence France-Presse, May 20, 2009, "Moderates take on hardliners in Iran vote", http://www.google.com/hostednews/afp/article/ALeqM5jrQJFlC3BlhE6Tc0z1MtKaE6A6Cg

3. Alan Woods, International Marxist Tendency, June 18, 2009, "Iran: how can the movement go forward?", http://www.marxist.com/iran-how-can-movement-go-forward.htm

4. Al Giordano, The Field, June 18, 2009, "Iran Khodro Auto Workers Begin Work Slowdown to Protest the Regime", http://narcosphere.narconews.com/thefield/iran-khodro-auto-workers-begin-work-slowdown-protest-regime

5. Al Giordano, The Field, June 20, 2009, "Iranian Bus Workers Join the Resistance", http://narcosphere.narconews.com/thefield/iranian-bus-workers-join-resistance

6. Iranian Worker Solidarity Network, The Free Trade Union of Iranian Workers, June 18, 2009, "Message of the Free Trade Union of Iranian Workers to Iranian workers", http://www.iwsn.org/labour/free-union-workers-18jun09.htm

7. Jay Solomon, Jonathan Weisman and Yochi J. Dreazen, The Wall-Street Journal, June 24, 2009, "Obama Rips Iran in Tactical Shift", http://online.wsj.com/article/SB124575867345041295.html

Pragmatism and Socialism

(Written November 5, 2008)

As of last night, Illinois Senator and Democratic candidate Barack Obama was elected the 44th President of the United States. Though votes are still being tallied, President-elect Obama has achieved an electoral vote count that far surpassed the 270 votes necessary to win the Presidency. With only Indiana, Missouri, and North Carolina left to call, the longest Presidential election in American history has come to a close.

On January 20, 2009, Barack Obama will be inaugurated as the President of the United States, thus ending the long and tumultuous eight-year reign of George W. Bush and blatant neo-conservatism. A plethora of problems are left in its wake: two wars abroad, a self-destructing economy, massive unemployment and home foreclosures, and most important of all, the standing of the working class. This critical juncture requires clear and concerted action if the left is to posit a solution to these problems.

The end of the Bush Presidency calls for a widespread restructuring of the left. In eight years of what most Americans consider the worst Presidency in US history, the left has very little, if anything, to show for its struggle against the Republican establishment. The anti-war movement has replaced critical proletarian theory and the movement towards revolutionary socialism has largely stagnated in the face of widespread opposition to the Bush Administration's actions. Within two Presidential terms, the struggle for socialism has been reduced to a crude anti-Bush ideology, whose protest was levied against a single actor rather than the system that props up the actor. In short, the left has, as a whole, lost its focus and as America enters an era without a political effigy like Bush to burn whenever necessary, the left faces irrelevance if it does not radically restructure itself.

The American working class largely opposes the wars and refuses to endorse the Bush Administration's belligerent imperialist actions but the failure of socialists to channel that anti-Bush fervor into constructive, revolutionary consciousness has allowed Washington's travesties to continue. Americans would not stay silent, though, and in the final year of the Bush Presidency, they took what they perceived to be a step towards achieving the change they wanted to see: They supported, campaigned for, and ultimately elected Barack Obama, the dialectical synthesis of neo-conservative imperialism and defunct leftist theory.

Barack Obama arose out of the Democratic Party as an agent of change, filling the archetype Americans sought so desperately. He was the man who would go forth and reverse the disturbing trend of American hubris and militarism abroad should he be elected President. He promised the working class that he could fix the economy so that everyone would benefit from it. Ultimately, Barack Obama represented everything Americans wanted.

For too long the left focused their attacks solely on the figure of George Bush. Though they were unable to shape these attacks into any meaningful or impactful action, public opinion did respond to the resounding call for the end of US imperialism. However, since the attacks on the wars were never given a definite class character and lacked a broader strategy to mobilize the working class, the working class’ dissatisfaction with Washington manifested itself through votes for Obama. Dialectically speaking, both the left and the right created Obama and facilitated his election.

