Even More Republican Hypocrisy – Spending, Earmarks, and Taxes

A nice piece of reporting in USA Today exposes yet another aspect of Republican hypocrisy: with all of McCain’s talk of “reigning in spending,” “cutting taxes,” and “eliminating pork barrel legislation,” it appears as though his running mate has done exactly the opposite during her tenures as mayor of Wasilla and governor of Alaska.

Apparently John McCain lied about Palin not seeking earmarks as governor. In fact Palin “asked Washington for $197 million in earmarks this year, down from $254 million the year before.” As mayor of Wasilla, Palin acquired $27 million in earmarked federal funding – Wasilla had a whopping 5000 residents when Palin was mayor!

On the issue of spending, Palin’s list of expenses make for entertaining reading. According to reporter Ken Dilanian:

As governor, Palin has signed off on $402,000 to study the arctic fox; $154,000 for renovations to three gun clubs and $125,000 for the Alaska Aviation Heritage Museum, state records show. Her budgets have funded $44,500 to spruce up a ski resort, $75,000 for the Arctic Thunder Air Show and $50,000 to improve a Little League field in the Mat-Su Valley near her hometown of Wasilla.

(Sounds just as bad as spending hundreds of thousands on a planetarium in Chicago, no?)

Palin also increased taxes on oil companies – a laudable act that should be mimicked nationwide, but that is now decried by the McCain-Palin campaign as being antithetical to capitalism, perhaps even socialist (gasp!).

Perhaps McCain should have checked Palin’s record against his own campaign platform before her picked her.

The Ignorance and Selfishness of Drilling

gas guzzlerWith the chorus of “Drill baby, drill,” emanating from the halls of the Republican National Convention, Republicans (and to a lesser extent, Democrats) have latched onto what they consider an important election-era economic issue that will draw American votes.

And, as this Pew Research poll shows, they are correct in assuming the utter selfishness and ignorance of Americans.

As a society we seem to balk at the increased price of gas far more than that of milk and vegetables. Our gas guzzling tanks are more precious than food on the table.

So when Karl Rove and his proteges capitalize on such sentiments by announcing oil drilling as a way to lower prices at the pump, Americans rejoice.

polar bearsAnd we stick McCain-Palin signs on our front lawns blissful at the prospect of saving a few hundred dollars a year, some day in the distant future, when all the polar bears and glaciers are gone, when our wallets are empty and our stomachs growling, but our oil executives are fat and rich and our cars purring and gleaming.

First of all, drilling will not lower oil prices – not for a VERY long time. Who says so? The US government. Really. According to the Energy Information Administration, which releases official energy statistics from the government, offshore oil drilling “would not have a significant impact on domestic crude oil and natural gas production or prices before 2030.” Read the whole report here.

Secondly, what we lose as a result of this drilling is far too precious and irreversible. The Natural Resources Defense Council, in an excellent report on the impact of oil drilling on the environment, urges us to rethink this madness: Drilling for oil could seriously damage our oceans, coastal communities and marine life.

“Change to Win” May Do Just That

In my earlier post I expressed the fear that the formation of the new Change to Win labor coalition might split the labor movement so much that in its already weak state it would fragment. It’s impossible to predict one way or the other, but I’m slowly coming around to a more hopeful view and I’ll give my reasons below. First of all, I should re-emphasize that I am somewhat naive and untutored on the US labor movement. But I do believe that an anti-corporate, internationalist domestic polity based on solidarity is a necessary condition for a world order that respects human rights and true democracy, not to mention produces a just and equitable society. The Change to Win coalition promotes this kind of polity, in an institutional setting in which millions of US workers are engaged. That alone should garner the support (or at least the interest) of US progressives.

But of course the real question is: While the coalition works towards building “a movement for working people that can confront and restrain corporate power in both the workplace and the community,” (from the coalition’s Constitution) and ensuring “that global corporations respect [international] workers’ freedom to form unions and negotiate agreements that raise living standards toward their highest level”; and while the coalition works towards ending “Wal-Martization” (“a global phenomenon” for which “a global approach is required,” according to the group’s manifesto)– will the coalition be contributing to the breakup of the already weak US labor movement?

