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Keep socialist blog En Passant going - donate now
If you want to keep a blog that makes the arguments every day against the ravages of capitalism going and keeps alive the flame of democracy and community, make a donation to help cover my costs. And of course keep reading the blog. To donate click here. Keep socialist blog En Passant going. More... (4)

Sprouting sh*t for almost nothing
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My interview Razor Sharp 18 February
Me interviewed by Sharon Firebrace on Razor Sharp on Tuesday 18 February. http://sharonfirebrace.files.wordpress.com/2014/02/18-2-14-john-passant-aust-national-university-g20-meeting-age-of-enttilement-engineers-attack-of-austerity-hardship-on-civilians.mp3 (0)

My interview Razor Sharp 11 February 2014
Me interviewed by Sharon Firebrace on Razor Sharp this morning. The Royal Commission, car industry and age of entitlement get a lot of the coverage. http://sharonfirebrace.com/2014/02/11/john-passant-aust-national-university-canberra-2/ (0)

Razor Sharp 4 February 2014
Me on 4 February 2014 on Razor Sharp with Sharon Firebrace. http://sharonfirebrace.files.wordpress.com/2014/02/4-2-14-john-passant-aust-national-university-canberra-end-of-the-age-of-entitlement-for-the-needy-but-pandering-to-the-lusts-of-the-greedy.mp3 (0)

Time for a House Un-Australian Activities Committee?
Tony Abbott thinks the Australian Broadcasting Corporation is Un-Australian. I am looking forward to his government setting up the House Un-Australian Activities Committee. (1)

Make Gina Rinehart work for her dole
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Sick kids and paying upfront

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Save Medicare

Demonstrate in defence of Medicare at Sydney Town Hall 1 pm Saturday 4 January (0)

Me on Razor Sharp this morning
Me interviewed by Sharon Firebrace this morning for Razor Sharp. It happens every Tuesday. http://sharonfirebrace.com/2013/12/03/john-passant-australian-national-university-8/ (0)

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What’s causing the market mayhem?

The wild plunges of international markets in the past weeks are related to deeper economic and financial problems. Petrino DiLeo and Alan Maass in the US magazine Socialist Worker explain how.

PANIC RETURNED to Wall Street and financial markets worldwide in the first weeks of August. The specter of several new financial crises and fears that the economies of the U.S. and Europe could slump back into recession led to the biggest drop in the U.S. stock market since 2008, and worse than that in other countries.

Many factors are driving the worldwide market mayhem, including the fiasco in Washington over raising the U.S. government’s debt ceiling and the spreading “sovereign debt crisis” in Europe.

But looming behind them all are the deep-seated weaknesses in the world economy more than two years into the “recovery” following the Great Recession–and the failure of the responses to the crisis by the U.S. and other powerful governments.

In the U.S., the bipartisan deal to raise the debt ceiling and head off default–at the cost of draconian budget cuts, and the threat of worse to come for cherished programs like Social Security and Medicare–was supposed to save the world economy, according to the commentators. The “serious people” in Washington and on Wall Street were breathing a sigh of relief, we were told.

But as the deal was passed by both houses of Congresses and signed by Barack Obama, the stock market began a dramatic weeklong fall. One reason for this was anticipation of the downgrading of the U.S. government’s credit rating by the Standard & Poor’s agency. On Friday, August 5, the agency took away the AAA status that classifies U.S. government bonds as among the safest of all investments.

Wall Street wasn’t reacting, as millions of people around the U.S. are, to the drastic scale of the cuts. On the contrary, the credit downgrade reflects the financial elite’s assessment that the deal arranged between Congress and the White House is too modest.

Meanwhile, America’s most powerful political and economic leaders failed dismally to stem the decline.

On Monday, August 8, Barack Obama held a press conference intended to “calm the markets,” but the best he could muster was the claim that the U.S. would always be a “AAA country.” The stock market immediately lost hundred of points off the Dow Jones index.

The next day, the U.S. Federal Reserve released a statement that promised the country’s central bank would keep short-term interest rates at near 0 percent through 2013–likewise designed to demonstrate that policymakers are concerned about weak economic growth. But the stock market fell hundreds more points immediately after the announcement, before rebounding dramatically in the other direction.

Pundits celebrated Tuesday’s overall upswing in the stock market as a sign that the chaos was over. But those gains were wiped out the very next day with another plunge equal to nearly 5 percent of the total value of the stock market, according to the Dow Jones index.

