feminist marxism in motion

*This is a dope article about the Maoist/Naxalite movement sweeping India. Super inspiring and interesting. I found it here:

Roiling with contained anger at the revisiting of colonial history with a new face, the deep hinterlands of the Indian sub-continent is once again witnessing the explosion and implosion not seen since late Sixties when the peasants and tribal uprising shook the entire Indian peninsula..

A spectre is haunting Europe — the spectre of communism. All the powers of old Europe have entered into a holy alliance to exorcise this spectre: Pope and Tsar, Metternich and Guizot, French Radicals and German police-spies. (Manifesto of the Communist Party: 1848)

Now, again a spectre is haunting. The region is [India] and the spectre is of people’s movements. All the exploitative powers in [India] have come together to pulverize the resistance movements.

Movements-soaked in anger against the usurious usurpation of forests, hills, rivers and ocean waters–movements voicing protest against the destruction of the livelihood and autocratic attempts to transmogrify lives into that of zombies trapped in internal diasporia in alienation saturated heterotopias– are simmering and glimmering and igniting fire in the minds of the oppressed people across the country.

Roiling with contained anger at the revisiting of colonial history with a new face, the deep hinterlands of [India] is once again witnessing the explosion and implosion not seen since late Sixties when the peasants and tribal uprising shook the entire Indian peninsula.

Spontaneous and peaceful in nature with stray incidents of a cornered-retaliatory violence- the movements like in the Sixties when the sub-human conditions of tribal folks and landless labourers came to fore following the revolt, at the dawn of the new millennium the protests are revealing the rapacious Medusa locks of corporate greed.

The result-even as the wild life on land, air and sea are fast disappearing from the country – the Indian State in a bid to keep the memories of the creatures of the wild alive and as an apology to Nature, are churning out forces like-Octopus, Cobras, Scorpions, Tigers (with green stripes) Cats of all hues and shades, Grey Hounds, Mastiffs, Wolves, Vipers, Black Mamba etc.

If by any chance the Indian Home Ministry exhausts the zoological who’s who in their war against the people’s resistance, then the readers and viewers of the corporate establishment media may soon read and hear eulogised announcements of forces with names like Vampires, Draculas, Aadamkhors-all with a sole purpose- to crush people’s movements and usurp the land, rivers and oceans, for corporate houses.

After all there is gold in the hills and pearls of profits in water. Indian sub-continent is witnessing what the American sub-continent witnessed in 19th century-the Gold Rush. The country is the 21st century El Dorado for the western world and their Indian lackeys. And like in the past when the imperialist forces decimated the American natives, the history is being re-enacted in India.

Describing the devastation during the Gold Rush, Rawls, James J. and Orsi, Richard J. in their book “A golden state: mining and economic development in Gold Rush California,” write, “The human and environmental costs of the Gold Rush were substantial. Native Americans dependent on the health and bounty of the natural environment, became the victims of starvation and disease when it suffered from the effects of placer mining (or the later, even more damaging, hydraulic mining), as gravel, silt and toxic chemicals from prospecting operations killed fish and destroyed habitats. The surge of mining population also resulted in the disappearance of game and food gathering locales as gold camps and other settlements were built amidst them, causing the forests to be cut down and domestic animals put to graze on the land. Later farming spread to supply the camps, taking more land from the use of Native Americans. Starvation often provoked the Native tribes to steal or take by force food and livestock from the whites, increasing white hostility and provoking retaliation against them.

“The Act for the Government and Protection of Indians passed on April 22, 1850 by the California Legislature, allowed settlers to continue the Californio practice of capturing and using Native people as bonded workers. It also provided the basis for the enslavement and trafficking in Native American labor, particularly that of young women and children, which was carried on as a legal business enterprise. Native American villages were regularly raided to supply the demand, and young women and children were carried off to be sold, the men and remaining people often being killed in genocidal attacks.” The same dance of death reduced the African continent from lush green land of plentiful to a bleached, gnarled bones, with its people now dying in hunger and women opening their legs for a loaf of bread to feed their children and themselves.

The countries in this continent, reduced to the darkest darkness of a black hole, emerge at the dawn only to disappear in the twilight of gun fires; and this blood-soaked melee of power, hunger and survival rake in profits for the corporate dictators strutting around as peddlers of “democracy and development.”

