US Perspectives 2004

As this document was drafted in April of 2004, many of the specific facts and figures have changed. However, the fundamental processes and trends remain accurate to this day, and many of the predictions are already coming to pass. The economic recovery has still not conclusively taken off or slipped back into recession, but the factors that allowed some breathing room for the economy are rapidly disappearing. The effects of Alan Greenspan’s recent interest rate rise - in an effort to counter inflation - cannot yet be predicted. With energy prices cutting into consumer spending, the industrial sector is once again shedding jobs, and the economy is producing less than the bare 150,000 jobs required just to keep up with the growing workforce. The world is as unstable as ever, with the farce of Iraq’s “freedom” a tragic joke on millions of Iraqis and the over-stretched US troops sent there to die in the heat and sand. The presidential election is polarizing America like never before, with Michael Moore’s Fahrenheit 9/11 waking up millions to further political awareness. Kerry’s choice of John Edwards as his running mate is a surprise to no one, and millions of voters are once again faced with no real choice in the election.

This material is intended as a discussion document for those interested in working with and joining the Workers International League, the Marxist tendency in the United States, grouped around the ideas of the In Defence of Marxism website. It outlines our general perspectives for the US for the coming period, and is updated yearly. We invite our readers to read our previous discussion documents here. If you agree with the general outline of this document, and with our program, please contact us.

April 2004 Introduction

Three years ago we explained that the world had entered a period of wars, revolutions, and counter-revolutions. In the pre-September 11 world, this seemed to many people to be a more than slight exaggeration. However, events since that fateful day have overwhelmingly confirmed our analysis, and it is only the beginning. Most people do not learn about the class struggle from books, but from the bitter experience of life itself – the school of hard knocks. It is events, events, events that will shake the consciousness of the working class from top to bottom. Already, in the year since our last US Perspectives document was written, we have seen numerous open clashes between the nations and above all between the classes.

Since the collapse of the USSR and its Eastern satellites, US imperialism has marched around the world with impunity, imposing its conditions on the majority of humanity. This has resulted in seething resentment against imperialism across the globe, and has also led to the rapid growth of discontent here at home. The pre-emptive invasion of Iraq has destabilized the entire Middle East and indeed the world. The situation in Afghanistan is spiraling out of control, and it would appear that Pakistan will be a center for US military operations in the not-too-distant future. In Venezuela and Bolivia, the class struggle has reached a fever pitch, and the dramatic revolutionary process in those countries is far from over. Again and again, the masses have mobilized to defeat reaction and change their destines. In Haiti the absolute rottenness of the capitalist system led to yet another US imperialist occupation of a third world country in order to prevent a collapse into chaos. In Spain we saw the dramatic political earthquake that followed the terrorist attacks in Madrid. In France we witnessed a similar process, as the seemingly apathetic masses turned out in droves and threw the right wing out. In one country after another, events are transforming the consciousness of all classes in society. This process of polarization and radicalization will continue to intensify in the coming months and years.

Tremendous volatility is on the order of the day, with sharp, sudden changes in the situation emerging like a thunderbolt - or a Boeing 767 - from a clear blue sky. But it would be incorrect to say that these convulsions have truly emerged from nowhere. They are a reflection of the enormous contradictions that have built up in society over the last 20 or 30 years. The epoch of global capitalism brings with it global crisis and most importantly from our point of view, global revolution. The fundamental cause of this instability is the deep crisis of the capitalist economic system itself. Economically, politically, socially, and militarily, capitalism finds itself unable to re-establish any semblance of equilibrium. The capitalists are caught between a rock and a hard place. Anything they do to correct the situation will lead only to further volatility. In order to restore profitability they must attack the wages, conditions, and even dignity of the working class. These attacks have already begun, and will be stepped up in the future – the capitalists have no other choice. This is a finished recipe for explosions of the class struggle in every single country on earth including the United States.

2004 promises to be a highly politicized year, and the Marxists must make the most of the heightened awareness about politics, the state of the economy, and the international situation in order to spread our ideas and build our forces.

The US Economy: Introduction

The root of the social, political, and military instability is the crisis of the global capitalist economy. The global economic recovery is still far from consolidated, with some countries still in deep crisis. And although there has been modest growth in some advanced countries, and emerging markets reported a jump of more than 50 percent in net private capital inflows in 2003 to a six-year high of 194 billion dollars, any shock could send the whole system into a tailspin. The unprecedented economic collapse of Argentina is an example of what can happen practically overnight in almost any country – even the US.

The US economy, the motor force for the world, has been struggling to fully emerge from recession for over two and a half years. The economy grew an impressive 8.2 percent in the third quarter of 2003, but it has slowed somewhat since then, and the overall recovery has been uneven. Leading indicators for the strength of the economy remain mixed. One week there is euphoria over the prospects for a robust recovery; the next week there is despair over an imminent slump. Although the stock market has somewhat recovered from its previous lows, the recovery is far from guaranteed in the long term. According to Charles Dallara of the Institute of International Finance, “Although the strong growth outlook for the United States is encouraging in the short term, its sustainability remains at risk."

In last years’ US Perspectives document we explained that a “double dip” – a rapid return to recession – was still a possibility. Technically speaking, this has not occurred. However after 2.5 years of the so-called recovery, the health of the economy remains spotty and lackluster. Most importantly from the perspective of the working class, it has benefited only the bosses. For millions of working people the “recovery” has been nothing of the sort; if the economy does formally slip back into a recession the effects will be even more devastating. It is certainly possible that the economy can continue to limp along in a “joyless” recovery for quite some time, but eventually it will have to either go up or down – the laws of boom and slump are still in effect. Making precise economic predictions is very difficult, since economic data is a reflection of the immediate past, not of the future. However, it is clear that even a full-fledged recovery would not be able to make up for the losses of the previous period. Boom or slump, capitalism remains a parasitic system that benefits a tiny minority at the expense of the vast majority.

Faced with a Great Depression-style collapse, the capitalists and their “laissez faire” government have made a colossal effort to revive the economy, with huge tax cuts, unprecedented deficit spending, a massive armaments program, and the defacto devaluation of the dollar. Based as it is on enormous government contracts, this massive intervention into markets has been termed “military Keynesianism” by some economists. As a result of this, the federal deficit is set to top an astonishing $520 billion this year. This is having an effect on the global economy. IMF chief economist Raghuram Rajan made the following comments during a recent conference call: “The rest of the world is affected seriously by the U.S. fiscal deficit. When the U.S. borrows money, it's going to withdraw from world savings, leaving less for the rest of the world. And to that extent, it's going to raise interest rates not just in the United States but in the rest of the world, and that's going to affect output throughout.”

Everything has its limits. Sooner or later, the debt must be paid back – with interest. This can only mean further attacks on already gutted social programs such as health care and education. Having played most of their cards in an effort to revitalize the economy, the capitalists will have very little room to maneuver in the event of another downturn. And in spite of this massive influx of cash into the economy, the government has still not been able to address the most fundamental issue facing American workers: job creation.

Jobless Recovery

In his State of the Union Address, Bush unveiled his new tax cut with the following promise: “When America works, America prospers, so my economic security plan can be summed up in one word: ‘jobs’.” It’s clear that this pledge has not even remotely been met. The “jobless” recovery was transformed into the “job loss” recovery and back again. In fact, GW Bush will be the first president in 7 decades to preside over a net loss of jobs. Although GDP growth and productivity boomed after the brief recession, job creation not only didn’t keep pace, but hemorrhaged badly. Even with the robust payroll gain of 308,000 in March 2003, the economy has still lost a net 1.84 million jobs since Bush took office in January 2001. 3 million manufacturing jobs have been lost in that period. In order to make up these numbers, the US economy would have to add some 400,000 jobs each month until the end of 2004 (as a point of reference, even during the 1990s boom, such phenomenal job growth occurred in only eight of 102 months). The volatility of the system was graphically underlined when only a week after the 308,000 jobs were added in March, new jobless claims, expected to come in around 7,000, rocketed up 30,000 – the biggest jump in a year - to 360,000. For working people, there is no guarantee of stable employment so long as they are seen as mere factors of production, not human beings.

Just to keep pace with the growing labor force, the economy must come up with 150,000 jobs each month. Far from that, the “recovering” economy lost jobs or added just a few thousand each month until March. Even with this modest turn-around, the damage has been done. There has been no net increase in employment since the end of the recession in November 2001. There are fewer jobs for more workers than there were 2.5 years ago. The all-important manufacturing sector shed jobs for 44 months before stopping the layoffs in March – but they still aren’t hiring. Those jobs that are being created are low-paid with few benefits and no job security, while hundreds of thousands of the jobs that have been destroyed were more highly paid and unionized. One in six US manufacturing jobs was lost over the past four years, and the generally lower-paid and less secure services industry now accounts for roughly 80 percent of the U.S. economy.

A few months ago, the Bush administration stopped reporting the number of mass layoffs due to a “lack of funding”. But Congress recently restored that funding, and the resulting figures are astonishing. According to the Bureau of Labor Statistics, more than 2,400 employers reported laying off 50 or more workers in January 2004, the third-highest number of mass layoffs since the government began tracking them a decade ago. The news headlines are filled with reports of these large-scale layoffs, for example: “Sun Microsystems cuts 3,300”; “VW to Cut 5,000 Jobs”; “Bank of America Corp. to cut 12,500 jobs”; “Gateway to Cut Another 1,000 Jobs”; “Warner Music to Cut 1,000 Jobs”; “DuPont to Cut 3,500 Jobs”, etc. No wonder the number of workers saying jobs were hard to get rose in March to 30.0 percent from February's 28.9 percent.

Long-term joblessness is at a 20-year high. As a percentage of all the unemployed, the long-term jobless - those out of work for 27 weeks or more - made up 22.1 percent in 2003, the highest annual percentage since 23.9 percent in 1983. The average spell of joblessness was more than five months in February 2004, the highest in two decades. A report from the Labor Department showed that the average length of joblessness rose to 20.3 weeks, the longest since January 1984. The number of workers out of a job for more than 27 weeks stood at 1.871 million in February 2004. 1,121,900 unemployed workers have exhausted their unemployment benefits. But these numbers don’t fully explain just how volatile the job market is. It is estimated that 1,000,000 people leave their jobs every day. Most of them find employment elsewhere, but hundreds of thousands do not, and are eventually no longer counted among the unemployed since they are not actively seeking work. The official unemployment rate of 5.7 percent / 8.35 million does not take into account those millions of able workers who are no longer considered part of the working population.

“Employed” has a very different meaning in 2004 than it did in say, 1954. 50 years ago, one wage earner was able to provide for the needs of an entire family. Of course, America in the 1950s was no utopia – it was still exploitative capitalism - but on the basis of the post-war boom and the struggles of the working class in the 1930s and 40s, conditions were much better than they had been before the war. Today, things are worse. Wages and benefits are far lower in real terms, and the 4.7 million Americans who are forced to take on part-time work out of economic necessity are also counted as employed, although one part-time job is hardly enough to keep afloat. By keeping workers on as part-timers, employers are able to cut down on the costs of providing benefits and salaried wages.

According to Chip Hanlon, chief operating officer for Euro Pacific Capital, earnings are still dominated by cost-cutting measures: “I don't think we're experiencing a sustainable recovery.” So far profitability has been maintained by job cuts, the weak dollar, lower effective tax rates and reduced debt servicing costs. The weakened dollar means overseas sales are worth more when converted back into dollars. International Business Machines Corp. recently said that without the weak dollar, its first-quarter revenue would have risen only 3 percent. And Johnson Controls Inc., the No. 4 US auto parts maker, also said revenue was helped by the weak dollar. Job cuts increase profits by allowing companies to pay higher stock dividends to investors instead of wages and benefits to employees. Lower corporate taxes means more money for profits. Lower interest expenses helped Southwest Airlines Inc. reduce its interest bill by $7 million, or 27 percent, in the first quarter. But these factors will not last forever.

The key to as sustained recovery remains capital investment and the jobs this would presumably produce. Although businesses boosted spending on equipment and software at a 14.9 percent rate in the fourth quarter of 2003, businesses continued to cut spending on new plants and buildings in both the third and fourth quarters. After all, what’s the point of investing in industrial capacity when it is already running at just 76.5 percent of available capacity, leaving plenty of room for expansion? And no business wants to be the first to take on new workers - thus cutting into profit margins - when they can invest in ever-cheaper technology and squeeze more out of existing workers.

Productivity Boom

So how is it that the economy is growing, but the number of jobs is far lower than it was just 3 years ago? How is it that factory output continues to increase, while the number of factory workers shrinks? Simple: the capitalists have been able to recover a certain level of profitability only by squeezing more surplus labor from the working class through speed-ups and layoffs. Productivity gains through the use of computers and telecommunications allows one office employee in 2003 to do the work of three employees in the 1980s. Employee productivity rose 4.2 percent in 2003, a jump Federal Reserve Chairman Alan Greenspan characterized as "stunning." That was on top of a 4.9 percent gain in 2002. Together they marked the best back-to-back growth in worker output in five decades. In short, they are forcing fewer workers to do more work for less pay. This is great for corporate profits, but according to Bruce Nussbaum of Business Week, one percentage point of productivity growth can eliminate up to 1.3 million jobs a year.

The tremendous wealth created by increased productivity has primarily gone to increase corporate profits, which rose 10.3 percent in the second quarter of 2003 and 9.9 percent in the third. Since the recession officially ended in late 2001, the working class’ share of the national income is the lowest on record. New jobs being created are paying 13 percent less than those lost during the recession - $14.65 per hour versus $16.92 per hour. By contrast, new jobs created during the later years of the last expansion (1998 to 2000), paid 12 percent more. According to the Economic Policy Institute, previous recoveries provided an average of 61 percent of total income growth - and never less than 55 percent - to workers. In this recovery, however, only 29 percent of the total income growth has gone towards workers’ wages and benefits. Meanwhile, corporate profits have claimed an average share of 46 percent of total income growth in this recovery, compared to the historic average of 26 percent.

A separate study by the Center for Labor Market Studies at Northeastern University came to similar conclusions: “This is the first time we've ever had a case where two years into a recovery, corporate profits got a larger share of the growth of national income than labor did. Normally labor gets about 65 percent and corporate profits about 15 to 18 percent. This time profits got 41 percent and labor [meaning all forms of employee compensation, including wages, benefits, salaries and the percentage of payroll taxes paid by employers] got 38 percent … [The increased wealth was used to] boost profits, lower prices, or increase C.E.O. compensation … In no other recovery from a post-World War II recession did corporate profits ever account for as much as 20 percent of the growth in national income. And at no time did corporate profits ever increase by a greater amount than labor compensation.”

So despite impressive productivity gains, job creation has been poor, and wages have been frozen or have risen only slightly. Many workers are putting in long hours of overtime, often without overtime compensation. It’s becoming increasingly common to give rank-and-file workers fancy titles to lull them into thinking they are executives, and thus not entitled to overtime. In a lawsuit against “forced overtime” at one company, the following email memos from management to employees were submitted as evidence: “If you want to make it here ... put in lots of extra hours.” Another said: “Work your tails off. That means 10-hour-plus days.”

The effect this has on the nerves of the working class cannot be fully appreciated. More workdays are now lost to stress than to any other occupational health-related problem. It is estimated that work-related depression accounts for close to $12 billion in lost workdays each year. Another $11 billion in other costs accrue from decreased productivity due to symptoms that sap energy, affect work habits and cause problems with concentration, memory and decision-making. This is already having an effect on the working class’ outlook. As Trotsky explained, it is the accumulation of constant little attacks, pinpricks, insults and degradation that eventually leads to a revolutionary leap in class-consciousness.

Accelerated Polarization

Over the last few years the gap between rich and poor has widened considerably, and there has been a phenomenal increase in impoverishment in the US. According to the US Census Bureau, since 2000, the number of poor Americans has grown by 3 million. Interestingly, this is the precise number of manufacturing jobs that have been lost. The official poverty rate in 2002 (the most current year for which figures are available) was 12.1 percent, up from 11.7 percent in 2001. 34.6 million Americans were living below the official poverty threshold, a figure 1.7 million higher than the 32.9 million in poverty in 2001. The number of Americans living in severe poverty - with incomes below half of the poverty line - increased by 600,000 in 2002, to 14.1 million.

Since 1999, the number of poor Americans suffering from “food insecurity” and hunger has increased by 3.9 million - 2.8 million adults and more than one million children. In 2002, 34.9 million people lived in households experiencing food insecurity - that is, not enough food for basic nourishment - compared to 33.6 million in 2001 and 31 million in 1999. The total number of children in poverty increased to 12.1 million in 2002, up from 11.7 million in 2001. In an incredible condemnation of the capitalist system, one out of every three Americans living in poverty held a job during 2002 - 37.9 percent or 9 million - yet, despite working, could not earn enough to afford the basic necessities such as food, housing and healthcare. Of all Americans living and working in poverty, 2.6 million, or 11.2 percent, held full-time jobs that did not pay enough to raise them above the official poverty threshold.

As reported by the Center on Budget and Policy Priorities, the working poor in America grew poorer during 2002, with incomes dipping farther below the poverty line than in any other year since 1979, the first year for which such data is available. The average amount by which people living in poverty fell below the federal threshold was $2,813 in 2002. While the Census figures reveal a significant number of Americans living in poverty, many experts (including those at the Economic Policy Institute) feel that the measures used by the federal government drastically underestimate the real scale of poverty in America - primarily because the official poverty thresholds are considered by many to be too low. Many experts believe a more realistic poverty threshold for a family of four would be in the area of $30,000 a year - and that a more accurate estimate of the poverty rate in America would be 30 percent of the total population.

By contrast, the CEO / worker pay gap was 281 to 1 in 2002, nearly seven times greater than the 1982 ratio of 42-to-1. The rebound in US corporate profits and the return of the stock market bull last year paved the way for a 16 percent raise in 2003 cash pay for America’s top executives, most of the gain coming from a 20 percent rise in CEO bonuses. Median cash pay for chief executives - base salary and bonus - grew to $2,029,500 from $1,750,000 in 2002, up 16 percent. Bonuses overall leaped 20.4 percent to $1,064,099 from $883,944, and six out of 10 CEOs enjoyed lump sums last year. The median base salary increased to $950,000, up 3.1 percent from 2002. These averages conceal the extraordinarily high salaries and compensation packages of the very top executives.

For those who argue that these captains of industry “earned” their wealth, we have to agree: they “earned” it the old-fashioned way – they stole it. While millions of workers (those who produce the wealth) were thrown out of work, the heads of those companies made a killing. At the 50 companies with the most announced layoffs, median CEO pay skyrocketed 44 percent from 2001 to 2002, while overall CEO pay rose only 6 percent. These layoff leaders had median compensation of $5.1 million in 2002, compared with $3.7 million at the 365 large corporations surveyed by Business Week. At the 30 companies with the greatest shortfall in their employees’ pension funds, CEOs made 59 percent more than the median CEO.

According to the Institute for Policy Studies and United for a Fair Economy, the top layoff leader in terms of layoff numbers is Carly S. Fiorina at Hewlett-Packard. She fired 25,700 workers in 2001, and saw her pay jump 231 percent, from $1.2 million in 2001 to $4.1 million in 2002. The top layoff leader by percentage pay increase is AOL Time Warner's Gerald M. Levin, who presided over 4,380 layoffs in 2001. Levin's pay increased a staggering 1,612 percent, from $1.2 million in 2001 to $21.2 million in 2002. The highest paid layoff leader was Tyco's Dennis Kozlowski, who took home over $71 million in 2002, a $34.7 million raise, even though he was forced out in disgrace mid-year. In 2001, Tyco laid off 11,300 workers. The top 50 layoff-leaders cut a total of 465,252 jobs in 2001.

Since then the polarization has most likely accelerated even further. This is the state of things in the world’s richest country - the “land of milk and honey”. The true face of Bush’s economic “recovery” is clear for all to see: the rich get richer and the poor get poorer in both relative and absolute terms.

