Buffet and Lemann: two peas in pod

Jorge Lemann: won't eat what he produces

by Richard Mellor GED

Afscme local 444, retired

In a previous piece I commented on New York City’s mayor, Michael Bloomberg, having a certain worldview.  He believes that the city’s services and no doubt the existence of the city itself, is made possible through the financial generosity and sacrifice of billionaires like him.  In response to the accusation that NYC has become two cities, one for the rich and one for the poor under his governance, Bloomberg denies it and says, “if to some extent it is, it's one group paying for services for the other."  This reflects two separate and distinct views of the world based on class.

People like Bloomberg, Warren Buffet and their colleagues, are ruthless thugs really.  You cannot accumulate $27 or $45 billion dollars without being so, excepting a lottery win. They believe they are where they are because they are special; because they are smarter than those who get up and work for a wage all of our lives.  How can they not be smarter, they’re rich and don’t work.

Every ruling class justifies its rule this way and each member of the ruling class accepts that they are where they are through their hard work and diligence.  For the rest of us, just get off your butts and be prepared to take the risks.

But like all ruling classes, they are where they are through their control of the forces of production in society, something that overwhelmingly comes to them through family ties. Functioning as owners of society’s productive forces and wealth is a set up that their state, or what most workers call government, keeps in place through violence, and coercion.  Just look at that photo of the heavily armed police at that peaceful WalMart protest.  What are the police there to protect?  They are not there to ensure that the workers demands are met, that they get a better deal than starvation wages from the owners of WalMart who do no work yet posses more wealth than 90 million Americans. The police are there to defend the Walton family’s wealth.

These people have nothing in common with workers.  They may be Americans in name like us, or British, Japanese or South African.  On days like today, remembering the victims of the attack on the World Trade Center in 2001, they call for national unity; we are all together they claim. But they have a different view of the world.  This difference is greater than any religious, racial or national differences workers have between each other. Despite all the weaknesses and horrific things workers can resort to as society degenerates or as non-owners, we are far more collective creatures by nature of our daily existence in capitalist society.

I was reading in Bloomberg’s magazine, Business Week, about one of the 1%’s heroes.  Not Gates or Buffet, one of their heroes from abroad, a Brazilian.  His name is Jorge, Paulo Lemann; he’s also Swiss. Lemann is a coupon clipper that runs an outfit called 3G Capital. Lemann and his partners have been on a bit of a buying spree and now own H.J Heinz , Burger King, and Anheuser-Busch.  Burger King was once owned by another bunch of coupon clippers in a club called Cerberus that had the imbecile Dan Quayle on its board; the connection to established political families is a plus in the business world.

Lemann’s 3G and Buffet’s Berkshire Hathaway have equal stakes in Heinz despite Buffet putting up three times as much cash according to BW.  So Buffet trusts this guy. Not only that, Buffet refers to him as, “classy” and admits that Heinz will be, “Lemann’s show” according to BW. Buffet recognizes ruthlessness when he sees it.

Lemann has already proved to Buffet how “classy”he is firing 600 of Heinz’s office

Buffet with one of his employees

staff in the US and Canada, about 350 of them in Pittsburgh PA. And when they bought Burger King from Goldman Sachs, Bain Capital of Mitt Romney fame and a couple other coupon clipping outfits Lemann was even classier, ridding the firm of 28,000 employees, or putting it in business lexicon, shoving “…28,000 employees off Burger King’s balance sheet.”

Lemann brought in a former railroad executive to run Burger King, the man knew nothing about fast food, but that doesn’t matter as the food is not the object of this exercise. Whatever form of production the owners of capital choose to engage in, it is not the finished product as an object of consumption or use that they’re after, it is the surplus value contained in the commodity and realized in its exchange that matters. “What’s important is not knowing hamburgers, it’s knowing how to lead a company” says a former colleague; “It’s the kind of intelligence that transcends any specific business segment”. It’s about profits. 

Could Marx have been any clearer when he wrote:
“A schoolmaster is a productive laborer when, in addition to belaboring the heads of his scholars, he works like a horse to enrich the school proprietor. That the latter has laid out his capital in a teaching factory, instead of in a sausage factory, does not alter the relation.”

Yep, Jorge is a real hero.  He surfs, (30 foot waves says BW) plays tennis even playing in a Wimbledon event.  In fact, Jorge admits that it wasn’t the things he learned at Harvard that gave him, “…a certain confidence when it came to taking risks.” It was that 30-foot wave he surfed in Copacabana. It all comes down to be prepared to take risks, take a chance.  If you’re bold enough to take a chance you can become rich and famous like Jorge and others like him.  The more than $30 million his dad left him wasn’t what got Trump started of course, and that Lemann’s Swiss father was a dairy entrepreneur didn’t give him a certain confidence, a willingness to take a risk someone without that sort of backing might pass on. When you fail, as George W. Bush did in most of his ventures, the moneyed interests, family or friends are there to rescue you.  Who won’t take risks with that backing? They’re not risks at all.

Lemann went to the American School of Rio de Janeiro.  This school is an institution designed to develop and strengthen Brazilian capitalism and its ties to US corporate interests.  Its creation was made possible by funding from the U.S. Department of State, the Ford Foundation, private individuals, corporations, and the American Chamber of Commerce. So Jorge is not just an ordinary guy who pulled himself up by his bootstraps.  He’s not a self made man, there’s no such thing. Everyone has help and people like Lemann have the most help, the most handouts, have all the connections in the right places.

