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A massive wave of layoffs was announced yesterday by 12 major US corporations, including Caterpillar, General Motors, Home Depot, Sprint Nextel and Pfizer. Microsoft also announced its first-ever mass layoffs of 5,000 workers. Overall, more than 75,000 jobs are being cut from the workforce after Unemployment levels were reported as 7.2% in December, the highest level in over 16 years, with no end to the bleeding in sight.
As more and more workers fill the unemployment rolls, it’s time to ask: where will future jobs come from? While government and corporate bigshots plan yet another “economic stimulus” and bailout of the banks, what long-term jobs can we realistically create right now?
Lots of answers present themselves if we look through the lens of peak oil, and start replacing our oil-based economy with a people-based economy. Instead of relying on greenhouse gas-producing fossil fuels, we can tap into the power of human labor, which happens to be our greatest renewable resource.
Certainly there is a need to employ millions to weatherize homes and build and install solar panels and wind turbines (which Obama may address), but there is also a huge need to re-tool Detroit automakers to STOP producing gas-guzzling individual cars, and start making buses, trains and other forms of public transit. Bicycles are also desperately needed, so we need workers to build them and more to repair them too.
We also need lots more doctors and nurses if we make health care universally available, and social workers and therapists to help deal with the psychological trauma our population has suffered from militarism and soulless consumerism. Since many of these jobs require education and training, we need to hire lots more teachers, and we also need education to be a lot more affordable to so more people can access these kinds of careers.
Perhaps the largest gains in the job sector can be achieved by shifting food production away from mega-scale agribusinesses and fossil-fuel intensive monoculture and factory farms, towards community-based, local, organic, family farming and free-range livestock raising. By breaking up the huge corporate farms into family-size and community-size plots, we can repopulate rural America (and stop suburban sprawl), produce better, healthier food, respect animal rights, and create millions of new landowners. Simultaneously we can follow the example of Cuba and turn our blighted inner-cities into gardens, by utilizing permaculture and organic community-run agriculture, which would reduce crime and poverty in our decaying urban areas, bring quality food to places currently plagued by malnutrition, and create millions upon millions of rewarding and meaningful jobs.
How will we finance it? Simple. Disassemble the huge financial firms and multinational corporate banks whose greed caused this economic crisis and create thousands of local banks and credit unions, run by people in the community (even more jobs!) Taxing the rich would help a lot too, and we can cut tons of wasteful government spending on things like the wars in the Middle East, excessive prisons, and nuclear, biological and chemical weapons. The money is right there, we just need to redirect it to things that actually help people instead of killing them.
This of course requires a revolutionary change in the economic and political structure of the United States, which means average people like you and me having control over the decisions affecting our lives, instead of remaining at the whim of wealthy elites who in the current crisis have shown themselves unable to run a lemonade stand, let alone the global economy.
[alex]
Deluge of layoffs hits U.S. economy
January 27, 2009
By Jerry Hirsch and Maura Reynolds
Scott Olson, Getty Images
A worker walks between Caterpillar earth-moving equipment at a road construction site near Joliet, Ill. The company has announced that it will cut nearly 20,000 jobs as the recession reduces demand for its products.
Companies including Home Depot, Caterpillar, Pfizer and Sprint plan to cut nearly 60,000 jobs, adding urgency to the need to agree on a stimulus plan.
U.S. companies slashed nearly 60,000 jobs Monday, adding impetus to the Obama administration’s efforts to reach agreement on a plan to pump $825 billion into the economy over a two-year period.
But it’s unclear whether even that massive influx of funding and tax cuts would be enough to get companies hiring again in the near term.
The cuts by firms including Caterpillar, General Motors, Texas Instruments, Home Depot, Sprint Nextel and Pfizer brought the total of jobs shed so far this month to 187,550, more than November or December and well over double the number of January 2008, according to employment firm Challenger, Gray & Christmas Inc.
Analysts believe that Obama’s strategy of pouring money into state and local governments could prevent layoffs and furloughs of public sector employees, including teachers, police officers and other government workers.
Economists have estimated that the plan will protect or create 3 million to 4 million jobs in the next two years.
