Food Crisis Behind Revolts

The rapidly rising cost of food is leading to revolts around the world and not just the Middle East.

The cost of food while making profits for Big Agri-Business cartels and those infamous Hedge Funds and Bankers, is impoverishing people.

The global food crisis which began at the end of 2010 mirrors the one in 2008 and the usual reaction to recourse to growing outputs in the hope that prices will go down is insufficient and short-sighted, said De Schutter at a press briefing yesterday.

The “real reason people are hungry” is poverty, he said, because “we have impoverished” small-scale farmers. Policies have favoured a small number of large producers, and now is the time to stray away from an unbalanced agricultural system that maintains poverty, leads to pollution and is heavily dependent on fossil fuels, he said.

And food revolts, which resulted in creating most of the historic revolutions since the French Revolution, the Russian Revolution and even the Iranian Revolution, may be coming to developed advanced Capitalist countries including Canada.

While there are those who blame natural disasters for the problem the real issue is capitalism treats food as a commodity, and trades it on the futures market.

The Food and Agriculture Organization under the United Nations issued a rare alert last month that the drought in north China could put at risk wheat production and also put pressure on wheat prices.

Further, wheat futures in Chicago have soared more than 60 percent in the past year and last month jumped to the highest level since 2008. Corn and soybean prices have also witnessed steep increase.

Food prices are soaring to record levels, threatening many developing countries with mass hunger and political instability. Finance ministers of the Group of 20 leading economies discussed the problem at a meeting in Paris last week, but for all of their expressed concern, most are already breaking their promises to help.

After the last sharp price spike in 2008, the G-20 promised to invest $22 billion over three years to help vulnerable countries boost food production. To date, the World Bank fund that is supposed to administer this money has received less than $400 million.

Food prices are now higher than their 2008 peak, driven by rising demand in developing countries and volatile weather, including drought in Russia and Ukraine and a dry spell in North China that threatens the crop of the world’s largest wheat producer. The World Bank says the spike has pushed 44 million people into extreme poverty just since June.

A senior economist at HSBC has warned that Britain could experience riots if food prices continue to soar in line with the cost of crude oil.

Karen Ward told Sky News that amid "very low" wage growth in the developed world, failing to compensate workers for recent rises in food and energy prices could provoke social unrest in the U.K.

Energy markets -- where prices are near their highest levels since 2008 as battles rage in oil-rich Libya -- are "a significant contributor" to higher food prices, Ward told Sky Tuesday.

Food price inflation has helped spark the uprisings in North Africa and the Middle East that toppled longstanding rulers in Tunisia and Egypt.

Last week, the United Nations said food costs are at their highest point since the agency began tracking them 20 years ago.

"The Great Food Crisis of 2011" is here. That's what the highly respected magazine Foreign Policy is calling the rampant food inflation that is causing problems worldwide.

The British government just completed a two-year study involving 400 experts from 35 countries to assess the global food situation. The results are scary. Here's what the report said:

By 2050 global food supplies will not be sufficient to feed an expanding population. The UN estimates that food production must rise by 70 percent to feed a world population of more than nine billion in 2050. [But] rising demand and surging global population coupled with increasing resource conflicts over land, water, and energy will hamper food production.

And the United Nation's Food and Agriculture Organization (FAO) states that the "double whammy of high food prices and the global economic slump pushed an additional 115 million people into poverty and hunger." Over 1 billion people go hungry every day and it's rising.

2008 was also a bubble year for many commodities as U.S. food prices were up 5.5%. But 2011 isn't as simple as a bubble -- supply-and-demand economics suggest long-term imbalances. We have a real crisis when we combine the dismal long-term outlook with short-term supply shocks caused by the forces of Mother Nature and, arguably, climate change. It is time to be prepared.

The ongoing popular uprisings in North Africa and the Middle East poses the question if other developing countries, including Ghana, may experience similar or other forms of uprisings in the light of the imminent global food crisis of 2011.

In order to answer this question one needs to look at the underlying drivers for the uprisings in both 2008 and now.

In 2008 riots from Haiti to Bangladesh to Egypt over the soaring costs of basic foods have brought the issue to a boiling point and catapulted it to the forefront of the world's attention.

Although food prices eased by the end of 2008, the UN’s Food and Agricultural Organization (FAO) convened a World Summit on Food Security at its headquarters in Rome in November 2009, noting that food prices remain high in developing countries and that the global food security situation has worsened.

In January 2011 it became clear that the world was experiencing a second food crisis and that prices have risen to levels close to or above those prevalent in 2008.

The rice wall

In broad terms, food prices today are at the highest level ever recorded by the UN.

Wheat has risen by 58 per cent in the past 12 months, while corn has soared 87 per cent. Raw sugar prices are up 37 per cent.

Overall the UN food price index climbed by over one-third in the past year, with all food goods advancing.

So why aren't we as bad off as we were in 2008? For one reason only: the key staple of more than half the world's population has not taken off along with the others. Rice.

It has gained only a modest 6.5 per cent in the past 12 months.

"I've never loved rice more than now," gushed Abdolreza Abbassian, a senior economist at the Food and Agriculture Organization in Rome. "Probably rice is the commodity separating us from a food crisis."

In the aftermath of 2008, some Asian countries began stockpiling rice more effectively. But we still need to be hyper-vigilant as today's rising oil prices, combined with some weak harvests, are starting to affect local prices.

Bangladesh, Indonesia and China, for example just announced rice increases of over 20 per cent.

If that seems like dull reading, just pause for a moment to contemplate what the current unrest in the world would be like if Asia were also to boil over should rice shortages become an issue.

At one point in 2008, Britain's MI6 foreign intelligence unit warned that as many as 70 countries might be unhinged by food costs.

Since then intelligence agencies have been keeping a close watch on rising food prices because of two events that tend to follow in their wake: widespread political unrest and mass financial devastation.

The milk rally that sent prices up 49 percent this year, more than any agricultural commodity, may be ending as farmers respond with record production and the costliest cheese in a quarter century curbs demand.

Output in the U.S., the world’s second-largest producer, may rise 1.7 percent to 196 billion pounds in 2011, enough to fill about 34,500 Olympic-sized pools, the Department of Agriculture estimates. Demand will weaken as restaurants cut promotions and grocers raise prices, said INTL FCStone Inc., a New York-based broker. Futures may drop 14 percent to $16.86 per 100 pounds by Dec. 31, a Bloomberg survey of 10 analysts showed.

Dairies are missing out on profits from milk’s biggest rally since at least 1996 as the surge in grain that drove world food prices to a record, contributing to protests in northern Africa and the Middle East, also boosted the cost of feeding cows. While income for grain and cotton growers will rise more than 20 percent this year, earnings at dairies may drop 13 percent, the government estimates.

“Grain farmers are having some of the best years they’ve had in a long time profit-wise, but you couldn’t say that for dairy,” said Bob Cropp, an economist at the University of Wisconsin in Madison who has been studying the industry since 1966. “Dairy facilities are running at the maximum. With a little softening in demand, prices are going to come down.”

Milk futures on the Chicago Mercantile Exchange closed on March 11 at $19.65, a 32-month high. Prices are up 54 percent from a year earlier as importers from Mexico to China increased buying and the rebounding U.S. economy bolstered domestic demand.

Commodities Rally

Milk’s 2011 rally has exceeded those of all agricultural futures traded in New York and Chicago including cotton, which surged 42 percent and reached a record last week. The Standard & Poor’s GSCI Index of 24 commodities advanced 11 percent, and the S&P 500 Index of stocks rose 3.7 percent. As of March 10, Treasuries gained 0.1 percent this year, a Bank of America Merrill Lynch index shows.

MARK COLVIN: We've heard plenty about how the uprisings in the Middle East and north Africa may affect the price of oil, much less about how the price of wheat may have caused them.

Fred Kaufman is a contributing editor at Harper's Magazine, who's published a number of long articles about what he calls the "food bubble".

He points out that when food prices peaked in 2008, there were riots in more than 60 countries. Prices have now gone past that peak again.

I asked him on the line from New York if that was a contributing factor to the revolts in Egypt, Tunisia, Libya and elsewhere.

FRED KAUFMAN: Well I would say so. I mean the food sector inflation rate in Egypt for the two months previous to the revolution was 17 per cent each month.