Jorge Lemann places money above all things, not in the same way as workers do, to pay the rent or mortgage or feed the family or for that little extra cash for pleasure.  People like Lemann seek to accumulate capital, live through the profit of capital as opposed to productive labor.  He places the accumulation of money above social needs. This is why Warren Buffet and Sam Walton, the retail outlet’s founder, gave him an audience.  Lemann subscribes to hatchet man Jack Welch’s business philosophy, the 20-70-10 rule on how to deal with employees, “Promote 20 percent…maintain the middle 70, and fire the rest.”  A simple thing really.

Lemann may be a capitalist involved in the production of food and beverages, an important aspect of productive life for human society.  But he doesn’t eat the stuff he produces. He ate a Burger King hamburger once and wasn’t impressed.  “What he liked about Burger King was how it generated cash.”,  He admires the Goldman Sachs model as well, “Innovations that create value are useful” is one of the favorite maxims.  We must be clear that by “value” capitalists mean surplus value, the value created above that paid out for wages, value for which the capitalist gives nothing in return and that is the source of their profits: “People say that the customer comes first and all that”, says Vincent Falconi, a management consultant hired by Lemann when he owned the Brazilian beer company AmBev that provided the seed money for the purchase of AB InBev “but actually it’s cash”

And cash flowed in to InBev which sells one in every five beers in the world according to BW.  But most of it went in to Lemann and his partner’s bank accounts.  This no doubt helped replenish the $6.4 million Lemann and his partners were fined by the Brazilian regulators for crooked dealings at AmBev.

According to Business Week, Heinz is different as there is “less fat to trim”, so “How then, to wring more value from Heinz” is the question Business Week poses. As workers we know about how bosses “squeeze”more value from a company only too well; how they “trim the fat.” We experience it in the unemployment line, longer hours for those that don’t get laid off, less pay, increased pace of work as job cuts mean fewer hands doing more.

So far production, jobs at Heinz are still intact, but “workers are nervous” says one Union official, and so they should be.  This perpetual insecurity and fear is another cause of stress and the by-products of it, poor health, family break ups, drug and alcohol abuse and domestic violence. Waiting to be fired is not freedom. But that’s the market.  The Union official has no alternative to the waiting, or the unemployment that follows “fat trimming”. Fighting back, taking the production of society’s necessities out of the hands of the Jorge Lemann’s of this world is not something they consider.

Maybe I’m being a bit selfish here because writing about this is a sort of catharsis for me. It keeps me on my political toes, reminding me (and hopefully some who read it) of how the world really works and how absurd it is that the production of a social necessity like food is in the hands of private individuals and that production is set in to motion only if profit accrues to the owners of capital like Lemann, the moneylenders and other coupon clippers. It reminds me of who my enemies really are.

Lemann could have, as the quote from Marx stated above, invested his capital in condom production or a mining concern, it matters not to these people.  What matters is the end result, more money coming out of the process than went in.

A friend I talk to about these things worried that to take these important social functions out of the hands of private individuals would mean a bloodbath, that we will deny them life itself.  That is not necessarily so. It has not been workers that initiated violence in the historical struggle for some control over our lives at work and the respect and dignity that comes with it.  It has been the bosses and their government that resorted to violence, who hired gun thugs and entire armies to keep working people down.  The violence against strikers; the black folks who fought to eliminate Jim Crow and the apartheid south, and all Americans who fought for equality was always initiated by the state and its agents.

The Jorge Lemann’s , Warren Buffets and Donald Trumps of this word are all welcome as productive contributors in the society so many activists are fighting to build.  They just aren’t going to continue to live off the labor, poverty and misery of the vast majority of humanity.

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Lobbyists, politicians and owners responsible for deaths in West Texas explosion

by Richard Mellor

The efficiency that the authorities, (FBI, Homeland Security, police etc) showed in capturing the alleged Boston bombers is nothing less than remarkable.  It’s incredible what they can do nowadays, including pinpointing a “terrorist” in a pick up 6000 miles away and blowing them to bits, along with their family of course.

If only finding out who is responsible for the 14 deaths and massive destruction after the fertilizer plant exploded in West, Texas was so easy. Texas lawmakers, which means politicians form the two Wall Street parties, are trying to “..sort out who in the state is responsible for monitoring the safety of such plants like West Fertilzer Co…” the Wall Street Journal reports. How difficult can that be unless you don’t want to find out?

As is normally the case, a struggle of sorts has been taking place between various forces. Such anti-American elements like “Environmental groups and Unions..” have been pressuring the federal government to “mandate”new safety procedures. This is more of the same “big government” policies that are destroying the 1%’s way of life and is typical of these commie type organizations.

Fortunately the real Americans step to the plate.  “..agricultural and chemical lobbying groups have long opposed laws that would require it…”  the WSJ reports.  And it’s hard to argue with their reasoning, any such laws or safety measures, “..would be unnecessary, costly, or impractical.” Profit is king for these patriotic fellows.

That’s enough satirical humor about this tragic event, an act of terrorism on Texas soil. As I commented in a previous piece on this tragedy, government agencies like OSHA are a joke.  OSHA is a social service, just like public transportation or education; it’s “money out” for the coupon clippers and crowds them and private capital from the marketplace.  Dan Keeney, speaking for the Fertilizer company says that the company’s focus now “..is on doing whatever we can to make sure this never happens in any community again.”

