(The following is based on a report presented by some young comrades to a recent PLP Central Committee meeting).

The current situation for U.S. imperialism is unstable. Although the economic slide following-9/11 slowed somewhat, millions of jobs are disappearing, unemployment is climbing and the federal deficit is skyrocketing into the hundreds of billions. Overall the U.S. economy is in decline. It has a crumbling foundation and is losing ground to its rivals. The ruling-class response has been imperialist war and increasing attacks on the working class.

The boom of the 1990’s was based on speculation rather than on the creation of real value. Corporations played tricks like using capital to buy their own stocks so that they could create an image of increasing value, holding off the inevitable bankruptcies involving Enron, WorldCom and United Airlines. The reality then and now points to a world crisis of overproduction. Significant overcapacity exists in major industries such as auto, steel and aerospace.

This crisis has fueled the contradictions between rival imperialists. In the power vacuum after the collapse of the Soviet Union, the U.S. fought the first Gulf War without any imperialist opposition. But there has been more substantia1 opposition to the conquest of Iraq. This opposition mirrors the growing relative strength of rival imperialists.

China continues to take a larger market share of many industries worldwide with its cheap labor. China matches this economic power with military power through huge investments in a "blue water" navy in order to further its imperialist ambitions. Middle Eastern oil is crucial to China’s growth and plays a important role in the war with Iraq.

The European Union economy is larger than the U.S.’s and the Euro has surpassed the dollar in value. Ruling-class strategists point out that Europe’s "natural" drive is to become a superpower, but they are limited by the lack of a capable army. They also don’t have the nuclear weapons that Russia uses to command respect.

Saudi Arabia, Iran and others in the Middle East are increasingly influenced by "bin Laden" elements. These anti-U.S. forces have gained ground through the war in Afghanistan and the war against Iraq. The U.S. fears that governments friendly to it will not survive over the long term.

Besides individual rivalries, there is a general economic problem of growing trade deficits to Europe and Japan. The U.S. has massive debts to both. Withdrawing capital from the U.S due to a shaky stock market or to political motivations could sharpen conflict. How long can the U.S. maintain military dominance while Toyota and Airbus beat GM and Boeing, except through destruction of the formers’ productive capacity?

Control of the world’s cheapest supplies of oil is essential to dominating these rivals. With a target price of $13 per barrel, U.S. occupation of the Middle East would give a short-term boost to the rate of profit and jumpstart the world economy. But this adventure also has its contradictions:

1) Instability in Russia and other oil-producing nations would increase due to lack of oil revenue. (Russia needs a price in the twenties.)

2) Further alienation of Europe, Japan and China, impelling their military build-up.

3) Cheap oil helps Chinese capitalist growth.

4) Working-class anger growing out of a long, bloody and expensive occupation.

5) The military "victory" in Iraq is creating new and bigger problems. Tens of thousands began protesting as soon as the Hussein regime collapsed, but instead of welcoming the U.S.-UK "liberators," they shouted, "No to Saddam, No to America." Several U.S. soldiers have been killed since Bush declared the Iraq war "was over." The Iranian fundamentalist regime seems to be the big winner, particularly among the Shiites (the majority of the Iraqi population).

The imperialist logic of seizing Iraq is clear. But there is disagreement within the ruling class. The "unilateralist" view of Bush/lRumsfeld/Wolfowitz is willing to "go it alone" and wants to show the world that the U.S. can and will do what it pleases. The other section has been using the Democrats and the New York Times to make its case for "multi-literalism" and coalition-building. They’ve been giving lip service to the anti-war movement and using liberals like Kennedy and Daschle to call for debate and "making a case." This wing worries that the U.S. will galvanize its enemies if it cuts them out of the Iraqi oil deals. It also wants to share the cost of rebuilding the Iraqi oil infrastructure with its multilateral partners. A point of unity between the factions, however, is that U.S. imperialism wants to demonstrate that it has an army that will continue to fight even with massive casualties.