It is no surprise as to why the left failed in mobilizing any substantive, working class opposition to Barack Obama's campaign. SocialistWorker and the International Socialist Review dedicated a large part of their weekly (and monthly) proceedings to critiquing Obama's stance on the wars, revealing his monetary ties to the capitalist class, and challenging his hope-filled rhetoric. Their criticisms, though oftentimes accurate, found no new audience to resonate with.

Similarly, Ralph Nader offered his token opposition to the Democrats and the Republicans and still came up drastically short of the 5% popular vote necessary to qualify him for federal campaign money. The problem wasn't that the left was silent in the 2008 election but rather that the left was not pragmatic.

The criticisms constantly levied against Barack Obama by the left were practically the same that were brought against Bill Clinton in the 1992 election. Though Obama is unequivocally a ruling class politician, it was counter-productive to view him in the same light as past Democrats like Al Gore (2000) and John Kerry (2004). A critical look at Obama reveals a clear distinction between the spineless endorsement of candidate John Kerry by the Communist Party USA in 2004 and what could have amounted to pragmatic entryism into the Obama campaign.

For instance, labor was an issue that was almost entirely passed over in the 2008 election, despite the fact that Obama had pledged to sign the Employee Free Choice Act, the largest labor reform proposed since the National Labor Relations Act of 1935. Had socialists thrown their support behind Obama, even amidst inevitable, scathing criticisms from the left, it would have provided a major public venue to ignite discussion on working class’ interests in contrast to that of the capitalist class, especially in light of America’s economic catastrophe. Instead, the working class was treated to the crude economism of the Democratic Party’s standard rhetoric, being identified by cowardly terms like “middle class” whose meaning remains ambiguous.

Revolutionary socialists have a tremendous opportunity to gain a foothold should Obama actually sign the Employee Free Choice Act. By eliminating the ability for employers to call for a secret ballot election after a majority of workers call for collective bargaining via card check, the EFCA will greatly expedite the process of forming a union. The revolutionary party can only be built in the US on the backs of a strong proletarian culture cultivated through mass unionization, all which is now possible under President-elect Barack Obama.

The left missed a vital opening to rally the working class around labor as the major campaign issue. A similar opening will present itself again in the coming months and the left must prepare to hold Obama accountable and draw unionism to the forefront of national politics.

Capitalism in Decay

The U.S. economy is in decay. The once-powerful center of investment and capital is collapsing on its own weight, causing Washington to scramble for a solution. The collapse of Lehman Brothers and American International Group, amongst other investment banks, signifies a new chapter in the ever-growing economic crisis; one in which capitalism is imploding in a way that the world has never seen. The effects of neo-liberalism and globalization are magnifying this crisis, causing America's turmoil to spill out into other nations.

All the while, the working class is being tossed and turned on this ship without a captain. The U.S. Department of Labor has documented the effects, noting mass layoffs affecting nearly 174,000 workers in August 2008 alone (1). Their damning report from September 23, 2008 goes on: "The national unemployment rate was 6.1 percent in August, seasonally adjusted, up from 5.7 percent in the prior month and from 4.7 percent a year earlier." As firms cut back investment in this tumultuous, if not hostile, economic environment, working people are losing their jobs.

The effects of layoffs are plainly realized when one examines the rate of foreclosures, which continues to rise significantly more than a year after the crash of the housing market. A September 12, 2008 article by Forbes Online cited a report released by RealtyTrac, a foreclosure database monitoring the crisis, which found that "One in every 416 U.S. households got a foreclosure filing in August, affecting 303,879 properties nationwide, for increases of 12 percent from July and 27 percent from August 2007." (3)

It is important to approach this unique economic crisis with an understanding of why these problems emerged.