And of course we know that revolutions are traditionally led by middle class, angry people and in this case what you have is a situation where the price of wheat goes up, all of a sudden, the price of vegetables goes up and milk and if you no longer can feed your kids milk and fresh meat you're going to get very angry if you're a middle class person.

MARK COLVIN: The obvious parallel I suppose is the French Revolution where the price of bread just went up and up and up until people could take it no longer.

FRED KAUFMAN: Or even look at 1848 when the entire content of Europe goes into revolution and this is directly related to tremendous amounts of famine across the continent. Now I'm not saying there's famine, because now the situation with food has changed, which is that people aren't really going hungry because there isn't enough food. One thing we have to realise is that there is more than enough food; there's more than enough food to feed double the world's population.

The issue is not enough food; the issue is can you afford the food? And of course this leads directly into what I've been talking about for the past year and a half, which is speculation in global wheat and food markets.

MARK COLVIN: You call it the food bubble I think. What does that mean?

FRED KAUFMAN: Well, what it means is that there are exterior forces at work forcing up the price of wheat, forcing up the price of global wheat. Because remember that the last food bubble we had in 2008, when all was said and done, the wheat harvest of 2008 was the greatest the world had ever seen and in fact as the statistics are coming in from Russia and as the out, you know, we're seeing what's probably going to happen now that rain and snow has hit China it's looking as though we're going to see quite a good wheat harvest for this year too.

So that there's something else going on and what I discovered was actually there's a tremendous and a new kind of speculation going on by the largest banks in the world, who now perceive food as one of the last bastions of real value on Earth.

MARK COLVIN: Who's driving it then; which banks?

FRED KAUFMAN: They are the usual suspects. I mean of course Goldman Sachs was the first one who came up with this particular sort of food derivative in 1991, but of course as soon as Goldman had figured this thing out and it became very lucrative for them, they were followed by everybody; by JP Morgan, Chase, Deutsche and Barkleys and of course Lehman and AIG in America, which were part of the great financial debacle.

These financial products, what I call food derivatives, really hijacked the global wheat markets, because what they did is they put a tremendous demand pressure on wheat and on wheat futures that was exterior to any supply and demand natural pressure and these products were made, these are what are called long-only products, in other words they were made only to buy wheat futures. There's no mechanism in these products ever to sell and so of course when there's five times the year there's a tremendous demand of hundreds of billions of dollars to buy; this is of course going to have an effect on the global price.

MARK COLVIN: That's extraordinary; a product that you can buy but not sell?

FRED KAUFMAN: Yeah they're called the long only commodity index. And as I say Goldman masterminded this product in 1991 but of course the markets were not completely deregulated throughout the 1990s these are the American futures markets, and so what happened by the end of the 1990s is that the markets were deregulated and so large banking institutions were suddenly allowed to take huge stakes in food futures, which they had not been allowed to do since really before the Great Depression, since the financial regulations had been in place since then.

And after those position limits were given exemptions for these banks they went whole hog and then of course what happened was a perfect storm after 2005, with all the other derivatives and mortgage backed securities and stock markets and currencies tanking, where was a safe haven, where was a refuge? Well it was in commodities.

MARK COLVIN: Are these though like the derivatives that none of us understood before the global financial crisis but which led to it?

FRED KAUFMAN: Well you know what's so interesting is that actually a wheat future is the world's first financial derivative. So derivatives have been around for a long time and in fact these financial derivatives are not all bad in the sense that they help people who actually buy and sell wheat, the farmers and the processors, they help them manage their risks.

The problem with derivatives is when they subvert the market. In other words when they're no longer being used by what are called the bona fide hedgers, the people who actually have a stake in the markets, and this is what the banks have done. They realised, there's a way that we can eke money out of this mathematically and they eked out tremendous profits.

The current crop of deposed heads of state may have Wall Street to thank for their forced retirement. While the causes of helter-skelter commodity prices are complex -- natural disasters such as floods and droughts can play a big role, as can interest-rate shifts engineered by central bankers around the globe -- rapid-fire trading and speculation on the Street can magnify the problem.

In an era when vast pools of capital shift in and out of markets for basics like food and oil with the a few computer keystrokes, trading can cause prices to see-saw in ways that are sometimes harrowing and hard to control.

And this wouldn't be the first time. Less than three years ago, another food crisis was marked by rampant financial speculation that helped cause prices to skyrocket and prompted regulators to examine whether traders were also gaming oil prices. At the time, governments were also flush with enough cash to boost food subsidies and calm protesters. This time around, governments ravaged by the crisis lack the financial wherewithal to tamp down prices with subsidies.

Wall Street says that trading keeps food and energy markets liquid, allowing farmers to plan ahead when planting their crops or helping oil producers to know how much crude they can ship. Often, of course, that's true. But there also can be a more brutal calculus at work: big price spikes are good for traders holding onto wheat or oil contracts, allowing them to stuff more money into their wallets while families struggling to make ends meet thousands of miles away suddenly find that it's become too expensive to feed themselves.

The top lobby group for the derivatives industry, the International Swaps and Derivatives Association, says it supports financial regulatory reform, but resists blame for pricing problems. "Although speculation is often blamed for causing problems in markets, the economic evidence shows that it is in fact a necessary activity that makes markets more liquid and efficient," ISDA Head of Research David Mengle wrote in a September memo.

Meanwhile, derivatives trading remains a largely under-regulated affair, even though such gambling was a major cause of the financial crisis in the United States and broadened the severity of the entire debacle.

It is now widely accepted that speculation helped fueled the price hikes of 2008: Economists at Princeton University, World Bank, the European Commission, the Peterson Institute for International Economics, the International Monetary Fund, Rice University, the Massachusetts Institute of Technology, and the Texas A&M University Agricultural and Food Policy Center have all published studies indicating that speculation played a role in 2008's commodity-price swings.

"Look, you have no market without speculators, so I like speculators," CFTC Commissioner Bart Chilton told HuffPost. "But it's more like a casino right now than anything else."

Libya A Diversion

The civil war in Libya is acting as a convenient cover for more repressive American backed regimes in the Middle East to continue their oppressive regimes and attack their citizens who are protesting. By focusing on Libya the silence of the International community is deafening when it comes to these attacks on legitimate protests.

Violence in Bahrain, Yemen; Oman's ruler cedes some power

Police fired tear gas to disperse hundreds of anti-government demonstrators blocking access to the financial district of Bahrain's capital on Sunday, as sectarian tension escalated in this tiny island kingdom.

The Persian Gulf kingdom, home to the headquarters of the U.S. Navy's 5th Fleet, has seen weeks of demonstrations led by Shiites, who make up a majority of the population but say they are discriminated against by the Sunni royal family.

The confrontations Sunday were among the most violent since the military killed seven protesters on Feb. 17. They followed similar clashes Friday when security forces fired what protesters said were rubber bullets, and pro-government gangs armed with sticks beat back several hundred protesters near the royal palace.

At least one person was killed and scores were hurt on Sunday when Yemeni police fired live rounds and tear gas at protesters in Sanaa demanding an end to President Ali Abdullah Saleh's 32-year rule, medical sources said. Meanwhile, protests continued in Saudi Arabia, Bahrain and Oman.

Four people, including a 12-year-old boy, were killed in protests around Yemen on Saturday, bringing the total number of dead during two months of unrest to above 30.


Yemeni security forces also fired tear gas and live ammunition for a second day in a bid to force students to vacate a protest camp near Sana'a University. Eyewitnesses say police and pro-government supporters also used wooden clubs and knives to attack the protesters. Dozens of casualties were reported.

Al-Jazeera TV reported that protesters in the southern Yemeni port city of Aden attacked and set fire to a police station for the second time in 48 hours. Al-Arabiya TV reported anti-government protesters also clashed with police in the city of Taiz, north of Aden, injuring several.

Yemeni protesters across the country have been demonstrating since mid-February, amid calls for the resignation of veteran President Ali Abdallah Saleh, who has offered sweeping concessions to the protesters.

In Lebanon, tens of thousands of supporters of the anti-Syrian March 14th coalition turned out in Beirut’s Martyr’s Square to commemorate the 2005 Cedar Revolution that forced Damascus to withdraw its troops from the country.

- Morocco's King Mohammed VI promised sweeping constitutional reforms, including real powers for a popularly elected prime minister instead of a royal appointee, as well as a free judiciary.