– – – – – – – – – – – – – – – –

BEHIND THE ups and downs, this week’s market roller-coaster ride is a telling sign of how little confidence the ruling class has in the U.S. political elite to come up with answers to the economic crisis.

For their part, the Republicans–always known as the first party of big business–had no hesitation about driving the world to the brink of the economic cataclysm that would have resulted from a default. Barack Obama and the Democrats, meanwhile, pose as “responsible stewards” of the system against the Republican maniacs. But as Obama proved again this week, when it comes to proposals for reviving the economy, they have nothing more than empty rhetoric.

As for the Federal Reserve, the promise to keep interest rates at near 0 percent through 2013 only draws attention to the fact that rates have been this low for years already–with no sign of any hoped-for increase in corporate investment. The Fed has already used virtually every tool it has to counter an economic slump, so its promises to do more of the same don’t exactly inspire optimism.

The same problems exist in Europe in different–and arguably more intractable–forms.

Several European countries–Greece, Portugal, Ireland, Spain and Italy, known collectively as the PIIGS–are facing what’s called a “sovereign debt crisis.” Greece, for example, has a current debt of more than $500 billion for a country of just 12 million people. Each national debt crisis in Europe is exaggerated by the fact that 12 countries share a common currency, the euro.

The European Central Bank and the continent’s chief economic powers, Germany and France, have been arranging bailouts–hundreds of billions in loans, in return for drastic austerity measures that have savaged working-class living standards–for the PIIGS. But each rescue seems to be followed by another, more expensive problem.

And now there are questions about the rescuers. The big drop on the international markets on Wednesday was caused by trouble in France. For one thing, French banks have a lot of loans to Greece and other countries at risk of default. Moreover, the price tag for a worst-case scenario in Europe–where all of the troubled economies, including Spain and Italy, need saving–would be well over $1 trillion. Outlays on that scale would likely push France at least into its own sovereign debt crisis.

The common thread between these problems specific to the U.S. and Europe is the role of governments in dealing with the economy. At one level, the early August turmoil in the financial markets represents the financial world’s vote of no confidence in the various political establishments and their proposals–or lack thereof–to fix the economy. And that’s true whether the governments are run by liberal or center-left parties or by the conservatives.

– – – – – – – – – – – – – – – –

LOOMING BEHIND these immediate factors is the ongoing crisis of the economy on both continents–and the threat that a second leg of the recession could be near.

In the U.S., the Commerce Department’s Bureau of Economic Analysis (BEA) reported at the end of July that the U.S. economy grew at an annualized rate of 1.3 percent in the second quarter of the year–April through June. The BEA also revised its figure for first-quarter growth to a microscopic 0.4 percent. For the full year through the end of June, the U.S. economy grew by just 1.6 percent–an incredibly low figure for a supposed recovery.

What’s more, the BEA revised its statistics from throughout the recession–showing that the downturn was even deeper than previously thought. The new numbers show that at the depth of the recession in the last three months of 2008, economic output fell at an 8.9 percent clip, a downward revision of 25 percent from previous statistics.

And the bad news isn’t limited to looking backwards. Current economic indicators are also throwing up warning signs. The Institute for Supply Management’s (ISM) index of manufacturing activity came in at 50.9 in July–a decrease of 4.4 percentage points from the previous month. Any reading over 50 indicates that the manufacturing sector is expanding, but the index has been falling in recent months and could turn negative. In fact, the ISM’s New Orders Index came in at 49.2–“indicating contraction for the first time since June of 2009,” the ISM reported.

Also, consumer spending dropped in June for the first time in 20 months. And the Small Business Optimism index has fallen for five consecutive months.

Then there’s the employment picture, which remains bleak.

The Bureau of Labor Statistics reported on August 5 that the overall unemployment rate for July dropped to 9.1 percent, down from its cyclical peak of 10.2 percent from October 2009. Yet there has barely been a ripple in the sea of joblessness caused by the Great Recession.

From high point to low point, the total number of non-farm employees in the U.S. shrank by 8.75 million by the time the jobs market bottomed out in February 2010. Since then, that number has risen by 1.9 million–less than one-quarter of what’s needed to make up the loss. At this pace, it could take up to a decade to get back to the previous employment high–assuming the economy doesn’t go back into recession and start shedding jobs again.

And on top of that, the official employment statistics are understated. Anyone who works as little as an hour a week is counted as “employed”–so 8.4 million underemployed workers with part-time jobs, but who want full-time work, are counted as having jobs.