 Well, we’ve heard that before. And I shudder to think what 14 deaths and the destruction of homes has done to the psychology of this small rural community.  Even if he means it, Mr. Keeney cannot stop this happening again as it is a by-product of the market, as natural to it as the air we breathe. The capitalist system of production and the class that governs it is responsible.

The reason for this has already been explained in the quote above from those who make a living bribing the corporate politicians, “unnecessary” (profits), “costly” (profits), impractical, (profits). And in case the reader missed that the WSJ gives us a little more information.  A Democratic politician proposed legislation earlier this year that would have required, “….certain chemical facilities to adopt technologies to reduce the impact of an accident or terrorist attack.” Note the use of the word “accident”here.  The dictionary describes an “accident” as, among other things, chance, mishap, coincidence fate.  This tragedy was none of these; it was a product of conscious design.

The above politicians proposal, and it’s hard not to laugh at this were the results not so tragic,  “..wouldn’t apply if it impaired the facility operator’s business.” You can’t put it any clearer than that? Is that what the average American, what millions of workers and the owners of most community businesses would argue is sound judgment, good political and legal practices? Are you a commie and anti-American if you put the interests of an entire community above the right of a capitalist or group of capitalists, many of them nothing but clippers of coupons?  It appears you are. So be it.

West, Texas: not an accident

Even this weak-toothed attempt at safeguarding workers and our communities is opposed by the terrorists that represent big capital.  Mike Pomeo, a Kansas Republican has introduced a bill that would “…bar the EPA from imposing obligations on companies to use a particular approach to making and storing chemicals,” (“big government” again.)  The 1 percent’s politicians have waged a successful war against any restrictions on these companies. 

So despite investigators from the US Chemical Safety Board claiming that they found the “..damage in the areas surrounding the plant, ‘The worst we’ve seen at any accident site.’” , the culprits will  not be apprehended.  We know who they are, they could be found as quickly as the alleged Boston Bombers who were not able to inflict as much damage to American life and property.  They are lobbyists, bribers of all sorts, some higher ups in government regulatory agencies, owners of business and the US Chamber of Commerce.  We should remember as I wrote earlier that the US Chamber of Commerce opposed OSHA as worthless as it is. OSHA’s role (and not fault to the grunts that work there) is to tally up the dead after these things occur and issue a few citations.

We know who the politicians are that have used their positions to undermine the safety of our communities in the interest of profits. They are guilty.  But most of all is that the system is at fault.  Leaving aside whether we would actually need such chemically based fertilizers if human food production was not an industrialized for-profit venture, a major step toward reducing such tragedies along with other tragedies like the BP spill, is a strong and militant union presence on the job.  In this way, rank and file safety reps could shut down jobs and refuse to work whenever workers and our communities were in danger; no worker or middle class people would oppose such measures that protected their lives, homes and schools. There’s a reason for the misnamed “right to work” legislation. It’s actually the “right to profit”. The “right to exploit.”  And coerce.

We must call for the banning of all lobbyists as an independent political presence and build an independent political party of working people based on our organizations, our communities and the youth in the schools and colleges as an alternative to the two parties of the one percent.

We have no party of our own here in the US.  When a worker says he or she is a Democrat it means they vote Democratic, the Democratic Party is not a living active party with millions of workers in attendance in branches throughout the country. It is a thoroughly corrupt big business machine and millions of workers have drawn the correct conclusion that on the basics it doesn’t make much difference who they vote for and abstain from electoral politics in disgust. The Democratic Party was the party of slavery and is the only political party in human history that has dropped nuclear weapons on densely populated urban centers.

Through such independent political action, the major industries that are crucial to the production of our needs from food production to transportation can be taken under public ownership and management, and must include the storage houses of capital, the financial industry.  This is the only way free market terror like the death and destruction in West Texas can genuinely “never happen again”.

More on West, Texas explosion here  and here

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More on the act of terror in West Texas

West Texas: No accident

by Richard Mellor
Afscme Local 444 retired

A recent Pew study found that the richest 7% of American households now own 63% of the country’s net worth up from 56% in 2009, while for the remaining 93% our average net worth declined to $134,000 from $140,000.  Poverty and inequality is presently at 1920’s levels. This is what their media calls a recovery, they actually mean, “our” recovery, it’s a matter of language.  When we add to this the attacks on already dismal social services, lack of health care, homelessness, indebtedness etc. and the insecurity that results, it is no surprise that in the absence of a means of organizational expression, the anger beneath the surface of US society often manifests itself in drug and alcohol abuse, domestic violence, psychological despair and acts of mass murder that we see on an almost daily basis.

Despite all the appeals to patriotism and nationalism, Americans don’t trust the government for good reason.  But these appeals get more of an echo as people see a nasty world out there and no alternative to the status Quo; better the devil you know.

A major source of this anger and alienation as well as the confusion, is the media.  And for those of us that do give the mass media more credibility than it deserves when reporting on global affairs and particularly the US government and war machine’s role in them, we should look at a recent domestic act of terror brought about by US capitalism and how its media reports it. I am referring to the West Texas fertilizer plant that exploded, killing 15 people and injuring more than 200.  The blast destroyed homes within a five-block radius. It “…destroyed a nursing home, an apartment complex, and a nearby middle school, according to the New York Times, the blast left a crater 93 feet wide and 10 feet deep, and the fire 'burned with such intensity that railroad tracks were fused.'" (propublica.org)

This act of domestic terrorism was easily preventable; it was not an accident. The New York Times headline in the aftermath of the catastrophe proclaims that the fertilizer plant, ”Fell Through the Cracks of Regulatory Oversight.”. “Fell through the cracks?”.  What “cracks” are these I wonder?  The Times again, “The uncertainty over who was aware of the chemical at the plant and who was not…”  Ok, we have “cracks” and “uncertainty” so far but there’s more; there were “bureaucratic cracks at the federal, state and local levels” says the Times. It’s hard to grasp it all except it seems no one was responsible.