In his first speech after uprisings across the Arab world and less than a month after protests erupted in Morocco for more social justice and limits on royal powers, the king Wednesday pledged to draw up a new draft constitution.

The live broadcast was the first time the king has delivered an address to the nation since thousands of people demonstrated in several cities on February 20 demanding political reform and limits on his powers.

There have been other peaceful rallies since then, including in the capital Rabat and the country's biggest city Casablanca, with young activists campaigning for greater democracy using the Facebook social network to call for new demonstrations on March 20.

Six people were killed in unrest that erupted after demonstrations on February 20, including five found burned to death in a bank set ablaze by people whom officials labelled vandals.

Another 128, including 115 members of the security forces, were wounded in the violence and 120 people were arrested, the interior ministry said.

Dozens of vehicles and buildings were also damaged or set alight.

F35 boondoogle

So the Parliamentary Budget Office declares that the Harpocrites have low balled the costs of their F35 fighter purchase, which they sole sourced. They say prove it...that's hard to do when the DOD fails to provide the PBO with any cost estimates, being under the cone of silence imposed by the PMO.

The F35 is a white elephant that has not gotten off the runway yet, you want too know the costs of this ,OK that's easy you just have read the press...The American and International press that is. Something the PBO did while the Harpocrites continue to deny, deny, deny....So what did Lockheed Martin promise the Harpocrites?

After all Lockheed Martin now also does the information collection for Stats Canada as it does for Stats UK.

Ironically the only persons to protest the mandatory census law in Canada and get charged, which the Harpocrites used to justify the canceling of the Long Form census, were Anti-War/ Anti-Lockheed Martin protesters.

Gates Shakes Up Leadership for F-35 - NYTimes.com

McCain Says F-35 Cost Overruns Have Been `Obscene': Video - Bloomberg


The cost overrun on the main engine for the Lockheed Martin Corp (LMT.N) F-35 fighter jet has grown by $600 million over the past year, despite tough cost-cutting measures by engine maker Pratt & Whitney, a unit of United Technologies Corp (UTX.N), a Navy document shows.

The total cost to complete the Pratt F135 engine is now estimated to be $7.28 billion -- $2.5 billion more than the $4.8 billion initially projected for the engine, according to the document, which was first reported by Aviation Week magazine on its website on Wednesday.

That is an increase of $600 million from the $1.9 billion cost overrun that was reported last year by the House Armed Services Committee.

Pratt spokeswoman Erin Dick said she was not familiar with the new number, and emphasized that the company's aggressive cost-cutting measures were taking effect.

Pentagon officials disclosed last week that the F-35 joint strike fighter program so far has exceeded its original cost estimates by more than 50 percent.

These revelations come as no surprise considering the history of this program. The Government Accountability Office concluded that F-35 estimated acquisition costs have increased $46 billion and development extended two-and-a-half years compared to the program baseline approved in 2007.

The price per aircraft projected at $69 million in 2001 is now up to $112 million, according to GAO. The Pentagon plans to acquire 2,443 jets for the Air Force, Navy, and Marine Corps. Foreign nations also are expected to buy the aircraft.

A congressional auditor said Thursday that the Joint Strike Fighter, the Pentagon's most expensive weapons program, "continues to struggle with increased costs and slowed progress," leading to "substantial risk" that the defense contractor will not be able to build the jet on time or deliver as many aircraft as expected.

Michael Sullivan, the U.S. Government Accountability Office's top analyst on Lockheed Martin's jet fighter, also known as the F-35 Lightning II, told the Senate Armed Services Committee in a hearing that the cost of the program has increased substantially and that development is 2 1/2 years behind schedule.

The United States plans to buy about 2,400 of the fighter jets for the Air Force, the Marine Corps and the Navy. The projected cost for the program appears to have increased to $323 billion from $231 billion in 2001, when Bethesda-based Lockheed won the deal, according to Sullivan. Eight other countries -- Britain, Italy, the Netherlands, Turkey, Canada, Australia, Denmark and Norway -- also plan to buy the jets.

The cost to build the plane is now expected to be $112 million per aircraft, according to a GAO auditor.

US Joint Strike Fighter (F-35) Hits Afterburners on Cost Overrun

POSTED BY: Robert Charette / Fri, March 12, 2010

The US Department of Defense officially announced that the Joint Strike Fighter aka F-35 Lightning II will breach a Nunn-McCurdy Amendment critical threshold on 1 April - an appropriate day, I think.

The Nunn-McCurdy Amendment says that a major defense program is considered to have incurred a "critical breach" if it exceeds the current baseline cost estimate by more than 25% or the original baseline cost estimate by 50%.

Defense officials told the US Senate Armed Services Committee in a hearing yesterday that the estimated cost per F-35 aircraft had risen from $50.2 million to somewhere between $80 to $95 million in 2002 constant dollars. The program has also slipped its schedule by at least two and a half years as well for the USAF and Navy versions of the aircraft (it was slipped by 2 years in 2004 as well).

As a result of the breach, the DoD must certify to the US Congress that the program is essential for national security, which it will, of course; and Congress - which is very unhappy with the program's management (the government's program manager was recently fired) - will continue to fund the F-35 because there is little other choice.

The other eight nations participating in the program - Australia, Canada, Denmark, Italy, the Netherlands, Norway, Turkey and the U.K. - aren't going to be happy about the cost increases either. I suspect some sweetheart deal will be made to make them less unhappy.

The F-35 program, which has a total life cycle cost of over $1 trillion dollars, was promised to be a "model acquisition program" which would avoid the cost overruns and schedule slips of past aircraft programs like the F-22 Raptor and provide an "affordable next generation strike aircraft."

The JSF website says that, "The focus of the program is affordability -- reducing the development cost, production cost, and cost of ownership of the JSF family of aircraft."

They may want to now amend that sentence.

The Australians are now seriously reconsidering their purchase of the F35

Because the RAAF’s Hornets are aging, Canberra approved the purchase of
Super Hornets as an interim aircraft between the classic Hornet and the
F-35. Aerospace industry and military officials contend that without the
Super Hornet to make the task of integration incremental, the shift
from Hornet to F-35 would likely have become a nightmare of increased cost, complexity and schedule overruns.

And yes Joe and Janey Canuk there is an alternative to this overpriced piece of war machinery...And Japan is looking at buying it....

The F-35, otherwise known as the ball and chain seemingly the entire Western world finds itself chained to, is probably not looking so good to Tokyo right now.

Now, delays suggest the F-35, another stealthy, state-of-the-art option, will not be available until 2020, which could leave a longer-than-acceptable gap for Japan.

Enter the Eurofighter, which is not as advanced as the F-22 or F-35 _ known as fifth-generation fighters_ but is already in service.

The supersonic aircraft, which made its first flight in 1994, is used by six countries: Germany, Italy, Spain, Britain, Austria and Saudi Arabia. Its makers are looking to sell the fighter to Greece, Denmark, Romania, Qatar and India. It is believed to cost about $100 million per aircraft.

A big part of the Eurofighter sales pitch is that it will not tightly restrict the transfer of technology, which means some of it could eventually be built in Japan _ a significant plus for Japanese planners concerned with domestic industry. The U.S. options may not be as generous.

"The Eurofighter group has offered Tokyo lots of sweeteners, including industrial participation," he said. "If the U.S. side can't come up with something equally attractive, then I think it will be difficult for Tokyo to choose a less beneficial deal."

Christopher Hughes, a Japan specialist and political scientist at the University of Warwick, said he believes Tokyo may go for the Eurofighter as a gap-filler, then buy the F-35 once it is ready.

"My feeling is that the Eurofighter might have a chance, but not as the main F-X," he said. "It ticks a lot of boxes and is ready to go, and whilst not cheap, probably nowhere near as costly as the F-35."

Besides budget Hawks like McCain even the Conservative think tank the Hudson Institute is critical of the F35 boondoggle.

Do you know "Cheop's Law"? Named for the Pharaoh who built the great pyramid, and postulated by the author Robert Heinlein, it runs:"Nothing ever gets built on schedule or within budget." Anyone who questions the wisdom of this maxim should examine the Defense budgets of the world's democracies, apart from the average home remodeling project.