The same screenplay is being played out in Indian sub-continent. Not that Indian sub-continent had not seen the imperialist invasion and greed earlier, but then the battle-lines were not so obfuscated, as it is now. The script that is being played out in the forests is more insidious.

The forested regions are home to some of the oldest communities of India, described variously as adivasi (aboriginal), vanvasi (forest dwellers), girijan (people of the hills) and after the transfer of power in 1947, the Indian constitution under a façade of benevolence brought them under a collective name of “Scheduled Tribes.”

What the powers of the State had forgotten is the history of struggle and resistance by tribes who are no strangers to displacement. The Godavari hills still reverberate with the sound of the drums when tribes of Koya and Reddy opposed the British colonial oppression.

Similarly, for the Santhal resistance, a British officer remarked in his journal: “The one piece of equipment they did not have among their meagre possessions was a white flag.”

The scene today is also the same. Raising the white flag is not an option for the Chenchu of the southern Tiger Hills, the Gond of the central Adilabad, the Gadrchiroli, the Moraya and Dorla Koya of Chhattisgarh, or the Dongri Khond of Orissa who lead a simple life not very different from their stone-age ancestors.

Though overtly there seems to be nothing that would attract the predators from the corporate houses, but then like in the 19th century American continent, or in Africa, the adivasis are sitting on a cornucopia which they can jingle their insatiable money vaults.

According to a research report, “a conservative list includes bauxite in Orissa, Iron ore in Chhattisgarh and Jharkhand states, and deposits of uranium, limestone, marble, dolomite, tin, graphite, copper, gold, diamonds, corundum, beryl, alexandrite and fluorite, and possibly coal in addition to teak, hardwood, bamboo, waters of several rivers, wildlife and fish. The bauxite deposits alone have been estimated to be worth between US$2-4 trillion. “

This El Dorado which the pirates from the multinationals are eyeing, stretches approximately 10,000 kilometres encompassing uncharted dense forests known locally as Abhujmad (unknown forests) cutting across states like Chhattisgarh, Orissa, Jharkhand, Madhya Pradesh and Andhra Pradesh.

And in the language of the government, the corporate establishment media and self-proclaimed “security” experts, the stretch is the “red corridor”, “red zone” or “Maoist stronghold”.

Of course, the tribes are not the only one who inhabit this stretch, along with them living on the fringes are petty traders, police and forest departments and guerrillas termed as “Naxalites”, “extremists”, “Maoists” or the self-described armed squads of the Communist party of India-Maoist.

The Maoist party, which is one of the biggest faction of the so-called Naxalite parties, is reportedly known for sabotage activities, arbitrary violence, sometimes amounting to barbaric brutality.

But for the State this brand of Naxalism has come as a boon and a bogey to launch a war against the tribes ironically under the name: Operation Green Hunt. A hunt to throw out the natives from the forests and hand it over to the corporate for ravaging and pillaging.

The scale of pillaging operations can be seen from the fact that a small state like Jharkhand had signed 90 memorandum of understanding (MoU) with various big plundering houses. The now tainted chief minister of the state once lauded by the corporate media, was found in possession of 1 billion $. Till date no enquires have been made as to who were the beneficiaries who paid these monies.

With Operation Green Hunt being planned as long drawn protracted armed campaign, every vested interest in the region wants to perpetuate the violence and since such armed conflict grants enormous powers to extract bribes shady activities like poaching and logging has abounded.

The State in its indifference to environment or the natives want to install power plants, open cast mines, highways, airstrips and of course generate employment for the tribal folk as measly-paid security guards or sweat shop workers and prop up some of the folk as quisling collaborators.

But not everybody wants to be a quisling collaborator. Struggles in Nandigram, Singur, Plachimada and other places have shown that people’s resistance call them Naxalism or by any other name, cannot be suppressed and it is this spectre which is haunting the State and Corporate predators alike in the post-recession period since even the uneasy squeamish urban populace is fast losing faith in the Friedman economics. Naxalism: Spectre Of People’s Movements By Prabhat Sharan, 04 March, 2010, MEDIA PRAXIS / The Verdict

Prabhat Sharan is a Senior Journalist and Editor of MEDIA PRAXIS a monthly magazine published from Mumbai. He can be contacted at verdictweekly@gmail.com

One of my favorite poets ever.