White Collar “Off-Shoring”

And it’s not just blue-collar jobs that are under the axe. Increasingly, formerly secure white-collar jobs are being “out-sourced” to other countries where wages are much lower. Beginning in the 1980s US corporations began the process of closing manufacturing and other industrial facilities, and then reopening them in countries in the ex-colonial world in search of cheaper wages and looser labor and environmental regulations. The containerization of ocean-going freight in the 1970s paved the way for these factory relocations, allowing vast quantities of goods to be moved quickly and cheaply across the globe. Throughout this process it was almost entirely the industrial workers who were left holding the bag, or rather an unemployment check and a bleak future. The capitalist elite and the banks, on the other hand, enjoyed unheard of profits. But in the first decade of the 21st century, due to the possibilities opened up by the Internet and communications technology, it is now possible for these same corporations to relocate work that was once considered immune from being sent overseas: professional and technical work.

For example, because of the availability and dropping prices for high-speed internet access, if one were to have a CT scan performed at a local hospital, there is as good a chance that the scan will be analyzed in Bangalore, India as in the same hospital or across town. The hospital simply emails the CT scan to Bangalore, where it is quickly analyzed according to order of urgency, and the results are then returned to your local hospital. Although this example is an interesting example of the tremendous possibilities of modern technology, that is hardly the reason why many US health care corporations have opened up CT labs in places like Bangalore. The reason for these relocations is the same as in the case of factory relocations – the search for cheaper labor costs and higher profits. A radiologist working in the United States earns on average over $300,000 a year, while his or her Asian equivalent is paid less than half that sum.

As could be expected in a profit-driven system, the comparative salaries and the possible profits are the motivating factor; an American accountant earns between $40,000 and $50,000 a year, while his or her Indian counterpart is paid less than half of that. For every American call-center employee whose job is shipped to India, a company can save as much as $35,000. According to Fortune Magazine, “Plunging bandwidth prices make talking and sharing data over the internet easier and cheaper for companies. At first the work was mostly limited to call centers – phone American Express with a query about a corporate card bill, and there’s a good chance you’ll be talking to Delhi. But in the past two or three years companies have turned to India and the Philippines for much more sophisticated tasks: financial analysis, software design, tax preparation, even PowerPoint presentations.”

Microsoft, IBM, and AT&T Wireless are aiming for their programmers, software engineers, and applications designers, and other professional workers to be low-paid Asian workers. In fact, analysts predict that as many as two million of these types of jobs will be shifted to these low-cost centers by 2014. According to I.B.M. executive Harry Newman: “I think probably the biggest impact to employee relations and to the Human Resources field is this concept of globalization. It is rapidly accelerating, and it means shifting a lot of jobs, opening a lot of locations in places we had never dreamt of before, going where there’s low-cost labor, low-cost competition, shifting jobs offshore.” An executive at Microsoft told his department heads last year to “Think India - pick something to move off-shore today.”

In addition to the “off-shoring” of professional and technical jobs, new advances in office productivity have provided the financial and service conglomerates with an opportunity to trim their operations - once again at the expense of the workers. Companies have slashed positions and simply fired employees they deem superfluous (and of course there are many more ‘superfluous’ workers during a downturn!) The effects of corporate ‘restructuring’ are already making themselves felt everywhere from the unemployment centers to the universities. With an overall unemployment rate of 5.7 percent, the rate for workers categorized as white collar stands at just around 3 percent. This may not seem like much, but when it is taken into account that in 2000 the unemployment rate for white-collar workers was only 1.5 percent, it can be seen that in the space of three years the number of professionals and technical workers out of work has doubled.

An analysis of Labor Department data by the Economic Policy Institute (EPI) found that of those classified as long-term unemployed (more than six months), over 18 percent came from white-collar jobs. In the recession of the early 1980s the percentage of joblessness for white-collar workers compared to that of the total work force was only 8 percent. In 1990 and 1991, the percentage was 10 percent of the overall number. But in 2003 the portion of unemployed white-collars to the total jobless rate is nearly double what it was in previous recessions. This is a much higher ratio of joblessness than their actual composition of the total work force.

Not only this, many US workers are asked by their companies to train in the very workers who will be taking their jobs. According to a new survey by the Washington Alliance of Technology Workers, almost one in five information technology workers has lost a job or knows someone who lost a job after training a foreign worker. In some cases, US workers getting pink slips are told they can get another paycheck or beefed-up severance if they're willing to teach workers from India, China and other countries how to do their jobs. The foreign workers typically arrive for a few weeks or months of training. When they leave, they take U.S. jobs with them. The U.S. employees who trained them are then laid off.

Of course it is not the fault of the other workers – many people in the US are quick to blame “foreigners” for taking “our” jobs. The fact of the matter is it’s the bosses who are at fault. The world capitalist class as a whole exploits the world working class as a whole. In the pursuit of profits, national boundaries, race, religion, gender, ethnicity, etc. mean nothing to them. They will send their investment capital anywhere they can get a good return on it. So who is really to blame? The “patriotic” billionaire capitalists who uproot entire towns by shutting down factories, or those making a few bucks a day just trying to crawl out of grinding poverty half way around the world? Marx’s famous aphorisms, “the workers have no country” and “workers of the world unite” gives us the answer.

The growing practice of moving office and professional functions to countries where workers are paid drastically less does not help new university graduates in their job search. Forrester Research, a financial consulting firm, predicts that within the next 15 years 3.3 million service jobs will be moved to places like Russia, China, India and the Philippines, mostly IT as well as financial services jobs. Another financial consulting firm, A.T. Kearney, has stated that it and other firms can transfer over 500,000 financial service jobs overseas by 2008, which is around 8 percent of the US work force in that sector.

In comparing the rates of unemployment today to those of past recessions it can be seen that corporate “restructuring” is making the situation for office and professional workers much harder than in the past. The situation for recent college graduates is not much better. At the Graduate School of Business of the University of Chicago in the year 2000, 96 percent of students had immediate job offers after receiving their diplomas. In 2002 only 72 percent had companies knocking at their door. At the Harvard School of Business 13 percent of students did not get offers of employment in 2002, after nearly all of them receiving offers in 2000. At lower level colleges and universities as many as half of graduating students don’t get job offers.

Every year universities around the world turn out millions of young people who have prepared themselves to go out into the world and apply all that they have learned – be it medicine, engineering, science or any other profession. These are people who have dedicated the best years of their lives to the study of some of the most necessary arts upon which the modern world depends. But, instead of finding jobs where they can apply their training and education, they instead find unemployment and low-wage jobs. As anyone can attest to, it is not unheard of to find that the person taking your order at McDonald’s has a Bachelors degree, or for an art student to be selling coffee or gas instead of developing their creativity.

Low-Wage Jobs

The idea that low wage work is just a temporary stage towards an ever-brighter and more prosperous future has become deeply ingrained in the American psyche. The ruling class uses various success stories to justify the fact that millions of working people live under the poverty line. We are told that if we work hard and “play by the rules”, we will be able to earn a decent living - if you fail to move up, you must be lazy or incompetent. 30 million Americans – more than a quarter of the working class - earn $8.70 an hour or less, a rate that works out to $18,100 a year, which is the current official poverty level in the United States for a family of four. For most young workers, the situation is even worse. These are often the most repetitious, dangerous, grueling, humiliating, and monotonous jobs – yet many of these workers feel “lucky” to have a job at all. Many Americans take these jobs in hope that something better will open up in the future. All too often, they find themselves doing the same type of work many years or even decades later.

The situation is far worse in the US than in other advanced industrialized countries that provide social safety nets for the working class, including universal health care (although the ruling classes there are in the process of dismantling these programs in the face of stiff resistance from the working class). According to a 1997 study by Timothy Smeeding of Syracuse University, Americans in the lowest income brackets have living standards that are 13 percent below those of low-income Germans and 24 percent below the bottom 20 percent of Swedes. The slashing of social programs over the past decade has left the millions of un- and under-employed Americans in a desperate situation.

Still, we are told that if we are “re-trained” and learn new job skills, things will get better – it is our own fault that we lack the necessary skills for finding a better job. But the truth is that the number of low-wage jobs is increasing, not shrinking, despite “re-training”. Between 1979 and 1999, 3 million manufacturing jobs vanished as global trade brought in textiles, shoes, cars and steel produced by cheaper overseas labor. Since 2001, 3 million more have disappeared. In June 2003 alone, 56,000 manufacturing jobs were lost. The two lowest-paid work categories, retail and service, increased their share of the job market from 30 percent to 48 percent between 1965 and 1998. By the end of the decade, the lowest end of the job market will account for more than 30 percent of the American work force. According to the U.S. Bureau of Labor Statistics, half of all new jobs by 2010 will require relatively brief on-the-job training. Only three of every 10 positions currently require more than a high school diploma. As explained above, these jobs are not only among the worst paid, they are also among the most tedious and difficult. To say these workers need “retraining” to earn more lets the bosses off the hook for failing to compensate them adequately for their existing skills and duties.

The fact is, low-wage job mobility is almost non-existent. A recent study by the University of Michigan found that about half of those whose earnings ranked in the bottom 20 percent in 1968 were still in the same group in 1991. Of those who had moved up, nearly two-thirds remained below the median income. At the same time, the purchasing power of the federal minimum wage fell 30 percent during the 1980s. According to the Economic Policy Institute, despite minimal increases in the 1990s, the real value of the current minimum wage of $5.15 per hour is still 21 percent less than it was in 1979.

Health Care Epidemic

One issue that hits working Americans harder every year is the cost of health care. There are an astonishing 44 million Americans without health care. Those who do have health care have to pay outlandish amounts of money for it, and even then, they have to worry about co-payments, deductibles, etc. A recent Census Bureau report states: “the ranks of those without health insurance grew from 41.2 million in 2001 to 43.6 million in 2002. The percentage who lack insurance rose from 14.6 percent in 2001 to 15.2 percent in 2002. The percentage of non-elderly adults (those aged 18 to 64) with private health insurance slipped from 70.9 percent in 2001 to 69.6 percent in 2001. There is no reason to believe this trend has improved over the last year.

And yet, according to a study by researchers at the Johns Hopkins Bloomberg School of Public Health, Americans spend considerably more money on health care services than any other industrialized nation - but the increased expenditure does not buy more care. According to the study, U.S. per capita health spending rose to $4,631 in 2000, which was an increase of 6.3 percent over the previous year. The U.S. level was 83 percent higher than Canada and 134 percent higher than the median of $1,983 in the other OECD member nations. The study found that in 2000, the United States spent 44 percent more on health care than Switzerland, the nation with the next highest per capita health care costs.

The study also found that the United States spent 13 percent of its gross national product on health care in 2000, which was considerably higher than other nations. In contrast, Switzerland spent 10.7 percent of its GNP on health care, while Canada spent 9.1 percent. The median spending level for the OECD nations was 8 percent. American private spending per capita on health care was $2,580, which was more than five times the OECD median of $451. In addition, the United States financed 56 percent of its health care from private sources, which was the greatest amount of the OECD countries.

According to the study, public financing of health care from sources like Medicare and Medicaid accounted for 5.8 percent of U.S. GDP in 2000, which is similar to the OECD median of 5.9 percent. However, the United States spent $2,051 of public funds per person, which was much more than the OECD median of $1,502. In most of the other OECD countries the public health care expenditures cover everyone, unlike the United States. At the same time, Americans had fewer physician visits, and hospital stays were shorter compared with most other industrialized nations. The study suggests that the difference in spending is caused mostly by higher prices for health care goods and services in the United States. The results are published in the May / June 2003 edition of Health Affairs.

According to the New England Journal of Medicine, in 1999, health administration costs totaled at least $294.3 billion in the United States, or $1,059 per capita, as compared with $307 per capita in Canada (which does have a form of socialized medicine, albeit imperfect). After exclusions, administration accounted for 31 percent of health care expenditures in the United States and 16.7 percent of health care expenditures in Canada.

So where does all the extra money spent on health care go? Why isn’t it being put to use to provide universal coverage for all Americans? The US Chamber of Commerce explains: “despite the recession, the HMO industry posted $503 million in profits during the first half of 2001, a 16 percent increase over its profits for the first six months of 2000.” In other words, much of that money disappears in the form of profits and does nothing to improve our physical health, with 44 million not covered at all. These super-profits are gained at the expense of the health of all working class Americans. In a rational society, one that values the health and well being of its citizens, that money could be put to use improving everyone’s quality of life. Americans spend more on health care than any other country in the world, and yet we do not have coverage for all. In the wealthiest nation on earth, this is simply absurd. In its epoch of decline, the capitalist system is not able to provide even the most basic social services to the millions of working people it leeches its profits off of.

As always, it all comes down to profitability. But as socialists, we think that all health is important – not just avoiding the flu. The media and most politicians say that universal health care is simply not possible. But they’re wrong – the above figures show that the money is there, and that Americans already pay more than enough to cover it. It is a matter of how the money is being spent – billions of those dollars go to line the pockets of the rich, not to mention the countless millions spent on marketing, advertising, etc., which do nothing to improve our health. Universal health care is impossible only under capitalism. The benefits of universal health care to the whole of society would be tremendous. Preventative health care alone including regular checkups would improve the overall health of millions and rapidly reduce the need for more expensive procedures. But this is not going to happen under the capitalist system. Certain politicians may make this a part of their platform, and we would support the implementation of a universal health care system, but the fact is that this is pure demagogy and will not come about so long as the billionaire corporations run the show. The fight for universal health care involves a lot more than just more frequent doctor’s visits and cheaper prescription drugs. When we get right down to it, the fight for universal health care is a fundamental part of the fight for an end to the diseased capitalist system.

Tax Cuts for the Rich, Deficit Crisis for the Working Class

Bush’s much-touted tax cuts are really just a return to the discredited “trickle down” theory. The idea is that by freeing up more money for investment, the big corporations would invest in more capacity, and hence lead to increased job creation. As explained above, the result has been the complete opposite. Instead of that money being available to create jobs and improve the lives of millions of people, it is going into the offshore bank accounts of the ultra-wealthy. Add the billions spent on the Iraq and Afghan wars and occupations, and the amount of social wealth flushed down the toilet is mind-boggling. The US ruling class is the most shortsighted, greedy, and obtuse group of exploiters in history. They have deliberately bankrupted the national treasury as an excuse to viciously attack the working class. Although tax refunds for families does give a short-term boost to consumer spending, what happens once these are exhausted? For most working class Americans, it’s back to the daily grind of living from paycheck to paycheck, trying to dig out from under a mountain of debt. Once again, the rich get richer and the poor get the shaft.

Fully 60 percent of large corporations did not pay a penny in taxes in 2002. Between 1997 and 2002, 350 leading firms received an estimated $3.6 billion in tax deductions based on their CEOs filling their pockets with $9 billion in option gains. This lost federal revenue is about the same amount as the combined 2003 budget deficits of seven of the top ten largest states (Florida, Illinois, Pennsylvania, Ohio, Michigan, New Jersey, and Georgia). It also approximates the amount by which spending on Medicaid in all 50 states exceeded budgeted amounts in 2003. Corporate taxes’ share of federal taxes dropped from 12 percent in 1996 to 8.7 percent in 2001. At the 24 Fortune 500 companies with the most subsidiaries in offshore tax havens, median CEO pay over the 2000 to 2002 period was $26.5 million - 87 percent more than the $14.2 million median three-year pay at other Fortune 500 firms surveyed by Business Week.

This means that the working class has been forced to shoulder even more of the tax burden than in the past. Chuck Collins, co-founder of United for a Fair Economy outlined the situation in a recent interview: “Unless you are super-rich, it’s a tax shift, not a cut. Non-wealthy taxpayers will pay for these tax cuts with increased state and local taxes or cuts in public services.” Between 2002 and 2004, the Bush tax cuts to the top 1 percent of US income earners redirected billions of dollars in revenue that could have eliminated virtually all of the budget shortfalls in the states. Chris Hartman of United for a Fair Economy explains: “Congress had the option to send aid to the states to prevent $200 billion worth of service cuts and regressive tax increases. Instead, they gave tax breaks totaling roughly the same amount to multi-millionaires and the rest of the top 1 percent.”

A recent UFE report found the following: Between 2000 and 2003, there was a 15 percent shift in tax burden from the federal to the state governments; since 1980, there was a tax cut on unearned income - such as inheritance or investment - of between 31 percent and 79 percent, but a tax hike on work income of 25 percent; since 1962 at the federal level, a 17 percent decline in the share of revenue from progressive taxes and a 135 percent increase in the share of revenue from regressive taxes; a 67 percent drop in the share of federal Most corporations pay nowhere near the standard federal tax rate of 35 percent. This has led to such a blatant bias towards big business that even mega billionaire Warren Buffet exhorted Bush to raise his taxes, and added, “If class warfare is being waged in America, my class is clearly winning.”

Here is how one parent interpreted the shifted tax burden: “I got a rebate check last summer for $400,” said Collins. “Then my eight-year-old’s public school asked me to contribute money to replace worn-out chairs for the students. At the same time, I found out they laid off the librarian because of budget cuts. What good is a $400 tax cut when parents have to cough up additional money for chairs and books or else see their children go without?”

Another result of these tax cuts has been an unprecedented budget crisis in states and cities across the country. The Federal government and almost all 50 states face their worst budget deficits in decades, with several large states near bankruptcy. Last year, California alone, with a population of 34 million, had a deficit covering more than 32 percent of its total budget! Texas and New York were not very far behind. The Federal government, which only three years ago was actually turning a profit, is once again running at a massive deficit.

Every state of the union except New Mexico and Wyoming faced a fiscal crisis last year. Democratic and Republican governors and legislatures alike have slated welfare and educational programs for elimination. Many states have warned of layoffs, while others are either already laying workers off or forcing furloughs on others. Public transportation, education, local government and state employees’ pensions are being forced to absorb the largest reductions. In addition to cuts, the state governments are shifting a large part of the debt onto local governments. Despite the fact that tens of thousands of working poor were already eliminated from the welfare rolls under the Clinton Administration, the budget crisis will mean even wider cuts for the millions who depend on public assistance to survive.

This is the real fruit of Bush’s tax cuts for the wealthy and corporations and can only have dire consequences for the millions of the poor and elderly who depend upon welfare and Medicare / Medicaid. Already, Alan Greenspan has declared that Social Security and Medicaid benefits are potential targets in order to make up the deficit. Tuition at state colleges is rising quickly, and several states have already warned that entire education programs and grants will be eliminated. Federal and state workers will once again face layoffs, destabilizing one of the few stable sectors of the economy.

The effects on education have also been devastating. For over eight years school districts and some state colleges in every region of the country have continually suffered budget shortfalls with the resulting elimination of classes and lower salaries for teachers. This has been especially acute in urban areas, where the combination of a declining local tax base and a lack of adequate funding from the states and the federal government has led to a bleak situation. The recent state fiscal crisis and the Bush administration’s war budget have compounded the problem. Many school superintendents, teachers and students are being driven to near desperation. The superintendent of schools for Buffalo, NY, was quoted in the New York Times saying, “It’s the worst thing I’ve ever seen, and I’ve been in the district 35 years. I mean we’re looking at crazy things, like a four-day week, no kindergarten, no pre-kindergarten, no sports. I’ve done everything I could think of, I’ve closed schools. I’ve suspended service at schools. It’s been horrible.”

One of the worst parts of the educational budget crisis has been the suspension and cutbacks in programs teaching non-English speaking immigrant children the English language, in practice the only official language in the United States. This means that a large number of the children of immigrants go to school not to learn, but simply to be stored away for eight hours. This also means that many non-English speaking students will have to wait more than the standard four years to graduate high school due to the fact that they will be unable to pass the English Regents test. This also means extra time before these students can go on to a university or get a job.

Karen Kraut, United for a Fair Economy’s State Tax Partnership director sums it up: “The Bush administration has followed a strategy of starving public services by pulling tax money away from education and housing and giving it away to multi-millionaires. States are suffering as a result, and people are going without essential services in order to fund the lifestyles of the rich.”

The state and federal budget crisis is not purely the result of which capitalist political party sits in office. Nor is the fact that the US spends more than half of its massive budget on arms the result of a Republican administration and Congress. This practice has continued for the last fifty years through Democratic administrations as well, even under the ‘pacifist’ Carter. The reason that the educational system in this country is in crisis is due to the fact that the politicians of both parties, and their corporate sponsors, have chosen to pursue a policy of “guns before butter”. In defending its interests around the world, the American capitalists are more than ready to put tanks, warships and bombers before the education of a whole generation of future workers.