The US should be getting better results for the money it spends. The quality of an F-22 air superiority fighter , for example, is not in question, but if the President and Congress decide that we can only afford 187 of them, compared to a certified need for 380, then something is terribly wrong. The same problem of excessive costs leading to a severely curtailed procurement, afflicted the B-2 bomber: only 21 were bought when the air force needed about 120. Today, the F-35 Joint Strike Fighter is in danger of being canceled or curtailed due to an estimated overall 65% cost increase since 2002.

The problem with the military projects in the US is that it is their form of state capitalism, which Eisenhower called the 'Military Industrial Complex.'

"Big military contractors, like Lockheed Martin, Northrop Grumman or Boeing, have a relationship with the government that is unusual and tight. In some ways, they operate almost as wholly-owned subsidiaries of the Pentagon, which can provide the bulk of their revenues."

Herbert Hoover and the Labor Movement

Since the racist reactionary neo-conservative right wing, the so called Tea Party, has taken over the Republican party during the "worst recession since the Great Depression" and is behind the recent attacks on union rights and the public sector in Wisconsin and around the U.S.

Let's go back to the Republican President during that time; Herbert Hoover, and see what his relationship was to the Labor Movement of his day and his political economic solution to America's post war problems.

The whole of Hoovers chapter on Labour from his Memoirs is posted below.

My views on labor relations in general rested on two propositions which I ceaselessly stated in one form or another:

First, I held that there are great areas of mutual interest between employee and employer which must be discovered and cultivated, and that it is hopeless to attempt progress if management and labor are to be set up as separate "classes" fighting each other. They are both producers, they are not classes.

And, second, I supported continuously the organization of labor and collective bargaining by representatives of labor's own choosing. I insisted that labor was not a "commodity."

On September 5, 1925, I stated:
It is my opinion that our nation is very fortunate in having the American Federation of Labor. It has exercised a powerful influence in stabilizing industry, and in maintaining an American standard of citizenship.

He was on good terms with Samuel Gompers, the founder of the AFL and even asked for his help when Democrats were smearing him during an election. Gompers died in 1924, so this must have occurred during an election campaign earlier than the 1928 election.

"The Democratic underworld made a finished job at these low levels with several favorite libels Another attack was laid on with a defter touch. Some years before, I had taken an interest in a group of young men to enable them to buy a ranch near Bakersfield, California. From over devotion, they had named it the "Hoover Ranch" and had painted the name on the gatepost. Agents of the Democratic County Committee painted a sign "No White Help Wanted" and, hanging it on the gate below the name, had it photographed and distributed the prints all over the country. The reference was to the employment of Asiatics. The ranch never had employed any such help. Through my friend Samuel Gompers, I at once secured an investigation by the Kern County labor union leaders. Their report was an indignant denial, but we were never able to catch up with the lie. This smear was used for years afterwards."
The Presidential Campaign of 1928

Hoover was proud of his relationship to the American Labour Movement, and despite having to intervene in the Great Rail Strike he placed the blame squarely on finance capital, the bankers on Wall Street.

In a statement from his memoirs his critique of finance capital is as pertinent today as it was then. He blames the continued conflict not on the owners or workers, Hoover was of the progressive school that saw government as a partnership of the productive classes; workers and owners. Instead he blames continued conflict in the rail industry on the Stock Brokers and Investment Bankers of the day.

It is a safe generalization for the period to say that where industrial leaders were undominated by New York promoter-bankers, they were progressive and constructive in outlook. Some of the so-called bankers in New York were not bankers at all. They were stock promoters. They manipulated the voting control of many of the railway, industrial, and distributing corporations, and appointed such officials as would insure to themselves the banking and finance. They were not simply providing credit to business in order to lubricate production. Their social instinct belonged to an early Egyptian period.

Hoover thus exemplified the early 20th Century American Producer ideal, that all Americans were producers, either farmers or workers, even the capitalist. Producerism resulted in political economic ideologies of wealth redistribution popular at the end of WWI; both Social Credit and the ideal of Cooperative Socialism.

Hoover offers a liberal / utilitarian compromise between these two. Hoovers ideas came from his engineering background, which was the new management ideal that developed immediately after WWI.

It is reflected in Hoovers ideal of a scientific solution to American economic problems.

typical is the picture of the engineer presented by J.E. Hobson, Director of
Stanford's Research Institute in the 1950:" the engineer is not playing with
scientific matters for the pleasure he derives from his studies he has a very
specific purpose an objective in mind: that of applying his technical knowledge
to an economic problem".

This concept of scientific social engineering is an American phenomena reflected in Scientific Management that resulted in Fordism , and the idea of Technocracy based on Thorstien Veblen's (a Wisconsinite) "The Engineer and the Price System”

Hoover was no Tea Party Republican, nor was he an Ayn Rand individualist nor did he embrace the economics of the Austrian School, he embraced scientific management of the political economy while having a similar distrust of finance capital as Veblen.

His American Individualism was not that of the American Libertarian Right nor the current Republican leadership.We would call him a Progressive Conservative in the Canadian context or a Liberal Democrat in the UK. Something Left Wing Historian William Appleman Williams goes to great pains to document.

The Postwar Need of the United States for Reconstruction
It was apparent that from war, inflation, over-expanded agriculture, great national debt, delayed housing and postponed modernization of industry, demoralization of our foreign trade, high taxes and swollen bureaucracy, we were, as I have said, faced with need for reconstruction at home. Moreover, not only were there these difficulties arising from the war but there was the letdown from the nation's high idealism to the realistic problems that must be confronted. Deeper still was a vague unrest in great masses of the people.
Our marginal faults badly needed correction. We were neglecting the primary obligations of health and education of our children over large backward areas. Most of our employers were concertedly fighting the legitimate development of trade unions, and thereby stimulating the emergence of radical leaders and, at the same time, class cleavage. The twelve-hour day and eighty-four-hour week were still extant in many industries.
During my whole European experience I had been trying to formulate some orderly definition of the American System. After my return I began a series of articles and addresses to sum up its excellent points and its marginal weaknesses.
Constantly I insisted that spiritual and intellectual freedom could not continue to exist without economic freedom. If one died, all would die. I wove this philosophy, sometimes with European contrasts, into the background of my addresses and magazine articles on problems of the day. Along with these ideas, I elaborated a basis of economic recovery and progress. I did not claim that it was original.2
It involved increasing national efficiency through certain fundamental principles. They were (a) that reconstruction and economic progress and therefore most social progress required, as a first step, lowering the costs of production and distribution by scientific research and transformation of its discoveries into labor-saving devices and new articles of use; (b) that we must constantly eliminate industrial waste; (c) that we must increase the skill of our workers and managers; (d) that we must assure that these reductions in cost were passed on to consumers in lower prices; (e) that to do this we must maintain a competitive system; (f) that with lower prices the people could buy more goods, and thereby create more jobs at higher real wages, more new enterprises, and constantly higher standards of living. I insisted that we must push machines and not men and provide every safeguard of health and proper leisure.
I listed the great wastes: failure to conserve properly our national resources; strikes and lockouts; failure to keep machines up to date; the undue intermittent employment in seasonal trades; the trade-union limitation on effort by workers under the illusion that it would provide more jobs; waste in transportation; waste in unnecessary variety of articles used in manufacture; lack of standard[s] in commodities; lack of cooperation between employers and labor; failure to develop our water resources; and a dozen other factors. I insisted that these improvements could be effected without governmental control, but that the government should cooperate by research, intellectual leadership, and prohibitions upon the abuse of power.
I contended that within these concepts we could overcome the losses of the war.
Aside from the better living to all that might come from such an invigorated national economy, I emphasized the need to thaw out frozen and inactive capital and the inherited control of the tools of production by increased inheritance taxes. We had long since recognized this danger, by the laws against primogeniture. On the other hand, I proposed that to increase initiative we should lower the income taxes, and make the tax on earned income much lower than that on incomes from interest, dividends, and rent.
I declared that we should have governmental regulation of the public markets to eliminate vicious speculation, and that we must more rigidly control blue sky stock promotion.
At that time these ideas were denounced by some elements as "radical."

2 Twenty years later an economic institution in Washington, with loud trumpet-blasts of publicity, announced this as a new economic discovery.

