Saturday, April 3, 2021

Growth in class struggle in the US pits workers against the pro-capitalist trade unions





https://www.wsws.org/en/articles/2021/04/03/pers-a03.html




Tom Hall
12 hours ago







There are a number of expressions of a significant growth of the class struggle in the United States, which pose fundamental questions of perspective for the working class.

At Columbia University, 3,000 graduate students are fighting against “COVID-19 austerity” and are demanding decent pay, health and child care benefits. In Worcester, Massachusetts, more than 700 nurses have been on strike for more than four weeks against unsafe staffing ratios in the midst of the coronavirus pandemic. These ongoing strikes were joined this week by important sections of industrial workers, including 1,300 workers at steelmaker ATI in the northeast US and 1,100 miners at coal company Warrior Met in Alabama.


Left: Workers picket at the Hunts Point Market on January 19, 2021 (WSWS Media). Right: Striking Columbia graduate student workers (WSWS Media).



These struggles are a component part of a growing movement of workers internationally, including a one-day general strike against a pay-rise cap in Belgium, a four-day strike by 2,000 Amazon workers in Germany, a strike by 2,000 coal miners in Bosnia and Herzegovina over unpaid wages, and a planned walkout of primary school teachers against school reopenings as the pandemic surges in France.

This is only an initial expression of an enormous growth of social antagonisms throughout the world as a result of the ruling class response to the pandemic. The subordination of public health to the profit interests of the rich has led to more than 2.8 million deaths globally, including more than 560,000 in the United States alone. At the same time, the pandemic was used to orchestrate a historically unprecedented bailout of the rich, which is being followed by a massive restructuring of class relations to force workers to pay for it.

Every struggle of the working class raises directly the reactionary role of the corporatist trade unions, including the AFL-CIO in the US, which serve to suppress the class struggle and, when they cannot avoid a strike, to isolate and defeat it. The “unions” intervene not on behalf of the workers that they falsely claim to represent, but on behalf of management against workers.

At Columbia University, the United Auto Workers, which covers graduate students, is working to keep the strike isolated from graduate students at NYU only a few miles to the south, who are in the same local. Last month, the president of the UAW local revealed that they had planned to shut down the strike before a strike vote at NYU. The UAW is doing nothing to mobilize auto workers behind the graduate students and everything to prevent them from even knowing about the strike.

Meanwhile, the UAW is starving graduate students out on the picket line with a meager $275 weekly strike pay, in spite of the fact that the UAW controls a strike fund of $790 million.

The Massachusetts Nurses Association (MNA), the largest state organization of the National Nurses United with 123,000 members, is isolating the 700 Worcester nurses while not providing any strike pay. Instead, the MNA is forcing nurses to beg for charity: it is running a Venmo account to receive donations from the public to pay for nurses’ living expenses.

As for the ATI and Warrior Met workers, the United Steelworkers and the United Mine Workers are using the tactic of an “unfair labor practice” strike to avoid raising any concrete demands, and to allow the union to shut down the strike as soon as possible under the pretext that management is “bargaining in good faith.”

Over the past year, the executives that operate and control the AFL-CIO have played an absolutely essential role in enforcing the homicidal policy of the ruling elites. The teachers unions—the American Federation of Teachers and the National Education Association—have been instrumental in forcing a reopening of schools against overwhelming opposition from both teachers and parents. Local teacher unions have forced through reopening agreements by forcing teachers to vote on a fait accompli, as in Chicago and Los Angeles, or by not allowing them to vote at all, as in Philadelphia and Detroit.

The United Food and Commercial Workers union and its subsidiary, the Retail, Wholesale and Department Store Union, have kept meatpacking workers on the job even as more than 50,000 in the United States have become infected and at least 286 have died. In the auto industry, the UAW is not only keeping workers on the job but forcing them to work 50, 60 and even 80 hours per week, while covering up all information on the extent of infections and deaths.

The word “union” conjures up images of an organization that defends workers against the deprivations of the companies, or at least one whose fate is somehow bound up with its ability and willingness to defend workers’ standard of living. This, however, bears no relationship whatever to the present unions. They function as labor syndicates, controlled by wealthy executives whose incomes move in inverse proportion to the fate of workers.

Within every major national organization in the AFL-CIO, there are literally dozens, and in some cases hundreds, of bureaucrats at both the national and local levels who earn more than $100,000 per year, many times more than the workers in the unions. Top executives have incomes that place them in the top 5 or even top 1 percent of income earners in the US.