Inflation, Deflation, Trade, and Credit

Although interest rates are their lowest levels since 1958, the economic recovery remains unbalanced. In last year’s US Perspectives document we explained that there was a danger of deflation – a downward spiral of falling prices – a nightmare scenario for the capitalists and Federal Reserve Chairman Alan Greenspan. Since then, it would appear they have dodged the deflation bullet, with higher energy prices in particular exerting inflationary pressure on the economy. Greenspan recently concluded: "It's fairly apparent that pricing power is gradually being restored … threats of deflation, which were a significant concern last year, by all indications, are no longer an issue for us." Recent data indicates inflation may well be the real threat in the immediate future. The Consumer Price Index rose 0.5 percent in March after a 0.3 percent rise in February. The core CPI, which strips out often-volatile food and energy costs, surged 0.4 percent, the biggest increase in nearly 2.5 years. Over the past 12 months, core prices have risen 1.6 percent, the biggest 12-month gain since the period ending last May and a sharp pick-up from the tame 1.2 percent increase posted through February. According to John Lonski, chief economist at Moody’s Investors Service, “It looks as though core inflation is back. We have the core CPI now growing at an average monthly rate of roughly 0.3 percent thus far in 2004. That adds up to a rate hike happening sooner rather than later.”

Low interests rates cannot be taken for granted. If inflation starts to get out of hand, or if the economy grows “too fast”, the Federal Reserve will be forced to raise rates, which will come as a shock to those who have become accustomed to the near-zero rates of the past two years. The stock market generally reacts badly to interest rate increases. Although the market is not a direct reflection of the real health of the economy, many companies measure their worth by the value of their stocks. A rise in rates could send the market downward, even further discouraging companies from hiring new workers. But Greenspan and co. may have no choice if they are to reign in inflation.

If inflation starts to take off, the effects on working people who are just squeezing by as it is could be overwhelming. Real wages are not keeping up with rising prices, which means that working people cannot afford to buy as many good as they could previously with the same amount of money. For example, a loaf of bread that cost $1 yesterday may cost $2 next week in a situation of out of control inflation. If wages do not also double, then that $2 loaf of bread is eating up a much larger proportion of the worker’s wages than before. The Labor Department said real average weekly earnings fell 0.7 percent in March and were essentially unchanged over the past 12 months. The CPI report cited above showed that energy prices rose 1.9 percent last month. Record-high gasoline prices take an ever-larger bite out of workers’ paychecks.

One factor that contributes to inflation is the massive trade deficit, which hit an all-time high of $489.4 billion last year, including a gap of $124 billion with China and $94.3 billion with the European Union - up 17 percent from 2002. US imports increased 8.3 percent to a record $1.51 trillion in 2003, aided by a record volume and value of crude oil imports and the highest average oil prices since 1984. Even with the dollar at historic lows, which should help moderate the discrepancy, exports inched lower and imports were sucked into the country at a record pace in 2003 – much of it bought on credit. In the first quarter of 2004, both imports and exports have risen astronomically. The weaker dollar has finally had a positive effect on increasing exports, but the trade gap in February still stood at a hefty $42.1 billion. In the long-term, this is an untenable situation for the world’s only superpower. Those who imagine that an Argentina-style meltdown is impossible here in the US shouldn’t cross their fingers.

Contributing to the unbalanced situation are the bloated levels of consumer credit, which grew at a $2.2 trillion annual rate in the first quarter of 2003, and then rocketed at a $3.3 trillion rate in the second quarter. By the end of 2003 debt reached $33 trillion, with annual interest of nearly $2 trillion, a colossal amount even at today's historically low rates. More and more, workers are charging things such as groceries that they could formerly afford. Debt is now growing seven times as fast as the economy itself. This trend has continued in the first months of 2004. Outstanding consumer debt rose $15.8 billion in January, and a further $4.1 billion in February to a seasonally adjusted $2.019 trillion. So while it is still increasing, there is a marked slowdown as Americans’ confidence in the health of the economy is constantly shaken – not to mention the creeping realization that all of that must be paid back with interest.

Not only consumer debt, but also national debt has skyrocketed to astronomical heights. The national debt of the United States swelled to an all-time high of more than $4 trillion at the end of 2003, with the projected 2004 budget deficit of $520 billion to be added to that by the end of the year. This represents an incredible 40 percent of GDP, with a projected growth to 52 percent over the next decade. This would mean, in effect, that the country would have to gather revenue for more than half of the year just to meet its debt obligations. Any other country with this level of debt would have had a formal intervention by the IMF and World Bank, and would have been downgraded by ratings agencies. But the US is no ordinary country. However, being the biggest and the baddest cannot last forever.

And just who will pay this debt incurred by millionaire politicians to the billionaire bankers? The US working class, through further cuts in services, a shifted tax burden, and lower wages. To illustrate just how out of balance the situation is, the National Bureau of Economic Research asked this question: If the United States collected all of the future revenue it anticipates receiving and matched that to its future obligations, in an extended time period Social Security actuaries refer to as "the infinite horizon," would it be able to meet them? The answer was no — to the tune of $45 trillion. These projections are based on today’s historically low interest rates. The effect of higher interest rates in the future on the government’s debt service burden can only be imagined.

Bush’s handouts to the rich – the tax cuts and his prescription drug benefit package - alone will add trillions to the national debt over the next decade. With some 77 million Americans eligible to retire over the next 20 years, the pressure on the already shaky Social Security and Medicaid system will be intolerable. The situation is so bad, Moody's Investors Service recently raised the possibility they would be forced to downgrade their rating on the sovereign debt of the US government. This is yet another graphic illustration of the complete inefficiency and irrationality of the capitalist system.

The trade and current account deficit have put downward pressure on the already weakened dollar, which could lead to inflation as the price of imported goods, in particular oil, continues to rise. The US dollar, which has lost some 20 percent of its value against other major currencies over the past two years, has recently stabilized against the Yen and Euro, due largely to weakness in Japan and Germany. However, according to Gary Thayer, chief economist at AG Edwards & Sons in St. Louis, the data suggests “the decline we've seen in the dollar over the last couple of years is not having an impact. It suggests the dollar may still need to fall to help narrow the trade deficit. But there's a risk to higher inflation if it does.”

Lack of confidence in the US economy over the past year has resulted in the stunning collapse in foreign-capital flows over the past year. From a peak of $110.4 billion in May of 2003, net foreign flows fell to $90.6 billion in June, to $73.4 billion in July, to $49.9 billion in August, and to $4.2 billion in September. September's net inflow was only 10 percent of the monthly minimum required to fund the $542 billion current account gap. Private interests overseas have forsaken the dollar in favor of other assets. International central banks hold nearly one-third of the outstanding debt in the form of US Treasury bills and regularly lend the United States the difference between what it brings in and what it spends. So far, only the buying of dollars or US dollar assets, such as Treasury bonds by foreign banks - thus lending money to the Bush administration - has kept the dollar from destruction. In September, for example, while the rest of the world was dumping dollar assets, the Bank of Japan spent $40 billion to support the dollar, fearful of the consequences if the US economy were to melt down.

Having abandoned its “strong dollar” policy, the Bush administration hoped a weaker currency would help make up the trade deficit and increase exports. But this has not happened to any significant degree, and a weak dollar puts a greater burden on the economies of the rest of the advanced industrialized countries. As Alan Greenspan recently stated, "The dollar's depreciation over the past two years is now adding to the challenges Japan and Europe are facing." In an effort to avoid the inevitable backlash at home, the capitalists of each country are working desperately to export the crisis of unemployment to one other. But the global nature of the economy means that weakness in any one country can spread to the world economy as a whole. In the pre-atomic age, these rivalries would likely have led to open war a long time ago, but this is no longer possible. Instead, there is an intense economic war going on behind the scenes.

Despite all the talk of free trade and open markets, the specter of protectionism looms ever larger, threatening to undermine the entire network of global trade so painfully built up in the post-war period. On the basis of the recovering US economy and increased imports, world trade has begun to recover since 2001 when it declined by 1 percent, with growth of 2.5 percent in 2002, and 4.5 percent in 2003. But this is still far from the average growth of 6.7 percent each year during the boom of the 1990s. Continued jitters about the international situation, and the life or death scramble over even the tiniest market could again throw this process into reverse. The conflicts of interest between the main imperialist powers that blew into the open before the invasion of Iraq were a direct reflection of this.

Consumer Confidence, Spending, and the Housing Bubble

At the heart of the health of the economy is consumer spending, which accounts for two-thirds of economic activity in the US. Consumer spending rose at a 3.2 percent pace in the fourth quarter of 2003, following a 6.9 percent growth rate in the third quarter. Retail sales, which account for 36 percent of overall consumer spending rose an unexpectedly sharp 1.8 percent in March to a seasonally adjusted $333.01 billion, the biggest gain since March 2003. This is great news for retailers, but as explained above, may force the Federal Reserve to raise interest rates. But there is no guarantee this pace will continue. Since the outbreak of the Shiia uprising in Iraq, consumer confidence has been dampened, and other factors that have encouraged increased spending may have exhausted themselves. High oil prices affect every sector of the economy, from transportation to food, and hit the working poor the hardest. But according to Lynn Reaser, chief economist at Bank of America Capital Management, “The situation in Iraq is probably the biggest threat to consumer confidence.”

A survey of consumers’ feelings about current economic conditions dropped to 94.3 in early April, down from March’s reading of 96.8. The “jobs” sub-index of the gauge dropped to 100.3 in early April, compared to 109.3 in March. The sub-index measuring consumers’ feelings about economic expectations, including conditions in the local areas where they live or work, over the next six months, fell to 90.5 in early April, from a reading of 95.2 in March.

Despite this, most analysts expect consumer spending to continue healthily for the first half of the year, as tax refunds filter in and borrowing rates remain low. But prospects for the second half of the year are much less certain. Carl Steidtmann, Deloitte Research's chief economist explains his outlook: "Consumers will continue to spend sizeable tax refunds over the next few months on high-priced goods and services, such as consumer electronics and home improvements. However, we've reached an inflection point in the index. In four to six months, the stimulating effects created by the tax cuts will reach a peak, resulting in a smaller amount of disposable cash and causing consumer spending to grow at a slower rate." Add to this uncertainty over interest rates and the instability of the international situation in an election year, and a solid recovery is not at all certain. These constant mood changes are a direct reflection of the world crisis of capitalism.

Another weak point in the economy is the housing market. Leaving aside the fact that affordable housing is increasingly difficult for many working people to find, the overall prospects for this recently booming sector are hazy at best. With housing prices growing steadily, and mortgage prices at their lowest level since the Eisenhower administration, millions of Americans have bought new homes or re-mortgaged their existing homes. This extra cash helped keep consumer spending going strong despite the gloomy job outlook. It also drove up home prices as millions of people searched for a place to call home (some 70 percent of Americans how own their own homes). But everything has its limit, and despite the low rates, the money has to be paid back with interest. As Marx explained, credit is a way for the capitalists to artificially extend the constraints of the market – but sooner or later, all good things must come to an end. In an ominous indicator on the health of the housing sector, the Mortgage Bankers Association said new mortgage applications fell in first week of April for the fourth straight week as demand for loan refinancings dropped sharply. With interest rates possibly set to rise, demand for new homes will likely continue to fall, affecting everything from construction to consumer confidence as home-owners lose equity they thought they had due to inflated home prices.

Not only that, but with rates so low, many Americans have taken out adjustable-rate mortgages instead of 30-year fixed loans. With this type of loan, the buyers get a lower rate now, but lenders have the option of raising rates in the future. The danger of this is clear: many owners who are currently just squeezing by on their monthly payments may not be able to afford them if interest rates and hence monthly payments rise substantially in the future. If inflation continues in the broader economy as well as in home prices, the Federal Reserve may be forced to do just that. In an economy where net jobs are being lost, the possibility of millions of people losing their homes looms large. As explained by BankRate.com: “Here's a worst case scenario: Today's buyer of a $500,000 home finds that in three years she owes that same amount, but has to pay twice as much to finance it, while she can sell the house for only $300,000. It doesn't take much imagination to see what such a trend would do to the banking industry, consumer confidence, and the broader economy.”

Conclusion

As is clear from the above material, the health of the economy is mixed. This is normal in a transitional economy, moving between recession and recovery. But the capitalists have not seen the light at the end of the tunnel yet. Even during a so-called recovery, the situation for millions of workers has deteriorated further. In such an unstable period of history, international events can have a disproportionate effect on the US economy. Any shock from outside or within the US, even if not directly related to the economy, could send it into a tailspin. The effects of another major terrorist attack inside the US – which is almost inevitable – are incalculable. A healthy economy could survive such a blow, but one that is already unbalanced could be pushed over the edge. The real key to the situation is investment and job creation.

However, even if the recovery does take off, creating the now-elusive jobs, the damage has already been done. The ruling class has used the crisis to slash the living standards of the working class, rolling back the gains fought for in struggle by working people over the last 70 years. It will require colossal effort and heroism to regain this lost ground. But the working class is relatively fresh and undefeated – it has more than enough potential power and dynamism to take back what has been robbed from them and then some. The only lasting solution is the socialist transformation of society. The capitalist system of booms and slumps will continue until the rotten system is ended once and for all. There can be no “final crisis” of capitalism. It will inevitably recover so long as the system continues – but at what cost in human lives, waste, and misery?

As Marxists we are not for worsening conditions for working people, and a recovery would not be a bad thing from our point of view. We fight everyday to improve wages, conditions and benefits, and to increase working class unity. But we realize that so long as the profit system continues to dominate our lives we will not be able to fully realize the full potential of humanity. An improved job market would lead to workers feeling more secure in their jobs, and hence would be more apt to unionize, strike for improved wages and conditions, etc. And even in the event of a full recovery, another slump would not be far behind. As the capitalists found when the IT boom of the 1990s burst, there is no “new economic paradigm” – what goes up still must come down. For working people it is not the absolute lows that bring about a revolutionary consciousness, but the constant insecurity, sharp, sudden changes, and lack of any guarantee that they will have a roof over their head and food on the table in a year or even a month’s time.

A recovery in the jobs market would lead to greater confidence of the working class who at present are rightfully concerned about their economic future and security. Despite their militancy, most strikes in the recent period have been of a defensive nature designed to hang on to the gains of the past, especially health benefits. But without a leadership that truly defends the interests of working people, even the most self-sacrificing trade union struggles will come to naught. The workers are forced to fight not only their immediate employers, but also the capitalist class and its supporters as a whole: the government and the trade union bureaucracy included.

What is most important for us to understand is that the overall trend of the capitalist economy is downward. The recessions destroy more wealth than the booms produce. This decline imprints itself on the psychology of all classes in society, and it is this consistent deterioration, combined with the constant insecurity about jobs, health care, education, housing, security, etc. that is slowly but surely preparing the conditions for a massive upturn in the class struggle here in the US. Despite the powerful propaganda of the ruling class and its media against social welfare and collective solutions to social problems, nine out of ten Americans believe the federal government has a responsibility to alleviate poverty. In a report by Lake, Snell, Perry & Associates, January 2002, a strong majority believes that government should do more, not less, to help people move from welfare to work by providing skills needed to be self-sufficient. After decades of searching for individual solutions to collective problems, working people and especially the youth are increasingly looking toward working class unity and militancy to resolve the problems confronting them.

Many people like to blame GW Bush for the current state of affairs, and it is true that he and his administration has made its mark on the situation. But the real root of the problem is to be found in the capitalist system itself. In the search for profits, the capitalists will go to any lengths to improve their bottom line. Workers are merely factors of production, and if they can pay engineers in India a third of what they are currently paying their American counterparts, they will do it. The weak global economy is forcing the capitalists to scrounge for every market, cut every corner, and squeeze every ounce of productivity out of the world working class. Recovery or no recovery, it is still capitalism.

As they are based on an incomplete snapshot of the past, precise long-range economic perspectives are extremely difficult - we do not have a crystal ball. Our task, therefore, is to draw out the general trends and movement of the world economy, and above all its effects on the working class. The only really consistent feature of the current economic situation is extreme volatility. One day the markets are up, the next they drop to multi-month lows. Consumer confidence plummets one month only to make modest gains the next. Payrolls surge one month, but are followed by gains so low they do not even keep pace with the growing workforce. The movement of the economy, like society as a whole, does not follow a straight line, but rather, has ebbs and flows like the ocean’s tide. This constant uncertainty of living from paycheck to paycheck is waking millions of workers up to the realities of life under capitalism.

The new generation is the first since the Great Depression that has a lower standard of living than the generation before it. We work harder than ever, and yet there is no guarantee that we will have a secure job, health care, education, or even housing. This is the present and future of capitalism and the anarchy of the free market. No lasting solution to these problems can be found as long as the vast expanse of the world economy is held in private hands for private profit. Only a nationalized, democratically planned economy, linked to a worldwide economic network, can solve the crisis of wasted human and material resources. Only an economic system based upon the needs and prosperity of all can best utilize the labor and talents of the whole of humanity. Working people are able to make great sacrifices and endure terrible privation if they feel that their efforts will result in a better life for their children and grandchildren; in other words, if things are consistently getting better. Slowly but surely, Americans are realizing that things are not going to get any better. The accumulating mood of frustration and discontent will explode at a certain point. Last year’s massive anti-war protests were just a hint of what’s to come.

Last year’s US Perspectives document was written on the eve of the US invasion of Iraq. How quickly things change! As predicted, the US imperialists were able to topple the Saddam Hussein regime in just a few weeks, but the post-war occupation of the country has rapidly turned into a quagmire, sucking in ever-more money and troops. Before the Iraq war, at a meeting of the Arab League, Secretary General Amr Moussa said that a US war on Iraq would “open the gates of hell." Much to the chagrin of Bush and his handlers, this prediction has come painfully true. Not only for the administration, whose days of triumphant arrogance are fast becoming a thing of the past, but also for the troops in the Middle East, their families back at home, and the American working class as a whole, which will have to pay off this mess for decades.

Before the war started, there was an unprecedented explosion of outrage and anger against the impending invasion. As we explained in the introduction to last year’s document: “The relatively short war cut across the anti-war movement and prevented it from becoming more generalized at that point in time. But the truly mass character of the protests (larger than even at the height of the Vietnam War), which took place even before the war started is significant. For millions, this was the first time they had taken to the streets to make their views known. In a significant development, it was not just the ‘usual suspects’ – the activists and ‘rrradicals’ who participated in these demonstrations, but people from literally all walks of life. In the coming years of increasing instability, this experience will serve as the starting point for millions of Americans in their struggle to fight back against the depredations of capitalism.”

Most of those on the demonstrations were working people, most of them unorganized in unions, and only loosely organized by the various anti-war coalitions. Significantly, US Labor Against the War was founded, an important step in the politicization of the labor movement. However, the start of the war and the relatively quick “victory” cut across this movement, as the call to “support the troops” rallied millions of those who opposed the war, but felt it would be “unpatriotic” to oppose it openly once troops had been put in harm’s way. Millions of Americans genuinely thought they could stop the war through their presence on the streets. The start of the war dampened their spirits, as they felt they had failed, despite it being clear that Bush and co. had made the decision to invade Iraq long before September 11. In June of last year, with the start of the guerrilla war against the US-led coalition, the mood in the US soured against the war, but by the holiday season, it seemed things were back on track for the US occupation, at least on the surface.

But Bush and co. counted their chickens before their eggs were hatched. More US troops were killed in the first 3 weeks of April 2004 than during the official “war”. Under pressure from the masses at home, Spain, Honduras, and the Dominican Republic are withdrawing their troops from Iraq, and other “coalition” members are sure to follow. Whereas they at first rejected the very existence of an organized guerilla opposition, the US military has been forced to negotiate with insurgents in Falluja and Najaf. More than a year since Bush announced the conclusion of “major combat operations”, swooping onto an aircraft carrier emblazoned with a “mission accomplished” banner, the mood in the US is once again pessimistic about the legitimacy and prospects for the continued occupation of Iraq. Iraq has been plunged into chaos with rampant murders, indiscriminate suicide bombings, and economic privation affecting every nearly part of the country. In a presidential election year, the current situation in Iraq is a nightmare scenario for Bush and his advisors, who will do their best to sugar coat the real state of affairs in the run up to November.