The NY Times knows this is so because an unnamed federal official told the paper that “regulatory cracks” seem to be the culprit so far.  Why the  “uncertainty”though? We’ve seen the precision and efficiency the US government applies to its military operations and assassinations of various characters in its staunch efforts to protect us all.

It appears that there is a legal requirement that requires a company like the fertilizer plant that just blew up to send annual reports to three state and local agencies according to the Times.  These reports are supposed to inform the authorities of the hazardous chemicals on site.  The company sent them this year informing these agencies that in 2012 it had 540,000 pounds of ammonium nitrate stored at its facility, more than 100 times that used in the Oklahoma bombing. What the response to this information was from these agencies is unclear.

What we do know is that after 911, Congress passed a law that required these companies that store high explosives or hazardous chemicals to notify Homeland Security if they had more than 400 pounds stored.  This was not done in the West Texas case despite the company having more than 1350 times that amount.

In a previous blog on this issue I commented that OSHA last inspected the plant 28 years ago and that

A West Texas victim of capitalist terror

even when found at fault for “serious violations” the fines are so paltry, no company would be hurt by them.  OSHA officials claim that this lax approach was due to the results of prior inspections.  A “lack of worker complaints” was also a factor as well as the company not being “classified as high risk by the EPA”says the Times.

Here’s where the frustration and anger is about to erupt.  Why would a worker not complain about safety violations?  Ask any worker and they’ll tell you.  (Assuming you’re not the boss or one of their flunkies).  You’ll be victimized.  You’ll be punished in some way either by denial of advancement, vacation preferences, overtime availability etc.  Or if you persist you’ll be fired. The main thing is it lets the bosses know you’re not on their, “Team”. You’re, a “trouble maker”. Persist, and you’ll be unemployed.  I worked in the more humane public sector and had a Union and even then, workers were wary.  Only a strong, organized and militant Union presence on the job encourages such freedom.  We are talking about Texas here. And at least, we all know that OSHA rarely has the person power to respond until workers die and can’t protect you against retaliation so you keep your mouth shut and carry on working to keep your head above water and your kids in school.

And it’s not certain the EPA would have done much if anything and in this instance the agency wasn’t even informed. Another accident?  Another slip through the “Regulatory cracks”?

One agency, the Texas Feed and Fertilizer Control Service did make visits to the plant, 35 of them, including one 12 days prior to the explosion. This agency is supposed to keep tabs on the sale of this potentially powerful chemical through the state. Officials of this agency are forbidden by law to divulge information about these facilities.

We finally come to the answer to all of this when an expert on chemical safety informs us that the problem, or a major “shortcoming in the system of regulating chemical plants…” , to use his own words, is “…the reliance on self reporting.” 

 “Self reporting” is like asking the fox to protect the chickens and the Times reports that in its 2011 Risk Management Plan that it has to file with the EPA, West Fertilizer, “..did not check the box saying the plant might face a risk of fire or explosion.”

That should raise the eyebrows of any concerned person but here come those damn “cracks” again.  This time the “budgetary constraint” and “overstretched staffs” cracks kicked in and this little gem slipped by. That may be true in this case.  But why the budgetary constraints?

The ruling class, and the NYT is a organ of the US ruling class, uses language carefully.  They don’t call this terrorism but it is; a far more destructive and violent domestic kind than anything foreign. It is the terror of the market, it is capitalist terror just like the deaths of the workers in Bangladesh this week.

This was no accident.  Human beings made conscious decisions about everything leading up to this event including allowing the construction of such a facility so close to human habitation, schools, libraries, homes. These same forces allow a private corporation dealing in such dangerous chemicals a free hand in how it does so.  The same forces decide what is important and what is not in the allocation of society’s resources, both labor and capital. Another aspect of the location is that it is a small rural community. It is not only that workers and youth in the urban centers are victimized, so are our brothers and sisters in rural communities where regulation and Unions are weak and poverty rife.

There is no shortage of labor power nor is there a shortage of capital in society yet there is apparently a shortage of staff which emerged from thin air and contributed to this catastrophe.  Although, the labor power is available in this case the Times makes clear, but is not put to use due to “budgetary restraints.”  But such budgetary restraints are also arrived at consciously and by the same forces that have other more important areas to think about rather than curbing investors’ ability to profit from their investments by government interference. 

The Boston bombing on the other hand gets a different treatment. We must unite, us as workers and the same capitalists responsible for the act of terror in West Texas that has killed 15 of us and brought horror to a community. We must join them in the struggle to defend our way of life from the countless foreigners who want to take away our freedoms, like the freedom to lose one’s home. They claim they are our guardians abroad but they are our killers at home. Once we understand this, their War on Terror should be looked at more closely. If they care so little about the lives of US citizens in West Texas and countless other victims of capitalism like those that died in mine explosions or the BP disaster or the two million in prison or the old people who’ll soon have no post office if they have their way; how little can they care about foreign workers when it comes to their rapacious thirst for profits.