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But fear of the inexplicable has not alone impoverished the existence of the individual; the relationship between one human being and another has also been cramped by it, as though it had been lifted out of the riverbed of endless possibilities and set down in a fallow spot on the bank, to which nothing happens. For it is not inertia alone that is responsible for human relationships repeating themselves from case to case, indescribably monotonous and unrenewed: it is shyness before any sort of new, unforeseeable experience with which one does not think oneself able to cope.

But only someone who is ready for everything, who excludes nothing, not even the most enigmatical, will live the relation to another as something alive and will himself draw exhaustively from his own existence. For if we think of this existence ofthe individual as a larger or smaller room, it appears evident that most people learn to know only a corner of their room, a place by the window, a strip of floor on which they walk up and down. Thus they have a certain security. And yet that dangerous insecurity is so much more human which drives the prisoners in Poe’s stories to feel out the shapes of their horrible dungeonsand not be strangers to the unspeakable terror of their abode.

We, however, are not prisoners. No traps or snares are set about us, and there is nothing which should intimidate or worry us. We are set down in life as in the element to which we best correspond, and over and above this we have through thousands of years of accommodation become so like this life, that when we hold still we are, through a happy mimicry, scarcely to be distinguished from all that surrounds us. We have no reason to mistrust our world, for it is not against us. Has it terrors, they are our terrors; has it abysses, those abysses belong to us; are dangers at hand, we must try to love them. And if only we arrange our life according to that principle which counsels us that we must always hold to the difficult, then that which now still seems to us the most alien will become what we most trust and find most faithful. How should we be able to forget those ancient myths about dragons that at the last moment turn into princesses; perhaps all the dragons of our lives are princesses who are only waiting to see us once beautiful and brave. Perhaps everything terrible is in its deepest being something helpless that wants help from us.

Here is a paper I wrote last semester about the budget cuts where I argue that the budget cuts are inherently racist and gendered because the modern liberal nation-state is inherently gendered due to its private-public split and the way gender has been mapped onto that split.

Also, I argue that the budget cuts are raced because the state is inherently raced, but I don’t really elaborate too fully on that. My view is that capitalism, and U.S. capitalism in particular, has race woven into it, because capitalism has developed in a way that’s been structured along racial lines due to the racialized way labor has been used here.

This paper is pretty academic-ey but whatever. :) I have cut out a few sections, so it may seem choppy.

Rejecting Neoliberal Rationality: Towards a New Dialogue About Budget Cuts

California is experiencing a deep restructuring of its economy. Using the state’s massive budget deficit as a rationale, Californian politicians are making unprecedented cuts to the public sector. Public education, health care and a range of other social programs are being choked of their financial resources. I argue these budget cuts, properly named structural adjustments, are classed, raced, and gendered. However, politicians explain the political rationality behind these cuts in purely neutral economic terms.

Furthermore, I argue that the discourse of resistance to these cuts has largely continued to operate within the framework of this rationality. Within the discourse around budget cuts, there is frequent mention that these cuts affect raced, classed and gendered populations in a disproportionately negative way. However, this construes the negative raced, classed and gendered consequences of these cuts as coincidental and not as fundamental to the mechanisms of the neoliberal processes themselves.

The gendered/raced dimensions of Neoliberal Capitalism

Neoliberal rationality ideologically flattens identity, difference and inequality, and construes everyone as equal competitors for the same market shares. This has long been recognized by various feminists analyzing globalization, as Carla Freeman points out;

A gendered understanding of globalization is not one in which women’s stories or feminist movements can be tacked onto or even “stirred into” the macropicture; rather it challenges the very constitution of that macropicture such that producers, consumers, and bystanders of globalization are not generic bodies or invisible practitioners of labor and desire but are situated within social and economic processes and cultural meanings that are central to globalization itself. (1010)

Here Freeman alludes to a point which is often missed by those examining political economy and its relation to identity politics. Economic practices and policies are enacted through bodies whose social positioning is shaped by and constituted through discourses of race, gender and a myriad of other elements of identity. This makes identity central to the processes of political economy, not an addition to it.