In addition, there are 1.1 million “discouraged” workers and 2.8 million “marginally attached” workers in the job force, but not counted as unemployed. Add those workers into the mix, and the underemployment rate jumps to 16.3 percent. Lastly, there are 6.6 million people who are “not in the labor force,” according to the government, but who want a job–they aren’t counted in any of the government’s statistics.

– – – – – – – – – – – – – – – –

ALL OF this will only be made worse by the relentless drive for austerity demanded by business and accepted by both major political parties in the U.S. According to analysts at JPMorgan Chase, the plans for government cutbacks already in place–not counting the ones hatched in the debt ceiling deal–will knock 0.3 percent off gross domestic product growth in 2011 and 1.4 percent in 2012.

Political leaders ought to be proposing measures to create jobs–most effectively of all, by devoting government funds to projects such as infrastructure redevelopment. But almost no one in Congress will suggest any such thing. Instead, the bipartisan consensus is for cuts, cuts and more cuts, even though this threatens to stifle what little job growth has taken place. And at the state level, the austerity agenda has ruled for years already, whether carried out by Republican union-busters like Wisconsin Gov. Scott Walker or Democratic “friends of labor” like New York Gov. Andrew Cuomo.

The same problem is evident in Europe. Greece, for example, is caught in what’s known as a “debt trap.” The savage austerity measures demanded as a condition of Europe’s bailouts have pitched the country into a deeper recession, which has led to less and less revenue coming back to the government, making the country all the more dependent on further bailouts.

As the Guardian‘s economics writer Larry Elliott wrote:

There is no happy ending to this story. At best, there will be a long period of weak growth and high unemployment as individuals and banks pay down the excessive levels of debt accumulated in the bubble years. At worst, the global economy will be plunged back into recession next year as the U.S. goes backwards and the euro comes apart at the seams. The second, gloomier scenario, looks a lot more likely now than it did a week ago.

Why? Because there is no international cooperation. There are plans for austerity but no plans for growth. Even countries that could borrow money for fiscal stimulus packages are reluctant to do so.

The only “happy ending” has been for corporations and the wealthy. Profits rates have been restored to pre-crisis levels and then some–and corporations are sitting on an unprecedented amount of cash. The net worth of the richest individuals is growing again. No wonder, then, that, luxury consumption is the most dynamic part of the retail sector, according to the New York Times.

Yet these are the very people who are demanding more and more sacrifices from the rest of us in the name of fiscal responsibility.

The stock-market gyrations of August are further evidence of the mayhem of capitalism–a system that demands workers pay, while profits roll in for corporations and Wall Street.

The wild plunges of international markets in the past weeks are related to deeper economic and financial problems. Petrino DiLeo and Alan Maass explain how.

August 11, 2011

PANIC RETURNED to Wall Street and financial markets worldwide in the first weeks of August. The specter of several new financial crises and fears that the economies of the U.S. and Europe could slump back into recession led to the biggest drop in the U.S. stock market since 2008, and worse than that in other countries.

Many factors are driving the worldwide market mayhem, including the fiasco in Washington over raising the U.S. government’s debt ceiling and the spreading “sovereign debt crisis” in Europe.

But looming behind them all are the deep-seated weaknesses in the world economy more than two years into the “recovery” following the Great Recession–and the failure of the responses to the crisis by the U.S. and other powerful governments.

In the U.S., the bipartisan deal to raise the debt ceiling and head off default–at the cost of draconian budget cuts, and the threat of worse to come for cherished programs like Social Security and Medicare–was supposed to save the world economy, according to the commentators. The “serious people” in Washington and on Wall Street were breathing a sigh of relief, we were told.

But as the deal was passed by both houses of Congresses and signed by Barack Obama, the stock market began a dramatic weeklong fall. One reason for this was anticipation of the downgrading of the U.S. government’s credit rating by the Standard & Poor’s agency. On Friday, August 5, the agency took away the AAA status that classifies U.S. government bonds as among the safest of all investments.

Wall Street wasn’t reacting, as millions of people around the U.S. are, to the drastic scale of the cuts. On the contrary, the credit downgrade reflects the financial elite’s assessment that the deal arranged between Congress and the White House is too modest.

Meanwhile, America’s most powerful political and economic leaders failed dismally to stem the decline.

On Monday, August 8, Barack Obama held a press conference intended to “calm the markets,” but the best he could muster was the claim that the U.S. would always be a “AAA country.” The stock market immediately lost hundred of points off the Dow Jones index.