The death and devastation in West Texas will not receive the media attention as Boston because Boston is supposed to take our mind off it, turn our anger in a different direction toward the “foreign”enemy rather than the domestic. Marshall law and the use of some 9000 militia after the bombing was a practice run, an opportunity to test the security and police presence beefed up since 911 and the Occupy Movement entered the stage and in preparation for the coming battles here in the US as workers rise to resist the attempts by capital to drive us back 150 years.

So, I am done now. I’ve got it out of my system for a while.  I just want to urge my class to think about it.  About what happened in Texas not being an accident and that behind the increase in global hatred for the US government there is more than meets the eye; things CNN doesn’t tell us. We should be angry and moved when people in our own community are killed but where our anger should be directed is a bit more complicated and we have to have information to draw the right conclusion. And one of those conclusions must be that society needs new managers and the productive forces need collective ownership.  An economic system should be built on human solidarity not the accumulation of profits. There will be no massive hunt for those responsible for the destruction and death in West Texas.  "Regulatory cracks"  disappear once you've fallen through them.

As for language, we can start by referring to the tip jar at the counter by the name that actually describes its function---the “employer’s subsidy jar”

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Capitalism at work: More Bangladeshi workers die as factory collapses

Workers mourn the death of their comrades

by Richard Mellor

As I write, Bangladeshi authorities are trying to figure out how many workers have been killed in the latest factory disaster there.  So far, the death toll as a building housing workers collapsed according to the Wall Street Journal is 145, but it is expected to climb much higher. 700 workers have been killed in factory fires in the last decade in this Dickensian world of manufacture and mass mayhem.

Most of the workers are women according to reports and this catastrophe comes on the heels of the Tazreen factory fire last year where 100 workers died. This is capitalism at work. These killings are not accidents and the guilty are not simply the small fry that run these outfits but the executives in the board rooms of Wall Street and the western retailers that demand cheap labor to keep the profits rolling in. These workers have died so that consumers in the west can purchase items under such colorful brand names as "Joe Fresh" or from the the likes of Spanish apparel giant "Mango."

Like electricity that seeks the line of least resistance so do capitalists in their rapacious quest for profits.  As if Chinese wages and conditions aren't abysmal enough, as Chinese workers have fought to raise wages foreign manufacturers flee in search of human beings more desperate for work and survival and preferably living under more repressive conditions.  Vietnam and Bangladesh have become more lucrative markets for human Labor power, "Foreign companies have flooded in to Bangladesh in recent years..." to escape the higher cost of Chinese workers the WSJ points out.  This is as natural to the capitalist mode of production as the air we breath is to life, no amount of regulation will stop it. 

If we should learn one thing as workers it is the need to build international solidarity with all workers, those that make the decisions at US corporations don't move production to low wage countries to improve living standards, just the opposite.  We must reject the idea that we should compete with foreign workers that the bosses claim are "willing" to work for less and under more inhumane conditions.  Acceding to one's oppressor under coercion is not being a "willing" partner in the arrangement. We must not blame them and be driven in to competition with them for the necessities of life.  Our allegiance must be not to a nation state but to our class across such national boundary's. The existence of low waged areas is a threat to all of us, whether in Mississippi or Bangladesh, the bosses will always be drawn to them.  The way to combat it is to build international working class solidarity against international capitalism.

The investors and other thugs that run the likes of Wal Mart and Nike cry crocodile tears for the dead and throw a million bucks here and a million bucks there to satisfy western non profits and human rights groups who are constantly raising the conditions in these factories.  After the last fire, Wal Mart has been paying for fire inspections at the factories that supply it with cheap goods and has donated $1.6 million for training in fire safety according to the Journal.  We should remind ourselves that the Wal Mart heirs are worth some $100 billion, made off the backs of these women in Bangladesh, many of whom now lay dead.

A huge crack was seen in the building a day before the collapse and workers were evacuated. The bosses had a meeting that evening and the owner of the factory told workers that "The building will stand for another hundred years", according to Selina Aktar, a 24 year old worker who survived.  She told the WSJ that as workers were gathered outside the next day, bosses through megaphones warned them that if they didn't return to work their pay would be docked. Shortly after they did, the place collapsed. "I was trapped in the darkness" she told the Journal, "There was choking dust. There was a big slab of concrete. I couldn't get out."

Bosses coerced workers in to returning after defects were found

according to reports.

No amount of regulation or intervention on the part of western non-profits will prevent the continued savagery of capitalist production.  As I pointed out in recent commentaries, US capitalism has driven wages and conditions in the US to such a low level that this country is becoming an attractive place to do business as it already has fairly decent infrastructure compared to many other countries.  Caterpillar shifted production from its London Ontario plant to Indiana where wages are 50% lower and the Union leaders more cooperative.  As Marx once said, workers have no country.

The same forces that we bailed out to the tune of trillions of dollars are at work here.  Capitalism was saved from collapse through the intervention of public funds.  We should have helped it over the cliff.  The austerity agenda that is being imposed on workers here in the US, the savage conditions imposed on workers and peasants throughout the Third (former colonial) World is the natural order of things for the so-called free market.  Workers can only rely on our own strength, our own organizations, both economic and political.  The women and men, and children that die everyday as a result of business decisions are our brothers and sisters.

At the 1994 California State Labor Federation Convention to which I was a delegate, then Executive Director, Jack Henning stated in his opening address: "There should originate, in the leadership of the AFL-CIO, a call to the unions for the only answer that is noble: global unionism is the answer to global capitalism."