But the U.S. economy lost 2.6 million jobs last year and could lose 2 million more during the first half of this year. Read the rest of this entry »
“The Tyranny of Oil: The World’s Most Powerful Industry and What We Must Do to Stop it”
by Antonia Juhasz
2008 HarperCollins
Ever wondered why the US government spends trillions of dollars to launch massive wars against Middle Eastern nations that have never attacked us, but refuses to do absolutely anything about the ongoing climate crisis? This book is for you.
The Tyranny of Oil is an exposee of “Big Oil”, meaning Exxon-Mobil, Chevron, BP, ConocoPhillips, and Royal Dutch Shell, the largest oil corporations in the world (and some of THE largest corporations in the world). The book exposes how these enormous oil octopi have gained virtually total control over the US government, and use their money and political power to make big profits at the expense of the public and the planet. (For example, Exxon Mobil in 2003 posted the largest profits of any corporation in history, then proceeded to beat that record each of the next 5 years).
It all starts with the origin of Big Oil, the mother, Standard Oil. Juhasz stresses the importance of monopolies and corporate mergers, in a sense missing the deeper analysis of capitalism, but nevertheless we come to understand how enormous companies wielding enormous profits can and do undermine democracy.
The book progresses to tell a story about Big Oil’s development and control over the government agencies that are supposed to be regulating it, and finally Big Oil’s plans for the future (War and Trashing the Planet, basically), before an inspirational chapter on What We Can Do. (There’s also a shoutout to SDS here and to our No War No Warming action in DC last year! Cool!)
This is essential reading for all US citizens, because if you aren’t familiar with the concepts she lays out, you frankly have no understanding of the country you live in. Environmental racism, corporate lobbyists and corrupt government agencies, the criminal behavior of Cheney’s Energy Task Force, deregulation and Enron-style fraud, tar sands, and the list goes on.
My only major complaint of the book was the virtual silence on the looming and imminent reality of Peak Oil and how this will transform everything. Juhasz does recognize the scarcity of oil and the likelihood of oil peaking, but chooses to essentially overlook its importance, instead blaming oil companies and speculators for driving up the cost of oil.
This is not just a minor quibble, because the BIG TRUTH is that we’re not just in a struggle against Big Oil, we’re in a struggle against capitalism, and it’s a fight that is reaching perhaps its final act. Peak Oil will challenge the dominant for-profit institutions of power, and can create an opening for social justice activists and organizers to push for much more radical change than appears possible within the current system. Nevertheless, this is probably a subject for another book (mine!), and Juhasz treads on steady ground by appealing to a more mainstream audience and demonizing the oil companies exclusively. This is a very effective book, highly recommended!
Finally, my favorite quote (pg. 325):
“As Paul Wolfowitz said in 1991, ‘The combination of the enormous resources of the Persian Gulf, the power that those resources represent – it’s power. It’s not just that we need gas for our cars, it’s that anyone who controls those resources has enormous capability to build up military forces.'”
Two days before he published this article, David Graeber spoke at the People’s Forum in DC, which was organized by DC SDSers as part of Global Justice Action. The People’s Forum ran simultaneously while the G20 met in DC to save capitalism, because capitalism isn’t in crisis – capitalism is the crisis. The activities included a brainstorming session to explore “What Comes After Capitalism?” and a celebratory “Funeral for Capitalism” where the below pictures were taken. [alex]
At the "Funeral for Capitalism" - photo by Jake Cunningham
Hope in Common
David Graeber
Originally published by InterActivist Info Exchange, November 17, 2008.
We seem to have reached an impasse. Capitalism as we know it appears to be coming apart. But as financial institutions stagger and crumble, there is no obvious alternative. Organized resistance appears scattered and incoherent; the global justice movement a shadow of its former self. There is good reason to believe that, in a generation or so, capitalism will no longer exist: for the simple reason that it’s impossible to maintain an engine of perpetual growth forever on a finite planet. Faced with the prospect, the knee-jerk reaction—even of “progressives”—is, often, fear, to cling to capitalism because they simply can’t imagine an alternative that wouldn’t be even worse.
