No matter how the Obama administration or the bosses’ media pundits try to spin the “economic recovery,” the actual 33 million jobless figure keeps getting in the way. Now even some of the NY Times analysts have taken to confirming what Karl Marx proved over a century ago: capitalism inevitably breeds unemployment. And capitalism based on racism breeds double unemployment rates for black and Latino workers.

As CHALLENGE has reported previously, the “official” U.S. jobless rate hovering around 10% represents 15 million unemployed. The latest headlines scream a June “drop” to 9.5% (a phony figure — see next paragraph). But the actual rate — including part-timers who can’t find full-time jobs and “discouraged” workers who have given up looking — jumps to 21.6%, more than double the “official” figure. (Shadowstats.com, Commentary #301).

And the “discouraged” workers are only counted as “discouraged” if they’ve stopped looking for up to six months. But millions have been out of work over a year and therefore are completely off the radar screen. All this doesn’t even count the workers on welfare who would work if there were jobs and available day-care.

Statistical Juggling

The government’s “official” unemployment rate for June “drops” to 9.5% because it is based on the Payroll Survey that counts the number of jobs — not the number of people with jobs — and therefore includes multiple job holders. The government’s own “Household Survey” counts the number of people with jobs which showed a June job contraction of 301,000! So how can the jobless rate “drop” to 9.5% when the number of people without jobs increases? Only by statistical juggling.

An Associated Press dispatch (6/19) ran under a NY Times headline, “Most State Jobless Rates Fall.” But right there in the first paragraph it reports: “mainly because people gave up looking for work and were no longer counted.” (Maybe the headline writer didn’t read the article.)

Meanwhile, the bosses’ Congress can’t even pass legislation extending unemployment checks for the 1.8 million whose benefits expired in the last two months — although they can “preserve a tax loophole benefitting the wealthy money managers at private equity firms” (NY Times editorial, 6/30). This gift-wraps tens of millions of dollars for these parasites who helped bring on the financial crisis in the first place.

None of these “analyses” of the jobless figures even mention the fact that at least 40% of the jobless are excluded altogether from unemployment benefits because of government restrictions. Many of them admit that millions of those currently out of work may never work again. That’s “democracy” under the profit system.

Yes, Marx Was Right!

Now along come some of these columnists writing about the economy to prove Marx was right. Marx said that because every capitalist drives for maximum profits, looking to capture as much of the market as possible, it inevitably leads to overproduction of the means of production and of goods: all of them can’t sell what their workers produced. So to try to maintain their very existence, many of them close factories and lay off workers, who can’t buy back what they’ve produced, leading to more closures and still more layoffs. That’s known as the “bust” in capitalism’s business cycle.

NY Times business writer Andrew Sorkin, in maintaining that no amount of financial “regulations” can stop this “bust,” says: “Businesses in general, and Wall Street in particular, often overreach in search of profits….We haven’t found a way to legislate around that reality.” (NYT, 6/29)

That reality means millions lose their jobs, their savings, their homes and their health insurance. And because of racist discrimination, doubly so for black and Latino workers.

Furthermore, this is an international phenomenon since capitalism covers the planet. So workers are facing this crisis in Greece, Spain (jobless rate 20%), Portugal, Ireland and Eastern Europe, among others, with France, England and Germany not far behind.

Meanwhile, imperialism — capitalists extending their search for maximum profits to low-wage areas in Asia, Africa and Latin America — reduces hundreds of millions of workers to permanent poverty, with several billion trying to live on less than $2 a day. This, of course, leads to imperialist wars as the only way these rival capitalists ultimately can settle who will have the “right” to exploit the most workers.

Sorkin faces the facts of capitalism. His article is headlined, “Preparing For Next Big One,” stating, “The next Great Crash is coming. Guaranteed….[and] sooner than we think.

“How can I be so sure? Because the history of modern markets is a story of meltdowns.”

He then details the blow-ups in the U.S., Mexico, East Asia, Russia and the dot-com bombs — all in just the last 20 years. Every one of these produced mass layoffs for workers. Then he catalogues “The stagflation of the 1970s, the Depression of the 1930s, the panics in the 1900s…and back and back and back…all the way to the Dutch and their tulip bulbs.”

“Booms go bust. That’s the way markets work….[And] the one thing it [the Obama financial reform Act] won’t do is prevent another crisis….”

He concludes that this Act may help “prepare us for the next Big One….But it won’t stop it.”

There’s only one thing that can stop it — communist revolution, because it destroys the profit system and the capitalist state apparatus that enforces it. Communism is a society run by and for the working class which, after all, is the class that produces all the value in capitalist society. But in a profit-free society our class will allocate all that we produce according to workers’ needs. That’s the real “Next Big One.” 

Treating the latest Russian spy scandal as mere entertainment misses the point. Sure, all the makings of a Hollywood blockbuster are there. But U.S. media are likening the plot to 1960s thrillers (or parodies of them), to obscure the stubborn fact that U.S. and Russian capitalist rulers still aim at destroying one another, while killing millions of workers in the process.