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Although Henning had no intention of using his office to fight for such a development, it is advice we can all agree with.  Only a united global movement of workers can drive back the global capitalist offensive and would be a step to preventing disasters like yesterday's factory collapse in Bangladesh. We must break the barrier in our own minds of nationalism and patriotism and build such global solidarity among workers, not motivated by some notion of morality in defense of those less fortunate than ourselves, but to defend out own class interests.   "United We Stand" is a good slogan.  Who we unite and stand with is the crux of the matter.  The coupon clippers that have driven Americans from our homes, denied our youth education, our sick health care are as responsible for the deaths of our class brothers and sisters in Bangladesh.  They call themselves Americans too, but we must not be fooled by that, there are Americans and Americans.

There will be no manhunt in the offices or board rooms of Wall Street for these criminals, just like those whose decisions led to the deaths in West Texas. They know too well the conditions that are necessary for them to make their millions and they make their choices accordingly. 

Such a movement is necessary, but what we stand for is crucial.  Taking in to public ownership the finance industry and banks is crucial because workers cannot change this situation if we don't own capital and control its allocation in society, not the individual savings of workers and the middle class, but a collective accounting of how this capital is used in  production.  Taking under workers control and management  the dominant sectors of the economy is what will change this situation, not having illusions in capitalism regulating itself.

The usual crocodile tears will flow for these victims of the market from the apologists of capital.  The US capitalist class will blame it on their junior partners in Bangladesh.  We will hear their usual arguments that it is "crony capitalism" that is at fault as if the US isn't the home of "crony capitalism".

Our future can only be guaranteed if we end this madness, end capitalism as a means of producing human needs and replace it with a world federation of democratic socialist states.

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Obama woos Democratic bigwigs, offers to cut social security benefits

Happy after lunch with the billionaires in SF

by Richard Mellor
Afscme Local 444, retired

So President Obama was here in San Francisco this week meeting with his constituents, not the vast majority of people who vote for him, but the people who bankroll the party that represents their interests and that Obama leads.

He had two do’s Wednesday night, one at Tom Steyer’s house where 100 people turned up to hand over cash for the party and the other at the house of another billionaire, Gordon Getty.  Steyer is a coupon clipper worth $1.4 billion according to Forbes.com. Getty, worth $2 billion, has his money by virtue of being the product of a union between two folks one of them the oil magnate J Paul Getty.

Steyer is looking to get in to Democratic Party politics more actively and has been suggested as a candidate for governor.  The two events raised more than $3 million and part of this drive is to get more Democrats in to the House and Nancy Pelosi returned as speaker. Pelosi, from an established eastern bourgeois family is the poor one in the crowd worth anywhere from $26 to $58 million.  Like all of them though, Pelosi’s wealth comes from investments, real estate, stuff like that.

It might have been a bit tense at the Steyer’s as Tom is a “…vociferous opponent of the Keystone Pipeline..”,  according to the media.  But Steyer won’t make too much fuss over that.  With his eyes on political prizes, making an issue of the pipeline, by pointing out Obama’s hedging the issue, would not be useful.  Like a lot of billionaires, Steyer likes to dabble in areas that are of concern to millions of people but not seriously; at 55 he has high hopes of playing a major role in the Democratic Party in the period ahead. “He (Obama) is doing everything he can on the issues that we care about.”, he is quoted in the media as saying, “He has political limitations ----so we really have an obligation to help him.”

Obama was not shy on climate change but never mentioned the Keystone Pipeline, he is among friends with the billionaires that finance the Democratic Party and wants unity.  He pointed out that  the issue of the temperature of the planet is not the main concern of most workers, workers main concern is “How do I feed my family” “The politics of this are tough.” Obama said. They are indeed, and keeping people in a state of debt bondage and in everlasting insecurity is one sure way of keeping people’s attention focused on the immediate, necessities food, shelter, health.  His billionaire backers gave him the “most enthusiastic applause” when he pointed out the gains that have been made in LGBT rights.

This should come as no surprise, such advances in no way threaten the interests of the people he is talking to, the class whose interests the Democratic party represents.  This is not to say this is not an important issue to those who are denied rights the rest of us have due to their sexual orientation, it is.  But we have to clearly see that this and other issues are used by the parties to avoid the most important issues for all people regardless of their race, religion, sexual orientation etc. and that is food, shelter, education, a job (including for the immigrant population) instead of prison, health care, homelessness.

It is comical to hear politicians and supporters of the other party of the 1% harangue Obama for being, “On billionaire’s row” as a Republican Party ad did. The Republican Party is funded by the same class that funds the Democrats. After the two SF billionaires, Obama headed over to the Peninsula to meet with another coupon clipper that loves the environment, investor Mark Heising. He topped it off with lunch with Levi Strauss heir, John Goldman, and his wife Marcia. Goldman is a “philanthropist” apparently. For billionaires this means giving away other people’s money.  You don’t have too look far to see on whose backs Goldman’s wealth was made.

More often than not I have gotten in to some hot water with friends who vote Democratic because they are forced because they vote for this party to defend it.  Actually, they shy away from defending it because it’s impossible to defend it without admitting it is hostile to workers’ interests and defends the interests of the 1% ; so they simply omit the party at all when they’re voicing opposition to the capitalist offensive.  It is always the Republicans that are blamed for the offensive, for cuts in social services, wages, benefits etc. 