The next day, the U.S. Federal Reserve released a statement that promised the country’s central bank would keep short-term interest rates at near 0 percent through 2013–likewise designed to demonstrate that policymakers are concerned about weak economic growth. But the stock market fell hundreds more points immediately after the announcement, before rebounding dramatically in the other direction.

Pundits celebrated Tuesday’s overall upswing in the stock market as a sign that the chaos was over. But those gains were wiped out the very next day with another plunge equal to nearly 5 percent of the total value of the stock market, according to the Dow Jones index.

– – – – – – – – – – – – – – – –

BEHIND THE ups and downs, this week’s market roller-coaster ride is a telling sign of how little confidence the ruling class has in the U.S. political elite to come up with answers to the economic crisis.

For their part, the Republicans–always known as the first party of big business–had no hesitation about driving the world to the brink of the economic cataclysm that would have resulted from a default. Barack Obama and the Democrats, meanwhile, pose as “responsible stewards” of the system against the Republican maniacs. But as Obama proved again this week, when it comes to proposals for reviving the economy, they have nothing more than empty rhetoric.

As for the Federal Reserve, the promise to keep interest rates at near 0 percent through 2013 only draws attention to the fact that rates have been this low for years already–with no sign of any hoped-for increase in corporate investment. The Fed has already used virtually every tool it has to counter an economic slump, so its promises to do more of the same don’t exactly inspire optimism.

The same problems exist in Europe in different–and arguably more intractable–forms.

Several European countries–Greece, Portugal, Ireland, Spain and Italy, known collectively as the PIIGS–are facing what’s called a “sovereign debt crisis.” Greece, for example, has a current debt of more than $500 billion for a country of just 12 million people. Each national debt crisis in Europe is exaggerated by the fact that 12 countries share a common currency, the euro.

The European Central Bank and the continent’s chief economic powers, Germany and France, have been arranging bailouts–hundreds of billions in loans, in return for drastic austerity measures that have savaged working-class living standards–for the PIIGS. But each rescue seems to be followed by another, more expensive problem.

And now there are questions about the rescuers. The big drop on the international markets on Wednesday was caused by trouble in France. For one thing, French banks have a lot of loans to Greece and other countries at risk of default. Moreover, the price tag for a worst-case scenario in Europe–where all of the troubled economies, including Spain and Italy, need saving–would be well over $1 trillion. Outlays on that scale would likely push France at least into its own sovereign debt crisis.

The common thread between these problems specific to the U.S. and Europe is the role of governments in dealing with the economy. At one level, the early August turmoil in the financial markets represents the financial world’s vote of no confidence in the various political establishments and their proposals–or lack thereof–to fix the economy. And that’s true whether the governments are run by liberal or center-left parties or by the conservatives.

– – – – – – – – – – – – – – – –

LOOMING BEHIND these immediate factors is the ongoing crisis of the economy on both continents–and the threat that a second leg of the recession could be near.

In the U.S., the Commerce Department’s Bureau of Economic Analysis (BEA) reported at the end of July that the U.S. economy grew at an annualized rate of 1.3 percent in the second quarter of the year–April through June. The BEA also revised its figure for first-quarter growth to a microscopic 0.4 percent. For the full year through the end of June, the U.S. economy grew by just 1.6 percent–an incredibly low figure for a supposed recovery.

What’s more, the BEA revised its statistics from throughout the recession–showing that the downturn was even deeper than previously thought. The new numbers show that at the depth of the recession in the last three months of 2008, economic output fell at an 8.9 percent clip, a downward revision of 25 percent from previous statistics.

And the bad news isn’t limited to looking backwards. Current economic indicators are also throwing up warning signs. The Institute for Supply Management’s (ISM) index of manufacturing activity came in at 50.9 in July–a decrease of 4.4 percentage points from the previous month. Any reading over 50 indicates that the manufacturing sector is expanding, but the index has been falling in recent months and could turn negative. In fact, the ISM’s New Orders Index came in at 49.2–“indicating contraction for the first time since June of 2009,” the ISM reported.

Also, consumer spending dropped in June for the first time in 20 months. And the Small Business Optimism index has fallen for five consecutive months.

Then there’s the employment picture, which remains bleak.

The Bureau of Labor Statistics reported on August 5 that the overall unemployment rate for July dropped to 9.1 percent, down from its cyclical peak of 10.2 percent from October 2009. Yet there has barely been a ripple in the sea of joblessness caused by the Great Recession.

From high point to low point, the total number of non-farm employees in the U.S. shrank by 8.75 million by the time the jobs market bottomed out in February 2010. Since then, that number has risen by 1.9 million–less than one-quarter of what’s needed to make up the loss. At this pace, it could take up to a decade to get back to the previous employment high–assuming the economy doesn’t go back into recession and start shedding jobs again.