What is important to keep in mind is the rapidity of the changing mood. During the Vietnam War, it took years before the masses turned against the war. We haven’t yet reached a decisive level of opposition, and even though they are not on the streets as they were before the Iraq war began, it is certain that more Americans are opposed or at least much more uncomfortable about the situation in Iraq than before the invasion began. Ron Kovic, the paralyzed Vietnam veteran who became a symbol of protest with his book Born on the Fourth of July recently said, "There is potential here for the most powerful anti-war movement in the history of the United States and the world.”

The euphoria of a quick victory with only a handful of casualties evaporated in less than a year. It is important also to keep in mind the economic backdrop of these events. The 1960s was the end of the golden age of US capitalism. In a situation of improving wages and conditions, the class struggle was dampened for an entire period. It took years before opposition to the war took on a generalized form. Now, on the basis of the economic stagnation described above, the pent up frustration and anger at how things are going in general is being expressed in opposition to the war. Americans from all walks of life are opposed to the war, but are still not sure what to do about it. In an election year, they are focusing on electing “anyone but Bush” – but as we will see further down, Kerry is not a real alternative for working people and those opposed to the occupation of Iraq. What is needed is a working class program and leadership – only the working class can end the war and occupation.

Millions of Americans, many of whom formerly supported the war wholeheartedly, have now begun to doubt the validity of the war’s proclaimed aims and the progress of the war itself. The White House was forced to admit that many of their pre-war claims and justifications were based on baseless or forged evidence. The open-armed welcome of the Iraqis was limited at best, and did not last more than a few weeks. The complete absence of the “imminently threatening” weapons of mass destruction has cast much doubt on the sincerity of Bush’s war aims. Even before US officials conceded more troops might be needed (a reversal of earlier claims to the contrary), eight out of ten in polled by Post-ABC said they were very or somewhat concerned that the United States “will get bogged down in a long and costly peacekeeping mission.”

Although GW Bush allegedly went AWOL for a year during his Vietnam-era stint in the Air National Guard, and Dick Cheney had “better things to do” while 58,000 of their fellow Americans were killed in that tragedy, they believe it is quite an honor to “die for your country”. Curiously enough, the sons and daughters of the rich are not lining up to meet such a glorious end in the defense of “their country”. Most of those dying in Iraq are minorities and the poor in general, while the children of the rich profit handsomely off the billions in government subsidies to the war industry. Ironically, one of the first American soldiers killed in Iraq wasn’t even a US citizen, but a Mexican immigrant who had been promised citizenship if he “did his duty” for the United States.

The staggering cost of the war is estimated at over $4.7 billion per month, not including operations in Afghanistan. Just extending the Iraq tours of 20,000 troops will cost the Pentagon about $700 million more over the next three months. Bush is set to ask for more “emergency” money before the old appropriation runs out in September – between $50 and $75 billion - but would desperately like to delay this until after the elections. This has had a direct effect on the quality of life of millions of American workers here at home. As explained above, the budget deficit has led to massive cuts in social spending, and this is already leading to a backlash against the costs of the occupation, which has only just begun. The only ones to benefit are the massive corporations getting billions in tax dollars in no-competition contracts with the government. It’s no surprise that many of the companies, such as Halliburton and Brown & Root, are intimately linked with the Bush administration and the neo-conservative Project for a New American Century.

It is true that Bush and his cronies have unprecedented power, technology, and resources concentrated in their hands, but they are not invincible or all-powerful. On the contrary – they are extremely vulnerable. There is a much more powerful force on the planet. Despite the considerable dangers facing US troops in Iraq – the heat, sand flies, rocket-propelled grenades, improvised explosive devices, Sunni insurgents, Shiia clerics and their militias, etc, the real threat to Bush and the US imperialists is right here at home – the US working class. Trotsky explained that the US would emerge from WWII as the most powerful country on earth, but that it would have dynamite built into its foundations. That dynamite is the working class - only the working class can end the war on workers at home and abroad.

Iraq and the Vietnam War

Senator Ted Kennedy recently called Iraq “Bush’s Vietnam”, and many others have picked up the theme. Even right-wing isolationist Pat Buchanan has declared, "what Falluja and the Shiia attacks tell us is that failure is now an option." To be sure, there are many differences, but it is impossible not to make comparisons with the US experience in Vietnam. The specter of the Vietnam War has haunted the US military and ruling class since their ignominious withdrawal from Saigon in 1975. It took the US imperialists 30 years to recover enough from “Vietnam Syndrome” to be able to embark on the blatantly predatory campaigns of the past few years. Although the US enjoyed overwhelming military superiority in Vietnam, American forces were ultimately forced to withdraw with their tails between their legs. This was due to a combination of the progressive and heroic national liberation struggle of the Vietnamese people, and even more decisively, the growing opposition to the war on the home front. Ho Chi Minh and General Vo Nguyen Giap were certain they could outlast the US. Once the American working class turned against the war, it was all over for the US imperialists.

The most famous US commander in Vietnam, General William Westmoreland, badly misjudged the tenacity and endurance of the Vietnamese people. He had the illusion that the US could “bleed” the endurance out of the Vietnamese in a “war of attrition”. But the Vietnamese were fighting for their own country, with popular support, against a mostly-conscripted occupation army of young kids who had no interest in being there. As Ho Chi Minh prophetically told his French adversaries in the late 1940s: “You can kill ten of my men for every one I kill of yours. But even at those odds, you will lose and I will win.” After the war, General Westmoreland said, “Any American commander who took the same vast losses as General Giap would have been sacked overnight.” CIA analyst Patrick McGarvey summed up Giap’s strategy in 1969 when he noted that Giap measured the situation not by his own casualties, but by “the traffic in home bound American coffins.”

The American people always rally around the troops when a war begins. But that mood cannot last forever. As General Fred Weyland, the last American commander in Vietnam explained: “When the army is committed the American people are committed; when the American people lose their commitment it is futile to try to keep the army committed.” After the war, Colonel Harry Summers, Jr. met with a North Vietnamese colonel and said the following: “You know, you never defeated us on the battlefield.” To which his counterpart replied, “That may be so, but it is also irrelevant.” This will be the case in Iraq as it was in Vietnam.

It is also worth mentioning that both wars were initiated on false pretenses: the Gulf of Tonkin incident was used to justify major combat operations in Vietnam in order to stop the spread of “communism”; Saddam’s alleged WMDs were used to justify the invasion in order to stop the spread of “terrorism”. In Vietnam, the US was “bringing democracy” to the people by propping up a corrupt, hand picked regime. It is precisely the same situation in Iraq.

However, while similar in many ways, there are some fundamental differences that need to be taken into account. In Vietnam, North Vietnamese Army regulars backed the Viet Cong guerrillas in the south. They had a stable base of operations in North Vietnam, an intricate supply route through the jungles of Laos and Cambodia, military, food, energy, and financial support from the USSR and China, and were fighting a war the aims of which were clear to the multi-millioned Vietnamese rural population: kicking out the imperialist occupiers and abolishing landlordism. Despite being led by nationalist Stalinists, and not a genuine internationalist Bolshevik party, these immediate goals rallied the masses against the haughty occupiers. Despite the overwhelming military superiority of the South, the corrupt and endlessly intriguing pro-US regime could not inspire its troops to fight the insurgents.

On the surface, then, it would appear that the differences are fundamental: The Iraqi insurgents do not have the support of a regular army or a unified command structure; they do not have a stable base from which to operate; they do not have the massive financing of a major world power engaged in a global cold war against US imperialism; they do not have even a deformed “socialist” leadership fighting to bring about significant social reform; and they do not even have jungles to hide in. However, most military-age males in Iraq have had some form of military training, and there are literally tens if not hundreds of thousands of unemployed former soldiers; they are defending their own families, homes, and land, and there are indications they receive some support from neighboring countries such as Iran and Syria; they do have clerics like Moqtada al-Sadr who, in the absence of other avenues for political expression under Saddam, have brought their relatively astute and progressive ideas into the realm of religion; and though they have no jungles, they have the sprawling, labyrinthine slums of the many large Iraqi cities.

But the most important similarity is the following: in Iraq as in Vietnam, the insurgents have the overwhelming support of the local population, who after one year of “democracy” and “freedom” are quite ready to kick out their “saviors” and their local puppets. As in Vietnam, the foreign occupiers are finding it hard to find local surrogates to effectively take over the fighting. In the siege of Sunni Falluja, US-trained Iraqi defense forces refused to fight fellow Iraqis, and some even went over to fight with the insurgents against the US. It is reported that up to 40 percent of them simply walked off the job. This will further complicate any plans for a smooth withdrawal from Iraq. Unable to effectively seal Iraq’s borders, and uninterested in killing their fellow Iraqis, Bush has said he is “disappointed” in the performance of Iraqi troops.

The US was able for a time to contain the resistance to the “Sunni triangle”. But now that large numbers of the majority Shiia (who make up 60 percent of the population) have joined in the resistance, the prospects for the US occupation are increasingly bleak. Moqtada al-Sadr, the young cleric whose Mehdi Army started the Shiia offensive against the occupiers had the following to say, reflecting the mood of the masses: “If that means breaking the law of the American tyranny and its filthy constitution (for Iraq), I'm proud of that and that is why I'm in revolt.” Slogans calling for Sunni and Shiia unity against the occupiers, and Sadr’s call to the US working class for solidarity with the Iraqi people is a mortal threat to the US imperialists and their plans to exploit the people and resources of Iraq.

Already, many of the most rabid supporters of the Iraq War are no longer focused on the potential gains of a successful occupation, but rather on minimizing the damage in the event of failure. Some right-wing commentators are already calling for a “face-saving” withdrawal in order to preserve the military capability of the US imperialists – a stark reminder of Nixon’s plan for “peace with honor”. Arch-conservative Morton Abramowitz argues: "America's pre-eminent power position in the world can endure an early withdrawal from Iraq. US forces are so overstretched that a withdrawal might enhance our overall power position and our capacity to do more about Osama bin Laden and other terrorist groups." Of course, his interest is in more effectively pursuing the “war on terror” – an open-ended war on the poor of the world that will never end as long as there is poverty and destitution in the world. What is astonishing, however, is that people like Abramowitz and former Vietnam-hawk Robert McNamara are expressing themselves in this way just a year after the invasion.

If the Vietnam War had a long-term effect on the military adventures of the American ruling class, a humiliating withdrawal from Iraq would be ten times worse. If another major war were to erupt right now, it is doubtful the already overstretched military could handle it. But such is the hubris of the Bush cabal, that little things such as the facts cannot be allowed to get in the way. Speaking on the siege of Falluja, Donald Rumsfeld summed up the Bush administration’s complete myopia and misunderstanding of the real situation: “Thugs and assassins and former Saddam henchmen will not be allowed to carve out portions of that city and to oppose peace and freedom.”

This shows just how divorced from reality these people are. True, there may be a handful of foreign-born jihadis in Falluja, but a handful of people do not fight off the US Marine Corps! Literally thousands of residents of Falluja are armed and prepared to die defending their homes and loved ones. Hatim and Abd al-Razak, two young Iraqis not directly involved with the insurgents summed up the thoughts of millions of Iraqis in a recent interview in Baghdad. "What America doesn’t understand is that they cannot take over our mosques, our institutions, our cities, and think that Iraqis will just sit by and watch. Look at the people in Falluja, they, like all Iraqis, are a proud people. They do not like having foreigners invading their land and forcing them into their homes. That is our new democracy? That is our new freedom? Look at them. They drive around our streets like they own the country; they have no respect for us, no respect for our culture, no respect for our traditions, or our religion.” Rasool Gurawi, a spokesman for al-Sadr at an office in the vast Shiia slums of Baghdad had the following words for a reporter: "This is the freedom? This is democracy? Attacking peaceful demonstrations? Killing people and destroying buildings?" Shaykh Sadun al-Shemary, a former member of the Iraqi army who participated in the 1991 uprising and now a spokesman for the al-Sadr organization in Shuala said, "Things are exactly the same as in Saddam's time - maybe worse."

In spite of the differences between Vietnam and Iraq, the end result is very similar: the US is being sucked further and further into a quagmire with no end in sight. But the neo-conservative leaders in Washington did not foresee these problems because their arrogance blinded them to a very simple truth which we explained even before the invasion: winning a war militarily is one thing; to occupy millions of people who do not want you there is another altogether.

Reasons for the War

One of the main reasons justifying the current occupation of Iraq is difficult for Bush is due to the shifting and unclear reasons given by Bush and his hawks to justify the war in the first place. In the buildup to the Iraq War, Bush and his pals whipped up the nationalist feelings and passions of the American people. Tens of thousands of young people were being sent to suffer and die in the hot and sandy Iraqi war zone, and the administration needed to give them and their families a good reason why. Oil and geopolitical domination of the Middle East were clearly not good enough reasons to give the US public. Therefore, imminent threat of annihilation by Saddam’s alleged Weapons of Mass Destruction, the “war on terror”, “freedom”, and the defense of “democracy” against a cruel dictator were found to be much more suitable. But a year into the occupation, it is common knowledge that there were no WMDs, that the Iraqis do not want the “freedom” so graciously imposed on them by Washington, and that there is no democracy whatsoever.

As we predicted, the invasion of Iraq served only to intensify the contradictions and instability in the entire region and around the world. The threat of another September 11-style attack in the US is as high or higher than it was on September 10, 2001. Billions have been spent on “Homeland Security” to no real effect. The trains bombed in Madrid in response to Aznar’s support for Bush’s war are a graphic reminder that Al Qaeda and its supporters are far from being defeated by the “war on terror”. Ironically, whereas Al Qaeda had no presence in Saddam’s largely secular Iraq, they and possibly other fundamentalist terrorist groups have set up shop there in the vacuum created by the US. This is not to say that the insurgents are mostly foreign jihadis – on the contrary, the real danger to the US forces on the ground in Iraq is the broad popular opposition to the presence of the imperialist occupiers.

Of course, no one fighting in the interests of the world working class mourns the fall of Saddam’s cruel and despotic regime. But to oppose Saddam does not mean support for US pro-consul Paul Bremer and the occupation authority. Iraq is now controlled by a handpicked, rubber-stamping council, whose decisions must be approved by Mr. Bremer. Plans to transfer “sovereignty” to the Iraqis involves handing power to another un-elected group of handpicked pro-US Iraqis, on the basis of a Constitution written by the Americans themselves. The US military will continue to operate in Iraq, and even the national security advisor is to be appointed by the US. Now, even the cynical excuse that the US was bringing “democracy” to the Iraqis has been dropped – now the occupying authorities speak only of “freedom”. But what good is freedom without freedom of speech, the press, and assembly? What good is “freedom” without jobs, healthcare, housing, education, transportation, or even electricity?

The American public is rapidly coming to the conclusion that they were duped – that Bush and co. had been planning for this even before September 11. It has been alleged that funds earmarked for the war in Afghanistan were secretly diverted into planning for the Iraq war well before this aim was made public. The Project for a New American Century – the right-wing think-tank intimately connected to the Bush administration – had plans for the invasion of Iraq and unilateral extension of US power through pre-emptive wars long before the September 11 tragedy. Immediately after S11, the Bush cabal set their sites on Iraq, but decided to invade Afghanistan first as their case for invading Iraq was still too weak in the public mind.

Even after an intense media barrage to justify the war, millions of Americans remained opposed to the impending invasion. The start of the war cut across this mood, as the calls to “support the troops” rallied the working class behind the young workers in uniform being sent into harm’s way. But how have these troops been treated since they were given a hero’s send-off? For all the talk of “supporting the troops”, the millionaires who sent hundreds to their deaths and thousands to be disfigured and traumatized for life do not really “support the troops” at all. Bush hasn’t even attended the funeral of a single soldier killed in Iraq. It’s big business and corporate profits that they support, in times of war as in times of “peace” - the war against working people is always going on although it is never openly declared. This is gradually having an effect on the consciousness of the troops in Iraq, their families, and the US working class as a whole. Big shifts in mood in against the war and occupation are inherent in the situation.

Hiding the Wounded

Due to the Vietnam experience, Bush, Rumsfeld, Cheney, and co. are aware that the American people have a limited threshold for casualties. At a certain point, the quantitative accumulation of those killed and wounded is qualitatively transformed into mass opposition to the war and occupation. This is why they have worked so hard to present the war in as sanitized a form as possible, with terms such as “smart bombs” and “collateral damage”. During the Vietnam War, the nightly news showed dead US soldiers in the jungles and cities of Vietnam, and endless flag-draped coffins returning home. You won’t see a single image like this in today’s media. The government has imposed a total blackout on images of those killed and of coffins returning from the war zone. They understand that although casualties remain relatively low when compared with the 58,000 killed in Vietnam, the longer the occupation continues, the more negative an effect the steady stream of dead and wounded will have on the American people. In an election year, this cannot be allowed!

So far, some 700 US troops have been killed, with over 3,600 wounded, according to Pentagon officials. As tragic as this is, this is still not a critical level by most standards; but the potential for that number to rise rapidly is there. From sporadic small arms attacks and roadside bombs, the insurgents have begun to mount larger and more sustained attacks with rocket-propelled grenades, mortars, and surface to air missiles. They are now targeting everything from coalition troops, the Iraqi police, foreign “contractors” and businessmen, aid workers, oil pipelines, prisons, police stations, hotels, etc. It is impossible for the coalition troops to guard everything. In the first weeks of April, when the Shiia uprising and siege of Falluja began, more US troops were killed than during the war that toppled Saddam. The last time US troops experienced a similar two-week loss was October 1971, two years before US ground involvement ended in Vietnam.

One factor that hides the number of military personnel killed or injured is the broad use of “private security contractors” – i.e. mercenaries. Some experts estimate that they are the second-largest contingent of armed occupiers in Iraq, surpassing even the British. And of course, mention of the many thousands of Iraqi casualties is given very little coverage. But the main reason there are so “few” US deaths in Iraq, is the advanced state of modern battlefield medicine. Wounds that would have meant almost certain death in the Vietnam era are now survivable – although the injured are often left horribly disfigured for life. From a military point of view, wounding enemy soldiers is sometimes preferable to killing them outright. A wounded soldier must be attended to by others, effectively reducing the number who are actively participating in a firefight. A wounded soldier also continues to drain economic and medical resources. By wounding so many troops, the Iraqi resistance forces are slowly bleeding the morale and resources of the armies of occupation.

Just as they do their best to hide the war dead from public view, the Bush administration conceals the high number of wounded, regularly treating these soldiers as second-class citizens in the process. We generally only hear about those that are wounded when they are wounded in incidents in which other soldiers are killed. The hundreds of soldiers wounded in the countless isolated attacks across the country are off the public radar. Many of these have only minor injuries and return to duty right away. These are therefore not counted among the wounded. According to William Winkenwerder Jr., assistant secretary of defense for health affairs, the military has made 18,004 medical evacuations during the first year of “Operation Iraqi Freedom” due to wounds, illness, or other battlefield reasons. But the precise numbers of wounded and the severity of their wounds is still not known.

Senator Chuck Hagel, a Republican from Nebraska, asked Donald Rumsfeld for the “total number of American casualties in Afghanistan and Iraq.” He also asked: “What is the official Pentagon definition of wounded in action? What is the procedure for releasing this information in a timely way to the public and the criteria for awarding a Purple Heart [awarded to those wounded in combat or posthumously to the next of kin of those killed or those who die of wounds received in action]?” The reply he received was astonishing: “The Department of Defense does not have the requested information.” Are we to believe that the world’s largest military machine, with massive bases and troops all around the world cannot even keep track of how many Purple Heart medals are being awarded in this war?

Treatment of the Wounded and Veterans

We have all heard the stories of homeless, disabled Vietnam War veterans freezing to death in Washington DC because they “slipped through the system”; of veterans too traumatized by their wartime experiences to hold down a regular job and maintain a stable home. That’s all changed, right? The government now takes care of those who have sacrificed for their country, right? Wrong. Not only are the numbers of casualties being kept from public view, many combat veterans wounded in Iraq are physically marginalized and kept from the quality care they are entitled to. Other soldiers reported being sent into combat with serious medical conditions, only to receive poor and erratic care upon returning. According to one officer, they are “being treated like dogs”. Many wounded veterans have had to wait in “medical hold” for “weeks and months at places such as Fort Stewart military base in Georgia, for proper medical help,” often under conditions “unacceptable for sick and injured soldiers.” More than 1,000 National Guard and Army Reserve soldiers, including hundreds who had served in Iraq were forced to wait in hot concrete barracks with no air conditioning or running water. According to one Sergeant, it “took months to get appointments . . . We were made to feel like we had failed the Army.”