Foreclosures are still occurring en masse because many working families are still holding onto toxic, sub-prime mortgages that were acquired before the housing market bubble burst in 2007. A lack of oversight by the federal government on mortgage lenders allowed many people to acquire loans and credit that they could either not afford to pay off or were based on abusive lending conditions. As homeowners are unable to pay the premiums on their mortgage(s), they default and may choose to foreclose and/or declare bankruptcy.

The bank that provided the mortgage finds themselves with a home, usually with very little equity, that they futily attempt to put back on the market in hopes of recouping some of their loss. This in turn forces lenders to cut back the amount of credit and mortgages available to not only consumers but also investors. This "credit crunch", as it has been termed, leaves bank with less liquidity and significantly decreases the ability for mortgage-owners to renegotiate abusive contracts and unreasonable interest rates.

Enter the secondary and tertiary market, where banks financed these mortgages by re-selling them as securities. In an attempt to capitalize on a rapidly-expanding market in 2005/2006, wealthy capitalists began to purchase sub-prime securities with the hopes that they would yield greater interest rates and earn higher returns. In an effort to defuse the risk of possible foreclosure/bankruptcy, these securities would often be sold again as re-packaged securities to foreign banks and lenders, who similarly wished to capitalize on the exploitation of working class homeowners.

A disproportionate supply of mortgages to meet demand finally broke the back of the housing market, creating a situation where homes simply could not be sold. Where a year earlier, a person's home could go for 200-300% of what they initially paid for it, the broken market left them in a condition where selling was near impossible. Borrowers defaulting on their mortgages coupled with grossly-deflated real estate prices had a trickle-up effect on banks and lenders, the secondary market, and the tertiary market.

As working class America was being forced out of their homes, the ruling class similarly saw their high economic position coming to a crash; a crash conceived, born, and nurtured from within their own ranks.

Enter the state. BearSterns, a multi-billion dollar investment bank specialized in trading securities, nearly collapsed before J.P. Morgan Chase bought out its stocks. In order to save the mortgages dependent on BearSterns, the Federal Reserve issued a $29 billion loan to the failing bank. Thus, the state set the dangerous precedent of issuing bailouts to failing financial institutions.

Since that time, banks and lenders have either consolidated with one another through company sales (Merrill Lynch bought by Bank of America) or have been sufficiently "bailed out" by the U.S. government (Lehman Brothers, American International Group, IndyMac). Perhaps the most drastic action was taken towards Fannie Mae and Freddie Mac, quasi-governmental organizations responsible for nearly $12 trillion in mortgages which have been possessed by the Department of Treasury so as to guarantee these loans to borrowers and shareholders.

The state cannot continue to hold up the ruling class. President Bush, Treasury Secretary Henry Paulson, and Federal Reserve Chairman Ben Bernanke proposed a plan early this week to give the Treasury Secretary discretion over $700 billion to bail out failing banks and increase liquidity. Thus far, Congress has not approved the plan but it is unlikely that the Democrats will reject this proposal, especially after the executive triumvirate's shameless use of bully pulpit tactics.

If this money is allotted by Congress, it will contribute to fueling inflation, which is already severely affecting millions of working Americans. The Department of the Treasury recorded total accumulated debt in the U.S. to be $9 trillion as of 2007. With all of the financial bailouts issued in 2008, the debt will undoubtedly increase, which means that the value of the dollar will continue to depreciate from its already-pitiful state. When faced with cost-push inflation stemming from America's oil dependency, the American working class cannot take any more increases of inflation, which manifests itself as higher food and energy prices.

Similarly though, allowing the free market to deliver a finishing blow to many of these financial institutions will leave many more American working families homeless. The lose-lose outcome from this bailout demonstrates the inability for Keyensian economics and public investment to mitigate severe economic turmoil.

Capitalism is in decay and there exists no hope for relief as America moves into the November elections. As the ruling class watches their empire self-destruct, a revolutionary atmosphere may be taking root in the hearts of working Americans; Americans who will no longer be the subject of exploitation in good times and in bad.