Stuart Appelbaum, the president of the relatively small RWDSU, which is campaigning for recognition at Amazon, made $344,464 last year, and secretary treasurer Jack Wurm made $324,022. In the RWDSU national office, there are 29 staffers who “earned” more than $100,000 last year, and the union spent more than $6 million on salaries for the national office alone.

Randi Weingarten of the AFT made $564,236 in total compensation for the fiscal year ending June 2019, according to the AFT’s IRS filings. The national office received more than $253 million in receipts and spent more than $238 million, including $43.75 million on salaries and zero dollars on strike benefits last year. Fully 234 people in the AFT national office alone made more than $100,000 during the union’s last reporting period, and 28 made more than $200,000.

The Teamsters union has more than 200 officials on its payroll making more than $100,000 a year, and ten making more than $200,000, including President James Hoffa ($387,000).

As the unions’ dues base has continuously shrunk as a result of their own betrayals, the executives have resorted to control of strike funds, pension funds and even ownership of corporate stock in order to finance and supplement their income. This directly ties the financial status of the organizations and the executives who control them to the profitability of corporate America and the performance of the stock market. They fear a movement of the working class not least because it would threaten their own financial interests.

The union bureaucracy has shared in the looting operation carried out by Wall Street during the pandemic. According to the UAW’s latest federal financial filings, for example, its assets increased by $31 million last year, and the union shelled out tens of thousands of dollars for trips to resorts and casinos for its top bureaucrats, hundreds of whom earn more than $150,000 per year. In recent years, the UAW has been exposed as an organization run by corrupt gangsters who steal workers’ dues money and accept bribes from the companies in exchange for ramming through concessions contracts.

The unions are emerging more and more as a critical instrument of bourgeois statecraft. The unprecedented intervention into the unionization campaign at Amazon by Biden and the Democrats, and even right-wing Republican Marco Rubio, reflects the intense fear within ruling circles of the growth of the class struggle, and their calculations that this can be blunted by putting workers under the guardianship of the AFL-CIO and byzantine US labor law.

Under conditions of growing commercial and military conflict between the US and its rivals China and Russia, the unions are viewed as a means of tying the working class to the capitalist state and its war preparations.

This year is the fortieth anniversary of the betrayal by the AFL-CIO of the PATCO air traffic controllers, who were fired by President Ronald Reagan in a deliberate provocation. The attack on the PATCO workers was preceded by an agreement from the AFL-CIO that it would oppose any broader mobilization of the working class to defend them. This was followed by a series of struggles that were systematically isolated and defeated with the collaboration of the unions. This was a key turning point, not just in the US but around the world, in the complete integration of the unions into the structure of corporate management.

The expansion and unification of the struggles of the working class requires the formation of rank-and-file factory and workplace committees, completely independent of the pro-capitalist trade unions. Such committees are the form through which workers can advance their own demands, including emergency measures to stop the coronavirus pandemic, an end to the unsafe reopening of schools and workplaces, with full compensation for workers and small businesses.

The World Socialist Web Site and the Socialist Equality Party will do everything in our power to promote and assist in the establishment of independent workers’ organizations, connecting the growth of the class struggle to a socialist political perspective and program. We urge workers interested in establishing such committees to contact us today.










Financial fictions: the old ones




by michael roberts



I must declare an interest. In days of old, many moons ago, I worked for an investment consultancy that advised Bill Hwang, the owner of Archegos, the ‘family office’ hedge fund that recently collapsed leaving $20bn owed to two big banks, Credit Suisse and Nomura.

Bill Hwang

Hwang was then a ‘Tiger cub’, someone that veteran hedge fund manager, Julian Robertson of the pioneering Tiger hedge fund showed favour on with ‘seed’ investment capital. After leaving Tiger, Hwang struck out on his own back in 2001 to great success. But then there was the first scandal when in 2013 Hwang was barred from the US investment business. Authorities alleged that, as part of an insider-trading scheme, his Tiger Asia Management hedge fund had violated promises it made to some of the world’s most powerful investment banks.

But no matter, Hwang, a pastor’s son and deeply religious, soon re-invented himself to do God’s work’ in financial speculation. Hwang has credited his faith with helping him get through the difficult times. After Tiger Asia’s demise, he said that he had listened to recordings of the Bible for hours.
https://thenextrecession.wordpress.com/2015/02/16/doing-gods-work-again/

On getting God’s word, he set up what is called a ‘family office’, Archegos Capital Management, and eventually built up its trading positions running into the tens of billions of dollars with Wall Street banks, including some of the ones his old firm was accused of cheating. Hwang’s downfall came last week when he was unable to meet margin calls on derivatives trades, known as equity swaps, that he had struck with several investment banks. These instruments gave speculators the option to gain from stock positions without having to own the underlying shares himself. As Marx put it some 150 years ago in Capital, “Profit can be made purely from trading in a variety of financial claims existing only on paper…. Indeed, profit can be made by using only borrowed capital to engage in (speculative) trade, not backed up by any tangible asset.”