Despite Obama’s promised “reset,” the imperialist rivalry between U.S. and Russian rulers is getting hotter. The two remain the most heavily-armed contenders — followed by Chinese and European bosses — in a sharpening competition for control of the world’s resources, markets and labor.

Kremlin bosses bent on economic, political and military expansion practice espionage seriously. So do their Pentagon foes, charged with maintaining the tottering U.S. empire. Some U.S. pundits dismiss the spy incident as a harmless, out-dated holdover of a Cold War mindset that no longer applies. In fact, it reflects the ongoing inter-imperialist struggle, headed to escalate into armed conflict.

Obama & Co. Step Up Missile,
Nuke Face-Off

While front pages and web pages featured images of Russian agent Anna Chapman, Hillary Clinton was in Krakow on July 2 signing a pact that puts U.S. Patriot and SM-3 missiles on Polish soil. Obama’s envoy absurdly claimed the missiles will defend Europe from a potential attack by Iran. But it’s Russia, not Iran, which lies on Poland’s border.

Clinton just wound up a whirlwind tour of former Soviet and Soviet-bloc states seeking their military allegiance to Washington. “Poland has been rattled by Russia’s more assertive foreign policy on the territory of the ex-Soviet Union, especially in Georgia, and the Patriot deal is seen as symbolically important in underlining U.S. commitment to its security.” (Reuters, 7/1) She also visited the Ukraine, Georgia, Azerbaijan and Armenia, areas hotly contested by Russia’s military presence and by George Soros-financed pro-U.S. election rigging.

More ominously, U.S. and Russian rulers continue to jockey for supremacy in city-destroying nuclear arms. But the U.S. wants the lethal edge in current arms talks that may soon limit strategic warheads to 1,550 a side, mainly for financial reasons.

Asked how the spy flap might affect his stance on the treaty, liberal warhawk Senator Joe Lieberman said, “I’d like to be assured that we’re investing enough money in modernization. In a world in which there will be nuclear weapons for a good long time... I want to make sure that the smaller number of weapons we’re left with in our stockpile work.” He no doubt worried about Russian infiltration into the U.S.’s bomb program. One Russian agent had “made contact with an individual who works for a U.S. research facility that works on small-yield, high-penetration nuclear warheads.” (Christian Science Monitor, 6/28)

Russian Spies Not As Incompetent As U.S. Bosses Pretend

Though probably not top agents, the seized Russians were hardly incompetent bunglers. Their influence reached fairly high into the U.S. Establishment. One spy, Cambridge, Mass.-based Donald Heathfield, had discussed a business deal with strategist Leon Fuerth, who would have been Al Gore’s national security advisor if Bush hadn’t stolen the 2000 election. And another spy, Manhattan Mata Hari Chapman, met Nouriel Roubini several times on “social” occasions. Economist Roubini has become a darling in U.S. rulers’ eyes because he foretold the current economic crash.

What we are witnessing in the spy case is not theatre, but a deadly aspect of what Lenin called “the highest stage of capitalism.” He was referring to the imperialist rivalry that underlay World War I. Forget the “James Bond” jokes. For workers today, the stakes are as high as in 1917. 

On June 29, N.J. Governor Christie signed the budget passed by the Democrat-controlled legislature. In addition to $1 billion in education and student aid cuts (hitting urban districts especially hard) and $450 million less in aid to cities, the budget puts a 2.5% cap on salary increases for all local government workers, terminates state health insurance for 12,000 immigrants, cuts $9 million from legal services to the poor and cuts state payments to households with a disabled person.

The Democrats mounted only token opposition; they “won” a paltry $81 million in restorations out of over $2 billion in total cuts proposed by Christie. The restoration package included the General Assistance (GA) program, which was slated to wipe out cash benefits for employable adults on July 1.   

In 1992, New Jersey politicians tried to make GA a six-month program. At that time, those would-be killer cutbacks were met with a massive campaign, led in part by the Progressive Labor Party (PLP) and the International Committee Against Racism (InCAR). In the six months leading up to the cutoff, we organized mass marches; and led a sit-in at the Governor’s office in December. All of this, along with other actions statewide, stopped the cuts cold, led to the creation of more jobs and convinced a number of people to join PLP.

This year the opposition to the cuts was highlighted by a student walkout on April 27, which PLP members helped organize, and a May 22 Trenton rally of 35,000 workers. But Christie and the Democrats continued to dance together on workers’ backs. The Democrats first voted to reinstate the “millionaires’ tax”, which would slice $1 billion off the cuts. Then, when Christie vetoed it, they dropped the tax in their desperation to make a deal with him. Workers and students are making plans to continue the struggle into the fall and beyond.

Both parties hid the $3 billion in this budget being paid as interest to the bondholders and bankers. The union leaders who called the Trenton rally did nothing to expose this or organize more actions to fight the cuts. After the budget passed, Christie vetoed a tax increase on businesses that would have gone into the state unemployment fund.

Christie originally called for maximum weekly unemployment benefits to be cut by $50 per week. Instead, he has settled for expanding the reasons for denying unemployment claims based on alleged “gross misconduct.” This will give more bosses the incentive to concoct rationales for firing workers and then deny them the benefits they have paid into while working.