Some say yes, and I focused on that side of things in my previous post. My particular fear came from the statement by Business Week that “a split in the labor movement would be a boon to corporate America.” Clearly, this is a true statement. But I allowed myself to see through corporate eyes, which perceived that trying something different will lead to a split in the movement. This might not be the case at all.

Jonathan Tasini, who operates the Working Life website says that the media are interpreting the formation of the new coalition as a “split” perhaps prematurely and in general are not asking the right questions.

[N]ot a single reporter asked about any of the organizing plans the new coalition has afoot. The answer might have been–we’re still working on that. But, heck, ask the question. Because the media rarely spends this much energy on labor issues, consumers of the information have no context in which to understand the complexities of how the labor movement operates (or doesn’t operate).

Those making the most of the potential split are “16th Street [AFL-CIO headquarters]…, …a small circle of labor leaders and activists, and…the press.” Tasini proposes the following scenario:

[What if] the Change To Win Coalition actually is able to try some interesting campaigns or projects. Maybe one or more unions leaves the AFL-CIO and the coalition evolves into a new umbrella. It should, then, be judged on its success or failure. If it succeeds, workers have more power. If it fails, it goes away or becomes irrelevant. End of story.

Sound worth a try to me.

And it’s not so clear to me that the business community is rubbing its hands with glee at the new coalition’s founding. Tasini published a memo by union-busting law firm Morgan Lewis that warns its clients

It is now likely that next month’s [AFL-CIO] convention will be a watershed event. The Change To Win Coalition unions say they are planning to submit a series of resolutions and constitutional amendments designed to create a labor movement of “real power and true strength” for employees…

What happens next will begin to define the future of the labor movement, and could significantly impact employers. If the Coalition’s members follow through on their threats to disaffiliate from the Federation later this year, employers can expect an increased interest in union organizing. This could be especially true for the nation’s largest non-union employers [read: Walmart]. For employers with existing unionized workforces, this means increased pressure to execute some form of neutrality and card-check recognition agreement. For employers with unions from both competing factions at their facilities, competition for better wages, benefits and other terms and conditions of employment is likely… The last several years also have seen a significant increase in the amount of collaboration between U.S.-based unions and their international counterparts. That collaboration could increase significantly. Finally, more union mergers should be forthcoming.

This is encouraging. What is also encouraging is that this movement to reform or leave AFL-CIO is being led by the SEIU, a union which has had incredible success in recent years, particularly in my home state of California. While overall US union membership has decreased from 35% of the workforce in the 1950s to about 10% today, the SEIU has tripled its membership in the past 25 years. Monday’s LA Times, gave a brief overview of some of the SEIU’s successes. For example, the well-known Justice for Janitors grassroots organizing and solidarity campaign which brought together thousands of poor workers to fight for their rights.

Since taking to the streets of Los Angeles with massive protests in the mid-1990s, …Local 1877 has grown to represent 28,000 janitors throughout the state [of California]. Most have won substantial raises and fully paid family health insurance under new contracts.

Similar campaigns have been waged for workers in hospitals, nursing homes, building security, commercial laundries and tourism — all areas that are likely to expand in the service economy.

Each one started with a carefully considered game plan that examined the strengths and weaknesses of entire industries and the major players in them. The unions then looked for ways to help cooperative employers while pressuring those who resisted in every way they could — working with political and community allies behind the scenes, staging attention-getting public protests, contacting customers and suppliers of targeted employers, running boycotts and sometimes launching well-financed strikes.

The goal typically was to win an agreement from employers to not fight the union’s attempt to sign up members.

Not all efforts have panned out. Faced with rising healthcare costs and intense competitive pressures, and convinced that a union would only add to their burdens, many employers are determined to keep organizers out.