It seems that Hwang had borrowed billions of swaps from different banks to maximise his ‘leverage’ in betting on the stock market, without telling each bank how much he had borrowed. The Archegos Capital debacle has exposed the hidden risks of the lucrative but opaque equity derivatives business through which banks empower hedge funds to make outsize bets on stocks and related assets. “We have a fundamental problem in the reporting of holdings of synthetic equity that is not secret and is not new,” said Tyler Gellasch, a former SEC official and executive director of Healthy Markets, an advocacy group. “If there are five different banks providing financing to a single client, each bank may not know it, and may instead think it can sell its exposure to another bank if they run into trouble — but they can’t, because those banks are already exposed.”

When Archegos’ bets went south, Hwang could not meet his commitments to these banks and several were left holding the baby. As Marx said in Capital, “In every stock-jobbing swindle everyone knows that some time or other the crash must come, but everyone hopes that it may fall on the head of his neighbour, after he himself has caught the shower of gold and placed it in safety.” In this case, Goldman Sachs and Morgan Stanley got out of Whang first and Credit Suisse and Nomura did not.

The Archegos story is an old-style financial meltdown. Yes, the financial instrument involved, equity swap derivatives, is a new form of financial asset (or what Marx called ‘fictitious capital’), invented in the last 25 years. And the setting up of a ‘family office’, which is not subject to the same financial regulations (such as they are) for modern hedge funds, has become a new way of avoiding scrutiny. Hedge funds are speculative financial vehicles basically for betting (with mostly borrowed money) on the movement in the prices of stocks, bonds, commodities, and on the ‘derivatives’ of these ad infinitum. Betting companies when advertising on TV must keep saying ‘please bet responsibly’, as the regulators demand (with little effect, of course). But with ‘family offices’, usually funded by mega-rich global family fortunes, it’s even worse. There are no controls or warnings at all.

In a report issued a year ago, business school Insead noted that the number of single family offices had grown by 38 per cent between 2017 and 2019, to reach more than 7,000. Assets under management stood at some $5.9tn in 2019, the report estimated. That compares with $3.6tn in the global hedge fund industry, according to HFR. These ‘family offices’ can do what they want with their assets, without regulation. Rich families place a growing share of their wealth in these types of structures. On average, they control assets worth $1.6bn apiece, according to another 2020 study by UBS, and a handful can stretch into hundreds of billions of dollars. Typically, each family office has two or three offices, often in hubs like Singapore, Luxembourg and London. Chief executives are paid something in the order of $335,000 a year, according to the Insead report.

In the Archegos example, it seems that only the mega investment banks have suffered and not the man and woman in the street. So we may have no sympathy for them. But indirectly, we all get hit because banks are using funds, also often borrowed, to speculate in this way rather than providing a proper banking service for people. Banks lend with strict conditions on mortgages or loans to small businesses, but it seems with no control at all to the likes of Archegos, where banks can make big money if all goes well. But as one equity derivatives trader put it, equity total return swaps are “a classic case of picking up nickels in front of a steamroller… You can pick up those nickels all day. That steamroller moves pretty slowly. But if you trip, boy, do you get run over.”

In the case of the Woodford financial scandal in the UK, there has been a direct hit to people in the ‘real world’. It is more than 18 months since the implosion of Neil Woodford’s investment fund business sparked the biggest British investment scandal for a decade. More than 300,000 individuals who entrusted their hard-earned savings to the famed ‘stock picker’ are still waiting to recoup the money. Many have had to delay retirement after nursing tens of thousands of pounds of losses. The UK’s Financial Conduct Authority, the supposed financial regulator, failed miserably to spot the Woodford crash. Woodford was once lauded as “the man who can’t stop making money” and “Britain’s Warren Buffett”. But great stock speculator was forced to suspend trading in his £3.7bn flagship Equity Income fund after failing to cope with a surge of investors reclaiming their cash. Investors stand to lose up to £1bn — more than a quarter of the fund’s value at suspension.