The first question we should be asking is: How did this happen? Is it normal for human beings to be unable to imagine what a better world would even be like?
photo by Christa H
Hopelessness isn’t natural. It needs to be produced. If we really want to understand this situation, we have to begin by understanding that the last thirty years have seen the construction of a vast bureaucratic apparatus for the creation and maintenance of hopelessness, a kind of giant machine that is designed, first and foremost, to destroy any sense of possible alternative futures. At root is a veritable obsession on the part of the rulers of the world with ensuring that social movements cannot be seen to grow, to flourish, to propose alternatives; that those who challenge existing power arrangements can never, under any circumstances, be perceived to win. To do so requires creating a vast apparatus of armies, prisons, police, various forms of private security firms and police and military intelligence apparatus, propaganda engines of every conceivable variety, most of which do not attack alternatives directly so much as they create a pervasive climate of fear, jingoistic conformity, and simple despair that renders any thought of changing the world seem an idle fantasy. Maintaining this apparatus seems even more important, to exponents of the “free market,” even than maintaining any sort of viable market economy. How else can one explain, for instance, what happened in the former Soviet Union, where one would have imagined the end of the Cold War would have led to the dismantling of the army and KGB and rebuilding the factories, but in fact what happened was precisely the other way around? This is just one extreme example of what has been happening everywhere. Economically, this apparatus is pure dead weight; all the guns, surveillance cameras, and propaganda engines are extraordinarily expensive and really produce nothing, and as a result, it’s dragging the entire capitalist system down with it, and possibly, the earth itself.
photo by Christa H
The spirals of financialization and endless string of economic bubbles we’ve been experience are a direct result of this apparatus. It’s no coincidence that the United States has become both the world’s major military (”security”) power and the major promoter of bogus securities. This apparatus exists to shred and pulverize the human imagination, to destroy any possibility of envisioning alternative futures. As a result, the only thing left to imagine is more and more money, and debt spirals entirely out of control. What is debt, after all, but imaginary money whose value can only be realized in the future: future profits, the proceeds of the exploitation of workers not yet born. Read the rest of this entry »
Now I hope people don’t see this article as ‘support for the Soviet Union’ or something ridiculous like that, but I think this is a very insightful and amusing article, based on a powerpoint presentation. The question is, was the USSR more prepared for the economic collapse it suffered than the US is for the collapse it will soon suffer? Orlov lived through the former and seems to think that it was.
Also note that I strongly disagree with his recommendation to abandon politics – he’s right that politicians are swine but i think he’s wrong in overlooking people’s ability to build a resistance movement that can make real changes to our society, despite politicians best efforts to derail it. So with that, enjoy the article! [alex]
Closing the ‘Collapse Gap’: the USSR was better prepared for collapse than the US
by Dmitry Orlov
Originally published be Energy Bulletin, December 4, 2006.
Good evening, ladies and gentlemen. I am not an expert or a scholar or an activist. I am more of an eye-witness. I watched the Soviet Union collapse, and I have tried to put my observations into a concise message. I will leave it up to you to decide just how urgent a message it is.
My talk tonight is about the lack of collapse-preparedness here in the United States. I will compare it with the situation in the Soviet Union, prior to its collapse. The rhetorical device I am going to use is the “Collapse Gap” – to go along with the Nuclear Gap, and the Space Gap, and various other superpower gaps that were fashionable during the Cold War.
Slide [2] The subject of economic collapse is generally a sad one. But I am an optimistic, cheerful sort of person, and I believe that, with a bit of preparation, such events can be taken in stride. As you can probably surmise, I am actually rather keen on observing economic collapses. Perhaps when I am really old, all collapses will start looking the same to me, but I am not at that point yet.
And this next one certainly has me intrigued. From what I’ve seen and read, it seems that there is a fair chance that the U.S. economy will collapse sometime within the foreseeable future. It also would seem that we won’t be particularly well-prepared for it. As things stand, the U.S. economy is poised to perform something like a disappearing act. And so I am eager to put my observations of the Soviet collapse to good use.
Slide [3] I anticipate that some people will react rather badly to having their country compared to the USSR. I would like to assure you that the Soviet people would have reacted similarly, had the United States collapsed first. Feelings aside, here are two 20th century superpowers, who wanted more or less the same things – things like technological progress, economic growth, full employment, and world domination – but they disagreed about the methods. And they obtained similar results – each had a good run, intimidated the whole planet, and kept the other scared. Each eventually went bankrupt. Read the rest of this entry »
On President-elect Barack Obama’s first trip to the White House yesterday to meet privately with his predecessor, lame duck George W. Bush, reportedly the first and most pressing message Obama delivered to the man in charge was “bail out General Motors.”