And on top of that, the official employment statistics are understated. Anyone who works as little as an hour a week is counted as “employed”–so 8.4 million underemployed workers with part-time jobs, but who want full-time work, are counted as having jobs.

In addition, there are 1.1 million “discouraged” workers and 2.8 million “marginally attached” workers in the job force, but not counted as unemployed. Add those workers into the mix, and the underemployment rate jumps to 16.3 percent. Lastly, there are 6.6 million people who are “not in the labor force,” according to the government, but who want a job–they aren’t counted in any of the government’s statistics.

– – – – – – – – – – – – – – – –

ALL OF this will only be made worse by the relentless drive for austerity demanded by business and accepted by both major political parties in the U.S. According to analysts at JPMorgan Chase, the plans for government cutbacks already in place–not counting the ones hatched in the debt ceiling deal–will knock 0.3 percent off gross domestic product growth in 2011 and 1.4 percent in 2012.

Political leaders ought to be proposing measures to create jobs–most effectively of all, by devoting government funds to projects such as infrastructure redevelopment. But almost no one in Congress will suggest any such thing. Instead, the bipartisan consensus is for cuts, cuts and more cuts, even though this threatens to stifle what little job growth has taken place. And at the state level, the austerity agenda has ruled for years already, whether carried out by Republican union-busters like Wisconsin Gov. Scott Walker or Democratic “friends of labor” like New York Gov. Andrew Cuomo.

The same problem is evident in Europe. Greece, for example, is caught in what’s known as a “debt trap.” The savage austerity measures demanded as a condition of Europe’s bailouts have pitched the country into a deeper recession, which has led to less and less revenue coming back to the government, making the country all the more dependent on further bailouts.

As the Guardian‘s economics writer Larry Elliott wrote:

There is no happy ending to this story. At best, there will be a long period of weak growth and high unemployment as individuals and banks pay down the excessive levels of debt accumulated in the bubble years. At worst, the global economy will be plunged back into recession next year as the U.S. goes backwards and the euro comes apart at the seams. The second, gloomier scenario, looks a lot more likely now than it did a week ago.

Why? Because there is no international cooperation. There are plans for austerity but no plans for growth. Even countries that could borrow money for fiscal stimulus packages are reluctant to do so.

The only “happy ending” has been for corporations and the wealthy. Profits rates have been restored to pre-crisis levels and then some–and corporations are sitting on an unprecedented amount of cash. The net worth of the richest individuals is growing again. No wonder, then, that, luxury consumption is the most dynamic part of the retail sector, according to the New York Times.

Yet these are the very people who are demanding more and more sacrifices from the rest of us in the name of fiscal responsibility.

The stock-market gyrations of August are further evidence of the mayhem of capitalism–a system that demands workers pay, while profits roll in for corporations and Wall Street.

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Comments

Comment from Ross
Time August 11, 2011 at 11:06 pm

The system works like this John.The Private Central Banks own our increases in productivity by creating it as debt.They are awash with money so they create these elaborate scams with their mates in Wall St eg Credit default swaps,collaterised debt obligations,selling of sub -prime mortages to superfunds and other derivatives that are not based on real production.

Most of our financial institutions have exposure to these ponzy schemes but cannot for some reason terminate them.Our 4 big banks have exposure of about 20%.They have also been bailed out by the US Federal Resreve.If the Fed calls in loans we are in deep shit.This is why we need to make our RBA the lender of first resort.

According to Webster tarpley and others the derivatives are valued at $150 trillion,more than the entire planet’s GDP.They are worthless and our super is tied up in it!

If the US Fed can create quantative easing money scams from nothing in their computers,then our RBA can do likewise for us with far less debt and save us from total economic meltdown.

Which polly has to the courage to stand up for all Australians? Don’t hold your breath.

Comment from john neeting
Time August 12, 2011 at 12:17 pm

Give me 100 million dollars and a diverse portfolio and I can double it in the market ATT.
It’s called ‘musical money’ and the world elete are doing just that to break monetary systems of certain countrys. You don’t have to be financial wizard – just have a bucket load of cash. Dump shares en-mass at the right time [ market plunge ] then buy them back again blah blah blah. But you gotta have gargantuan bucks to do it.