I came across the Hoover memoirs thanks to this interesting article;

John L. Lewis as Herbert Hoover's Secretary of Labor

In *The Memoirs of Herbert Hoover: The Cabinet and the Presidency
1920-1933,* pp. 221-2, Hoover wrote as follows concerning his choice of a
Cabinet after his election in 1928:

"When I formed the Cabinet, I came under strong pressure to appoint John L.
Lewis Secretary of Labor. He was the ablest man in the labor world. In view,
however, of a disgraceful incident at Herndon, Illinois, which had been
greatly used against him, it seemed impossible. He, however, maintained a
friendly attitude. As he stated publicly in later years, 'I at times
disagreed with the President but he always told me what he would or would not
do.' Lewis is a complex character. He is a man of superior intelligence with
the equivalent of a higher education, which he had won by reading of the
widest range. He could repeat, literally, long passages from Shakespeare,
Milton, and the Bible. His word was always good. He was blunt and even brutal
in his methods of negotiation, and he assumed and asserted that employers
were cut from the same cloth. His loyalty to his men was beyond question. He
was not a socialist. He believed in 'free enterprise.' One of his favorite
monologues had for its burden: 'I don't want government ownership of the
mines or business; no labor leader can deal with bureaucracy and the
government, and lick them. I want these economic royalists on the job; they
are the only people who have learned the know-how; they work eighteen hours a
day, seven days a week; my only quarrel with them is over our share in the
productive pie.'

"If Lewis's great abilities could have been turned onto the side of the
government, they would have produced a great public servant."


(There is no "Herndon, Illinois"; this is obviously a misprint for "Herrin,
Illinois." See http://en.wikipedia.org/wiki/Herrin_massacre and
http://www.geocities.com/Heartland/7847/massacre.htm for the details of the
1922 "Herrin massacre.")

Anyway, Hoover decided to re-appoint the Harding-Coolidge Secretary of Labor,
James J. Davis. http://en.wikipedia.org/wiki/James_J._Davis But in November
1930, a second opportunity arose to appoint Lewis. Davis was elected to the
US Senate from Pennsylvania and Hoover had to choose a succesor.

According to Irving Bernstein, *The Lean Years: A History of the American Worker,
1920-1933*, p. 354

"The American Federation of Labor had traditionally regarded the Department
of Labor as its own and the Secretary of Labor as its voice in the Cabinet.
Gompers had played the decisive role in the creation of the Department on
March 4, 1913. No one from outside the AFL had ever been Secretary of
Labor...Shortly after the Davis announcement, [William] Green [Gompers'
successor as head of the AFL] called at the White House to ask the President
to name a man from the Federation. He suggested five prominent leaders:
William L. Hutcheson of the Carpenters, John L. Lewis of the Miners, Matthew
Woll of the Photo-Engravers, John P. Frey of the Metal Trades, and John R.
Alpine of the Plumbers. Green urged Hoover to 'maintain the precedent set by
your predecessors.'

"The President, however, chose to break with tradition. He appointed William
N. Doak of the independent Brotherhood of Railroad Trainmen as Secretary of
Labor. In Hoover's judgment the AFL could be ignored even on an issue of
moment."

The idea of Lewis as Hoover's Secretary of Labor intrigues me in part because
the two men were philosophically compatible in many ways. I don't just mean
Lewis' opposition to socialism and communism--that was commonplace among
American trade unionists. What was more unusual is that Lewis shared the
engineer Hoover's enthusiasm for technological advance and modernization.
Notoriously, many labor leaders opposed the introduction of new technology
for fear it would put people out of work. Lewis, however, wanted the coal
industry to become more modern even if that meant employing fewer coal
miners. Mechanization would help put out of business the smaller, less
efficient mines that were driving down coal prices and wages. As Lewis put
it, "We decided it is better to have a half million men working in the
industry at good wages...than it is to have a million working in the industry
in poverty." (Bernstein, p. 225) Moreover, Lewis endorsed Hoover for the
presidency not only in 1928 but for re-election in 1932 as well (despite
Hoover's having turned him down for Secretary of Labor twice). Lewis'
politics later in the 1930's could hardly have pleased Hoover, but in 1940
they were allies again--Lewis even trying to get the Republicans to nominate
Hoover for president on a stay-out-of-the-war platform.


The Memoirs of Herbert Hoover: The Cabinet and the Presidency
1920-1933,

CHAPTER 15
___________________________________________________________
LABOR RELATIONS
From a technical point of view labor problems were in the hands of the Secretary of Labor, James J. Davis. He was a most amiable man who through his natural abilities had climbed from the ranks on the ladder of labor union politics. He was skillful in handling industrial disturbances—"keeping labor quiet," as Mr. Coolidge remarked. He proved to be good at repair of cracks. He had a genuine genius for friendship and associational activities. If all the members of all the organizations to which he belonged had voted for him, he could have been elected to anything, any time, anywhere.
When I accepted membership in the Harding Cabinet I had stipulated that I must have a voice on major policies involving labor, since I had no belief that commerce and industry could make progress unless labor advanced with them. Secretary Davis was very cooperative. I have already related my part in the Economic Conference of 1921, which bears upon these activities.
My views on labor relations in general rested on two propositions which I ceaselessly stated in one form or another:
First, I held that there are great areas of mutual interest between employee and employer which must be discovered and cultivated, and that it is hopeless to attempt progress if management and labor are to be set up as separate "classes" fighting each other. They are both producers, they are not classes.
And, second, I supported continuously the organization of labor and collective bargaining by representatives of labor's own choosing. I insisted that labor was not a "commodity." I opposed the closed shop and "feather bedding" as denials of fundamental human freedom.

I held that the government could be an influence in bringing better relations about, not by compulsory laws nor by fanning class hate, but by leadership.
The labor unions in that period were wholly anti-Socialist and anti-Communist. On September 5, 1925, I stated:
It is my opinion that our nation is very fortunate in having the American Federation of Labor. It has exercised a powerful influence in stabilizing industry, and in maintaining an American standard of citizenship. Those forces of the old world that would destroy our institutions and our civilization have been met in the front-line trenches by the Federation of Labor and routed at every turn.1

UNEMPLOYMENT INSURANCE
One result of the Industrial Conference of 1919 was an attempt on my part to convince the private insurance companies that it was to their advantage as well as that of the people at large to work out a method of unemployment insurance. I spoke on the subject at the Metropolitan Life Insurance Company managers' conference on January 27, 1923, stating my belief that in some industries, such as the railways and the utilities, the fluctuations in employment were not widespread, and that there was in them actuarial experience which would give a foundation and a start to such an insurance. However, the companies did not wish even to experiment with it.

CHILD LABOR
The Federal statutory prohibition of child labor had been declared unconstitutional by the Supreme Court. I had joined during 1920 in several efforts to secure a new Constitutional prohibition. Soon after I entered the Cabinet Senator Lenroot consulted me about the text of a new Constitutional amendment which he proposed to introduce into the Congress. I objected to his draft, as he had placed the age limit— eighteen—so high as to generate great public opposition. I agreed that this standard was ultimately desirable, but I feared that the lunatic fringe was demanding two years more than was attainable.

Senator, however, refused to change it and passed the amendment through the Congress. I was proved right as to the strength of the opposition. I spoke several times in support of the amendment, for instance, in April and December, 1921, and June, 1922.
When I became President I urged the adoption of the amendment by the states, but some of them, particularly the Democratic-controlled ones, would not ratify it. Roosevelt during his four years as governor of New York did not give more than lip service to its passage.
In the meantime, the agitation, particularly of the American Child Health Association, drove many of the Republican states to pass better laws prohibiting child labor. By the end of my administration in 1932 this evil was largely confined to the backward states.

