Impending crisis, the broken rules of the system v the 90%

Here, Michael Roberts gives a good overview of the global picture regarding new levels of instability in the economic system. Instability is an intrinsic feature of the capitalists system we live in.

He starts as follows:

The US stock market turned volatile this week and has now erased all the gains made up to now in 2018 in just a week or so.  So much for Trump’s boast that things for rich investors have never been better.  The fall in the US market has been matched by similar drops in the European and Asian stock markets.  The all-world index has had its worst performance since the Euro debt crisis of 2012.

— Read on thenextrecession.wordpress.com/2018/10/25/correction/

What does it mean for Australia?

Australia is affected, and the impact will sharpen in the months ahead as the national election gets closer.

Living in denial is dangerous. Governing in denial is destructive. Campaigning in denial is not very smart.

That does not mean giving up. It does means re-thinking the campaigns we are active in and how we join in them, and bringing others with us. Many of our demands will be just as valid. We will have to be tougher and more united in defending and winning them.

Living … in brief

Among other things, profits and profitability will fall. There will be bankruptcies. If you are a small business employer that possibility is very sharp. If you are a worker with a job, the likelihood that you will lose it or be pressured to take a big cut in wages will escalate. If you are a worker without a job there will be downward pressure on your social welfare entitlements. Just surviving will be tougher and we will have to resist a louder call to blame it on refugees and migrant workers. It will infect our thinking and our social solidarity instincts or, it will make them stronger.

Governing … in brief

The LNP government is preparing to leave the next economic crisis to the market. Deciding to do that takes about 5 minutes and means the government is not in control.

In the meantime, they will seek to get re-elected on the basis of “their record”: current growth numbers, reduced unemployment, and very low strike figures.

Growth as GDP is barely adequate.

Unemployment has fallen. They say, for example Kelly O’Dwyer (the rather shrill and vacuous Minister for Employment and Workplace Relations), that unemployment is at 5%. She is using the volatile nominal figures not the more reliable “trend” figures that say it’s a bit higher. I haven’t seen an interview with her that deals with that.

She also does not talk about underemployment. That is now rising and more entrenched.

Campaigning … brief, but not so brief

On climate change …

Apart from the big and growing campaigns against the Adani mega coal mine there remains no coordinated national campaign. There is rich potential for this in the dozens of small initiatives and mini campaigns.

A thousand flowers blooming, each one in its own paddock, will not be good enough to win the battle to reverse climate change.

On workers rights and Changing the Rules …

The union movement’s campaign to “Change the Rules” (CtR) that seeks more power in the hands of workers to reverse inequality and poverty will be affected by instability and new crisis.

We must factor impending crisis into our strategy. Not to do so would be negligent.

Electoral intervention will not be enough.

This is true for those who want the campaign to be focussed almost entirely on getting a new Labor government. That is, an electoral strategy that focuses on the marginal seats that the Labor Party must win.

If the crisis hits not long after such a government, as it did in 2008-9, that new government – on historical form – will seek that we retreat from our most important demands. They will join with the employers, albeit with some reforms to make retreat “excusable”. Recent and longer history says that the dominant (these days) laborist tendency in our union movement will go along with that.

Compliant industrial strategy will not be enough

The CtR’s current industrial strategy is to comply with the rules (even though a percentage who attended last week’s rallies did not do that) and then whinge about them through social media and national union leader media appearances.

This is a dead end strategy because it leaves both union and non union workers fully exposed to the bankruptcies and wage cut demands that go with economic crisis.

The champions of the dead end approach are also champions of rules that restore arbitration powers to the Fair Work Commission and inspectorial and prosecuting powers to the Fair Work Ombudsman. They oppose a comprehensive “right to strike” that puts power into the hands of workers, union and non union alike.

A prospective new Labor government relies on the “dead end” champions as it prepares to win the election with the focus on the ALP National Conference in December.

A defiant strategy: electoral and industrial action before and after the national election

For those who want an strong, interventionist industrial strategy for CtR that interacts with the electoral strategy and also escalates the priority on the “right to strike”, the impending economic and climate crisis is also a big deal.

If we are “fair dinkum”, the need to change the rules by defying them – a big part of Australian history – will rise.

There is a serious option: a minimum wage increase

The National Minimum Wage Review starts soon. The Fair Work Commission will announce a timetable at any time in the next few weeks. The Review process will then start and traverse through to June 2019. This is the period leading up to and probably just after the national election.

In the next few weeks, the ACTU will prepare and present a proposal for a minimum pay increase by taking all minimum wages – the statutory and award based minimums closer to a “living wage”.

Lets start discussing that proposal now even, if necessary, before it is formalised.

Lets build an industrial campaign, reinforced by our efforts in the key electorates, that puts pressure on employer organisations, the government and the Commission to accept that proposal.

Otherwise they will dominate the public debate with the economic c risks logic of 0% increase.

All methods and tactics of campaigning can be harnessed into such a campaign.

It can be designed to appeal to all of those workers who are not in unions but who try to live on the minimum wage and those whose thieving employers pay below the minimum.