Other feminists have pointed this out particularly clearly in the case of structural adjustments. Structural Adjustment policies (or SAPs) refer to a series of economic policies typically forced upon “developing” countries saddled with the rapidly rising debt stemming from loans taken out from IMF and World Bank. SAPs force countries to restructure their economy in a way that prioritizes the market and which maximizes its profitability. This translates to a reduction in social and infrastructure spending—seen as weights to the economy, and a redirection of those funds towards the development of industry needed to maximize the profitability of one commodity for the market. In addition, business and labor safety standards and trade protections are lowered or weakened (Desai 20).

The argument that SAPs do not just have gendered consequences but are actually gendered processes in and of themselves comes from an understanding of the gender and racial dimensions of the public/private sphere dichotomy. Carol Pateman’s groundbreaking analysis of the public/private sphere pointed out that “social contract theory, on which the constitutional democracies are based, hides a prior sexual ‘contract’ that legitimizes male dominance of women and divides public from private” (201 Jaquette).

The gendered division of public and private spheres has been imposed upon many colonized countries where western nation-states were established following decolonization (175 Pettman). Today these structural adjustments are being imposed upon the “periphery” within the “center”. Researchers of structural adjustment programs note that they affect women and children disproportionately in the following ways: first, they eliminate jobs in the public sector, where women are the majority of those employed thanks to the gendered division of labor. Secondly, it has been noted extensively that because women around the world are still primarily seen as responsible for reproductive labor, the destruction of public programs exerts a larger burden on women who are expected to pick up the slack of disappearing social and public works programs, due to gender roles which ascribe this kind of work to women (Sadasivam 636).  This observation explains a primary mechanism of structural adjustment programs, the transfer of economic “burdens” from the paid economy to the unpaid economy, or the transfer of work from the public to the private sphere, where it is assumed women will pick up the slack (Sadasivam 636).

The public/private split is not just a gendered construction, as Park and Wald argue, “the public sphere is implicitly and explicitly racialized as well as gendered— that is, normatively defined as masculine and white, and accessed via a privileged relation to patriarchal and white supremacist discourses” (271). This holds true within California as it does within the “third world”, due to the extremely racialized nature of class structure in the U.S. The power of white masculinity is intimately bound up with the ability to move freely between the private and public spheres and to not be fettered by dependency in either (Pateman 119). This construction is dependent on the immobility of the Other, (often marked by racial, ethnic and class difference). Race and class never mapped neatly onto this formation however, as black women in the U.S. worked as slaves within the homes of white women, but were rendered invisible by this devalued work (Park and Wald 271). This is also visible in the way immigration has become a central issue within the budget cuts debate. As resources grow scarce and the class divide expands in California, racist rhetoric intensifies, stemming from an anxiety over the slipping economic status of middle-class whites.

Furthermore, one needs only compare the rhetoric that surrounded the bailouts of AIG and Goldman Sachs, to the rhetoric rationalizing cuts to vital social services, to see that constructions of independence, individual self-responsibility and rationality are racialized and classed constructs. The needy person begging Schwarzenegger not to cut social services and the AIG executives who traveled to Congress to ask for a bailout, both fail to fulfill their “responsibilities” as independent subjects in the public sphere. However, one is construed as undeserving and irresponsible (feminine) and one is seen as greedy, and overly ambitious (masculine). Race figures largely in how each is interpreted because the standard of independence they are judged by is based on a race, gender and class privilege that stretches and contracts to keep white hegemonic masculinity in tact.

Conclusion

Those who are opposed to California budget cuts must resist the neoliberal political rationality of a discourse that is gender, race and class neutral. As schools located in poorer neighborhoods across California receive the disproportionate share of budget cuts, high school dropout rates rise, after-school programs are eliminated and students are pushed into a job market wherein people of color already make up a disproportionate share of the unemployed. We must be frank about the increased burden this puts on families, and in particular one-parent woman-headed households, which are especially prevalent in low-income neighborhoods given the criminalization of men of color. Privatization and the destruction of social services dramatically transfer the cost of social reproduction to women of color. In addition, these are fundamentally gendered/raced processes aimed at maximizing profit; and we must be explicit about this.

As of now, those opposed to California’s budget cuts have been stuck in a neoliberal cost-benefit discourse, which reduces the issue to a singular focus on taxes and financial priorities. This atomized approach to the cuts are symptomatic of the larger trend of atomization analyzed by Lisa Duggan, who documents the way that prior to the 1980s, social movements were tied to a “motley collection of connected issues” which were expressed in a variety of practical expressions of resistance ranging from “reformist to radical”(xvii). After the 1980’s however, “these single-issue” organizations “began to appear as the parts that replaced the wholes” (xvii).