ABOLISHING THE TWELVE-HOUR DAY
For the practical improvement of working conditions I undertook a campaign to reduce the work hours in certain industries. This black spot on American industry had long been the subject of public concern and agitation. Early in 1922 I instituted an investigation by the Department of Commerce into the twelve-hour day and the eighty-four hour week. It was barbaric, and we were able to demonstrate that it was uneconomic. With my facts in hand I opened the battle by inducing President Harding to call a dinner conference of steel manu-facturers at the White House on May 18, 1922.
All the principal "steel men" attended. I presented the case as I saw it. A number of the manufacturers, such as Charles M. Schwab and Judge Elbert H. Gary, resented my statement, asserting that it was "unsocial and uneconomic." We had some bitter discussion. I was supported by Alexander Legge and Charles R. Hook, whose concerns had already installed the eight-hour day and six-day week. However, we were verbally overwhelmed. The President, to bring the acrid debate to an end, finally persuaded the group to set up a committee to "investigate," under the chairmanship of Judge Gary.
I left the dinner much disheartened, in less than a good humor, resolved to lay the matter before the public. The press representatives were waiting on the portico of the White House to find out what this meeting of "reactionaries" was about. I startled them with the
information that the President was trying to persuade the steel industry to adopt the eight-hour shift and the forty-eight-hour week, in place of the twelve-hour day and eighty-four-hour week. At once a great public discussion ensued. I stirred up my friends in the engineering societies, and on November 1, 1922, they issued a report which endorsed the eight-hour day. I wrote an introduction to this report, eulogizing its conclusions, and got the President to sign it. We kept the pot boiling in the press.
Judge Gary's committee delayed making a report for a year—until June, 1923—although it was frequently promised. They said that the industry, "was going to do something." When their report came out, it was full of humane sentiments, but amounted merely to a stall for more time. I drafted a letter from Mr. Harding to Judge Gary, expressing great disappointment, and gave it to the press. The public reaction was so severe against the industry that Judge Gary called another meeting of the committee and backed down entirely.
On July 3 he telegraphed to the President, saying that they would accede. I was then with Mr. Harding at Tacoma en route to Alaska. He had requested me to give him some paragraphs for his Fourth of July speech. I did so, and made the announcement of the abolition of the twelve-hour day in the steel industry a most important part of the address. He did not have time to look over my part of his manuscript before he took the platform. When he had finished with the American Eagle and arrived at my paragraphs, he stumbled badly over my en-tirely different vocabulary and diction. During a period of applause which followed my segment, he turned to me and said: "Why don't you learn to write the same English that I do?" That would have required a special vocabulary for embellishment purposes. Anyway, owing to public opinion and some pushing on our part, the twelve-hour day was on the way out in American industry—and also the ten-hour day and the seven-day week.
When I became Secretary of Commerce, the working hours of 27 per cent of American industry were sixty or more per week, and those of nearly 75 per cent were fifty-four or more per week. When I left the White House only 4.6 per cent were working sixty hours or more,
while only 13.5 per cent worked fifty-four hours or more. This progress was accomplished by the influence of public opinion and the efforts of the workers in a free democracy, without the aid of a single law —except in the railways.

INDUSTRIAL CONFLICTS
During the years of my service in the Department we had comparatively little labor disturbance. Because of general prosperity and increasing efficiency, wages were increasing steadily in unorganized as well as organized industries—in the former to some degree because employers stood off organization by paying wages at least as high as those in the organized industries. But, in the main, employers willingly shared their larger profits with employees. We had only two bad conflicts.
In 1922, the railway shopmen and the organized bituminous coal miners went on strike at the same time. President Harding assigned the coal strike to Secretary Davis and requested me to negotiate a settlement of the railway strike. I was to learn some bitter lessons. I had arranged that the railway employees' leaders see the President and disclose confidentially to him their minimum demands, which were as usual considerably below the demands which they announced publicly. Through President Daniel Willard of the Baltimore & Ohio Railroad, the chairman of the Railway Managers' Committee, I secured a confidential statement of their maximum concessions. I found that the two antagonists were not far apart and suggested some modifications which seemed to me to be fair. The Employees' Committee believed they could carry the settlement. Mr. Willard's committee agreed to support the settlement on this basis. The railway presidents called a meeting in New York to consider the proposal. Mr. Willard asked me to attend the meeting and give him support. I secured a message from President Harding to open my statement. I was kept waiting outside the meeting for some time and was finally ushered in and introduced by the chairman with an attitude which seemed to convey, "Well, what have you got to say here?" Most of the two hundred men present were very antagonistic. I learned afterwards they had already repudiated Willard and his
committee. Anyway, I certainly had a freezing reception. Paradoxically, my temperature rose somewhat and my preachment upon social relations raised their temperatures and made my exit more welcome.
The railway executives now refused every concession. The men continued the strike until the roads represented by Willard's committee fell away from the rest and gave the men even better terms than the original formula. Then they all gave way.
While thenceforth I was not devotedly loved by certain railway magnates, their lack of affection was more than offset by friendship of others. Especially among these friends was Daniel Willard, who remained unwavering during the quarter-century before his death. He was respected by the whole American people and beloved by every B. & 0. man. There were many fine citizens among the railway presidents. At that time and in later years I had many devoted friends among them, such as Sargent, German, Budd, Crawford, Shoup, Gray, Storey, Downs, Scandrett, and Gurley, mostly western railway presidents. It was a suggestive thing that the railway presidents who led the opposition had their offices in New York City. They have mostly gone to their rest in graves unknown to all the public except the sexton, or they still dodder around their clubs, quavering that "labor must be disciplined."
A by-product of this incident gave me deep pain. An editor of the New York Tribune came to see me after the meeting in New York. He was a man with a fine conception of public right; he was greatly outraged at the whole action of the majority of railway presidents. The following morning the Tribune's leading editorial gave them a deserved blistering. The next day the editor informed me that Mrs. Whitelaw Reid, Sr., who dominated the paper, had ordered his instant dismissal after many years of service. The dear old lady was a righteous and generous woman, but a partial misfit with the changing times. In the science of social relations she was the true daughter of a great western pioneer, Darius 0. Mills. When the editor came to see me in Washington, while he had no regrets, it was easy to see that he was wholly unstrung by his tragedy and distracted by anxieties over growing family obligations and lack of resources. At once we gave him an economic mission in Europe, during which he somewhat recovered his spirits and was able to keep his family going. But he never really regained his grip.
It is a safe generalization for the period to say that where industrial leaders were undominated by New York promoter-bankers, they were progressive and constructive in outlook. Some of the so-called bankers in New York were not bankers at all. They were stock promoters. They manipulated the voting control of many of the railway, industrial, and distributing corporations, and appointed such officials as would insure to themselves the banking and finance. They were not simply providing credit to business in order to lubricate production. Their social instinct belonged to an early Egyptian period. Wherever industrial, transportation, and distribution concerns were free from such banker domination, we had little trouble in getting cooperation.
Others of the Department's services to labor sprang from its broad economic programs. However, our emphasis on the needs and rights of organized labor and our constant insistence on cooperation of employers and employees as the means of reducing the areas of friction brought no little change in public attitudes.

THE RAILWAY LABOR BOARD
It was obvious that we must find some other solution to railway labor conflict than strikes, with their terrible penalties upon the innocent public. Therefore, early in 1926, I began separate conferences with the major railway brotherhoods on one hand, and the more constructive railway presidents, under Daniel Willard, on the other. I discarded compulsory measures but developed the idea of a Railway Labor Mediation Board, which would investigate, mediate, and, if necessary, publish its conclusions as to a fair settlement, with stays in strike action pending these processes. Having found support in both groups, I called a private dinner at my home of some ten leaders, half from each side—and I omitted extremists of both ends from the meeting. We agreed upon support of this idea and appointed a committee to draft a law. We presented it to the Congress, and with some secondary modifications it was passed on May 20, 1926. This machinery, with some later improvements, preserved peace in the railways during the entire period of my service in Washington.

Commenting upon the progress of labor relations I was able to say in an address on May 12, 1926:
There is a marked change . . . in the attitude of employers and employees. . . . It is not so many years ago that the employer considered it was in his interest to use the opportunities of unemployment and immigration to lower wages irrespective of other considerations. The lowest wages and longest hours were then conceived as the means to attain lowest production costs and largest profits. Nor is it many years ago that our labor unions considered that the maximum of jobs and the greatest security in a job were to be attained by restricting individual effort.
But we are a long way on the road to new conceptions. The very essence of great production is high wages and low prices, because it depends upon a widening range of consumption only to be obtained from the purchasing power of high real wages and increasing standards of living. . . .
Parallel with this conception there has been an equal revolution in the views of labor.
No one will doubt that labor has always accepted the dictum of the high wage, but labor has only gradually come to the view that unrestricted individual effort, driving of machinery to its utmost, and elimination of every waste in production, are the only secure foundations upon which a high real wage can be builded, because the greater die production the greater will be the quantity to divide.
The acceptance of these ideas is obviously not universal. Not all employers . . . nor has every union abandoned the fallacy of restricted effort. . . . But . . . for both employer and employee to think in terms of the mutual interest of increased production has gained greatly in strength. It is a long cry from the conceptions of the old economics.
1 The C.I.O., with its socialist and Communist control in its early stages, was not organized until several years later.
2 Indeed, it preserved peace until the presidents failed to give moral support to the Board's recommendations and its potency was largely destroyed.
3 A list of my more important statements upon labor as Secretary of Commerce appears in the Appendix, under the heading Chapter 15.