The 90% in charge

The modest efforts that the Rudd Labor government produced in 2008-9 to deal with the economic crash back then will be inadequate. They complied with the financial management rules of the day. But we know the rules of the finance system are stacked for the 1-10%, even more today. They must not be allowed to dominate “governing” as the crisis strikes and takes effect. Unless the 90 % take charge, the 90%, and the natural world we are dependent on, will suffer horrendously.

But we also have the rich working class potential to develop and win an alternative.

Understanding its reality is the first activist step towards preparing for the next economic crisis

Global economy is facing a ‘perfect storm’

BIS fears that increasing protectionism could reverse decades of progress.
http://www.smh.com.au/business/the-economy/global-economy-is-facing-a-perfect-storm-warns-bis-chief-20180827-p4zzzq.html?btis

You don’t have to agree with or understand all of the stuff in this summary of what one of the major architects of “our” twenty first century capitalism is saying, except that another economic crisis is just around the corner. It will dovetail with the destruction of more climate change.

Among the experts I understand the Bank of International Settlements (BIS) is the international bank of banks.

The crisis they expect will have very serious consequences for any Australian government, the Change the Rules campaign, and all Australians. It will reach into every nook and cranny of all communities of the world.

Every single democratic and social justice campaign will also be affected. All will have to work out on whose side they will stand.

Will corporations and governments be permitted so much control over the handling of the crisis that the recovery that might follow is for them only?

Will campaigns like “Change the Rules” concede major demands that give more control to workers to win the even tougher struggles that the crisis will bring? Or, will it allow new control in the hands of institutions like the Fair Work Commission to resolve conflict through “consensus” and “even handedness” and “fairness”?

This is union activist business and part of their business is to make sure, even when union and political leaders are sluggish about it, that the problem is discussed among members and potential members.

Of course this should include discussions with a prospective Labor government and the Greens – including at the local level – that drive towards a government that enables much more power in the hands of workers to deal with the destructive effects of the crisis on their lives.

Understanding the reality of another crisis enables the possibilities of a different resolution to last time, a resolution that enabled continued destruction of the environment and more inequality … and an even more destructive next crisis.

The challenge for all genuinely democratic forces is how to transfer power into the hands of the majority and to therefore break the cycle.

This means the development and popular spread of an alternative programme of change for the majority – economic, political and environmental. Much of the content of this programme already exists in the mainly separated demands of the thousands of organisations that are struggling in so many different, and mainly separate ways, against the pressures on their lives, including our precious environment.

Australians could well look towards the largely coherent programme of the Corbyn forces in the British Labour Party for an example of what is meant. And examples exist in our own history. Both the ALP and the Greens have some good material in parts of their programmes. But both end up wanting to maintain the system that causes the big problems for the majority.

“The Greeks are NOT lazy.” Fighting Austerity for REAL is complex

THere is a lot more to fighting against Austerity than slogans, demands and even a humanistic programme for the people. This is one important lesson from SYRIZA’s negotiations with the representatives of European finance capital. In this case, it means complex negotiations. Solidarity with the Greek people and with SYRIZA must also include an unrelenting determination to fight the propaganda that financial capital and their aides in governments like that of Germany and France promote to justify austerity against the majority.
Michael Roberts’ – in this article – refutes the German promoted myth that the Greeks are lazy, and therefore deserve austerity. He povides basic information to back up these statements:
“Greeks work more hours in a year than any other country in Europe – and more than even the Americans or Brits! And surprisingly, it is the Germans who are the ‘laziest’, if measured by hours worked.” And …
“Although Greek economy-wide productivity started from a low base when the country joined the Eurozone in 1999, growth in labour productivity since then has been faster than the strong capitalist economies of Germany or France, up 25% compared to just 10% in Germany.”
… and a few other choice facts that make solidarity with the Greek people and SYRIZA essential. https://thenextrecession.wordpress.com/2015/02/20/troika-grexit-or-plan-b/

The ECB, QE and escaping stagnation (with an Australian perspective)

Who In Australia would trust the Abbott and Hockey (Liberal government) alliance with the Business Council of Australia to manage the economy in the next financial crisis?
Remember that when Rudd Labor came to office in 2007 it soon had to manage the impact on Australia of a global economic crisis, usually called the GFC. In a mild, Keynesian way they did a reasonable job.
Well, the Davos global ruling class gathering, frantically seaching for “inclusive capitalism”, and Mario Draghi are now talking and acting such that the handling of the 2007 crisis is now leading towards another global economic crisis, even before any real sign of recovery from the first one.
There is no chance that the Abbott government and the BCA will handle this “new” situation democratically, that is in the interests of the majority. Their current standards of competence suggest they wont even be able to handle it competently for their very own and precious 1%.
Well, that leaves the issue of the propect of a new Labor government, under its right wing led by Bill Shorten. What will they do? The next few months will tell us more.

Greece’s humanitarian crisis

Working through my emails and found this from a Greek friend:

http://m.guardian.co.uk/commentisfree/2013/feb/11/greece-humanitarian-crisis-eu

It shows some important detail of the NEW humanitarian crisis that is happening in Greece.
It is “NEW” because it did not exist 2-3 years ago.
It is a direct consequence of the neoliberal capitalist “solutions” to Greece’s economic “problems” dictated by the major institutions of capitalism in Europe and globally, championed by Germany’s Merkel speaking for them (not the German people), and allowed to thrive through the cooperation or silence of others who watched.