Acknowledging the budget cuts as being inherently gendered processes, operating along race and class lines, allows for greater unity amongst social justice formations and organizers. Duggan also notes that “categories of Liberalism produce false rhetorical separations between economic, political, social, cultural and personal life” (xxi), and argues that many within the progressive-left have reproduced these separations within their own political projects. I argue that if we are to produce broad based movements we must have a holistic critique of capitalism that is rooted in a recognition of the racist, sexist inequalities and class divisions which are woven into the very fabric of its cultural notions and political institutions, such as the private/public split.

Greece and California: Pt 2.

Okay so I want to continue writing about the parallels between Greece and California. This post is going to be me trying to explain the current crisis as best as I can, and I am not sure that I am 100% correct.

What do Greece and California have in common? Both governments have tremendous deficits and both rely on large loans (in the form of bonds) for revenue.

Now in both instances, the governments are saying that they must dramatically curtail state spending in order to close the deficits. Greece’s governing party PASOK is being told to cut public spending – i.e., cut public worker wages and public programs. Both Athens and Sacramento are under extreme pressure by the financial markets to reign in state spending or risk having their credit ratings be seriously downgraded.

Why do these two governments have such huge deficits? Public sector people in both countries are being told that they must deal with cuts to public programs, layoffs and wage decreases. After all, the governments just don’t have the money to pay these things.

Is this true? No. Actually, laying off workers, cutting wages and cutting public programs will only put these governments on a more severe collision course. These markets are going to have to crash, its just a question of when, and how bad the damage will be. If the governments are allowed to cut their public spending, they will be in much worse shape down the road.

Why?

I want to illustrate this using the example of California, which I think I can explain pretty well. To do this, I want to give some background to how we got here, in chronological order.

Phase 1: The Housing Market Boom

The housing boom was caused by a few things:

1) The rise of sub-prime mortgages.

Sub-prime mortgages are loans that were given to people with low credit ratings. Corrupt banks collaborated with credit rating agencies to approve a bunch of people who did not have the funds to take out these loans. Why? Because these loans were lucrative in two ways:

I. The loans were bundled into big packages of loans. So one package would have 30 different mortgages together, you buy this package and collect the interest from 30 different mortgages at the same time. These are called CDO or collateral debt obligations. Investors were eating them up left and right, and they were profitable, because for a short period, nobody was defaulting. The investors didn’t know (and in some instances, didn’t care) how risky these CDOs were, because they were being rated dishonestly by the rating companies and because the investors traded these CDOs.

II. The banks were able to sell insurance policies or (credit default swaps) on these loans that were incredibly lucrative. These insurance policies are usually taken out by the investors who are buying the debt packages to mitigate their risks. If the 30 people with mortgages default, the third party insurance agent will be responsible for the debt. Of course CDSs are not regulated, and people who sell them are not required to prove they have the capital to actually cover all the loans they are responsible for, should they all collapse at the same time.

2) Housing Market creates artificial pools of value, temporarily.

During bubbles, some people do pretty well. A lot of business occurs. During the housing bubble, people built and built houses like crazy because the demand for housing was pushed up artificially by the newly expanded market of home buyers.

Demand for homes increased because all of a sudden everyone could qualify for a housing loan. This means a few things = more income tax, more jobs (think construction jobs, retail jobs, all kinds of jobs related to housing). Also, consumer spending rises, as people are employed, upper middle class and rich people are making good money so they are spending like crazy. Not to mention there is also a ton of new credit floating around since people are using the increased value in their houses to take out loans. The demand bubble has driven up housing worth (by making it seem like there is a ton of demand for houses, these bubbles make everyone’s houses ‘worth’ more).

3) Now, the government is the beneficiary of these bubbles because they are getting an increased flow of revenue. This means that more people are paying taxes, more people are spending money, etc. etc.