This morning (I started this yesterday) I see that Obama has opened the door to cutting social security benefits if Republicans will agree to higher taxes.  This horse trading is done under the cloak of shared sacrifice, us and Warren Buffet joining forces to save capitalism from the abyss.  The White House assures us that, "This isn't about political horse trading……it's about reducing the deficit in a balanced way that economists say is best for the economy and job creation."

How nice of them.  Their economic gurus limited to a perspective based entirely on capitalist economics want what’s best for the economy, for their economic interests that is.  Their interest in jobs, or setting the Labor process in motion is only if they control it and reap the benefits of it in the form of profits.

“He who pays the piper names the tune” as the old adage goes. The Democratic Party heavyweights Obama spent the last few days with are not the friends of workers and the middle class. We won’t be hearing loud protests from them on the reducing of social security benefits which Obama is offering to do by reducing the program's cost of living increases. They talked about that with him this week in private and gave him the OK   Our youth who are being driven deeper in to poverty, prison or the streets will not be dragged from the morass by these people.  But it is also not about Obama as an individual.

A political party does not exist in a vacuum, it represents forces in society, it is financed by those same forces, inextricably linked to them and the Democratic Party, like its counterpart across what they call “the aisle” is a party of the capitalist class.  The assault on workers and our living standards has continued under Democratic and Republican alike, the difference is a matter of degrees.

The 138 million or so eligible voters that opted out of the last election are not simply apathetic as many liberals claim. They have drawn the correct conclusion that neither party represents their interests.

Workers can only rely on our own strength, rely on it here and by linking with workers throughout the world under attack by the same forces. There is no way out relying on the generosity of billionaires, even the trendy ones.  Building a united mass movement in our workplaces, streets and communities using direct action tactics is what will bring results; is what can drive the austerity agenda back and build an offensive of our own against capital.  An independent political alternative arising out of such a movement is the answer to the betrayals and dead end of the Democrats.

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The 1% fleeing to tax havens with our money

The real welfare cheats

by Richard Mellor

Afscme Local 444, retired

Numerous reports have come out in the last few weeks about the massive accumulation of wealth by a small sector of the US population.  One of these characters is John Paulson. Paulson is a bit of a waster, a coupon clipper who profits from the misery of others.  He does no productive work.

He has a lot of money though.  He is famous for one of the bets he made.  “What bet was that?” the reader may ask.  “A bet on a horse, the lotto, a card game?” 

No, my friends, John Paulson is smarter than that.  He made $15 billion for his hedge fund betting that workers, people that worked hard all their lives to build this society we live in, would be bled so dry by moneylenders that they’d find it impossible to pay their mortgages and default on them.  He was right.  The subprime market fell to pieces and Johhny boy was $15 billion better off.

The subprime market was primarily poor people, senior citizens, and the disabled; people with weak credit histories which means they couldn’t pay the moneylender their blood money.  A major section of this market was African American and other people of color and poor whites. The effect on these communities was devastating.  ,“…something very nasty is going down.” wrote the Financial Times’ John Gapper at the time,  explaining that,  “Some 52 percent of loans made to black people in 2005 were subprime and 80 percent of these subprime loans were exploding Arms.”  (Adjustable Rate Mortgages) (1)

Martin Eakes, a credit union CEO estimated at the time that this catastrophe, could well be “the largest loss of African-American wealth in American history.” (2) That’s if we exclude 300 years of unpaid Labor of course.

I will never forget the words of one of the coupon clippers’ victims, a woman named Gertrude Johnson still working as a health aide at the age of 89.  That in itself is pretty bad, working till you drop. Gertrude’s mortgage had ballooned to more than $3000 a month and she simply couldn’t go on. "I just wanted to be able to eat and sleep in my house and have a roof over my head…", she told the Wall Street Journal,  "Every day at midnight when I go to sleep, I think maybe when I wake in the morning they'll tell me to get out." (3)

Indeed, the collapse of subprime was very good for John Paulson.

But poor John hasn’t always had it so good, he made a few bad bets since then but he still wants to protect that $9.5 billion of his own money (more accurately, money belonging to the above Ms. Johnson and others) he’s invested in his own hedge funds.  So he’s looking to move to Puerto Rico where a new law eliminating capital gains on his $9.5 billion is on the books.  (good thing there's no poverty in Puerto Rico). This would definitely help him keep more of the money he acquired from the misfortune of those wanting a roof over their heads.  With this new law he would not have to pay local or US federal taxes on his capital gains unlike in NYC where long term capital gains are taxed at 28%.

Paulson is looking at a nice neighborhood of San Juan where an 8,379 square foot house lists for $5 million according to Bloomberg Business Week.

So Paulson and other like him will have to live in Puerto Rico 183 days of a year to take advantage of residency and I’m sure they won’t have a problem with that.  If you can invest a sum of $9.5 billion you can sure bribe officials.

There are more and more coupon clippers moving to Puerto Rico much like some of the European super rich who are fleeing higher taxes, even changing their nationality to avoid them. People like Paulson are global citizens.  Their loyalty is not to any country or similar patriotic nonsense.  Another important aspect of this is that as long as we as workers accept in our own mind that Paulson and others like him have the right to own capital, much like industrial capitalists own factories, then we cannot change things for the better.  Capital is an integral part of the process of production allowing the exchange of commodities to take place; it is the lubricant of society as many economists have explained. 

But wealth in the form of capital is put back in to production and should also be invested in social infrastructure, housing, transportation, education, health care and other crucial needs of a modern society.  Wealth is a product of Labor; there is no other source. It is the product of human Labor power in use.  In our society this wealth, this surplus value created through the Labor process, is the property of capitalists, they are the rightful owners of it in such a society, a society in which those who work get nothing and those who don’t get all.