But the campaigns that have succeeded prove that organized labor can grow even in a tough political and economic environment…

It’s possible that the new coalition may succeed where the ponderous AFL-CIO has failed. Rather than splintering unionized employees into two increasingly powerless and adversarial camps, maybe the formation of the new coalition will force the AFL-CIO to change to stay afloat. Regardless, the SEIU has already shown that it can increase the quantity of union members, improve the democratic and grassroots quality of union activism, and build solidarity across borders. These elements of the Change to Win manifesto are prerequisites for a better society at home and a dismantling of the US corporate-imperial juggernaut abroad.

What the Rich Get Out of Debt Relief

What do the rich gain from debt relief?

Not to say that it is bad that the wealthy nations of the world have agreed “to stop demanding payments from 18 of the poorest countries in Africa” (Under the Same Sun), but why did they do it? Why is Paul Wolfowitz on the same side of this issue as Archbishop Njongonkulu Ndungane, the patron of Jubilee 2000? I can think of four reasons.

  1. Popular pressure/it looks good. The rich get to appease a popular movement that has gathered steam for over a decade and appear benificent at the same time.
  2. Subsidies to banking. It looks like part of the debt cancellation plan includes rich governments paying off the creditor institutions (IMF, World Bank, and the African Development Bank). According to the Financial Times,

    The agreement, covering $40bn (£22bn) of debts of 18 heavily indebted poor countries (HIPC) with the World Bank, the International Monetary Fund and the African Development Bank, will cost rich countries $1.2bn a year for the next three years…As part of the weekend deal the industrialised nations promised more resources for the World Bank and African Development Bank for the next three years and made political commitments thereafter.

    This could be a quick way for the banks to get some cash up front, which of course will be re-loaned in due time.

  3. It gives the rich more leverage with the poor. An opinion piece in The Nation (Nairobi) by James Shikwati argues that both debt and debt relief are a kind of assertion of dominance of the poor by the rich.

    Each country is assigned a certain value, for instance, the industrialised counties have the highest value and the poor nations have the lowest value. With this approach, only the wealthy nations can salvage countries that have low value. To validate this argument, poor country elites are normally trained to believe in foreign support as the main way to get out of underdevelopment.

    (Shikwati runs the Inter-Region Economic Network, a group that promotes an interesting mix of neoliberal free market fundamentalism and anti-imperialism.)

  4. Coopting the popular movement. Since the anti-corporate globalization movement has been so successful in using odious debt to highlight financial domination of the poor by the rich, some neo-liberals think that eliminating the debt would take away a major propaganda crutch of the left. (As in, “we cancelled the debt, what more do you want?”)

    The weblog “Exploit the Worker” (this is the real title) by Jonathan Dingel has a very serious and thoughtful piece from the pro-capitalist perspective on why debt forgiveness should be “a free-market manifesto.” Dingel says that,

    Should market liberals fail to prioritize the issue of debt cancellation, anti-globalization activists will retain a powerful weapon in their arsenal, for the problem of indebtedness attracts many compassionate persons to their cause…Diffusing the anti-globalization movement by agreeing with them on common causes would be an excellent way to promote global welfare while preventing the anti-capitalist Left from doing economic damage.

What does the “anti-capitalist Left” want that might do “economic damage”? And who would suffer the damage? I leave it to my readers to figure that one out…

Debt Relief – Should We be Relieved?

The late breaking announcement that the US and UK have agreed on the cancellation of the debt for 18 mostly African countries should be seen as the successful culmination of years of activism. At the same time, it would be foolhardy not to see this as only a small piece of a larger struggle fought by democratic forces against the corporate imperialism of the United States and its allies.

The British government-sponsored Commission for Africa Report blames Africans for most of their problems: “internal factors have been the primary culprit for Africa’s economic stagnation or decline over the past three decades.” Then the report mentions that “external forces have been an important influence too,” including the debt “incurred by dictators…who were supported during the Cold War by the very countries now receiving debt repayment.”