Cuts to legal services programs will cost almost 100 jobs, including layoffs, buyouts, and resignations. This will, in turn, result in huge reductions in services to unemployed and under-employed workers who face evictions, utility shutoffs, benefit cuts or denials, foreclosures, creditor lawsuits, etc. A committee of union members did organize to try and stop these cuts. However, most members thought lobbying the politicians or relying on the “influence” of statewide legal services’ bosses was the best strategy. In the end, workers learned the bitter lesson that the Democrats’ promises of restoring cuts made to legal services’ programs were all hollow.   

Cutting money used to meet basic needs will kill people. The bankers and bosses need to tighten the racist screws on the most vulnerable section of the working class to offset lost profits from their own economic crisis. They also need to increase the racist scapegoating of black, Latino and immigrant workers to distract workers’ anger away from their real enemy — capitalism — and try to mobilize support for their unending oil wars.

Communist revolution will abolish the capitalist competition and constant drive to lower wages which is behind unemployment, and the capitalist crises that lead to economic depressions. PLP aims to lead that revolution- join us. 

Recently a flotilla of ships bringing humanitarian aid to Palestinians trapped in Gaza behind a fascist Israeli blockade was boarded and attacked by Israeli commandos on the high seas. On one ship, the Mavi Marmara, the commandos encountered resistance, opened fire, and killed nine of the travelers. 

Videos showed that the passengers fought militantly and bravely against the commandos, succeeding in disabling several and knocking some off the ship into the water. This action helps to dispel the “myth of invincibility” surrounding the Israeli military and its own CIA, the Mossad. They can be fought and beaten with boldness and militancy, even if they ultimately succeeded in gaining control of the ship.

But there’s a bigger picture involved in this episode. Israel has functioned as the proxy for U.S. imperialism in the Middle East. The U.S.-Israeli axis has operated for decades to intimidate the bosses of Arab nations and force them into compliance with the needs of U.S. imperialism, which are mainly about controlling the oil and gas resources in the Middle-East and Central Asia.  Arab and Iranian bosses have chafed under this threat and more and more, there is resistance to the U.S.-Israel axis.

Communist Resistance Needed

Most of this resistance, unfortunately, has been led by Islamic political forces with reactionary ideologies such as “restoring the Caliphate,” punishing non-believers in Allah, and reducing women to the status of virtual slaves. This has been the case with the Taliban, Al-Qaeda, the Islamic Republic of Iran, and much of the resistance in Iraq and Pakistan.

More recently, Prime Minister Recep Erdogan, leader of Turkey’s Justice and Development Party (an Islamic Party in Turkey), has joined the pro-Palestinian cause, dramatically changing Turkey’s long-standing pro-Israel stance. He criticized Israeli President Shimon Peres at the Davos Economic Conference in January 2009. Obama, despite Turkey’s continuing membership in NATO, felt it was necessary to visit Turkey.

Murder by a State

Nevertheless, at the U.N., Turkey’s Foreign Minister Ahmet Davutoglu correctly called the raid “murder conducted by a state” and demanded an immediate Israeli apology, international legal action and an end to the blockade.

Many of the passengers on the Mavi Marmara were Islamic militants supported by the Justice and Development Party and organized by Insani Yardim Vakfi (IHH), a humanitarian group in Turkey that supports Hamas. Those who died fighting the fascist Israeli commandos have been hailed at mass rallies in Turkey as Islamic martyrs. Notably absent from these rallies were the large workers’ groups which despise Islamic militants in Turkey and have been involved in pitched battles with them on May Days in past years. 

Some of these leftist organizations had sent fighters to Palestine in the 1970s to fight alongside George Habash’s Popular Front for the Liberation of Palestine, a secular, militant, nationalist Marxist group aligned with the Soviet Union. These fighters learned first-hand of the treachery of the Islamic groups in Palestine, who killed many of their members despite the fact that they were nominally united.

The flotilla episode is one more example of the relative decline of U.S. imperialism. Turkey’s initial move away from its long-standing alliance with the U.S. marks an important step. This action builds on the recent deal that Turkey and Brazil worked out with Iran (to hold its uranium) that undercut U.S. imperialism’s designs against Iran’s nuclear ambitions. Secretary of State, Hillary Clinton could only get the U.N. to approve very limited sanctions.

U.S. Isolation

The U.S. is being increasingly isolated in its Mid-east and Central Asian ambitions. Meanwhile, U.S. rivals, China and Russia, are dealing freely with Iran, gaining access to resources in deals that will only strengthen their geostrategic position.

The flotilla episode reflects in a dramatic way the sharpening conflict among the imperialists and the U.S.’s increasing desperation to hold onto its allies as its rivals gain ground.

With serious, dedicated work, the PLP can grow internationally and be positioned to turn the coming imperialist world war into communist revolution. Just as our predecessors in Russia and China did, we can turn their willing slaughter of workers for the sake of profit into a battle for a classless, communist society. Boldness and growth of the international communist movement is increasingly urgent!