Comment from Alfred Venison
Time August 12, 2011 at 8:08 pm

dear comrade
i get really mad when i read stuff like this – at the end of this road is slavery, and i don’t mean “wage slavery”, either.
when in this mood, my opinion (from my “light” side) is that the obvious way out of this is to tax the rich.
alternatively (from my “dark” side), let them buy up all the public assets and then expropriate without compensation – lock, stock and barrel.
and (more “dark” side) if they don’t like it: “up against the wall, mfp!”
as jim morrison sang: “you’ve got the guns, baby, but we’ve got the numbers”.
yours sincerely
alfred venison

Comment from John
Time August 12, 2011 at 8:39 pm

Taxing the rich is a slogan I often use but it is a slogan just the same. In a society based on profit, taxing the profits of the rich will often see the tax passed on to workers in attacks on wages or jobs, or in terms of higher prices. It has to be accompanied by a program ensuring no job losses or wage cuts and strict price controls. That might produce a flight of capital or a capital strike which should be met with nationalisation under workers’ control.

The strategy of numbers versus guns doesn’t always work. Syria comes to mind. The real power ins society that workers have is in production and the ability both to stop the flow of profits to the bosses and in doing that create the conditions for a democratic society in which production is organised to satisfy human need.

Comment from Alfred Venison
Time August 13, 2011 at 10:08 pm

dear comrade
thankyou for your considered response to my dark expressions.

these thoughts are “children” of my “dark” moods, eh (and john howard better stay out of broken lifts when i’m in ’em, too!) but regarding guns & numbers – well, it hasn’t worked in syria (so far?) but it was somewhat effective in india & i reckon we could propose examples & counter-examples till the cows come home.

and, yes i agree, its a slogan. one i was intending more metaphorically, too, and I now realise that maybe I should have striven to make that clearer. more “realistically”, though, i’m thinking rather in terms, for example, of the rolling back of the bush tax breaks, that was frustrated by the gop recently. and, also, the whole range of tax breaks for the rich that go back to reagan, which is when the rot of the “lower the taxes, lower the taxes” mantra really began to set in.

some of these tax breaks are just obscene. in the usa, for example, the tax deductable gps navigation systems for the yachts of the rich, the 400 private aerodromes of the rich which use federal infrastructure [air traffic control, radio frequency regulation] but for which the rich pay no taxes, not even land tax. these are just a couple of usa examples from a long list my old prof. angrily recited to me over a long phone call recently (he’s a “freedom marches” old left – way back & very angry: “obama’s betrayed a generation”, he says). then there are the zero taxes paid by the rich in greece. we could go on, country by country – the rich simply haven’t paid their fair share of tax for 40 years & instead have received tax break after tax break; like a mantra. how about even a simple “tobin tax” on massive financial transfers which benefit the rich disproportionately and the profit from which is used to further grind down people whilst solidifying the positions of corporations in the struggle of corporations against people?

and i’m all for any form of syndicalism & factory occupation politics (old-fart anarchist that i am), but if/when it comes to that one must i think expect to have to do it without support from parliament or parliamentary parties, but against parliament, the parties to which have been co-opted & neutralised by the enemy; hollowed out, as it were; mere ciphers – pretend representative institutions.

i’m starting to get inchoate – i think i’ll stop while i’m ahead.

thanks again for the response & sorry for taking up so much space.

yours sincerely
alfred venison

Comment from John
Time August 13, 2011 at 10:46 pm

Actually you were making a lot of sense Alfred. Please keep posting.

Re parliamentarianism, my view is that workers have to set up their own thoroughly democratic state.

Slogans are funny things. ‘Bread. Land. Peace’ was a slogan. Pretty effective. ‘All power to the Soviets’ was a slogan. Pretty effective.

In fact, re tax, I was going to suggest in Australia one way to cut $70 billion over 4 years from spending – the Liberal Party’s latest leaked austerity target – would be to eliminate just a few tax breaks for the rich and big business. I will write on this soon.

Comment from Tony
Time August 14, 2011 at 9:12 am

If Abbott wants to cut $70 billion over 4 years, we already know this could mostly be achieved simply by ending the current (IIRC) $14 billion per year in subsidies and rebates to physical capital intensive fossil fuels companies. The remaining $12 billion cut could be achieved through increasing the highest marginal tax rate substantially and restoring the mining tax to the levels first stated under Rudd. Not only will this end outrageous acts of corporate welfare and under compensation to state for resources, but do so with almost no burden on workers.

If Abbott is foolish enough to undertake austerity measures after observing the European malaise, something Stiglitz warned would occur as a consequence of austerity, then he clearly is not fit to be PM.