Building Fascism — The War Comes Home

The Hart-Rudman report continues to be critical to the overall blueprint for fascism. The Homeland Security agency is now a federal department with massive funding and cabinet level leadership. Already there has been movement on consolidating the Border Patrol, Customs and Coast Guard. The Pentagon is now taking bids on the software to be used in the Total Information Awareness program, where all of our electronic records will be consolidated and mined for "suspicious" patterns.

There continue to be other programs initiated by the ruling class that strengthen fascism. These include:

Citizen Corps — government program encouraging workers to volunteer in "Weed and Seed" program crime prevention. Workers are encouraged to "weed" their neighborhoods of crime by informing to police and to "seed" good behavior through the community policing.

2) No Child Left Behind Act of 2001 — plans to coordinate education standards and curriculum on national level. This plan was also part of the Hart-Rudman Report and its call for "the U.S. need for the highest quality human capital" so that U.S. imperialism can continue technology and weapons development. Education is seen as important to control and centralize the pushing of fascist ideology. The act also requires that the names of high school juniors and seniors be given to military recruiters.

3) INS registration of Arab and Middle Eastern workers, leading to massive arrests for petty immigration violations and contributing to the racist idea that many of those arrested must be linked to terrorism.

4) The USA Patriot Act allows secret wire taps, Internet spying, spying on college students with the help of the university and permission of the FBI to investigate people or groups that are not suspected of a crime.

5) The classification of U.S. citizens as "enemy combatants" if they are "terrorists" in government eyes. Based on the rulers’ judgment, the Constitutional rights of a citizen can be voided. When one is "an enemy of the state," it’s clear that the government’s gloves come off.

6) A rise in the visibility of outright fascists such as the National Alliance march in Washington, D.C. last summer. These fascists are also taking a more "liberal" line, like calling on Israel to give Palestinians their own homeland.

On the one hand, these are serious dangers for the working class. However, the ruling class does not resort to such measures out of strength but rather out of weakness, out of an estimate that they can no longer rule in "the old way."

Where is the Working Class?

The working class is not well organized to repel these attacks. Unions have proven themselves agents of capita1ism by selling out on all recent labor struggles. Boeing, ILWU and New York City Transit are visible examples of how union leadership is not willing to fight on principle for the working class. However, in many of these labor struggles, workers are becoming increasingly angry at their leadership. In a number of areas, a gap is growing between the mass of workers and the AFL-CIO honchos who tie themselves to the ruling class and betray the class interests of the working class. Communist organizing of this anger can make a serious dent in the rulers’ onslaught.

The anti-War movement has mobilized massive numbers for a political demand. (On the weekend of Feb. 15-16, an estimated 10 million people worldwide protested the war.) Although an exciting development, the line of the movement had been to either let the UN inspections "work" or to call for "peace." The rallies have been predominantly white and without a strong worker/union presence. The bosses took the offensive, trying to control the movement. Papers such as the Washington Post and New York Times first attacked the movement for being "communist led" and suggested that the movement be "taken back." United for Peace, ANSWER and Not in Our Name all have weak politics, mainly being anti-Bush. By not advancing an anti-capitalist and anti-imperialist outlook, become either supporting the multi-lateralists, or backing European imperialism (supporting a UN-sanctioned war) or the Democratic Party.

There is one factor that any movement opposed to U.S. rulers’ war plans must base itself on: the potential strength to be drawn from the working class and its youth who form the bulk of the bosses’ war machine. This is the class without which the rulers become paper tigers, the class that has the power to not only defang its military and its war production but to destroy the bosses’ system altogether.

What Are the Party Opportunities?

All these developments present new contradictions, creating many opportunities lacking a year ago. The war with Iraq affects all workers and youth. It’s being discussed by nearly everyone in our orbit — it is not just a "left" issue. The masses at the demonstrations are a clear sign of this. The ruling class is faced with the contradiction that in order to make war it must cut back on the working class, while also needing working-class support for the war. We can attack the cutbacks as well as the increased racism and link them to the war. Wars increase opportunities to step up our military work with many soldiers on or near the front lines. We can raise CHALLENGE sales and build the Party. The peace marches won’t stop the imperialists’ war drive. Only communist revolution to crush the warmakers and their system of maximum profits will bring peace to the workers of the world.