We have to challenge this right and challenge it first in our own consciousness because we are taught from day one that Paulson and others have a right to accumulate this wealth, this product of someone else’s Labor. But it is ours. It is our collective product and therefore it has to be taken in to our collective ownership and allocated in a way that benefits society as a whole, including John Paulson. He has a right to a secure and productive future free from want of basic necessities, something his activity denies everyone else.We should not deny John Paulson a roof over his head.

There is no shortage of money in society, the US or otherwise.  Poverty, disease, famine, hunger, wars, all the attacks on social services here in the US, these are all primarily a by- product of the economic system of production that Paulson and others govern and perpetuate.

Paulson thought nothing about making $15 billion off of millions of people who were struggling to pay the moneylenders for the right to have a roof over their head.  We should not worry about taking that money back from him.  It’s ours.

(1) FT 3-19-07

(2) ibid

(3) WSJ 3-12-07

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The arrogance of Wall Street. From the Horses' Mouth

Enjoy it while it lasts boys

Sometimes the horses' mouth is the best place to get information. Here we have it. The arrogance of the capitalist class.  The taxpayer, public funds pulled them and their failed system from the edge of the abyss, saved it from total collapse.  Workers continue to bail them out globally. This is from Bloomberg Business Week, owned by Michael Bloomberg worth over $20 billion. Here they gloat over their enrichment at the expense of millions of Americans and workers throughout the world.  They are proud that "their" government (it's certainly not ours) took our money and handed it over to them to save the system.  The fire is still smoldering as the profits pile up.  The capitalist class like to berate the Russian peasantry (or more so the Bolsheviks) for finishing off the Romanovs.   They are getting overconfident.  The world is in revolt, the US is a tinderbox ready to ignite.  They are throwing fuel on the fire and might get burned sooner than later. The Romanov's thought they were safe  too.

Yes, the Financial System Is Rigged. Why Shouldn't You Profit From That Knowledge?

Reprinted from Bloomberg Business Week

By Roben Farzad on March 08, 2013

Our system is rigged. Unfair. Hopelessly neglectful of the little guy.

All true. But do you really have a better choice? Did you honestly think Washington was going to let it all fail—and for good? After all, who’s backing Fannie Mae (FNMA) and Freddie Mac (FMCC), which are almost single-handedly backing the resurgent mortgage market? Who pumped more than $2 trillion into suppressing interest rates to record lows?

This is the lesson we should all be taking as the Dow Jones Industrial average closes at yet another record. It’s the lesson of how Wall Street traversed the Great Recession, after it survived (and thrived) past Washington-ameliorated crises such as the collapse of Long Term Capital Management and the Savings & Loan imbroglio. You could—should—shake your fist at all the bailouts; the record bank profits that are once again accruing to shareholders and executives; the asymmetry of rescuing now impossibly large institutions when so many individuals had to mail back the keys to their homes. But, in 20/20 hindsight, it was also smart to hedge that runaway cynicism with confidence that the system would take care of itself. In other words, you should have bought in, literally.

Yes, food stamp use is also at a record high. Chronic unemployment borders on permanence. Real medium household wealth is at a decade low. Equity abandonment hit historic levels well into last year. Even with this week’s market milestone, nearly six out of 10 Americans still think the country is in recession. So what, signal the largest banks. After the Big Six’s second-most-profitable year on the books, their investors are primed to enjoy more than $40 billion in dividend increases, Federal Reserve preferences be damned.

You pretty much knew this swagger was back a whole year ago, when JPMorgan Chase (JPM), the biggest U.S. bank, blindsided the Fed by announcing its dividend hike two days before Ben Bernanke & Co. thought the news would go out. Never mind the fact that the London Whale was at the time blowing a hole in the bank’s income statement; the real statement here was Morgan declaring to the Fed, “You’re not the boss of me anymore.”

In retrospect, Wall Street has disproportionately benefited from the largesse of economic policymakers, from easy TARP terms to a long-stretch of largely free consumer deposits. But you knew it would, didn’t you? And you had the power to profit off of that knowledge—assuming, of course, that you had the money and the stomach lining to survive the meltdown. Cut-rate exchange-traded funds, after all, are not just the province of the ultra-rich. You could have set aside some indignation and bought a simple bank ETF that has tripled in four years. Too many of us were able to make such a bet but couldn’t quite bring ourselves to stop worrying and trust the system, however unfair it seemed.

Now, we see housing ascendant again. Corporate profits are breaking records, thanks in no small part to a Federal Reserve—the wealthiest bank in the world—hell-bent on seeing both things happen. “At least the first part of this rally is a rock solid foundation,” remarked financial blogger Barry Ritholtz. “The second half, the argument goes, is built on inorganic matter, primarily Fed liquidity and generosity.” By his estimate, the Dow would be 20 percent to 30 percent lower, absent the Fed’s finger on the scale. “You cannot,” he said, “understate its impact on corporate earnings.” March 9, 2009, was, it seems, that once- or twice-a-generation moment when the market completely capitulates. I remember it well because it was the same week that a pair of BusinessWeek staffers summoned me to their stretch of the newsroom to ponder the new Great Depression and all the damage it would exact. One liquidated her 401(k). The other somehow kept the faith, and she and I have since been revisiting that moment of truth every week—the better to navigate the next one.

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