CHAPTER 15
1921: April 1, article in Industrial Management; Nov. 4, address at New York; statement in Labor on strikes.
1922: Feb. 18, statement on Coal Strike; Aug. 7, on Railroad Strike.
1923: Jan. 27, May 8, addresses at New York.
1925: April 11, address at New York; May 19, on the Seven-Day Work Week; Sept. 5, at American Federation of Labor; Dec. 28, on Labor Arbitration.
1926: May 12, address at Washington.
1927: Aug. Foreword to Year Book on Commercial Arbitration in the United States, 1927 (American Arbitration Association).
1928: Feb. 25, Report to President from Secretaries of State, Commerce, Labor, on immigration.
___________________________________________________________

Workers Of The World Unite

I was shocked, pleasantly so, to hear this from Chris Matthews as he opened his show Hardball on Wednesday March 10, 2011. He quoted Marx and Engels in his pre-show opener as he discussed the attack by Republicans on union rights in Wisconsin.

CHRIS MATTHEWS, HOST: Workers of the world unite. Let`s play HARDBALL. Good evening. I`m Chris Matthews in Washington. Leading off tonight: The Ash Wednesday ambush. The Republicans have won their battle with the unions in Wisconsin....

But its not just Matthews who is expressing this its also the American left who allowed the Republican financed Tea Party movement to take the political lead in expressing outrage over government bail outs of Big Finance and Big Business, and identifying the problem as not being capitalism but Big Government, Big Unions along with its racist attacks on President Obama as NOT being an American like them.

US left finds its voice over Wisconsin attack on union rights

State capitol building under occupation as tens of thousands turn out for biggest demonstrations since the Vietnam war

Proudly displayed in a corner window of the Barriques coffee shop, a block from Wisconsin's state capitol building, is a poster advocating Workers of the World Unite – not the kind of sign normally seen in shops in America.

But the last fortnight has been unusual. Tens of thousands have been turning out in this normally quiet midwest city for the biggest demonstrations in the US since the Vietnam war, and the state capitol building is under occupation day and night.

After a year dominated by the Tea Party, the American left has found its voice, and a cause, united against a bill backed by the state's Republican governor, Scott Walker, to neuter public sector unions.

What needs to be done now is to Build The General Strike for Workers Rights! The fact both these old Class War slogans have been embraced by American Workers in the 21st Century, when we have been assured by the right wing and its media that unions are a thing of the past, well as the saying goes; the more things change.....

Calls for a general strike are growing among union members and supporters as the state Legislature advanced a law stripping public sector unions of almost all bargaining rights, but it remains unclear whether strikes or pickets will appear soon.

Union leaders say the Republicans' fast-track passage of the bill has fueled strike talk, but for now most are urging legal measures such as recall of Republican legislators as a way to repeal the law.

"A general strike would be playing the trump card, and you don't play the trump right away, you build up to that," said Jim Cavanaugh, president of the 45,000-member South Central Federal of Labor in Madison.

The federation endorsed a general strike on Feb. 21 and on Thursday began distributing educational materials on how such a strike can be accomplished.

Madison firefighters’ union president

calls for general strike

‎

Joe Conway, president of the Madison firefighters’ union, said recently that the political situation has grown so dire in Wisconsin, he’d support a general strike.

“We should start walking out tomorrow, the next day … See how long they can last,” he told reporters with The Uptake. “This is a nation-wide movement to attack all working men and women in Wisconsin and the United States.”

His call mirrors one from filmmaker Michael Moore, who’s called on high school students and working people of all stripes to restart the American democracy movement and fight back in this latest round of “class war” against the middle class.

This video is from The Uptake, published Thursday, March 10, 2011.

When Is It Time for a General Strike?

‎"General strike" has been one of the chants that resounded through the Capitol during massive protests Wednesday and Thursday after the Legislature passed a bill that would remove bargaining rights for about 175,000 workers and create major obstacles to basic operations for unions representing teachers, state workers and local government employees.

As the Wisconsin State Senate rammed through their union-busting bill Wednesday night, people in the capitol chanted "General strike!" And I heard an echo. Not of 1934, the last time there was a general strike in the US, but earlier.

It was 1909, in the crowded Great Hall at New York's Cooper Union; a big union boss was talking about talks and a 16-year-old girl shouted out from the back: "WALK OUT"

More than 30,000 shirtwaist factory workers walked off their jobs after that. This week's International Women's Day celebrates the anniversary of that strike, by mostly young, immigrant women like 16 year old Clara Lemlich. 700 women were arrested, many more beaten and spat on for being "On strike against God."

They struck for eleven weeks. It was the first successful uprising of women workers in this country--but their success didn't go far enough.

And the General Strike is being proposed in the UK in response to austerity measures, again a nice term for attacks on public sector workers to pay for the bail out of the banks!

The threat of a general strike increases

‎

As expected, John Hutton’s review of public sector pensions has recommended that final salary schemes end. Hutton was across the broadcasters this morning, explaining that he was reflecting an “inescapable reality”:

“The solution to this problem is not a race to the bottom, it's not to hack away at the value of public service pensions. It’s to manage the risks and costs sensibly. The responsible thing to do is to accept that because we are living longer we should work for longer.”

Beside realism, Hutton’s guiding principle has been fairness. Final salary schemes encourage a “massive cross-subsidy from low-paid public servants to high-paid public servants” to pay for the “sudden spike” in pay at the end of a career. Hutton is “deeply troubled” by a policy that forces younger generations of public sector workers to “shoulder the cost and burden change”. Therefore, pensions should be determined by career average earnings.

At the moment, opposition to Hutton is split. Dave Prentis, the General Secretary of Unison, shied from attacking Hutton. Instead, he condemned the government’s decision to increase contributions at a time of “massive increases in the cost of living and pay freezes." On the other hand, Mark Serwotka, the General Secretary of the Public and Commercial Services Union, nonchalantly promised that “strikes are inevitable”, which places him among the ranks of the militant with Len McCluskey and Bob Crow. Christine Blower, General Secretary of the NUT, was adamant that “public sector pensions are not 'gold plated' and they are affordable.” The threat of a general strike across the public sector is now more serious; not least because its pensions are protected by complicated legal contracts. This will be an arduous struggle.

Pension reforms: Public sector workers to pay more and retire later ‎ The Guardian - 23 hours ago All state employees in the UK will be affected, creating the first legal basis for ... less likely that the entire public sector will go on general strike, ... Video: Eagle: 'Pensions are not gold-plated' ITN NEWS Delegates: 'Go out like Wisconsin'‎ - Morning Star Online Now doctors and headteachers threaten to strike over pensions‎ - Independent

The Guardian

'Secret plan' to counter general strikes in UK ‎ TwoCircles.net - 22 Feb 2011 By IRNA, London : A secret 'war plan' to counter a general strike has been drawn up by British ministers, with thousands of union-busting workers lined up ...

Class War-ren Buffet

The Labour movement in the United States responded to the attacks on public sector workers union rights in Wisconsin with a limp defeatist campaign entitled Stop the War on Workers....at least Warren Buffet, America's folksy Billionaire, got it right....it's Class War!

"There's class warfare, all right, but it's my class, t

he rich class, that's making war, and we're winning." –

Berkshire Hathaway CEO Warren Buffett,

quoted in the New York Times, November 2006

“I believe we are in the midst of an irrepressible labor conflict that has pitted the haves versus the have-nots,” said University of Wisconsin, Green Bay, history professor Andrew Kersten at the conference. “As Warren Buffett has said recently, ‘There is a class war, alright, but it’s my class, the rich class, that’s waging it, and we’re winning.’ It’s not merely the money or the political power they crave, they seek to transform the way we think and act on a daily basis.”

Warren Buffett created a stir in the billionaires' club when he told a New York Times reporter that America is in the midst of class warfare and that the rich are winning. Buffett made this comment as deregulation in the banking industry, tax cuts for the rich and runaway spending on Middle Eastern wars were setting the world up for a global recession. The predictable economic collapse which was made inevitable by tax cuts, wars and deregulation is now being deepened by political leaders who insist that the way out of this disaster is -- and please try to resist sticking a sharp stick in your eye when you read this -- by tax cuts for the wealthy, further deregulation and doubling down in our war in Afghanistan.