Retired Army Reserve First Sgt. Gerry Mosley, who served in Iraq, recently said the government’s outlook is to “use people, strip them of all human dignity, disrespect them, wear them down, and be pleased when soldiers no longer have the physical and mental capacities to continue to fight to have the same rights and respect as those American citizens for whom we have fought to preserve those entitlements." Mosley said that after returning from Iraq last summer, he has had to drive 195 miles each way at his own expense to see a specialist. He said the Army put him out of service without compensating him for a neck injury or vertigo apparently triggered from mortar explosions. He can no longer work his civilian job. Since being put out of the Army, he has been diagnosed with Parkinson's Disease.

And while the US military can easily defeat any opponent militarily, it’s a whole other ballgame to occupy a country and hold territory. Although the situation is not yet as bad as it is in Afghanistan, there are no safe “rear” areas in Iraq. Occupation troops are surrounded by a hostile population, and can be attacked at any time. Increasingly, there are entire neighborhoods and even cities where foreign troops dare not enter. Even the head of the Coalition Provisional Authority, Paul Bremer, and the head of the US Central Command and the US forces in Iraq, John Abizaid, have come under attack in recent months. Many troops are stationed far from the cities, living for months at a time in tents and eating pre-packaged food. On top of this, many of these soldiers are being put into policing or bomb-clearing roles which they are not trained for. The mother of one soldier killed by a roadside bomb wanted to know “why my son was playing with bombs when that’s not what he was trained to do. It’s not a declared war so what did my son die for? It’s time for us to get out of there. No parent should have to go through this.”

On top of the military threats, are concerns for the long-term physical and mental health of those serving in Iraq. As explained in previous articles, there has been widespread use of depleted uranium in Iraq. If the experience of the first Gulf War is any indicator, US troops will suffer terrible long-term damage, this time on a much wider scale. Already, 10,000 Gulf War veterans have died of the mysterious Gulf War Syndrome. This time around, with more extended contact with the 17,000 tons of radioactive waste left by the use of depleted uranium ammunition, the results are sure to be more devastating (there are entire villages that are off limits unless proper protective gear is used). And of course, the effects on the Iraq population will be a thousand times more horrific. Then there is the “Baghdad Boil” which has affected hundreds if not thousands of troops. Transmitted by sand flies, this disease produces painful open boils that can leave permanent scars.

The conditions facing most of the soldiers occupying Iraq are extremely difficult and stressful, which explains the high rate of suicide and depression. This is compounded by uncertainties over the duration of their stay in Iraq, the situation with their families and jobs back home, etc. Since the war in Iraq began in March 2003, 24 soldiers have committed suicide, an average of about two per month. The suicide rate for Army soldiers in Iraq in 2003 was 15.8 per 100,000, higher than the Army average of 12.2 for 2003 and 11.9 from 1995-2002. A recent survey found More than 60 percent of soldiers in Iraq reported "low morale." Almost all of the soldiers who committed suicide were young, white enlisted troops, the study showed. Most were having problems with relationships, money or legal difficulties. About 15 percent of all Army soldiers surveyed in Iraq said they sought help for combat stress. The most common reasons cited were viewing large numbers of dead bodies during battle, anxiety over being ambushed and stress associated with transitioning from a combat force to an occupying force. Two soldiers said better access to mental health services might have prevented two suicide attempts at two separate bases, and asserted that soldiers are sometimes prescribed powerful drugs by military health professionals in place of medical care. The soldiers also described widespread concern about being put out of the military without fair compensation for wounds and illnesses they received during service.

All of this comes as no real surprise in a country that cannot provide universal, quality health care for all of its citizens while the HMOs and pharmaceutical companies pocket billions in profits. But these are not just any citizens. These are Bush’s “heroic” veterans who have placed their lives on the line, many of them suffering disability and loss of limb in order to defend “democracy” and the “American way of life”. Again, this cynicism is not at all surprising, considering the Republican-dominated Congress’ plans to slash veteran’s benefits by $15 billion over the next ten years. They plan across-the-board cuts of 3.8 percent in mandatory spending on entitlements such as compensation for service-connected disabilities, burial benefits, means-tested pensions for permanently disabled low-income veterans, and education benefits like the Montgomery GI Bill. These benefits comprise 93 percent of the funding for programs under the jurisdiction of the Veterans’ Affairs (VA) Committee.

For many veterans, this could mean eliminating burial benefits and reducing the cost of living allowance (COLA) increases in compensation payments with service-connected disabilities for the next six to ten years. This could mean 168,000 fewer veterans with health benefits, 400,000 fewer hospital bed days of care for veterans, or 8,700 fewer nurses in VA hospitals. These cuts would arrive right at the same time that aging veterans become even-more dependent upon governmental veterans’ health care programs. If they are so callous and greedy as to cut veteran’s benefits in this way, it is easy to imagine the cuts they are preparing for the working class as a whole in the coming years. In the end, the ruling class treats workers in uniform the same way it treats all other workers – as factors of production in the pursuit of profits.

The Morale of the US Military

Morale is a decisive factor in war. How one treats one’s soldiers both before and after the war can affect the long-term prospects for success or failure. Even with the most advanced technology in the world, ground troops are the backbone of any army. In Vietnam, morale collapsed as the endless, seemingly pointless war dragged on and on. The anti-war protests in the US spread to the troops in the field, many of whom wore peace symbols and refused to go into combat. Insubordination and even the murder of officers grew rampant. It is estimated that as many as a third of the troops were addicted to opium or heroin, and drunkenness and the smoking of marijuana were routine. Relations between the enlisted men and the officers, and between white and black soldiers were increasingly polarized. Supply officers made huge profits on the black market. The My Lai massacre of over 300 civilians caused soldiers to believe their commanders were covering up other such grisly incidents. With soldiers being gradually withdrawn, nobody wanted to be the last one killed for a meaningless cause. The entire military establishment was in shambles.

During the war in Vietnam, most troops doing their tours of duty were conscripts (the average age was 19). Since those in college or with connections in government (like GW Bush and Cheney) could get assigned to the National Guard or get a total deferment, it was mostly the poor, and in particular minorities who did the killing, fighting, and dying for big-business America. After Richard Nixon ended the draft in the early 1970s, the arduous process of rebuilding the military as a cohesive fighting force for US imperialism was begun.

For all intents and purposes, the $120 billion spent on the Vietnam War over the course of ten years, went straight down the drain. In “normal” times, this money would have been used to modernize the military. Instead, the US military found itself in the late 1970s with a demoralized and ill-equipped force. As late as 1980, then-army chief of staff General Edward C. Meyer warned Congress that he was presiding over a “hollow” force. Of course, this state of affairs was cynically used by Ronald Reagan and George Bush Sr. to spend billions upon billions on national defense to prepare the next series of imperialist adventures. Ironically, the tremendous cost of the Iraq war and occupation is already having an effect on the future preparedness of the US military. The Pentagon has raised the possibility of junking their advanced Joint Strike Fighter aircraft program due to the un-planned for expenses of the Iraq occupation.

The armed forces now pride themselves on having an all-volunteer military, but the fact is it took a long time for the military to recover from the demoralization of Vietnam. And although they moved away from a conscript army largely to address concerns that it was disproportionately made up of minorities and the poor, today’s military has much the same social make-up. The lack of opportunities in the private sector (i.e. chronic unemployment), and the military’s promise of comprehensive health coverage, decent pay while learning a trade, and generous grants for education, has compelled many poor and minority men and women to sign up. By the 1990s the image of the US military as a professional, proud, cohesive, and disciplined force had been largely restored. But now even this is being undermined by the insensitivity and arrogance of Bush and his clique of ignorant parvenus.

The morale of the military forces in Iraq is not a fixed quantity. Thousands of soldiers who were pumped up to do their duty at the beginning of the war have now been overcome with cynicism, pessimism, and open hatred of their leaders, in particular the civilian leadership at the Pentagon. The tens of thousands of military personnel stationed in Iraq (who are, after all, workers in uniform) are rapidly losing confidence in their mission. Far from open-armed parades and flowers, US troops face a hostile population, and increasingly coordinated guerrilla attacks. Over 700 troops have now been killed in Iraq – far more than the 147 killed in the 1991 Gulf War. Some 25-50 attacks per day have left the troops in Iraq spread dangerously thin as the members of the “coalition of the willing” are dropping like flies in the wake of Spain’s withdrawal from Iraq.

All of this, combined with extended deployments, intense heat, and even lack of food and basic equipment such as proper boots and body armor has led to widespread discontent and a collapsing morale among the troops stationed there. Female service members are becoming pregnant on purpose in order to hasten their return home. Reserve infantryman Eric Holt says: “We didn't win this war, not at all. I don’t know what I'm doing here and I don’t like what's happening in this city. It ain’t right for the folks here”. Another told Good Morning America: “If Donald Rumsfeld were here, I’d ask him for his resignation… I would ask him why we are still here. I don’t have any clue as to why we are still in Iraq.” Statements to this effect can be reproduced by the thousands. If the occupation continues indefinitely, it is inevitable that the conditions for mutinies on a large scale will develop within the military.

Over-extension of the US Military and Rates of Retention

It is true that the Iraq occupation takes up far fewer than the 500,000 plus troops that were deployed in Vietnam, but when compared to the total size of the Army (now just 1.4 million worldwide), the mess in Iraq is comparable in terms of the number of troops it is tying up. With US forces currently stationed in over 130 different countries (Haiti is the most recent addition to that list), it’s no wonder that the armed forces are feeling the squeeze of over-extension – much like the Roman Empire in its final days. The National Guard and Reserves are almost completely tapped out. Soldiers in these units joined in order to be “weekend warriors”, earn some extra cash, and get money for college – not to be blown up by an improvised explosive device on some dusty road in Iraq.

Reserve units are currently being used as an extension of the active-duty military. Some units have been deployed 3 to 4 times since September 11, causing severe stress and strain on their jobs (it’s hard to keep a full-time job when you’re never around) and families (two-thirds of Reserve troops are married). Thousands of troops are being forced to serve beyond their agreed-upon terms of enlistment, causing great consternation. One soldier recently told a reporter, “Yes, I’m very upset. I’ve got a wife and two kids at home that I want to get home to. I’ve done my time over here, it’s just time to go home.”

The plans for the post-war occupation did not include having to “pacify” the entire country. The Pentagon planned to reduce troop levels to just 40,000 in the immediate aftermath of the war. That figure was quickly revised to 105,000. As of now, there are 137,000 US troops in Iraq, with Bush, Rumsfeld and other officials promising to send more if they are needed. In a reply hauntingly similar to US officials during the Lyndon Johnson Administration, Rumsfeld recently said, “"They will decide what they need and they will get what they want.” But most experts consider that the 5,000 to 10,000 extra troops being considered to reinforce those already in Iraq would be a drop in the bucket, having little effect on a spreading resistance movement of millions of Iraqis. Charles Pena, director of defense studies at the Cato Institute, is of the opinion that adding more US troops will only "make the problem worse" and increase Iraqi resentment.

Length of deployment is rapidly becoming an issue for troops sent to Iraq. The first units in Iraq had to stay just 6 months. That was extended to a year, and now, as many as 20,000 troops are having their one-year tours of duty extended by as much as 3 months. Troops rotating home from Iraq are being told just weeks later they must redeploy to Korea, Germany, Bosnia, or Afghanistan. This is having a disruptive effect on the families left at home. David Segal, a military sociologist at the University of Maryland says, "The recent events will have an effect on parents and spouses of soldiers. Parents are going to increasingly question whether their kids should be in the military."

All of this has led to a collapse in the rate of retention, with thousands of soldiers opting not to re-enlist. Military personnel experts have warned that full-time soldiers and members of the Guard and Reserve could begin leaving this year because of the strains of service, including longer and more frequent overseas missions. Through March 17, nearly halfway through the fiscal year, the Army fell about 1,000 short of meeting its goal of keeping 25,786 soldiers whose enlistments were ending or who were eligible to retire. That works out to a 96 percent rate of retention for the year, as compared to the 106 percent rate the year previous because more soldiers stayed than the Army had planned.

Recruitment has also fallen sharply, the National Guard ended last year about 10,000 below its recruitment target, with the prospects for this year’s targets no better if not worse. To stem losses, the army has started offering re-enlistment bonuses of up to $10,000 to soldiers in Iraq, Afghanistan and Kuwait. They are also preventing soldiers who are rotating home from retiring or handing in their notice for up to 90 days after returning to their home bases. This has naturally led to a great deal of resentment. Not only that, but the number of soldiers who have deserted and gone AWOL, refusing to return to duty after coming home for rest and recuperation is growing rapidly.

The modern military is extremely technology-reliant, and many of these soldiers are highly trained specialists that will be difficult to replace on short notice. For example, since the “end” of the way in May 0f 2003, 14 US helicopters have been downed, killing 58 pilots. This has raised fears that these highly skilled soldiers will be among those opting out of re-enlistment. Retention concerns are especially acute in the military’s aviation branches because of the extra investment in time and money required to train pilots to fly advanced helicopters such as the Apache, Black Hawk and Chinook.

As explained above, the treatment of injured soldiers has not helped matters at all Spc. Timothi M. McMichael recently told a Congressional panel: "I have spoken probably with hundreds of soldiers since I was placed in med hold. I can only say that the uniform consensus is one of frustration, disappointment and anger. I have had soldiers with 15, 20, even 25 years in the military tell me they are disgusted. The Army cannot afford to lose the number of senior non-commissioned officers it is losing every day."

Although Donald Rumsfeld dreams of a smaller, leaner, and even more technologically advanced military, the bottom line is that in order to hold territory, you need plenty of ground troops - the grunts. Far from wanting to reduce the size of the military, the professional officers at the Pentagon want to expand the military by as much as 500,000, and have even floated the possibility of reintroducing the draft, which would have predictable political repercussions. In a chilling reminder of the Vietnam era, David Segal, director of the Center for Research on Military Organization at the University of Maryland was recently quoted: "There is no question that the force is stretched too thin. We have stopped treating the reserves as a force in reserve. Our volunteer army is closer to being broken today than ever before in its 30-year history."

Effects on Families: The Mood at Home

GW Bush and co. seem to have forgotten one of the most important lessons from the Vietnam War, and it is one that will come back to haunt them: soldiers are workers in uniform, and as such, are a reflection of American society as a whole. The “hearts and minds” to be won are above all here in the United States. It is abundantly clear that these people do not represent the interests of working Americans, both in and out of uniform. They are happy to send our children, relatives, and friends to die for the profits of big business, but they can’t even follow through on their promise to “support the troops”.

Military families are also increasingly frustrated as their loved ones continue to die while Bush urged the “non-existent” guerrillas to “bring it on”. The wives of two soldiers appeared on “Good Morning America”: ““Just send my husband home - send all the soldiers home. They have done the job they were supposed to do,’ said Rhonda Vega from Hinesville, Georgia. Stacey Gilmore said U.S. troops were ill prepared for the post-war phase. ‘They were told after the fighting ended they were coming home. All I know is that morale is low and they are just hanging in there, sticking through it.’”

Another military wife, whose husband’s tour has been extended for a second time said, “We're all disgusted. We're to the point now where we're exhausted. We need this to be over. But we don't want it to be over until it's completed, because it would make the past 10 months a waste." As the realization that the sacrifices and hardships of the past few months have not made things better in Iraq or the US, the anger will boil over. Already, dozens of family support groups have sprung up, many of them opposed to the war and occupation. Ironically, Bush’s treatment of the servicemen and women and their families threatens to undermine an important layer of his electoral support. Votes from military families, especially those overseas, were an important factor in his “victory” in 2000.

Many blame Bush personally for the deaths of their friends and relatives, and at a recent meeting with military wives, the government’s representative had to literally flee the women’s aggressive demands that their husbands be brought back home. Dan and Emma Withers, whose son is stationed in Iraq explain: “’I gave [Bush] the benefit of the doubt because I felt they might have intelligence information that was not available to me. I guess I hoped if they were going to make the leap, they would base it on something I didn't have knowledge of. I'm not sure of that anymore. You just don't want to think you're being led down the garden path by the president and Colin Powell. ... I think I'm tired of being lied to.’ It’s hard for her to admit, because she’s a registered Republican. Dan Withers voted for Bush in 2000.” (Quoted in the St. Petersburg Times of Florida)

Long-term deployment and war have a devastating effect on families, jobs, economic stability, and psychology. Those soldiers lucky enough to have jobs waiting for them on their return will have a multitude of other problems to deal with. Ironically, while Bush “supports the troops” when they are fighting his wars overseas, he shows his true colors when he cuts veterans’ benefits (to the tune of $14.6 billion over the next 10 years) and healthcare here at home. Although it is not as openly apparent now as before the war started, opposition to the Iraqi occupation is much greater now than it has ever been. The nation-wide March 20 demonstrations showed renewed vigor in the anti-war movement, which had suffered a steep decline once the war began. In the coming months, this movement must be broadened, and as explained in last year’s perspectives, must be given a working class perspective and leadership. Tremendous discontent is simmering below the surface of American society, and sooner or later, the US working class will move decisively to end the rule of the handful of ultra-rich men and women who currently control our lives.

Conclusion

The situation on the ground in Iraq is unstable to say the least. Thousands of “weekend warriors” have been shoved onto the front lines of a mission they are not trained to do. Paradoxically, Bush’s pre-emptive war to “make America safe” has instead strained the US military to the limit, opened Iraq to al-Qaeda, and increased the chances of another major terrorist attack on the US or its “coalition” allies. At home, discontent is growing over the jobless economy and the progress of what was supposed to be a relatively low-risk, reasonably easy war and occupation gone awry. A recent opinion poll as Bush campaigns for re-election in November showed voter support for his handling of Iraq had fallen to a new low of 40 percent - down 19 points since mid-January. It also found 44 percent of Americans wanted US troops withdrawn from the country. These numbers will fluctuate depending on events on the ground in Iraq, but the general trend is downward – they are a far cry from the 90 percent approval Bush had after September 11.

Much has been made about the June 30 handover of “sovereignty” to Iraqis. As explained above, this is a sham and a deception. The real power will remain firmly in US hands, just as the real power in India after formal independence remained with the British. But even this handover date is uncertain as we write. Already, administration officials have qualified this date and the transfer of power as “nothing magical”. It is clear that the Iraqi defense forces would collapse like a house of cards without the iron heel of direct US military support. So the occupation will continue much as it is now, with the quality of life for the Iraqi people deteriorating, while the national treasury is bankrupted and billions of dollars are stripped from social programs in the US to pay for the adventure. Bush says, "We've got to stay the course and we will stay the course." However, the American working class may have something to say about that.

The war is above all a distraction from the war on working people here at home and around the world. Tens of thousands of Americans are thrown out of work and literally onto the streets in order to enrich a handful of CEOs and their chums in government. The only way to end the crisis in Iraq is to bring peace, stability, jobs, health care, education, electricity, etc. to Iraqis. The bottom line is the US capitalist class cannot even provide these basic things right here in America. The occupiers are not even able to provide basic security at the present time, and have exposed tens of thousands of innocent Iraqis to the murderous car bombings of al-Qaeda and other terrorist thugs. The Economist concludes pessimistically: "America may have done most of what it can do in Iraq. This means it has few options if the occupation fails to start improving the quality of life there. And, at the moment, the opposite is happening."

This much is certain: peace and stability will not return to Iraq so long as capitalism controls the world – let alone by June 30 or the November elections. Only the working class – the vast majority of humanity - can build a better society for all the workers of the world. Socialism is the only solution for Iraq and the USA. We cannot trust the representatives of big business to do anything in our interests. The first step towards genuine freedom for the working class is to break free from the pernicious influence of the bosses’ parties. In an election year, there will be plenty of opportunities to explain the need for a mass party of labor to represent the interests of working people. The American Marxists must approach this question boldly and with élan.