4) During the time when the government is getting this revenue, it is also still being manipulated by business interests and lobbyists who are working hard to get tax breaks for their companies, and they are successful. Over the past 5 or 6 years Californian government has  passed massive tax breaks for rich corporations, making itself more and more dependent on income tax and sales tax as its main source of revenue. Also, as we know, Prop 13 has made it so that California does not tax property, it only taxes income, so the richest class in California is not having its wealth taxed, it is having only its income taxed, and it is of course able to find loopholes to hide its wealth, get around taxes, etc., like most rich people are able to do. Not to mention that a lot of the people who are getting rich off sub-prime business booms are the same people who are at the top of the tax bracket.

5) While this is all happening, the average working class person’s wage has not risen at all. The only reason people are staying afloat is because credit is plentiful, and they are given a sense of false security due to being able to use their houses as equity, and the fact that the economy is awash with cash. (Not all people, the more privileged layers of the working class). So basically the working class is getting more and more dependent on debt, but it doesn’t realize it yet because there are still jobs and shit hasn’t hit the fan yet.

6) The government in California is in debt because despite the fact that it is getting income tax at a higher rate due to the bubble, it is still giving tax breaks and there’s a gap between the two. Many times the tax breaks the government gives, are to special interests which individual members of government get kickbacks from. They line their own pockets while depriving the state of critical funds it needs.

7) To make up the difference, government increasingly turns to loans in the form of municipal bonds. These bonds are very profitable and lucrative to investors who see them as safe. They are also another investment, just like the subprime loans, that people can sell insurance policies on (i.e. credit default swaps). These are super lucrative insurance policies since governments VERY rarely default, so there is very little risk for the people making money on the insurance policies.

8) The government issues municipal bonds using the leverage of income tax. It guarantees it will pay the funds by pretty much vowing to use the citizen income tax as its source of revenue. At the same time, remember, politicians are also maneuvering to deregulate businesses who are also sources of revenue, and sources of jobs, arguing that if the government does not make it easier for them to do business in the state (i.e. if their profit margin isn’t high enough because they are being taxed too much) they will leave the state and go elsewhere, depriving the government of the income tax from the jobs people have at these companies.

Phase 2: Shit hits the fan.

1) People begin defaulting on housing loans.

Inevitably, we knew that the subprime mortgage fiasco would have to end sometime, because people just did not have the money to buy all those houses. The more people default, the more that investors panic, they start selling their debt packages like crazy, and there is a rapid depreciation in the worth of these financial instruments since the market is flooded with them.

2) The insurance policies on the debt instruments start being called in, but the people who’ve been selling insurance don’t actually have the money to give the people whose loans they’ve guaranteed. Like AIG for example, who was an insurance giant that sold the most Credit Default Swaps out of anyone. Once all the loans started defaulting, people asked AIG for the money they were supposed to get since AIG had insured all those loans. AIG could not possibly pay off all the money it was responsible for—so it was bailed out by the federal government with taxpayer money.

3) People start losing their homes and their jobs. This creates a vicious cycle, the more jobs people lose, the less they spend, the more other businesses close, etc.

4) People start needing MORE government assistance, but paying less income tax. The government’s tax revenues are dramatically decreasing. FINALLY ITS OWN POLICIES OF CUTTING WEALTHY TAX AND CORPORATE TAX ARE HERE TO HAUNT IT, IT CANNOT RAISE THOSE TAXES AGAIN OR RISK THE FLIGHT OF THOSE COMPANIES AND THE JOBS THAT GO ALONG WITH THEM.

IN OTHER WORDS, the government cannot raise taxes on the rich without triggering businesses to flee from the state searching for higher margins of profit. The unemployment sweeping the state has weakened these businesses and their profit margins are more important than ever. They will go wherever they need to raise their profits and they will flee attempts to regulate them during times of crisis.

Furthermore, the credit rating agencies will not tolerate a move to regulate or tax corporations for the same reason. The credit agencies –S&P and Moody’s see this as anti-business, and at times of crisis, the bourgeoise unites together in its own common interest against attempts to regulate by the state.

If California’s credit is downgraded, and the investors are worried that California is going to chase jobs out of its territory and thus cause a rapid profit decrease, they will sell their municipal bonds as fast as possible. The flooding of the market with municipal bonds will cause their value to dramtically decrease, making them unattractive to investors. This means that California will have both chased out business and also restricted its own source of income – loans via bond obligations.

5) HERES A VERY VERY IMPORTANT POINT.

GOVERNMENTS ARE MANDATED TO PRIORITIZE PAYING THEIR OWN BILLS AND COST OF OPERATION FIRST.