The decision to cancel the debt should be publicized as an admission that the loans were never legitimate, but were given under “odious” circumstances. According to the Christian Science Monitor, “Since the United States has already persuaded other countries to forgive loans made to Iraq under Saddam Hussein, the logic goes, then debts made under other former dictatorships, from Nigeria to the Philippines, deserve similar treatment.”

“We are looking for 100 percent debt cancellation without conditions,” said Marie Clarke, national coordinator of Jubilee USA Network. When the rich aid the poor, however, it is never a case of “no conditions.” In a June 7 press conference with George W. Bush, Tony Blair made it clear that the debt relief package “is a two-way commitment” between “the African leadership” and its benefactors. “What we’re not going to do is waste our country’s money,” he said. Associated Press quotes him as adding, “It’s not a something-for-nothing deal.” White House Press Secretary Scott McClellan said, “We believe that it’s very important that in return for getting this kind of assistance, this debt relief, that those countries need to be moving forward on good governance and transparency and rule of law, and promoting economic growth, free market policies.”

The main instrument that the US uses to enforce “free market policies” in Africa is the so-called “African Growth and Opportunity Act.” Any debt relief for African countries should be seen in the context of this piece of legislation. Among other things, the AGOA is a subtle push to weaken the African textile and apparel industries and force African countries to produce items which do not compete with those made in the US. The AGOA allows unlimited exports of textiles from Africa, provided they are made from fabrics and threads produced in the US, but the Act limits the amount of exports made from fabrics produced in Africa or elsewhere. African-made fabrics will not be allowed at all after 2008. And just in case the African industries get too successful, a “tariff snapback” allows the US to impose tariffs on African textiles “in the event that a surge in imports…causes serious damage or threat …to domestic [US] industry.”

AGOA came online under the Clinton administration, about 8 years before the 2005 expiration on WTO quotas on textile trade. This end of quotas makes it harder for African producers to compete with the mass production abilities of more advanced industries in China, India, and other Asian countries. The US Trade Representative’s 2005 report on AGOA insists that “AGOA-eligible countries must move beyond apparel and diversify their exports to maximize AGOA benefits by producing any of the over 6,000 products eligible for duty-free treatment.” The US is not only dictating economic policy for African nations, but what industries they should shift to.

Meanwhile, apparel manufacturers are cutting wages and firing workers in an effort to stay competitive . In the case of Kenya, according to the East African Standard, “relatively high wages coupled with high-energy costs, …have fast edged out Kenya from the lucrative US market.” This business perspective on Kenyan wages contrasts with the fact that, in the poorly-regulated “Export Processing Zones” set up under AGOA, workers earn as little as $2 a day. The Nation (Nairobi) noted in 2003 that “strikes by Export Processing Zones employees have raised questions about the Government’s stand on labour interests against the need to attract foreign investment.”

If current events are anything to go on, foreign investment is a much higher priority for the Kenyan government than labor interests. The following is from a press release of the Kenyan Association of Manufacturers (KAM):

“Now that the quota is no more, it is important to take steps to reduce the cost of doing business in Kenya by 20% to ensure that there are enough firms located in Kenya to attract buyers from the US,” asserts KAM chief executive, Ms. Betty Maina.

Singling out labour as the highest production cost, the sector is asking the government to freeze ceremonial wage increases announced on Labour Day and be allowed to introduce performance-based piece-rate wages…

The apparel manufacturers add that labour productivity is affected by unprogressive attitude of trade unions that promotes withholding of labour, under-performance and a tendency to seek increased payments through over-times without commensurate productivity.

The Kenyan government recently complied with KAM’s demand and rescinded its annual minimum wage increase:

the [apparel] sector received respite when the finance minister revealed the government has applied the brakes on the annual wage increment, which had threatened to drag the firms to their deathbed. [East African Standard]

In addition the Kenyan apparel sector recently cut 2000 jobs. If I were optimistic, I would hope that the debt relief would free up government money to restore the wage increase and the lost jobs. More realistically the money will probably be used to “reduce the cost of doing business in Kenya by 20%” and accomplish other “free market reforms.”