To paraphrase Marx, every 4 years, Americans get to tick a box in order to decide which group of capitalist exploiters will exploit them for the next 4 years. In theory, the US is a “democracy” – but what matters to us as Marxists is whose interests are being represented and defended. Yes, we have a democracy, but it is a democracy for the handful of super-exploiters – the bourgeoisie - capitalist class. Under capitalism, the state – the army, police, prisons, laws, courts, etc. – represents the exploiting capitalist class and is used to repress the wealth-producing working class. This is how it will always be as long as capitalism runs the show.

Although there may be differences in the outward appearance of this or that presidential administration, the capitalist class is still in charge. As Marxists we understand that the only way to build a genuinely human existence for all is to abolish the capitalist system. We understand that this simply cannot happen under the exploitative confines of the capitalist system. Capitalism must be abolished – there is no mythical “kinder gentler” version. Only a truly democratic socialist society, in which the working class plans the economy in the interests of all, can raise the quality of life for all humans. It is from this basic starting point that we must proceed when analyzing any issue, and the 2004 presidential election is no different. If we lose sight of the fundamental class structure of society, and the tasks of the Marxists and the world working class in the coming period, we will lose our bearings and end up in a mess.

America is widely regarded as the most democratic country in the world, but even a 5^th grader can understand that this is a farce and a deception. Take for example the Electoral College, a system whereby we do not really vote for the president, but for “electors” who are not even bound to vote for who the voters have endorsed. The way the Electoral College is set up is biased in favor of the traditionally more conservative rural areas, which explains why Gore had over a million more popular votes than Bush in 2000, but still “lost” due to Bush’s “winning” Florida’s electors. Or the “winner take all” set up in which the “winner” (even if he / she had less popular votes) gets to appoint an entire un-elected cabinet (folks like Rumsfeld, Rice, and Powell were not elected). The Supreme Court, the highest judicial power in the land, is also not an elected body. Or the fact that millions – above all minorities and the poor in general - are declared ineligible to vote and are even physically threatened on their way to the polling booths. Or voting “irregularities” such as thousands of missing ballots, thousands of extra ballots, little old Jewish ladies voting for Pat Buchanan, and on and on. This electoral cycle, memories of the 2000 electoral fiasco will be sharply revived, though the media is sure to play it down in order to preserve the façade of “democracy”. Millions of new voters will also be politically aware for the first time, their perceptions based not on the relative stability of the post-Cold War world, but on the relentless turmoil and unpredictability of the past few years.

One would think that based on the economic reality for millions, and the quagmire in Iraq, Bush would have a snowball’s chance in a very hot place of being elected President in 2004. But things aren’t that straightforward. In the volatile period we have entered, almost anything can happen. It is far too early to make any firm predictions as the result of the November election, but we can say that the coming months will be highly politicized, with millions of formerly apathetic Americans tuned in to the world and domestic situation like never before. In the aftermath of the 2000 election fiasco, the September 11 attacks, the Enron scandal, the wars in Afghanistan and Iraq, and the wave of radicalization and revolution sweeping the world, American workers and in particular the youth are increasingly aware and conscious of the world around them.

The economic polarization described above extends to all aspects of life in 21^st century America. We must emphasize yet again that sudden, sharp changes in the consciousness of the masses are inherent in the situation. As with the weather, precise long or even medium-term electoral predictions are virtually impossible. Under conditions of extreme imbalance, subtle changes in the situation can have effects far out of proportion to their initial significance. It is therefore possible that the election will be closely contested as in 2000; it is equally possible that despite apparent parity in the opinion polls, one candidate will smash the other electorally on November 2^nd. As former British Prime Minister Harold Wilson used to say, “In politics, a week is a very long time.” What we can do is draw out the main trends and forces involved, and above all emphasize the need for a workingclass alternative to the two parties of big business.

Above all, it is the organic spinelessness of the Democrats that opens the door to Bush winning his first presidential election. If they were able to present a real program for improving the lives of working people, they could win overwhelming support. But they are unable to serve two masters: the capitalist and the working class. They are tied hand and foot to the capitalist class and will never represent the interests of working people. How could it be otherwise, wince most of the Democratic leaders are capitalist millionaires themselves?

At present, the Democrats are still able to dupe millions of people into supporting them, albeit as a “lesser evil”. As we shall see, however, the Democrats are in reality our main enemies. Bush and his more blatantly reactionary cohorts expose themselves for what they are: defenders of the most reactionary wing of the US ruling class. The Democrats, on the other hand, pose as more to the “left”, demagogically spreading confusion among Americans as to whose interests they really represent. They may put up resistance on various issues of minor importance, but they will never in a million years side against capital in favor of the working class. The reality is that being ruled by either party of the ruling class is still to be ruled by a tiny minority of exploiters. Only a mass party of labor based on the unions, and armed with a socialist program can implement a truly democratic system in the interests of all: socialism.

Election 2000 Revisited

The 2000 presidential elections were a watershed in American politics. The post-election debacle, in which Al Gore pusillanimously allowed GW Bush’s cronies to appoint him president, opened the eyes of millions of Americans to the real workings of US “democracy”. Gore gained roughly a million more popular votes, but due to the Electoral College, the decision hinged on the results in the state of Florida (and we can only imagine the “inconsistencies” that no one ever heard about in the rest of the country). After weeks of wrangling, the Supreme Court unconstitutionally declared a halt to the recount process and in effect appointed Bush President – by a vote of 5 to 4. In other words, one un-elected millionaire appointed another un-elected millionaire to the highest office on the planet. This is the reality of “democracy” in capitalist America.

Many people like to blame Ralph Nader’s campaign for Bush’s victory. This is a patently ridiculous argument. Is this not supposed to be a “democracy”, where voters are free to choose who they want? If Gore had simply won his own state of Tennessee, Clinton’s Arkansas and / or traditional Democratic stronghold West Virginia, then the close vote in Florida would have been irrelevant. It is only because of Gore’s failings in other states, which should have been "in the bag", that Florida became an issue. If Gore was such a terrific candidate, why could he not mobilize just a few hundred more people of those who did not vote at all? Why wasn’t the focus put on the hundreds if not thousands of African Americans who were physically kept away from the polling stations, a layer of society that almost overwhelmingly votes Democrat?

As we explained in 2000, before the result was known:

“So how is it that the candidate of an incumbent party at the helm of a booming economy is threatened with losing? It is quite simple really – the economy is not booming for millions of working Americans. As has been explained many times, the fact is that American workers have far less buying power than they did 30 years ago, and we work far longer than any other advanced industrial country. The boom has not brought us better jobs and job security, benefits, earlier retirement, universal healthcare, quality education, etc. It has brought a reduction of real wages, record layoffs, attacks on unions and new unionization drives, 44 million people without health care, nearly 2 million people in jail, and a booming temp work industry with few benefits or job security. This largely explains the reaction against the incumbent Democratic Party. Due to the two-party monopoly, half the population looked for a solution in a familiar alternative – the ‘other’ party (the Republicans in this case). It also explains why roughly half the population didn’t bother voting for any candidate whatsoever. The real winner of the election was the "’none of the above’ party.

“The working class is the largest class in this country, and yet we are perpetually faced with choosing between two candidates of the capitalist class. The millions of workers who trusted Gore to stop Bush and the Republicans have now seen that the Democrats could not even decisively achieve that. The Democrats cannot fight the ‘right’ wing of US politics for the simple reason that they have become part of it. The trade union leadership criminally supported the Democrats, and created illusions among the rank and file that with labor’s support, Bush could be stopped. But the resulting mess only proves that these leaders do not really have the interests of the workers in mind, but simply do the bidding of the Democratic Party. The only solution is for the workers to trust their own forces and strength to defend their interests. The trade unions must break with the Democrats! What is needed is a mass party of labor with socialist policies based on the trade unions. This may not seem to be an easy or ‘practical’ solution at the present time. But as Marxists we are not obliged to settle for ‘practical’ solutions. We want genuine social change which will improve the lives of billions of people – change which can only come through democratic and international socialism. This cannot occur overnight, and will take a lot of painstaking work. But the ongoing electoral fiasco makes it clear that the capitalist system cannot solve even the most basic problems of bourgeois ‘democracy’, let alone expand that democracy to the economic and social arena.”

And again, writing after Bush was appointed President:

“So why did the bourgeoisie allow this circus to continue for so long? If both parties are virtually the same, and firmly under the control of the capitalist class, why didn't they persuade Al Gore to concede 5 weeks ago? The reason lies in the fact that the bourgeoisie is split over how to confront the impending economic downturn and the inevitable social unrest it will bring. One half thinks that Gore would do a better job, the other half thinks Bush would. When social crisis is imminent, the divisions are often first felt and expressed in the form of a split among the ruling class. They cannot agree on how they should go about the business of exploiting the masses, and this disagreement breaks out into the open. The "many Al Gores" which were presented during the campaign, and the even split - along partisan lines - of the "impartial" Florida and Federal Supreme Courts during the legal proceedings were yet more indications of this. Behind the calls for "unity", "common ground", and "reconciliation" are the divisions growing within the capitalist class itself.

“Gore's claim in his concession speech that ‘that which unites us is greater than that which divides us’ is a shallow attempt to cover up these differences. For his part, Bush wants to ‘put politics behind us’ - by which he really means to say, ‘let the bourgeois go about the business of exploiting the working class without any interference.’ The capitalists are not at all pleased at the renewed restlessness of the masses. They prefer it when the masses recede back into their apolitical daily lives after an election. But the presidential carnival has kept many people interested in politics for weeks after the election, in spite of their feelings of discouragement. Combined with the growing opposition to capitalism among the workers and youth on a world scale, the stage is being set for big clashes of the class struggle. This is not to say that we are on the verge of a revolutionary situation, but the contradictions are piling up rapidly, and events are moving faster than most people imagine. The fact that this situation arose in the world's most stable and ‘democratic’ nation is cause for serious concern for the international bourgeoisie.

“While many workers still have illusions that the Democrats are ‘less evil’ than the Republicans, we must continue to explain that this is not the case. Gore should have mopped the floor with his sorely under-qualified opponent. In spite of having everything going for him in the election - incumbency, a strong economy, a generally popular president as his boss, etc. he failed to succeed. The reality is that Clinton / Gore years were a nightmare for the working class, and this is why the masses rejected the Democrats. Gore's loss only further stresses the fact that the working class cannot count on the defenders of the capitalist system to solve their problems for them. Only by relying on their own strength and organization can they defend their interests and lead the United States and the world to a system of democratic socialism.”

This basic analysis holds true today. The office of the presidency was in disrepute, as was the entire US political system. The prospects for Bush’s presidency were dim. He was seen as illegitimate by a polarized electorate and the economy was sinking after years of heady boom. But the events of September, like the attack on Pearl Harbor some 60 years earlier cut across this process. That fateful day set off a chain of events that most recently has led to the US sieges of Najaf and Falluja. But what many people also forget is that it didn’t take September 11 for the Democrats to show their true colors. They approved every one of Bush’s unelected, reactionary cabinet appointees, and put up only the most minimal token resistance to his anti-worker policies. After September 11, when the vast majority of them rallied to the calls for “national unity” and supported the open-ended war on terrorism and the invasions of Afghanistan and Iraq, it was nearly impossible to tell Republicans and Democrats apart.

The 2002 Mid-term Elections

This explained the results of the 2002 elections, when the Democrats were trounced in what at the time was a major surprise to most people. But the reasons for this were clear: the Democrats had become so much like the Reoublicans (following Gore’s lead in the 2000 campaign), that most people either voted for the incumbents (why switch horses in midstream if they are both virtually the same?), or were so uninspired by the available alternatives they didn’t bother to vote at all. Many people wrote off the Democrats, with those on the right rejoicing, and those on the “left” cowering before the supposedly unassailable domination of the Bush neo-cons. We explained otherwise at the time:

“However, despite their current ineptitude, and the fact that the masses in effect rejected them this election, the Democrats remain a powerful tool for the ruling class. In the absence of a traditional party of labor, the ruling class will try to use the Democrats and their historic connection with the AFL-CIO to derail any movement of the workers. At the present time, however, it appears that the ruling class prefers to use the much more overtly aggressive policies of Bush and his clique. But this will not last for very long. What the ruling class fails to take into consideration at this point is the fact that the American working class is still fresh and undefeated – they will move at a certain stage. There is tremendous discontent beneath the surface. This is what they did with Bill Clinton, when dissatisfaction with the Reagan years was growing. It is true that historically, due to pressure from the masses and on the basis of the post-war economic boom the Democrats were forced to grant some concessions to the working class. They lived off this reputation for decades, but their true face has now been shown, with Clinton passing some of the most anti-working class legislation in decades. He did the dirty work for the capitalist class - albeit with a charming smile on his face. Although their reputation is now in a shambles, their fortunes will be revived for a time at a certain stage when the capitalists can no longer rule openly through Bush and co.

The masses are still in a bit of shock after September 11, have adopted a "wait and see" approach, and have yet to mobilize on a mass scale. But they certainly will, and in what is essentially a one party system with two different faces, it is inevitable that there will be a swing back to the Democrats in the future. But that won't last long either. Lenin was fond of saying that "life teaches". Most people do not learn from books or theory, but from the school of hard knocks. And there are plenty of hard knocks in store for the working class as long as capitalism is allowed to continue…

“…The main lesson to be drawn from this is the utter incapacity of the Democrats to defend the interests of working people. This has always been the case, but what is most important it that this election shows that more and more people realize this. But this is not to say that they will not stage a comeback in the future – as we explained above, it is inevitable that they will. It is therefore imperative that we make it clear to Republicans and the Democrats alike that we are not content with the alternatives we are being presented with – that we will no longer allow a handful of people to control our destinies.

“The Democrats will now try and pose more to the ‘left’ – to try and differentiate themselves from their Republican counterparts. We must work to dispel all illusions people may have in them! We must never forget that these parties are just two sides of the same capitalist coin. It is the duty of the trade union leaders to break with them and provide a real alternative. It will be easier for the Democrats to pretend to be in opposition now that they have less control over government. By the same token, in 2004 Bush will be held fully responsible for all that happens between now and then. The fruits of victory are his for now, but those fruits may be rotted and infested with maggots in two years' time. The one constant in life and politics is that things change all the time – it is guaranteed that things in 2004 will be completely different…

“…The struggle has to begin with a clear explanation of the alternatives facing working people – continued rule under the incompetent and corrupt parties of the capitalist class, or the seizure of political power in the interests of working people. We need to hit the streets in protest against the war on workers here and abroad. We need to build the trade unions and put leaders in place who are not in bed with big business. We need to tear the trade unions from the decrepit body of the Democrats and build a mass party of labor which can genuinely defend the interests of working people. We need to inspire the millions of disenfranchised and disillusioned American workers with the possibility that a better world is possible – a world of genuine peace, freedom, and plenty in harmony with the environment. Above all, we need to build the forces of Marxism in the United States, and work with our class brothers and sisters around the world for an end to the capitalist system and all its brutality, ignorance, and degradation.”

This analysis has already started to come true. Far from the almost total slavish support for everything Bush did, and a policy of looking the other way when Bush made his constant gaffes, the Democrats and the media have taken a cue from their capitalist paymasters and have begun to turn up the heat. The Democrats have cautiously begun to act more like an opposition party – in words at least. It’s clear that due to increased public discontent with his policies, Bush is more and more becoming a liability. The ruling class has made a killing off its investment in Bush’s appointment as president, but many of them now feel they’ve gotten as much mileage as possible out of him, and it’s time to trade him in for a new model. They realize that to save their system as a whole, they will eventually have to switch from the right boot to the “left” in order to give the impression of “change”, when in fact the same parasitic class remains in power.

The 2004 Elections

This brings us to the present day and the 2004 elections. As we explained above, September 11 sowed a lot of confusion. However, the social tensions that had built up before 2001 were only temporarily and superficially glossed over by the Al Qaeda attacks. Since then, the contradictions have accumulated at a faster pace than ever - volcanic explosions of the class struggle are on the order of the day. There are those who say that “nothing ever changes”, and therefore “socialism is a good idea on paper but will never work in practice”. There are none so blind as those who will not see! A cursory look at the events of the past few months and years, shows just how rapidly things can and do change. This year’s elections come on the heels of one of the most turbulent periods in world history (and let’s not forget that it is only the beginning!). The world is an altogether different place now. There is a whole generation that has does not remember the relative calm of the post-Cold War years, and knows only terror, war, and instability. This will have a tremendous effect on the consciousness of American workers and youth.

As we explained in 2002: “It will not be until the 2004 Presidential election that the political climate in the US really heats up, with revived memories of the 2000 debacle. A lot can happen in two years, but we can be sure that events globally and domestically will continue to be unstable and convulsive. In a situation like this, people’s moods can change very quickly. It bears mentioning that in spite of the victorious Gulf War, President Bush’s father lost the presidential election only months later during the last ‘jobless recovery’.”

That being said, the more things change, the more they stay the same in many ways. Money and power still reign supreme in American politics. The political alternatives available to working people in the US remain the same – the Republicrats and the Democrans. This is the fundamental contradiction facing the US working class at the present time, and breaking out of this political holding pattern is the most vital task confronting workingpeople in the coming years. A mass party of labor is not going to emerge between now and November, but we must begin patiently explaining our position now. Thousands if not millions of workers, union and non-union, would support the creation of such a party, but unless this sentiment reachesa critical mass, the Democrats will continue to co-opt the labor and “progressive” movements. The rise of a mass party of labor will be the result of bitter struggle by the working class against the ruling class as a whole, including the current trade union mis-leaders.

Already there are encouraging signs for the future smashing of this logjam. It is well known that the wind shakes the leaves at the top of the tree first. In society, cracks in the apparently ironclad armor of the capitalist system often emerge first among the representatives of the ruling class. The 2000 fiasco was a prime example of this. Other cracks have since appeared, with many former Bush partisans violently rejecting his Nero-esque management of the system. The more far-sighted representatives of capital understand that Bush’s open reactionary arrogance threatens the very existence of the system as a whole. On the other hand, many still feel their interests are best served by Bush and his gang. This polarization is reflected in the media and in particular in the Democratic Party. That George Soros, one the world’s most powerful barons of capital, has thrown his cash and prestige behind the “anyone but Bush” movement is a clear sign of this.

Although they would prefer to avoid a repeat of the 2000 farce and tragedy, the splits at the top may lead to just such a repetition. Either way, big money will be poured into the campaign in order to influence the outcome as decisively as possible. In the end, the ruling class will choose to support the candidate that can best screw over the working class without sparking too much social unrest. Though the outcome cannot be predicted in advance, what we can say with absolute surety is that once again, the working class will be the real losers. The winner of the election will be a big-business president no matter which big business party is in power.

The Democrats Choose John Kerry

The 2004 primary cycle has been quite interesting, though not very surprising. The Republicans are sticking with the incumbent president, which comes as no shock considering how well he has represented them. The race for the Democratic nomination, on the other hand, said a lot about the Democratic Party in particular, and the mood of the working class in general. A wide array of candidates presented themselves as candidates, from Al Sharpton, to Howard Dean, Dennis Kucinich to Wesley Clark. Richard Gephardt also made an effort to win the nomination, but in the end, John Kerry rose rapidly to the top of the party.

The rapid demise of Howard Dean’s maverick grassroots campaign came as a shock to many who felt for a brief moment that the Democrats might end up with a slightly more unorthodox and at the very least anti-war candidate. This just shows how snugly the Democrats are in the pocket of their big business paymasters, and how futile it is to continue with the utopian illusion that somehow the Democrats can be “reformed” from within and “pushed to the left”. The Democrats couldn’t tolerate even Dean’s mildly “progressive” stances, even though they were well within the bounds of liberal capitalism and do not impinge an iota on the fundamental framework of capitalism. They brought the full weight of the media to bear on the primaries in order to choose someone more “electable” and “moderate”.

In other words, they allowed their candidate to be a hair’s breadth more “left” than Bush, and no further. With record amounts of money pouring into Bush’s campaign trough (on top of the $75 million in public funds each candidate will receive), the Democrats needed a candidate who would attract a nice chunk of cash their way – i.e. someone who will do the bosses’ bidding. Any “populist” rhetoric Kerry used early on to combat Dean’s grassrootspopularity has been consigned to the dustbin, as he rapidly becomes more “moderate”. Ironically, it is this very “moderation” (i.e. becoming a carbon copy of GW Bush in most respects) that has already led to disillusionment in the Democrats for millions of people who sincerely saw them as a viable alternative.