Paying government salaries (i.e. public worker salaries) as well as public programs, must be prioritized. Credit agencies demand that public cuts be made, so that they can ensure that income tax revenue does not get spent up on state obligations, before they are able to repay their debt obligations.

THIS IS THE ESSENCE OF STRUCTURAL ADJUSTMENT. A STATE IS FORCED TO CHANGE ITS INFRASTRUCTURE TO PRIORITIZE DEBT REPAYMENT. STRUCTURAL ADJUSTMENT TRULY HAS COME TO ROOST IN CALIFORNIA.

The thing is, once governments have cut taxes, they can’t go back and get them. Think about who was able to profit from the housing bubble—the people who sold financial instruments and then were able to migrate quickly out of that market, selling their assets. They may have taken small hits but the big bourgeoise is most insulated. They have effectively expropriated the working class of whatever profit it could, to make up for its own falling rate of profit, enriched itself, and now want more.

THE HOUSING BUBBLE ESSENTIALLY WAS A MASSIVE TRANSFER OF WEALTH FROM THE WORKING CLASS TO THE RICH CLASS.

The bourgeoise profited from the housing bubble by way of

1. -  subprime loans
2. -  financial instruments – which were subsidized WITH TAXPAYER MONEY once the banks collapsed
3. -  and consumer spending from the products that people bought with their equity loans.

The government pretty much facilitated the expropriation of the working class, and now since it is part of the ruling class, is not going to turn around and ask the ruling class to subsidize its own operations. It is going to demand that the working class subsidize its own operation.

The government is in a double bind—it is suffering from a massive lack of tax revenue. The government does spend a lot, but not on the people, on its own projects and pork, and waste and bureaucracy. It had more money to spend back then, so it grew itself. Now its revenue has decreased A LOT.

So: It needs money to function. It can only come from a few places:

1) Tax the corporations or the rich. This is out of the question, to raise taxes on the rich or the corporations requires politicians to fight their own constituency tooth and nail. Why should they do that? There are not people in the street forcing its hand.

Also, don’t forget, if the government taxes the bourgeoise, S&P and Moody’s will degrade its credit ratings. As I’ve mentioned before, the credit rating agencies are in bed with the financial interests. They are not regulated at all. Speculation alone can determine an area’s credit rating. If California’s credit rating is dropped, investors will panic and sell their municipal bonds like crazy, which will drop their value dramatically and cause more people to sell them. Once the market is flooded with California debt that nobody wants to buy, California can no longer take out the loans it desperately needs to run.

Corporations will threaten to move their business elsewhere, which would cause even more unemployment and thus depress income revenue even further.

2)   California can tax the working class, and reassure investors that government will prioritize the debt repayment. Just like if you were to get a loan, you have to show your expenses to prove you can pay the loan. California government is trying to do this, it wants to rid itself of its expenses to prove to investors that it is a safe place to invest money.

The problem with all of this is that California keeps accruing more and more debt due to the interest on these bonds. The more debt California gets in, the bigger percentage of tax income revenue it must sign away for investors to lend it money. Essentially, the people of California are becoming the indentured servants of the financial industry, and don’t even know it. They are being forced to give up their public programs and take wage decreases, so that business interests can struggle to regain their margin of profit.

But these governments ARE like crack addicts. The more credit they are given, the more they will enrich themselves, and just lean on more credit. The only thing that would stop them from doing this would be the power of the working class limiting its spending habit by imposing a limit on it.

Until today, there is no regulating body in charge of overseeing credit default swaps. NONE. The SEC is begging this other independent agency to start looking over this industry because it is so wildly anarchistic and out of control that they don’t even claim to have the teeth necessary to impose regulation upon it.

People who think that just because we are in a crisis, that means that the business interests have been reigned in are mad. There has been NO blows struck against the fiancnial industry as of yet. Nothing it does to itself alone will discipline it. Only the working class can deal it a blow. As of right now, the working class has not once yet dealt blow back to the ruling class , in the form of a serious massive wide-scale strike. Until it does this, it is naïve and dangerous to think that the business class has learned its lesson from subprime loans and that there is any reason to believe that any of these practices have stopped. THEY HAVE NOT. AT ALL.

The credit default swaps have just moved from the housing market, to the municipal and sovereign bond market.