An Aesop Fable for the 2008 Presidential Election

Reading Leon Trotsky is a captivating experience because of how relevant his words remain 60+ years after they were written. Fascism: What it is and how to fight it is my favorite Trotsky pamphlet for a number of reasons. First published in 1944 as a collection of other writings on the rise of fascism, it looks at the class origins of the brownshirt movement and evaluates the potential courses of action that a workers' party ought to take. At the center is a strong message urging all workers' parties to unite in the face of fascism; a policy stupidly rejected by the German Communist Party and the Comintern, both appendages of Stalin's regime in the USSR.

Neither John McCain nor the Republican Party are fascist in nature, in that neither has the ability to completely destroy the working class movement. However, the looming threat that John McCain poses to not only the American working class, but the international proletariat is a whole, is immense. The Democratic Party is by no means a revolutionary party, but the policies promoted by Senator Barack Obama will have some partly progressive benefits for the workers and prevent the perpetuation of destructive neo-conservatism.

I don't believe that this fable from Fascism is directly analogous to the situation that Americans are faced with in the 2008 Presidential election. At the same time, Florida is a major battleground state in this election and though I have gone back and forth with myself countless times, I have begrudgingly decided to vote for Barack Obama for President of the United States. Trotsky's warning, present in the form of a fable, explains my position better than I can.

We will "attend to the dealer as well" after the election.

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A cattle dealer once drove some bulls to the slaughterhouse. And the butcher came night with his sharp knife.

"Let us close ranks and jack up this executioner on our horns," suggested one of the bulls.

"If you please, in what way is the butcher any worse than the dealer who drove us hither with his cudgel?" replied the bulls, who had received their political education in Manuilsky's institute. [The Comintern.]

"But we shall be able to attend to the dealer as well afterwards!"

"Nothing doing," replied the bulls firm in their principles, to the counselor. "You are trying, from the left, to shield our enemies -- you are a social-butcher yourself."

And they refused to close ranks.

- Leon Trotsky, Fascism: What it is and how to fight it, 1944

Related Posts: The Obama Dilemma

Trouble in Florida

Florida isn't only a major battleground state for the Presidential election; the congressional race in District 8 (Central Florida) is already showing signs of being contentious. District 8 is a classic situation in which the the Democratic Party challenger is no better than the Republican incumbent. Alan Grayson is expected to be the Democrat's offering this November, challenging Republican incumbent Ric Keller for the long-held Republican seat.

Grayson, the multi-millionaire founder of IDT Corporation, has spent approximately $900,000 already, despite having only 5 donors from the district on record. Even more troubling is the very real possibility that Grayson committed tax fraud when he signed a questionably illegal document with Derivium Capital LLC, a firm which has garnered a great deal of attention by the IRS for sketchy accounting. An October 17, 2005 article from Forbes Magazine describes the type of deal that Derivium offered its clients:

The Derivium deal called for the customer to get a loan equal to 90% of the value of his shares. If the stock went up, he could get it back by repaying the loan, with interest. If the stock went down, he could walk away and owe nothing. And, supposedly, the initial loan was not a sale and thus not taxable. (1)

Derivium promised banking and loans for Grayson in excess of $28 million, while simultaneously promising him to be tax hidden. The Forbes article goes on to say that "Grayson collected $600,000 in gains when he settled early loans, giving him the comfort to deliver more shares to Derivium."

The company is now under suit from the US government in the case USA v. Derivium, and all its' clients can potentially be implicated as well for tax fraud. Grayson admits to being a client of Derivium and signing into the contract, yet argues he "didn't know" exactly what he could be getting into, and didn't know he owed the government $4.5 million in taxes. In response, he decided to sue Derivium to get his $28 million back, arguing he was ignorant of any fraudulent activity.

It's hard to say whether or not Grayson signed his contract with Derivium knowing that he would be avoiding major taxes. What can be said is that this controversy reflects not only Grayson's judgment, but also his immense ties to corporate America, however sketchy they may be.