So just who is John Kerry? Although on the surface Kerry seems to be quite different from Bush, on all fundamental questions, Kerry is cut from the same cloth. What matters most to Marxists are the class perspective and interests defended by any individual. In Kerry’s case, it’s big business all the way. For starters, both Bush and Kerry are both millionaire Yale alumni, members of the secret elite ‘Skull and Bones’ society. While trying to portrayhimself as the “working man’s candidate”, the Kerry campaign never talks about Kerry’s $750,000 speed boat (reportedly paid for in cash), the 5 houses, the Scaramouche, nor does it ever mention the palatial spa Kerry owns in Aspen, or the fact that Kerry's mother was a scion of the prominent Forbes family and his wife, Teresa Heinz Kerry, is an heiress to the huge Heinz ketchup fortune. Kerry castigates Bush for “special favors for special interests,” but Kerry, like Bush, has refused to accept voluntary campaign spending limits.

In 20 years in the U.S. Senate, Kerry has never once challenged the rule of the capitalist class, and he certainly will not do so if he is elected President. Now in his fourth term in the US Senate, Kerry has been a spectacularly unimpressive legislator, having organized the passage of just 7 bills, out of 317 introduced during 20 years. One of the bills he helped to pass was Plan Colombia (1999), which among other things involves the sending of military “advisers” to the brutal right-wing government (9 of 10 trade unionists killed around the world are from Colombia), and authorizes the chemical defoliation of rain forest. Under this Kerry legislation, 325,000 acres of Colombian territory (another country that never attacked the U.S.) have now been sprayed with toxins in a phony “war against drugs”, while cocaine production in that country has increased by 11 percent. It is reported that Senator Kerry is connected to Enron, and to Enron’s bank Citigroup through his multi-millionairess wife, whose Heinz Environmental Defense Fund has Ken Lay on its board of directors.

The 2004 elections will see an astronomical increase in the amount of campaign money spent by the candidates. It’s common knowledge that George Bush has, as explained by Charles Lewis in his book The Buying of the President, “redefined the parameters of fundraising,” creating in the process “the most awesome fundraising machine from corporate interests ever witnessed in politics anywhere on planet Earth.” But those who think Kerry is any different are putting the blinders on themselves. According to Lewis, “There is a wink-wink thing going on where there is a shakedown of employees in companies to give money. And those companies are absolutely, without question, expecting results. And this is not illegal, sadly. In fact it’s becoming the norm. The Kerry campaign is quite impressed and they're trying to emulate the system.” Kerry has gone so far as to mortgage his $6 million home in order to raise more money for his campaign. That’s a lot of money to invest to get a job that pays $400,000 a year.

Kerry’s biggest campaign donors are Boston area law firms, financial, and telecommunications companies. One of Kerry's biggest has been the Boston-based law firm Mintz, Levin, Cohn, Ferris, Glovsky and Popeo. The group, which lobbies on behalf of the telecommunications industry - and just happens to employ Kerry’s brother, Cameron – has been his single largest contributor over the course of his Senate career. According to the Center for Public Integrity, Kerry has sponsored or co-sponsored a number of bills favorable to the industry and has written letters to government agencies on behalf of the clientele of his largest donor.

In 2001, Kerry formed a fund-raising group called the Citizen Soldier Fund, which brought in more than $1.2 million in unregulated “soft money.” He pledged he would limit individual donations to $10,000. But in late 2002, just before new federal laws banning soft money took effect, Kerry quietly lifted the ceiling and took all the cash he could get. In the month before the election, the fund raised nearly $879,000 - including $27,500 from wireless telecom firms such as T-Mobile, AT&T and Verizon. That same month, Kerry cosponsored a bill to overturn a judge's ruling and permit the wireless firms to bid on billions of dollars' worth of wireless airwaves. Since 1999, Kerry has sponsored at least two bills and co-sponsored half a dozen that were sought by the Cellular Telecommunications and Internet Association (CTIA), an umbrella group for telecommunications companies, including industry-backed plans for winning lucrative auctions of spectrum, or airwaves. Thomas Wheeler, the former chief executive of the CTIA, and Christopher Putala, a lobbyist for the group, are both among Kerry's biggest presidential fundraisers.

Kerry has also accepted contributions from many corporations that also donate to the Bush campaign – HMOs, drug companies, and oil and gas companies. Researcher Michael Donnelly reports that “Enron’s bank, Citigroup, has been a major contributor to Kerry’s various campaigns. In 1995, Kerry cast the deciding vote to override Clinton’s veto of the very bill used by Enron and Citigroup to conduct their now well-known consumer rip-offs.” The ultra-rich understand that it’s good business to cover all the bases to make sure you have favors coming no matter who wins. After all, money talks in this country, and buying votes through manipulation of the media, promising special favors, and downright fraud is nothing new in America. But not since the days of New York’s Tammany Hall has the scale of corruption and graft been so vast – though most of this is “legal” now, despite Kerry’s demagogic calls for “campaign finance reform”.

While Kerry’s campaign web page talks about his “reputation for independence” and his “making tough choices on difficult issues,” in fact, Kerry has been eager to support several of Bush’s priorities: like nearly all the Senate Democrats, Kerry voted in favor of the Patriot Act, which has seriously compromised civil liberties in the US; he voted in favor of Bush’s unending war against Iraq, a country that never attacked the US. When the Kerry campaign page says that Kerry “has worked to address children’s issues,” it does not specify that Kerry was a supporter of Clinton’s welfare “reform,” which ended welfare as an entitlement for children of the poor in this country (this has led to an astonishing increase in child poverty, which in the wealthiest country in the world now stands at 18 percent). Kerry has reportedly boasted about his support for that measure. He also voted for NAFTA the “free-trade” agreement that has devastated US jobs and driven conditions for Mexican workers into the gutter. To imagine that Kerry and the Democrats will suddenly fight in the interests of working people if elected is naïve at best. He is a representative of the capitalist class, and it is their interests he will defend at every turn.

Kerry, the Democrats, and the Trade Unions

The US working class has taken a beating over the past 25 years. Since Reagan smashed the PATCO union in 1981, the labor movement has been in a state of decline. Scared to death of losing their cushy positions, the so-called leaders of the AFL-CIO (or is it AFL-CEO?) have kow-towed before big business and the government. They have abandoned working class militancy and any hint of a class perspective, and have worked to build a “partnership” between management and the workers they are supposed to represent – the “partnership” of the wolf and the rabbit. As a result, the proportion of US workers who belong to labor unions continued a 20-year decline in 2003. Here are a few relevant statistics:

In 2003, union density in the United States was 12.9 percent; it has fallen steadily since 1983 when density was 20.1 percent. Total union membership was 15.8 million, down 369,000 from 2002 and less than it was in 1995 when John Sweeney and his “New Voice” reform slate took power in the AFL-CIO and promised to organize millions of new members. Union density in the private sector of the economy is a stunningly low 8.2 percent, down by half since 1983. Only the 37.2 percent density in the public sector, which has held fairly steady since 1983, has kept the membership figures from showing catastrophic declines. About 17 percent of all public sector union members are in the federal government, and these are under strong attack from the Bush administration, which is both pushing for the privatization of many federal services and denying bargaining rights to federal unions under the cover of national security. State and local government workers are also threatened by both privatization and the fiscal crises of most of the states. So it might not be long before the public sector density and membership numbers start to decline as well. Apart from France, the United States has the lowest union density of any advanced capitalist country. It is interesting to note that half of all union members in the United States live in just six states: California, New York, Illinois, Michigan, Ohio, and Pennsylvania, states which account for only one-third of all wage and salary workers.

The working class has a colossal task before it – one that will not be achieved without great effort and sacrifice – and that is to combat the power and influence not only of the bosses and their government, but of their pro-big business “leaders” as well. While electorally backing the Democrats, the current union leadership covered up the fact that the Democrats worked closely with the Republicans to cripple the power of the unions. In strike after strike (after fighting hard to prevent a strike in the first place), they have failed to mobilize all the resources at their disposal in order to win, and in many cases have betrayed striking workers outright in order not to upset their corporate handlers. While 3 million mostly unionized manufacturing jobs were lost over the past 3.5 years, they did little in the way of defensive strikes in order to stop this hemorrhaging. They allowed the introduction of a “two-tier” system of wages, which is basically a recipe for phasing out the bargaining power of the unions. On the decisive issue of health care, the union leaders have absolutely failed to harness the heroism and sacrifice of the working class in defense of this fundamental right.

But this does not mean that the organized working class is no longer a force to be reckoned with. On the contrary, organized workers represent the most colossal potential force in this country. Combined with the millions of non-unionized workers, the vast majority of American society is working class. Electorally speaking, one out of four voters in 2000 were from union households. Yet it is a tragic irony of history that the country with the most powerful working class does not have a political party to represent its interests. With the unions and conditions under attack like never before, the need for an independent working class party is more acute than ever. But in the absence of such a party, and in order to derail any moves toward the formation of such a party, working people will come under intense pressure from the union leadership to once again endorse the Democrats in 2004. The AFL-CIO has promised to mobilize its 64 member unions representing 13 million members behind his campaign.

The AFL-CIO’s endorsing statement had the following to say about Kerry and his campaign: “The AFL-CIO wholeheartedly endorses Senator Kerry for president. We pledge to him and to the nation that we will run the most powerful campaign in the history of our movement - a campaign of, by and for America’s working families. Today we are unified in our support of a presidential candidate, one who not only can take on President Bush, defeat him and turn our nation around, but who is all of the best things America has to offer.”

What a pack of lies! This is the essence of the policy of “partnership” between labor and capital endorsed by the current union leaders. As Marxists we understand that the interests of the working class, and the exploiting capitalist class are diametrically opposed. That the so-called leaders of 13 million workers would endorse such a candidate is nothing short of a betrayal. The preceding section made it painfully obvious whose interests Kerry truly represents. To imagine that he will ditch all of that in order to fight on behalf of working families is absurd. Repetition is the mother of learning, so let’s say it again: the Democrats and Republicans are two sides of the same coin. Both major presidential candidates represent the parties of the big-business capitalist class, and no matter who wins, it will be a government by and for the rich.

John Kerry likes to present himself as a “friend of labor”, but even the misleaders of the labor movement are not at all convinced of this. Before Kerry secured the Democratic nomination, many powerful unions such as the Teamsters, AFSCME, and the SEIU threw their support behind Howard Dean or Richard Gephardt. Now, they are forced to settle for Kerry, and have put on a happy face in order to hoodwink workers into thinking that Kerry can do something for them. But far from unity in the AFL-CIO, several unions including the UAW and UNITE abstained from the endorsement. What lies behind the AFL-CIO’s endorsement of Kerry is the following: the union bosses, cynically using their members’ interests as cover, want to get the same perks and benefits that corporate CEOs get by donating money and securing votes for a winning presidential candidate. If Kerry wins, the union leaders will look to line their own pockets with the rewards, while the plight of the rank and file workers will remain unchanged.

Kerry blames Bush for the suffering of working people, and millions of workers agree with him. But much of this attrition was set up under the Clinton years, and the world economic downturn which Bush inherited would have forced corporations under a Gore presidency to pursue many of the same cuts, off-shoring of jobs, etc. in the search for profits. A Kerry presidency would not be fundamentally different. He may well put a “kinder gentler” mask on the situation, but the class dominating society will remain the same. Kerry’s support for labor issues is cosmetic. As always, none of the fundamental interests of the capitalist class is threatened by any of his proposals. Let us put it concretely: Kerry promises to stop the declining standard of living for working people and restore the 3 million manufacturing jobs lost. Those are fine promises, but just how does he plan to accomplish this? Will he nationalize the decisive sectors of the economy or initiate mass programs of public works in order to create high quality jobs for all, or guarantee universal health care, education, and housing? Not a chance! To do so would be to impinge directly on the interests of the ruling class – a demon does not voluntarily cut off its own claws.

It is no surprise that John Kerry is continuing the Democratic Party’s traditional pattern of election year promises to working people. But what will the fruits of such promises be? If we base ourselves on past experience, we can confidently predict that very little will be done in practice. Even if a few crumbs in the form of minor reforms are tossed to the working class, the fundamental exploitative structure of capitalist society will remain. Basing themselves on alleged “worker friendly” policies of decades past, the Democrats continue to dupe the working class into supporting them – but can only get away with it for lack of a genuine working class alternative. If offered a real alternative - a mass party of labor based on the trade unions, with a fighting program for socialism and the transformation of society, millions of workers, many of whom have fallen out of the political process would be energized and involved. When the trade unions finally vomit out their current leadership, and break their ties with the Democrats who backstab them at every turn, a new epoch for the American working class will open up.

Come November, millions of rank and file workers will be disgusted by the whole affair, but most of them will likely vote for Kerry anyway, as the alternative is even more distasteful to them. But the bitter taste left in their mouth after voting for John Kerry will only get worse after the election, no matter who wins. As long as capitalism continues, the working class majority will always get the shaft. The time to start organizing for a mass party of labor, based on the unions, armed with a socialist program, is yesterday.

Kerry’s Foreign Policy

As Marxists we see the world in internationalist terms. We understand that foreign policy is a continuation of domestic policy: the “war on terror” is a war on working people here and abroad. If we want to change foreign policy, we need to change domestic policy. Only a workers’ government here in the US can ensure an end to the predations of the US imperialists: regime change starts at home. So how does the “lesser evil” Kerry measure up on foreign policy issues? Let’s take a look at three of the most important international issues of today: Iraq, Israel / Palestine, and Venezuela.

Kerry voted to authorize Bush’s use of force in Iraq, months before military action was finally declared. As with the Gulf of Tonkin Resolution, which effectively granted Lyndon Johnson war powers without a formal declaration of war, Kerry and the Democrats gave Bush a blank check on Iraq, long before diplomatic solutions had been exhausted. The reason? Kerry, like Bush, was interested in getting his class’ snout in the trough of Iraqi oil. If Kerry truly held a principled position against the war, he would have rejected Bush’s appeal for a virtual free hand in Iraq. He has since changed his position, trying to out-do GW on military aggressiveness as Gore did in 2000. The results could be the same.

Kerry’s only real criticism of the Iraq war and occupation is that it is not being waged with enough international support. According to him, “The primary responsibility for security must remain with the US military, preferably helped by NATO until we have an Iraqi security force fully prepared to take responsibility.” Far from calling for a complete withdrawal of US troops from Iraq – a move wholeheartedly supported by the majority of Iraqis as well as a growing number of Americans – he insists he will send as many as 40,000 more troops if necessary - he would stay in Iraq as long as it took to get the job done. "I think the vast majority of the American people understand that it's important to not just cut and run. I don't believe in a cut-and-run philosophy." This position exposes all his anti-war posturing for what it really is: election year rhetoric. It would be the ultimate seal of approval for Bush’s war and occupation.

It is highly illustrative that the “anti-war” Kerry seems more eager to send large numbers of troops to Iraq than Donald Rumsfeld. As one commentator put it recently, “the differences between the candidates have sometimes been hard to detect.” Long gone is the returning Vietnam veteran John Kerry who said the following to the Senate Foreign Relations Committee on 22 April 1971: "How do you ask a man to be the last man to die for a mistake?" After serving nearly 30 years in the bosses’ government, Kerry is eager to continue Bush’s “mistake”, sending even more workers in uniform to their deaths in Iraq in order to protect the interests of American capital.

Regarding the pressure cooker that is Israel / Palestine, Kerry does no better – or rather, he once again tries to one-up Bush. Commenting on the recent Sharon plan – which makes a complete mockery of the so-called “roadmap” for peace in the Middle East, Kerry said, “I think that could be a positive step. What’s important, obviously, is the security of the state of Israel, and that’s what the prime minister and the president, I think, are trying to address . . . I've always felt that the right of return is contrary to the viability of a Jewish state, and that's what Israel is… Israel’s very survival in a hostile and dangerous region has always been predicated on the steadfast, unwavering and full support of the United States. In my administration, America’s commitment to Israel will never waiver.”

It’s clear from the foregoing that Kerry’s position on Israel is in effect a carbon copy of Bush’s plan. But let’s be clear: Kerry is talking about support for the reactionary Zionist leadership of Israel – not the Israeli working class. As in the US, Iraq, Mexico, Afghanistan, or any other country, both Bush and Kerry support the capitalist class against the legitimate aspirations of all working people. We Marxists, on the other hand, are in full solidarity with the working class of Israel, who in reality are the key to the situation.

And what about Venezuela, the country where the revolutionary process is most advanced, with the class divisions openly rending society from top to bottom? As could be expected, Kerry once again does his utmost to show he is even more steadfastly against the Chavez regime than Bush can get away with at the present time. The US imperialists see Latin America as their “backyard”. Ever since the Monroe Doctrine, American capitalists have treated the massive continent to their south as their personal fiefdom. Unlike GW Bush, Hugo Chavez has been overwhelmingly elected president twice by the Venezuelan people, and his Bolivarian process has been electorally confirmed on 5 other occasions over the past 6 years. His basic reforms have not threatened the fundamental capitalist framework of society, but they have improved the quality of life for millions of Venezuelans. Let’s be clear: Chavez is no Marxist. But even his confused albeit well intentioned half-measures, designed to improve the conditions of the Venezuelan people, are too much for the Venezuelan and US bourgeoisie. They are deathly afraid of “another Cuba” that would serve as an example for the downtrodden masses of Latin America and the ex-colonial world as a whole. Kerry, as a representative of the US ruling class, is no different on this issue than he is on any other issue directly affecting the interests of the capitalist class:

”With the future of the democratic process at a critical juncture in Venezuela, we should work to bring all possible international pressure to bear on President Chavez to allow the referendum to proceed. The Administration should demonstrate its true commitment to democracy in Latin America by showing determined leadership now, while a peaceful resolution can still be achieved. Throughout his time in office, President Chavez has repeatedly undermined democratic institutions by using extra-legal means, including politically motivated incarcerations, to consolidate power. In fact, his close relationship with Fidel Castro has raised serious questions about his commitment to leading a truly democratic government.

“Moreover, President Chavez’s policies have been detrimental to our interests and those of his neighbors. He has compromised efforts to eradicate drug cultivation by allowing Venezuela to become a haven for narco-terrorists, and sowed instability in the region by supporting anti-government insurgents in Colombia. The referendum has given the people of Venezuela the opportunity to express their views on his presidency through constitutionally legitimate means. The international community cannot allow President Chavez to subvert this process, as he has attempted to do thus far. He must be pressured to comply with the agreements he made with the OAS and the Carter Center to allow the referendum to proceed, respect the exercise of free expression, and release political prisoners.”

Kerry conveniently ignores that the “opposition” failed to gather enough signatures to force a referendum in the first place. The Carter Center and OAS are agents of US imperialism, working to put an “impartial” face on the predations of the US ruling class. What Kerry means by “our interests” and “commitment to democracy” are austerity measures for the masses while the ultra-rich elite make a killing. As for lack of democracy, Venezuela’s new constitution is the most democratic in the whole region, if not the world. And then there are Kerry’s calls for “peaceful resolutions”. The time for sugar-coated appeals for “peace” are long gone – the US-backed opposition have been spearheading an “extra-legal” campaign of murder, threats, coups and economic sabotage for over 2 years. Kerry also uses the “war on drugs” card to justify US intervention in Venezuela, by accusing the Chavez government of complicity in the Colombian drug trade. “Plan Colombia” is a thinly veiled attempt to build up an intervention force on the Venezuelan border in order to prevent “another Cuba”. Try as he may to appear as an impartial outsider with a pious desire for “democracy” and “legality”, Kerry’s class loyalties are crystal clear. Internationally, as in the US, he will always side with the capitalist class against the workers of the world.

Although not couched in Bush’s fundamentalist Christian Bible-thumping rhetoric, it is clear that Kerry’s fundamental worldview is almost identical to his Republican adversary – the defense of the capitalist system on a world scale. On the above decisive issues, Kerry plans to continue or even expand Bush’s aggressive imperialist policies. Kerry criticizes Bush’s “failed” policies only because he wishes to implement the same policies more efficiently, in order to better exploit the workers of the world. Remember, Bush was elected on an “America First”, protectionist platform. He rejected “nation building” and promised to focus on domestic issues. But as we predicted at the time, Bush would be one of the most aggressive presidents in world history.