Neil Woodford

Then there is Greensill. This was a ‘fintech’ bank set up by former Morgan Stanley and Citibank executive, Lex Greensill. It specialised in 'supply-chain financing", ie buying the invoices of companies owed money by overseas suppliers at a discount, to collect the debts later at a profit. Supply chain financing is just a fancy modern name for the age-old practice of factoring, whereby suppliers sell at a discount the debts their customers owe them to a financier who collects the full amount in due course. Lex Greensill’s revolutionary innovation was to realise that these debts could be packaged into investment funds — much as the big investment banks turned subprime mortgages into securities before the 2008 financial crisis.

Greensill took deposits to invest in its apparently lucrative operation from companies and local councils, offering high rates and finding funds and loans for clients when big banks would not lend. It sprouted fast and took on exposure in loans worth $143bn by 2019 with ten million customers. In particular, it provided funding for metals magnate Sanjeev Gupta, who owns the third biggest steel compnay in the UK.

Sanjeev Gupta

But Greenshill went bust because it could no longer find sufficient financing for its ever-expanding loan commitments and high deposit rates. Gupta's steel workers could now lose their jobs and German local councils could take a $500m hit.

The scandal is still unfolding as it seems Greensill never had sufficient funding to take on the huge liabilities (debts) that the likes of Gupta’s steel companies had. Worse, it also seems that Gupta’s companies were using invoices to raise loans from Greensill that were issued by other parts of the corporate complex – in other words, claiming potential receipts as collateral to Greensill that were really debts owed by other parts of the company! Meanwhile Gupta’s group company was receiving state-backed emergency Covid loans to tide its businesses over during the pandemic. Thus Gupta completed the purchase of a £42m London townhouse. Gupta is now believed to be in Dubai. The UK government under Boris Johnson may well be forced to ‘nationalise’ Gupta’s Liberty Steel to save the business. It has drawn up a contingency plan to run Liberty Steel using public money while searching for a buyer. So this financial meltdown will be resolved with the British public paying up, similar to how the Treasury supported British Steel in 2019 at a cost to taxpayers of nearly £600m.

So nothing has changed from when Marx wrote about “a new financial aristocracy, a new variety of parasites in the shape of promoters, speculators and simply nominal directors; a whole system of swindling and cheating by means of corporation promotion, stock issuance, and stock speculation.”

In the rise of finance, “All standards of measurement, all excuses more or less still justified under capitalist production, disappear.” …. since property here exists in the form of stock, its movement and transfer become purely a result of gambling on the stock exchange, where the little fish are swallowed by the sharks and the lambs by the stock-exchange wolves.

What is new are the forms of these swindles. There has been a huge rise in what is called ‘shadow banking’, ie lending and funding by non-banks (NBFI), which has expanded hugely since the end of the GFC and is now nearly half of all financial 'assets'. Our new financial moralist, former Bank of England governor, Mark Carney, warns that : “more than £20 trillion of assets are held in funds that promise daily liquidity to investors despite investing in potentially illiquid underlying assets.” Carney reckons that funds like those run by the disgraced manager Neil Woodford “are built on a lie and could pose a threat to the global economy. These funds are holding assets that are hard to sell in a hurry – while allowing investors to take their money out on demand – are a mounting risk to the financial system.”
https://thenextrecession.wordpress.com/2021/03/15/mark-carney-value-or-price/

https://www.fsb.org/.../global-monitoring-report-on-non.../

Back to Marx here. “The two characteristics immanent in the credit system are, on the one hand, to develop the incentive of capitalist production, from enrichment through exploitation of the labour of others, to the purest and most colossal form of gambling and swindling.” So the finance sector carries on just as before, engaging in speculation and regulators cannot and do not stop them.
https://thenextrecession.wordpress.com/2018/10/06/regulation-does-not-work/

As global stock markets hit new all-time highs and central banks continue to provide almost unlimited supplies of credit money into the financial sector, in the second part of this discussion of financial meltdowns, I shall review some new financial fictions and their inevitable meltdowns.




Friday, April 2, 2021

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https://www.youtube.com/watch?v=O3YEjuWcqMo&ab_channel=MIgardener




Derek Chauvin Trial Day 3

 

https://www.youtube.com/watch?v=nA539yFZ_M8&ab_channel=FreeSpeechTV




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https://www.youtube.com/watch?v=gSYb-j0jpq8&ab_channel=TeleSUREnglish




Online College: Now With 50% More Injustice!

 

https://www.youtube.com/watch?v=bsm7GfkGSz8&ab_channel=act.tv




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https://www.youtube.com/watch?v=nxANthQRjtg&ab_channel=TheHumanistReport