The reason governments are not able to pay their own bills has to do with the fact that the working class has been so badly expropriated of their wealth. They are paying less income tax than ever, and are losing their jobs left and right. More and more businesses have sought to displace their costs back onto the working class in order to gain a larger margin of profit, the effort to cut the public sector is a continuation of that. But as we know from Marx, the more the ruling class is able to do this, the more we lose, not win.

The interests of the working class and the ruling class are diametrically opposed. The more the ruling class is able to enrich itself, the more effectively it seeks to exploit the working class, to extract higher and higher levels of profit in order to offset the constantly falling rate of profit, and the stagnation of the economy.

If the working class does not strike back soon, the ruling class will just keep finding more and more catastrophic ways to buffer itself from the impending fall. The longer they are able to do this, and stave off the crisis, the more intense and horrific it is going to be when it reaches its APEX.

Conclusion:

Both the California and Greece states are both in contradictory situations caused by their contradictory dual characters.

1 - On the one hand they are entrusted with running a state infrastructure, and managing the economies of that state infrastructure.

2 - On the other hand they are also the bourgeoise, and they want to maximize profit and protect the interests of themselves and their ruling class constituencies. This is also due to the fact, on some level, that labor is actually dependent on Capital, but is also exploited by it. The more capital successfully sets up business, the more jobs are created, but also the more profitable capital is, the more it seeks to successfully exploit the workers to gain a competitive edge on its margins of profit against other capitalists.

The U.S. and the EU are doing what Greece and California are doing, on larger scales. Both are selling off debt, providing tax breaks for the bourgeois while also paying higher and higher interest on deficits. Except that EU and U.S. are worried about their currencies. Currencies are not tied to any material substance so they are always being traded and there is always a fluctuation as investors switch from one currency to another. The U.S. keeps printing money to give itself, and causing tremendous inflation, while also selling its debt. The U.S.’ tactical advantage here is that its currency is the universal equivalent, in a way. The world measures its currency against dollars because they are ubiquitous. But the U.S. can’t continue to do this forever. As it sells more and more debt to China, while printing more and more notes, China and other countries are getting worried. If the U.S. prints so much money that its notes are worthless, that is a significant problem for countries holding a tremendous amount of U.S. debt as assets.

To be continued… I doubt this is all coherent, but its good for me to try to write out what I understand anyway. I welcome questions and comments, as well as corrections.

Hell yes! In the face of the immense pressure from the European Union, Greek public sector workers go on strike AGAIN!

Its interesting that early into the article on this strike, the NYTIMES quickly reiterates the slimy attack on public workers that is often used here in the U.S. against public sector workers. The charge? They accuse the public sector workers of being “privileged”.

In Greece, commentators said the economic problems had exposed a general ignorance about the harsh realities of the global economy, while laying bare the strong sense of entitlement in a country where one out of three Greeks is employed in a civil service that guarantees jobs for life.

What does that mean though? With the price of living in Greece having skyrocketed so badly with the inflation and introduction of the Euro, these wages are not liveable wages. And why shouldn’t people have guaranteed jobs for life?

“People in other countries like Germany, France and the United States learned about the workings of the economy the hard way, by seeing their jobs on the line,” said Babis Papadimitriou, an economic analyst at the Skai radio and television group. “This hasn’t been the case in Greece.”

Yeah so this guy, Papadimitriou, says that Greek workers have not “learned” the workings of the economy. But this quote tells me otherwise:

But the Greek government’s proposals for deep spending cuts to rein in the deficit have met significant resistance.

“We won’t pay for their crisis!” loudspeakers blared from Klafthmonos Square, otherwise known as “the square of the crying people,” where disenchanted Greek workers have come for centuries to express their discontent. “Not one euro to be sacrificed to the bankers!”

This tells me that the Greek workers actually HAVE learned how the economy works, and that’s why they are shutting ‘ish down! What lesson haven’t they learned? That the economic crisis forces the government to cut vital services while bailing out banks to the tune of trillions of dollars? The lesson that when workers cede concessions, they only get asked to take more concessions? 

So far workers in the U.S. have largely not resisted the budget cuts and bailouts to banks. But I think that March 4th (hopefully) and the weeks after, might be the beginning of a movement that will show Papadimitriou (and the rest of the world) otherwise.