The increasingly turbulent economic and social situation on a world scale made this inevitable. What would Gore have done after September 11? Based on his statements during the Bush-Gore debates, he would have followed much the same policy. There are those who say Kerry would be different. But this is naïve in the extreme. Ivo H. Daalder, a fellow at the Brookings Institution, commented recently: “the world we live in is not going to be terribly different under a Bush presidency and a Kerry presidency. The United States is the most powerful country in the world, and therefore, the use of American power is going to be indispensable in getting anything done . . . the US is going to have to lead . . . using power, using coercion.”

It is enough to note that Kerry’s choice as his National Security adviser is none other than Rand Beers, a veteran Washington bureaucrat who served on the National Security Council under presidents Reagan, Bush Senior, Clinton, and GW Bush. Just months ago, he was working under Condoleeza Rice as Special Assistant to the President and Senior Director for Combating Terrorism. According to Beers, he and Kerry’s main goal is to “'to show that we can protect America better than George Bush.” Once again, Kerry’s focus isn’t to differentiate himself in any way by appealing to the genuine interests of the working class majority, but to “out-GW” GW. He is pandering to the most basic fears and worries Americans face in an epoch of tremendous instability – an epoch brought on by the organic and terminal decline of the capitalist system he defends.

Beers openly admits that there is no real difference between Bush and Kerry’s foreign policy objectives. “Much of American foreign policy is bipartisan. The goals are not always in question; it’s the style, it’s the way in which we’re approaching it.” The emphasis on different “styles” is a clear effort to blur the class interests represented by both the Democrats and the Republicans. Let’s not forget that the Republicans under Eisenhower started US involvement in Vietnam, the Democrats under Kennedy and Johnson continued it, and the Republicans under Nixon finally ended it after covertly extending the war into Cambodia. It is in this context that Ralph Nader’s independent run is a threat to Kerry and the Democrats insofar as he calls for a withdrawal from Iraq, appealing to millions of voters who are both anti-Bush and anti-War.

Though Bush’s public opinion ratings are falling consistently, those polled still think he would do a better job than Kerry in the “war on terror” and in dealing with the occupation of Iraq. The only real difference between Bush and Kerry’s approach has to do with who will be doing the occupying. Kerry wants to draw in the UN and NATO – under a US general, of course - but now Bush is saying the same thing. Walter Russell Mead, a fellow at the Council on Foreign Relations, had the following to say: “'I think they are moving toward a merge. Most of the people I talk to don’t think there’s going to be that much difference between them, in substance, because the options are so limited. I think in a second term, the Bush administration would try to get more foreign support, and a Kerry administration would sometimes have to go it alone. In this sense, voters are going to say to themselves, ‘What’s the difference? If I vote for Kerry, I will get a war in Iraq and someone who doesn’t believe in the war but is going to have to fight it anyway. If I vote for Bush, I get a war in Iraq, fought by somebody who believes in the war.’”

Nader, Kucinich, and “Anyone But Bush” – the Return of the “Lesser Evil”

So there we have it. There can be no doubt in anyone’s mind that John Kerry and the Democrats do not represent the interests of working people. Kerry’s nomination reflects his organic ties with the big business elite the Democratic Party represents. Yet this is the so-called “lesser evil” we are hysterically being asked to endorse. We can understand and sympathize with many of those who want to elect “anyone but Bush”. For them, this represents a sincere shift to the left, a rejection of Bush’s neo-conservative, imperialist policies, and is a reflection of the growing economic and political polarization in society. But we must explain that the Democrats can do no better. Their interests are tied directly to the capitalist system itself – the root cause of all the suffering faced by working people around the world. Many will complain that we do not yet offer anything concrete as an alternative. This may be true at the present time. But we will never have a genuine working class alternative unless we start organizing right now. Clarifying the real interests of the main political parties is the first step toward breaking the working class and their unions from the decrepit body of the Democrats.

As was seen in the Democratic primaries, there are many within the Democratic Party who are discontented with the nomination of Kerry, who had heartfelt illusions that “this time it will be different”. But the selection of Kerry confirms yet again that the Democratic Party is not capable of being “pushed to the left” from within. Supporters of Kucinich in particular, who has continued his populist, grassroots campaigning, going so far as to call for a workers’ government, an end to Taft-Hartley, the right to strike, the right to unionize, an end to collective bargaining, no to the FTAA, withdrawal from Iraq, etc. must surely see how fruitless their continued support for the Democrats is. Much of what Kucinich has to say is positive: free healthcare, environmental awareness, increased labor rights, etc. But so long as he is just on the fringe of the Democratic Party, he can only serve to channel discontent into the tired old “lesser evil” argument.

The popularity of Kucinich and even of Dean shows the potential for a real political alternative in this country. That millions of people at a grassroots level rallied behind candidates seen as being “left” – at least in the context of the US two-party system – shows the potential that could open up if a real alternative for working people were present. The Democrats mobilized all their forces and influence in order to stop this, and by choosing Kerry, hence alienating many who felt their ideals may be represented this time around, may end up losing the election to a complete nincompoop yet again. Far from helping his cause, the more “mainstream” Kerry becomes, the more likely he will lose the election to Bush. With such massive discontent against Bush coming from all quarters of society, that Kerry may be incapable of defeating him shows the utter bankruptcy of the Democrats and their big-business politics. What happened to winning on merit? The Democrats assume that certain votes will be theirs no matter what policies they carry out. How long must working people continue to tail these people? There are literally millions of eligible voters who do not bother voting since they correctly see no real difference between the two capitalist parties. If even a fraction of these could be mobilized by a genuine program to improve workers’ lives, the entire political playing field would be transformed overnight.

A clean start is needed – millions of working people understand this instinctively. There is nothing in the Constitution or anywhere else that says that there can only be two parties. Unfortunately, in an atmosphere of fear and paranoia, many have fallen for “lesser evilism”. People like Howard Zinn, and Noam Chomsky, have lost sight of the real class interests involved by calling for a vote for the Democrats and by default, Kerry. Michael Moore, who backed Nader in 2000 and humorously explained that the “lesser of two evils is still evil”, went from backing Howard Dean to backing Wesley Clark – ironically the general in command of the bombing of Yugoslavia during the massacre at Columbine High school, the subject of Moore’s film “Bowling for Columbine”.

In 2000, after a long discussion, the American comrades of the In Defence of Marxism group decided to lend critical support to Ralph Nader’s campaign, despite the terrible weaknesses in the Green Party and in Nader himself, insofar as he was energizing millions behind his anti-corporate and anti-2-party message. This position allowed us to connect with his supporters, explain our many criticisms in a friendly but firm way, and spread the ideas of revolutionary Marxism, the need for a mass party of labor to break the 2-party stranglehold, etc. In the end, despite the Democrats’ frenzied anti-Nader propaganda, he won 7 percent of union voters’ votes, as compared to 3.5 percent or so of the general population.

The farce of “democracy” in the US was clearly exposed by the fact that the “blame” for Al Gore’s loss was placed on Nader and some 500 votes he “stole” from the Democrats. Never mind that Gore lost several states he should have won handily, that there was massive fraud and disenfranchisement, especially of minorities in a state controlled by GW’s brother Jeb, that the Supreme Court un-Constitutionally appointed Bush president, or that the Electoral College meant that the 1,000,000 more votes Gore got in the popular election were irrelevant. However, in the aftermath of the 2000 election debacle, Nader bowed to public pressure, and ran away with his tail between his les, missing a terrific opportunity to further expose the hypocrisy of the system.

This year, Nader has decided to run again, this time without the Greens. Freed of the Green’s environment-centric platform, Nader has been more aggressive in some ways, but on the whole his campaign so far has been very confused. On the one hand he exposes the weaknesses and hypocrisy of the Democrats, then goes on to say he will work to help them in certain swing states, offering up the sad idea of “vote swapping” between voters in different states. Far from a class-based perspective on Iraq, he calls for the UN to enter as the occupying force instead of the US. Then there is his history of busting his own workers’ attempts to form a union, his own millions in wealth, and the fact that formally speaking, he doesn’t represent an organized working class alternative to the bosses’ parties.

So it’s clear that Nader has many weaknesses, and we understand that he is not a workers’ leader or a Marxist, but the fact that millions of radicalized workers and young people rallied behind him in 2000, and are apparently doing so again, must be kept in mind. Without a traditional mass party of labor, it is inevitable that all kinds of elements will step into that political vacuum. We must work to connect our ideas with the US working class, and especially the youth. Already he is polling at between 4 and 6 percent, higher than his total vote count in 2000 – and he is not even on the ballot in most states. This is a reflection of the deep discontent many Americans have with the 2-party system, especially among the youth, whose future under capitalism is bleak. American youth are more tuned in to politics then they have been for a long time, with issues such as the economy and the occupation of Iraq of decisive importance to them. It is notable that Nader has already drawn enough interest from young voters aged 18 to 29 that 12 percent said they favored Nader over the Republican and Democratic Party candidates.

One thing is for sure, and that is that he is a real thorn in the side of the Democrats, who in many ways revile him worse than they do GW Bush himself. Those who support Nader, for all his faults, are at least making a break with the Democrats in an intense “anyone but Bush” atmosphere. Kerry is already starting to mimic Gore’s pantomiming of GW Bush and is predictably losing support in the polls. Nader’s campaign has yet to really take off, so it is too early to take a decision on whether or not to give him critical support. Much will depend on what happens over the next few months. We would clearly reserve the right to criticize him. We can use this situation to continue to hammer away at our position on the need for a real working class alternative. We need to explain to people that the time to start building a mass party of labor based on the unions is now! The American working class and youth should not settle for just a symbolic protest vote in a winner-takes-all electoral system, but take a real stand against the parties of big business.

The supported gained by Kucinich and Nader are proof that millions of Americans are open to an alternative, even if they know their candidate cannot possibly win. As we explained in last year’s perspectives document: “Most working people do not like Bush and the Republicans, but they don’t like what the Democrats have to offer either. Many do not really believe the old ‘worker friendly’ lie any longer, and expressed their discontent by staying away from the polls . . . It is interesting also to recall the example of Jesse Ventura's gubernatorial victory in Minnesota in 1998. When presented with what at least on the surface appeared to be a real change from the run of the mill ‘Republicrats’ candidates, voter turnout was over 60 percent, and he won in what was then an astonishing upset. So the question we must ask ourselves is, what kind of alternative are the masses looking for?

“Clearly, the working class is looking for a class solution to their problems . . . What is needed then is a clear lead – a class analysis of the problems facing working people, and a concrete plan of action. The trade union leadership does not help the situation at all by clinging to their traditional support of the Democrats, and some unions have even supported the Republicans! In the struggle between the bosses' association the PMA and the ILWU dockworkers, the only political guidance the workers were given by their ‘leaders’ was to vote Democrat on November 5^th. Never mind that California Democrat Diane Feinstein was actually encouraging Bush to invoke the anti-worker Taft-Hartley Act against the locked out workers (note – they were not even on strike but had been locked out by the bosses!). Why? Because her husband is in the shipping business! What working people need is a clear class alternative that unambiguously poses the question of workers’ control over the running of society – let those who produce the wealth democratically decide what to do with that wealth! What is needed is a mass party of labor armed with a program for the socialist transformation of society.”

These lines remain true today. Until such a party is formed in the course of determined and persistent struggle against the influence of the bosses, the Democrats, and the trade union bureaucracy, this general perspective will apply.

Not surprisingly, but unfortunate nonetheless, the US Labor Party has all but withered on the vine, and the Communist Party USA is predictably backing the Democrats. The Socialist Party is putting forward a weak and confused reformist program and represents no one but themselves. Unfortunately, it seems the US Labor Against the War organization, formed in the heated atmosphere before the invasion of Iraq, and containing within it the potential for becoming a focal point in the building of a nation-wide working class political alternative, has fallen for the “anyone but Bush” argument as well. Their recent “call to action” contains the following radical sounding lines, but in the end, their call amounts to a vote for Kerry: “ . . .Calling for a massive turnout at the polls in November, the organization called upon the labor movement to 'resoundingly reject four more years of bravado, unilateralism, and squandering of precious lives and the public treasury on corporate cronyism, militarism, and global domination.’” This is a recipe for disaster for the labor movement.

We must repeat over and over again: the time to start organizing a real alternative for working people is now. To wait until the next electoral cycle is to waste precious time. The putrefaction of the capitalist system threatens to drag the whole of humanity down with it. Many people complain that forming a mass party of labor will be a colossal task. No one said it would be easy! It will take a lot of sacrifice and endless patience in the face of formidable odds. But one of the main aspects of the Marxist worldview is the fact that nothing ever stays the same - everything always changes. The United States didn’t always exist, nor did the capitalist system. The trade unions did not always exist, and the Democratic and Republican Parties had their beginnings as well. Just because something does not yet exist does not mean it cannot or will not exist. That there is not yet a viable alternative should not lead us to despair. On the contrary, it should inspire us to redouble our efforts to break the working class from the grip of the big business duopoly. No third party will be able to truly break this political domination without the backing of the main trade unions and the working class as a whole. The criminal role played by the AFL-CIO leadership in retarding this process must be exposed at every turn.

US Elections Conclusion

As in the perspectives for the economy and the world as a whole, intense volatility can be expected around the presidential elections. We should be prepared for sharp, sudden changes. It should come as no surprise if there is a larger than usual voter turnout this time around which could upset all the predictions of the pollsters. Already Bush has gone from 12 points down six weeks ago to 4 points up at the present time. There are many wild cards in the upcoming election, making any accurate prediction impossible. For example, the overseas / absentee votes of the soldiers helped get Bush in office - how will those millions of traditionally Republican soldiers and their relatives feel about him this year? Millions of new voters, more politically aware in the post September 11 world, and more than likely to oppose Bush’s policies will be hitting the polls in November. As the recent election in Spain showed, things can be transformed almost overnight. The effects of say, another major terrorist attack are hard to predict. But most likely, far fewer people would rally to Bush’s calls for national unity than after September 11. Many millions would recognize that Bush and the capitalist class are incapable of stopping the terrorist attacks, which are a direct result of the capitalist system itself.

On the other hand, Kerry’s pathetic “opposition” to Bush cannot help but remind us of Gore’s equally wretched parroting of Bush 4 years ago. With all the problems facing Bush, he should be unelectable. But Kerry may well manage to get Bush in power for another 4 years. Despite Bush’s historically low ratings in the polls, he would most likely beat Kerry if the election were held today. The reason for this is no mystery. Kerry is simply incapable of a principled position on any issue – he is trying to appeal to both the workers and the bosses. It is well known that you cannot serve two masters at the same time. Kerry is already alienating anti-war workers who are genuinely leaning to the left in search of a solution for their problems. He is also isolating himself from the capitalists who have received terrific service from GW Bush, even if he is becoming a liability.

In the end, millions may hold their noses and vote for Kerry, but they know damn well that this is not what they really want – millions of others will express their discontent by staying at home with the feeling: “it doesn’t make any difference”. In the end, the next president will probably be elected by just over a quarter of the electorate – hardly a shining example of representative democracy. Then again, it hardly matters to the ruling class. For them, elections are just a cosmetic exercise in order to disguise the real masters of society: the capitalist class and its control over the means of production. One or another gang of economic pirates will end up in power in 2004, and the capitalist class as a whole will benefit, while the poor get poorer, the unions continue to be mercilessly attacked, and the predations of the US imperialists continue around the globe. Only the working class can put an end to all of this. We can trust only our own class forces and organizations. Break with the Democrats! For a mass party of labor based on the unions! What we need is not simply a change of president, but a fundamental change in the entire structure of society. To trade a cruel, ignorant slave master for a “kinder, gentler” one is still to be a slave.

Conclusion to US Perspectives

This year’s perspectives have had to cover a lot of ground. The economic situation is shaky at best. So far the “recovery” has been nothing of the sort for working people. It’s not ruled out that the capitalists can scrape by and enter a more sustained recovery, but there are many powerful factors that could send it collapsing like a house of cards. Either way, the working class will continue to be exploited, and the quality of life we have fought so hard for over the decades will continue to decline. The Iraq war and occupation threw the already precarious balance of the world into a tailspin. The US occupation has turned into a quagmire that will affect foreign and domestic policy for years to come. The only way to pay for this adventure is to squeeze the lifeblood out of the working class of the world. The “war on terror” remains a war on the working class at home and abroad, with the Democrats its most raucous supporters.

This will make the presidential election fertile ground for spreading the ideas of revolutionary Marxism. If Bush manages to win, it would be a much different presidency than his first. We have weathered the worst; in the aftermath of September Bush pretty much had a blank check to do whatever he liked, yet was still unable to crush the working class, which is still relatively fresh despite the constant attacks and betrayals of their trade union leaders. The honeymoon is long over, and the situation in Iraq is not likely to improve significantly any time soon. It is already rumored that Powell and Rumsfeld may not serve in a second GW Bush administration. Society will continue its rapid polarization, and the stage will be set for an even stronger shift to the left in 2008.

If Kerry wins, he will be under intense pressure to make good on what little promises he has been making to the working class. He will have something of a honeymoon period, but not for long if the economy and Iraq occupation continue to stagnate. The ruling class he is a part of will equally be putting pressure on him to continue the counter-reforms started by Clinton and continued by GW Bush. Any reforms that Kerry may introduce would be due only to the pressure from below in order to stave off social unrest. As was the case with FDR, the capitalists sometimes need to cut off the most blatant excesses in order to save the system as a whole, like a gangrenous arm. If Kerry wins, we will have many opportunities to expose the Democrats and their anti-worker, pro-big business policies. Again, the stage will be set for continued polarization and the preparation of the forces of Marxism for an even broader intervention in the elections of 2008.

The occupation of Iraq, perhaps even more than the economy, the handling of September 11, the lack of WMDs in Iraq, or any other pre-war lies could be the decisive issue in the coming election. The economy will also be a decisive issue for millions of voters who historically “vote with their wallets”. In this highly polarized and unstable situation, any little change can have consequences far greater than imagined. The election could be very close, or could be skewed dramatically one way or another. Our ideas are easily understood if they are explained with patience and real world examples. Once the American working class realizes that capitalism is not the only possible way of organizing society, the floodgates will open. The mood in favor of a mass party of labor will spread in the coming years. The American Marxists must use the coming months to raise our ideas in a clear, patient way – there are literally thousands if not millions of people who will be open to our ideas – what we need to do is get those ideas out there on a broader basis than ever. We need audacity, revolutionary optimism, élan, perspectives, firmness, and above all, a lot of hard work.

The litmus test for any social system is its ability to develop the means of production and continually improve the standard of living for all. While it is true that in the advanced countries capitalism is able to develop the means of production for the benefit of a tiny minority of the population, the vast majority of humanity lives in poverty, destitution, ignorance, and squalor. Capitalism no longer plays a historically progressive role, and can no longer take human society forward. Once progressive, the nation state and market economy have reached their limits, and can only continue to exist through periodic crises that devastate the living standards of the working class. Those who believe that it is possible to “reform” the system, to make it “kinder and gentler” are either openly deceitful or just plain naïve. There is no solution within the bounds of capitalism.

The capitalist class is unable to competently run their own system. Instead of things getting better with every generation, things are now getting worse. Surrounded by the most advanced technology ever known, the greatest efficiency of labor, and the best educated and qualified workforce in history, the capitalists cannot provide even the most basic needs of society: jobs, health care, housing, education.

The decrepit profit system threatens to drag civilization into the abyss with it. Fortunately, the ideas of Marxism are alive and well, and the most powerful force on earth – the world working class – is relatively fresh and undefeated. Once the ideas of Marxism connect with the multi-millioned masses, there will be no stopping the world socialist revolution. In the coming years, there will be countless opportunities for the working class to take power in one country after another – including the United States. However, Trotsky explained long ago, the crisis of humanity is the crisis of its leadership. The masses will move again and again to change society, and will make the most heroic sacrifices with or without a Marxist leadership. But history tragically shows that without a revolutionary party, steeled in the ideas of Marxism with decades of experience fighting shoulder to shoulder with the working class, these revolutionary moments can be lost in the blink of an eye. We must build it!