Cartoon by The Rag Blog
The American taxpayers are sick and tired of their money being doled out to corporate crooks like the carbon-polluting, oil-guzzling auto industry, or banks like AIG who apparently weren’t satisfied by the first two bailouts and now want another. (They apparently spent too much of their last check on trips to the spa.)
Is this really Obama’s highest priority? Giving public money to private companies that will use it to pollute the planet?
If YOU had the opportunity to sit down with President Bush for an hour and have him actually listen to you, what would YOU ask him to do?
Why not instead bail out homeowners by ending foreclosures to keep people in their houses?
Why not bail out the poor, sick, and elderly, by instituting single-payer universal health care like every other industrialized nation does?
Why not bail out Iraqis, military families and soldiers by pulling U.S. forces out of Iraq and ending a bloody occupation? (or Afghanistan, or the 100+ countries where the US military is stationed)
Why not bail out human rights by ending torture, closing Guantanamo and allowing all prisoners a trial by jury?
Why not bail out civil rights by ending anti-immigrant raids and the criminalizing of immigration?
Why not bail out students, who are suffering from the greatest debt crisis in history as education becomes increasingly unaffordable?
Why not bail out the planet, by investing heavily in renewable energies controlled by local communities, urban gardens, home weatherization and create 5 million new Green Jobs?
Barack, if you’re going to be a president worthy of the immense praise and expectation placed on you, you’re going to need to stop palling around with terroristic industry and corporate lobbyists, and listen to the people.
[alex]
Sources: Obama pressed Bush for auto industry bailout
Originally published by CNN, November 11, 2008
Jessica Yellin, Candy Crowley, CNN’s Ed Henry
(CNN) – At their private Oval Office meeting on Monday, President-elect Barack Obama urged President Bush to support billions of dollars in aid for the struggling auto industry during the upcoming lame-duck session of Congress, according to three officials briefed on the meeting.
The officials said Bush privately expressed skepticism about taxpayer money for automakers on the heels of a string of government bailouts for other industries, and the president also urged Obama to help push through a free trade pact with Colombia Read the rest of this entry »
[There are many articles (including one I wrote in college), and even whole books written about Petrodollars – the way that US dollars dominate the world economy by their crucial involvement in all global oil trades. This just happens to be a very clearly written and accessible essay, so I’m reprinting it despite slightly out-of-date numbers. The extent to which the fragility of petrodollar hegemony affects US foreign policy is probably the biggest question mark, but it seems plausible that the much-threatened aggression against Iran has a lot to do with that country’s moves to abandon the dollar for their oil trades. – alex]
Oil prices and the dollar
C. P. Chandrasekhar
Jayati Ghosh
Originally published by Business Line, February 26, 2008.
| The depreciation of the US dollar has been closely bound up with the movement of oil prices, as world oil trade is typically denominated in dollars. Yet this relationship may now be under threat as the dollar continues to depreciate and the US economy tips into recession. In this edition of Macroscan, C. P. Chandrasekhar and Jayati Ghosh examine how oil prices have changed with different numeraires, and consider the implications for the future of the oil-dol lar nexus. |
The relationship between oil and the US dollar has been at the heart of the way international economic relations have been organised for more than half a century.
International capitalism has relied on the US dollar as the basic reserve currency, and has therefore granted it an essential degree of stability for several decades despite the large external deficits run by the US and the periodic swings in its valuation in currency markets.
More than half of aggregate world exports are denominated in dollars; more than 80 per cent of all international currency transactions similarly involve dollars.
Loans made by the IMF and other multilateral institutions are denominated in dollars. More than 60 per cent of the foreign exchange reserves held by central banks of all countries are in dollar assets.
This has obviously meant huge advantages for the US. It has allowed the US economy to benefit from access to imports that can effectively be paid for simply by printing dollars, and has therefore allowed the US to run enormous current account deficits for prolonged periods. It has encouraged the rest of the world to finance these deficits by providing its savings to be held in US or dollar-denominated financial assets, to the point that all the developing regions of the world are also building dollar reserves that directly or indirectly find their way to the US economy.
Dollarisation of oil markets
A key feature of this entire process has been the dollarisation of world oil markets. Oil is the central commodity of industrial capitalism, absolutely essential for the production of essential and widely used goods. All industrial economies, and most developing ones, would grind to a halt with even a moderate disruption of oil supplies.