All in all there is a class warfare currently going on, under the covers, which even the great Warren Buffet has admitted to in an interview in 2005 with CNN's Lou Dobbs, wherein they said: "DOBBS: ... In 1983, Alan Greenspan, the Fed chairman, he had a very simple idea: raise taxes. That's what you're saying here. BUFFETT: Sure. But I wouldn't raise the 12-point and a fraction payroll tax, I would raise the taxable base to above $90,000. DOBBS: That's a progressive idea. In other words, the rich people would pay more? BUFFETT: Yeah. The rich people are doing so well in this country. I mean, we never had it so good. DOBBS: What a radical idea. BUFFETT: It's class warfare, my class is winning, but they shouldn't be..."

Money Talks.

But, oh no, we can't raise marginal tax rates a lousy 4.6 percent on incomes above $250,000. Perish the thought. Never mind that the past 30 years have seen the wealthiest 1 percent of Americans increase their share of the national wealth from 7 percent to approximately 23 percent. Nor that, according to a study by the Economic Policy Institute, corporate CEOs who made 24 times more than a typical worker in 1965 now earn about 275 times more than the guys in the shop. Assuming the shop hasn't closed down and moved to Thailand, that is.

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But heaven forbid we bring back Clinton-era tax rates. Instead, let's stimulate the economy by putting a few hundred thousand federal employees on the street. That'll work.

"There's class warfare, all right," Warren Buffett, the multibillionaire investor told the New York Times in 2006, "but it's my class, the rich class, that's making war, and we're winning."

Meanwhile, in Wisconsin, a brand-new Republican governor largely financed by the infamous Koch brothers, the Scrooge McDuck type of billionaire, has identified even more sinister enemies of the common man: schoolteachers, nurses and the guys who drive snowplows.

Gov. Scott Walker, an Eagle Scout and career politician, came into office spouting the usual Tea Party humbug: lower taxes, fiscal restraint. Then he pulled a bait and switch worthy of the cheesiest kind of used car dealer. First, he persuaded the Republican-controlled Legislature to pass $140 million in corporate tax cuts. Then he announced a $137 million budget deficit that could only be closed by making public employees pay a substantially higher share -- as much as 12 percent of their salaries -- for their healthcare and pensions.

As events in Egypt showed, you never know what will set off mass protest.

Here at home, over-reaching by a novice Republican governor of Wisconsin has finally triggered the protest marches that have been eerily missing during the more than three years of an economic crisis that has savaged the middle and bottom and rewarded the top.

It's not as if we lack a politics of class. As mega-investor Warren Buffett famously said, there is plenty of class warfare in America, but the billionaire class is winning.

This economic crisis, after all, was brought on by excesses on Wall Street. Yet with the rest of the economy still mired in high unemployment and fiscal crises of public services, Wall Street was first to be bailed out, the first to return to exorbitant profitability, and the last to be held accountable.

Month after month, progressives have been asking each other, where are the mass protests?

You might expect popular indignation to be focused on the banks. Instead, the economic unease of ordinary people has been substantially captured by the Tea Party right and directed against government, while Beltway politicians of both parties are outdoing one another to vie for the role of more austere deficit hawk, which will hardly win back popular support for the public sector.

Then the newly energized Republicans made a couple of big mistakes. One was trying to cut too deep, on the heels of a massive tax cut for the rich. But the other miscalculation was to declare war on the one bastion of organized economic representation of regular people -- the labor movement.

With new legislative majorities in 18 states, several freshman Republican governors are hoping to withdraw collective bargaining rights from public employees and to otherwise demonize nurses, teachers, fire-fighters, cops, sanitation workers and others who have managed to hang on to decent pensions and health coverage.

This looked to be a cakewalk. Public workers, seemingly, are an easy target. After all, they still have jobs and benefits. Instead of demanding to know why our own pension and health coverage is so lousy, the rest of us are supposed to resent middle income workers in the public sector for having health and pension benefits better than ours. It is a carefully cultivated politics of division and resentment.

But this time, Republicans overreached, and the long smoldering economic unease has finally sparked mass demonstrations. Rather than following the script and resenting public employees as a privileged "other," the citizens of Madison increasingly view teachers, nurses, cops, firefighters, and other public workers as their violated neighbors.

One recent poll showed that two-thirds of Wisconsin citizens polled (none from public employee families) felt that Walker had gone too far. Even citizens who wanted public workers to pay more of the costs of their benefits concluded that his scheme was excessive. Another poll, sponsored by an Illinois Manufacturers Association, found a similar result.

Now, mass protest has broken out in other states where Republican governors are attacking unions, tens of thousands of other citizens are joining their union brothers and sisters, and even the mainstream press is taking sympathetic notice. In a fine piece in Saturday's Times, Michael Cooper and Kit Seelye asked: "Is Wisconsin the Tunisia of collective bargaining rights?"

Maybe it is. And not just of collective bargaining rights.

At long last, resentment against the economic crisis is beginning to find its natural home, where it always belonged -- against financial elites, their privileges and Republican allies. It is dawning on ordinary voters that something is wrong when hedge fund billionaires and investment bankers are making more than ever, while public workers (average Wisconsin pay: $48,000) are being made the scapegoats.

Workers of the World Unite...

The analysis of Karl Marx, believed archaic and irrelevant only a few short years ago, have again become highly relevant. Our social and economic conditions, for all the bluster and noise of the 20th century, are fundamentally unchanged from where they were in the 1800s.

The 20th century was a time of optimism. The American dream was validated. The radicalism of the previous century was forgotten after World War 2. Radicals like Karl Marx were proven to be wrong. Since 2008 however, the jury has reconvened. And in that jury box we come cannot help but be impressed. Consider, for an example, these two quotes from the Communist Manifesto, written 1848:

The bourgeoisie, by the rapid improvement of all instruments of production, by the immensely facilitated means of communication, draws all, even the most barbarians, nations into civilisation. The cheap prices of commodities are the heavy artillery with which it batters down all Chinese walls, with which it forces the barbarians’ intensely obstinate hatred of foreigners to capitulate. It compels all nations, on pain of extinction, to adopt the bourgeois mode of production; it compels them to introduce what it calls civilisation into their midst, i.e., to become bourgeois themselves. In one word, it creates a world after its own image.

And...

Now and then the workers are victorious, but only for a time. The real fruit of their battles lies, not in the immediate result, but in the ever expanding union of the workers. This union is helped on by the improved means of communication that are created by modern industry, and that place the workers of different localities in contact with one another. It was just this contact that was needed to centralise the numerous local struggles, all of the same character, into one national struggle between classes.

If Marx were alive today, if he were witness to the struggles through Europe, Africa, the Middle East, and America he would not be surprised. He saw it coming. He saw it coming because he understood the nature of capitalism.

While we may not want to run out and join our local band of communists, we may want to reconsider many of the observations that were relevant in the 19th century not only from Marx, but from others. Strangely enough, for all the progress we have made over the past century, we seem to be back, more or less, where we started from.

We now live in a time of ruthless, predatory capitalism.It takes no prisoners and when it does, it tortures them. Since the 1980s workers have faced stark choices. Threats to move manufacturing abroad have actually been promises. Unions have become crippled and powerless.

The two pillars of working class strength, strong unions and public spending, have been reduced to ineffective shadows of their former selves. The social democratic response is limited to asking for more, for a larger piece of the pie. That is because the fundamental ideology of social democratic movements and parties are reformist. The aim is to reform capitalism; to redistribute wealth. In the past this objective has been met in some places more so than in others. And if we learn anything from history, we know that you don't 'ask' the billionaire class for anything. You demand and you are prepared to back your demands, or stay home.

Today, unions are powerless because the bosses have become radical and right wing to the extreme. The only principles they adhere to beyond cold pragmaticism are cold and calculating neo liberal policies, policies that boldly proclaim, it's every man for himself. Sink or swim. They would rather ship jobs away or close shop than negotiate. Social democratic political parties merely parrot the wishes and policies of the private sector. If social democrats want to strengthen the safety net, a powerful assault from the right, from bond rating agencies and even the IMF will efficiently put them down.