Most of the world oil trade has operated and continues to operate in dollars, even when the US is not the trade partner. Oil prices are defined in dollars for most oil exporters. As a result, oil importing countries also pay in dollars. The oil-exporting countries accumulate dollar reserves, which have been preferentially invested back in the US because of the zero currency risk involved in this.
Indeed, this recycling of petrodollars has been very significant as a source of finance for US trade deficits in several periods, including in recent times. Other countries also hold dollars for future oil purchase.
The dramatic increase in the price of oil in the past few years could be argued to have accentuated this tendency. As Chart 1 indicates, oil prices have increased dramatically in dollar terms especially from 2003, going up by nearly 2.5 times between 2003 and 2007.
This has obviously contributed very significantly to the wealth of oil exporters, and allowed them to generate balance of payments surpluses and build foreign exchange reserves, which have then been invested dominantly in dollar assets in US markets.
However, this is also the period that the US dollar has been depreciating, especially with respect to some of the other major currencies such as the euro and the Japanese yen. As a result, the change in oil prices has been less striking in terms of these currencies than in terms of the dollar.
The currency factor
Read the rest of this entry »
I found this letter to the editor in the Scotland Herald pretty spot-on with its analysis, so I thought I’d repost it. Worth reading, even without the article he’s responding to. [alex]
Ian Bell’s superb analysis that we are undergoing a “paradigm shift” in economics is timely and insightful (October 25). This is potentially a wonderful time in human history. As someone who has read Marx, Mr Bell recognises the inevitable consequence of capital accumulation as paper “value” in a system in which money is issued as debt, at interest.
Thus finance capital expands exponentially in the hands of fewer and fewer people desperately trying to increase their individual net worth through calls on the product of the real economy, which has to grow to meet these.
In contrast, the real economy can grow only as far and as fast as increasing productivity and technological innovation will allow, resulting in what the great US Green economist Herman Daly calls the “fallacy of exponentially increasing natural resource productivity”, whereby mainstream economics proclaims resource infinity – a scientific absurdity – and treats depletion and pollution as joint externalities.
Thus the desperate search for economic rents in all areas of life (the encroachment of the private into the public under the Thatcher/Reagan voodoo economics of the Chicago school), and a succession of speculative bubbles. Mr Bell also recognises this as the consequence of class war, whereby the owners of capital retain an outrageously unfair proportion of surplus value. Proof that the class war is still alive: bailouts for the owners of capital, and recapitalisation of destitute banks from public funds, the usual expected remedies now being applied: Some pseudo-Keynesian activity used to stimulate demand (but the owners of capital will not let this go too far). There will be some winners from the fire sales of assets (Citicorp and JP Morgan spring to mind) and there will be great anger and hardship.
But the probability that this will work this time is limited by two things: we are likely at peak oil, thus destroying any prospect of growth in the real economy, and global warming plus biofuel production is increasing basic food prices through scarcity of food and water, and finity is taking care of all other basic resources. Meanwhile, the expansion of western economies (demanded by finance capital) is limited largely to the military-industrial (the civil real economy having been exported to points east to exploit cheaper labour there). So the Keynesian option is seriously limited, except by war, which is problematic since present wars are being financed by the Saudis and Chinese purchase of T-bonds – and these are going badly – but sadly not impossible (read some of Joseph Biden’s speeches and quiver).
The finance capitalist paradigm is broken, probably beyond repair. For students of Marx, there is absolutely nothing surprising about this, the only surprise being that anyone is surprised. Indeed, much of this was also understood (but forgotten by his country) by the great Thomas Jefferson, author of the American Constitution, and president: “I believe that banking institutions are more dangerous to our liberties than standing armies.” Well, now we have both – owned and controlled by the same people.
The Marxian analysis is right, to a point. But Marx was a man of his time, and like Adam Smith, who grew up on the nascent Scottish coalfields, saw the “infinite” potential of extraneous hydrocarbon injections as part-liberator of the working class. (Marxism, too, is into “technological fixes”).
This option is no longer open. A recession that reduces consumption in an ecologically challenged world is no bad thing, so long as we share the hardships. The present crisis offers us a new beginning: a move to steady state economics and a system that returns humanity to a balance with the rest of our natural ecology. We have reached the end of the present paradigm; what matters is to choose the right successor. If we don’t? The words of another great US scholar and statesman spring to mind: “This sucker is going down”. For “sucker” read planet.
Dr John O’Dowd, Bothwell.
The End of Capitalism 
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