greydog

Linda Ross aka greydog is a native Chicagoan who lives and works in Prague. greydog is the founder and editor of 99GetSmart.

Jul 282016
 

By Gürkan Özturan, 99GetSmart

(Flickr/Merton Wilton)

(Flickr/Merton Wilton)

Turkey has opened its first Traitors’ Cemetery in the aftermath of the July 15th coup attempt and Istanbul Metropolitan Mayor announced that the first burial has taken place.

“There is a place needed, to be called the cemetery of the traitors; all passers-by to curse when around it. All those walking by should curse and spit on it; there shall be no resting in peace for them, even in their graves.” –Kadir Topbas, Istanbul Metropolitan Mayor


Some days it feels like life in Turkey is a chapter in a dark and deep dystopian novel. Today is one of those days. On July 20th, only days after the failed coup attempt, Istanbul Metropolitan Mayor, Kadir Topbaş announced his will to open a cemetery for the traitors who participated in the bloody coup on July 15th. According to media reports, the cemetery has just been opened and the first burial taken place.

The first body buried is Captain Mehmet Karabekir who killed the community chief in Istanbul’s Acıbadem neighbourhood on the night of the coup attempt. The mayor announced that the family of the dead did not want his body, so he was to be buried somewhere and the ‘Traitors’ Cemetery’ was the venue for this occasion. The cemetery is located in Istanbul’s Pendik district, at the Istanbul Metropolitan Municipality’s ‘dog shelter’.

Previously, the religious authority of the Prime Minister’s Office, Diyanet had announced that there would be no religious services for those who died in an attempt to overthrow the government through a violent coup. Denial of religious services had previously been discussed for certain leftist/progressive academics and journalists, yet no matter how much reaction there was from right-wing supporters, the services still took place.

However, there are also many unknown graveyards of notable rebels of the state; Sheikh Said, the leader of an Islamist/Kurdish uprising in the 1920s; Seyid Rıza, the religious leader of the Kurdish movement in the 1937-38 Dersim Rebellion; Said Nursi, an influential Kurdish Sunni cleric in the early years of the Republic who later inspired many Islamist movements formation and rhetoric. Their graveyards are still unknown to date.

Apart from rebel leaders, the body of Aziz Güler, who had gone to Rojava to fight against ISIS, was kept waiting for 2 months at the border before being given to his family for burial; and another disturbance occurred when Şafak Yayla, the perpetrator who had taken prosecutor Mehmet Kiraz hostage at the Istanbul Court Palace, was killed, and his family had to bury him in the front yard of the house after violent mobs threatened to attack the body, which finally ended with his family pouring cement on the gravesite.

Attacks against graveyards are also a recurring theme in Turkey’s history. After the 1960 military coup, when the prime minister at the time, Adnan Menderes, and two of his ministers were hanged by Alparslan Türkeş (later founder of far right Nationalist Movement Party MHP), their bodies were buried in a neglected state on İmralı island –currently where the PKK leader Öcalan is kept in solitary confinement. However, Menderes’ remains were carried to a mausoleum in 1990.

The idea of a ‘Traitors’ Cemetery’ and its location at the dog shelter feels like it is straight out of a dystopia, or a horror film. However, this is the reality in Turkey; still a country that feeds on hostility, even regarding the dead. Yet, the word ‘traitor’ is used quite loosely by almost everyone, and who knows, perhaps some of those who are accusing each other of treason might lie side by side in that cemetery someday.

Jul 242016
 

By James Petras, 99GetSmart

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President Recep Tayyip Erdoğan prepared a list of targets for arrest even before the coup (sic) was launched”, European Commission official on Turkey (FT 7/19/2016).

Introduction

The coup in Turkey was made to order. A group of military officers and police officials were set-up to seize power by senior intelligence operatives in the Erdoğan regime. They were allowed to drop a few bombs, seize bridges and buildings before they were encircled, rounded-up and arrested using a list of targets for arrest prepared even before the so-called coup. In the midst of this fake coup, the ‘vacationing’ Erdoğan flies into Istanbul unharmed, of course, because his vacation resort was bombed after he had left. He seizes the mass media, denounces the coup, rouses the Muslim masses and sets about on a mass purge of Turkish society, concentrating on the civil service, teachers and administrators, the military, the courts and judges. Indeed every institution capable of independent action or reputedly critical of Erdoğan is closed. After a week over 60,000 people had been purged.

Why did Erdoğan resort to a coup? Why did Erdoğan purge Turkish society? What policies will follow Erdoğan’s power grab?

Prelude to the Coup

Over the past 5 years Erdoğan has suffered a series of political, economic and diplomatic failures and defeats, seriously undermining his dictatorial and territorial ambitions. His air force shot down a Russian military jet operating within Syrian territory. The images of Turkish jihadi mercenaries murdering a Russian pilot as he parachuted to safety, as well as a member of the Russian rescue party, caused the Russian government to halt the multi-billion-dollar Russian tourism industry in Turkey and cancel lucrative business deals. He broke relations with Israel, which undercut a lucrative gas and oil offshore contract. His support for ISIS and other violent Salafist mercenary groups operating in Iraq and Syria provoked a rupture with Syria and Iran. His subsequent effort to disavow Turkey’s links with ISIS led to a series of horrific terror bombings by jihadi cells implanted in the country. Turkey’s diplomatic position in Egypt deteriorated as Erdoğan sought to maintain his ties with the Muslim Brotherhood after it had been ousted from power by a US sponsored Egyptian military coup.

Domestically, Erdoğan alienated the secular Kemalist military and civilian political-economic elite via trumped up trials and media purges. Erdoğan’s heavy-handed assault on liberal and leftist protestors over environmental issues increased Western concern. His brutal handling of the labor protests following the 2014 Soma coal mine disaster, when over 300 workers were killed, further isolated him.

Erdoğan’s war on the Kurdish independence movements in Turkey, Iraq and especially in Syria, where they were allied with the US against the jihadi terrorist ISIS, added to domestic unrest and international isolation.

In order to consolidate his executive power, Erdoğan had first allied with the extensive Gulenist-Islamist networks in Turkey in order to undermine the Kemalists and then he turned around to purge his former allies.

Faced with enemies and adversaries at home and overseas, Erdoğan decided on a dual strategy of improving his ties abroad, especially his links with Russia and Israel while launching a total war on domestic critics.

Fabricated Coup and the Permanent Purge

Erdoğan’s intelligence operatives within the military command encouraged or even provoked his critics in the General Staff, who were fed up with his bungling and disastrous policies, to mount a coup. They gave the rebellious military sufficient space and resources to provide a semblance of authority while retaining strategic control over the air force and key ground troops. They may have feigned sympathy to the launching of a premature uprising … doomed to defeat. Once the heavily infiltrated rebel units moved, the entire Erdoğan operation struck. Hapless conscripts thought they had been called out for military exercises, only to find themselves encircled, arrested and even lynched. The dissidents were isolated, their advances paralyzed, their leaders incapacitated. Erdoğan’s loyalist within the Turkish Air Force flew the triumphant president into the ‘liberated’ Istambul International airport to the cheers of his adoring civilian supporters.

Erdoğan immediately decreed a massive purge – in the name of the fatherland. A real coup had indeed taken place – Erdoğan’s total power grab. The entire political, military, judicial and police system was stripped of personnel within hours. There were over 20,000 arrests, beatings and disappearances. There were calls to re-introduce the death penalty.

Erdoğan’s power grab eliminated key US assets among the Gulenist and eliminated independent Supreme Court officials and secular republican officials. The president was free to rebuild an entire civil, governmental and military apparatus with his own loyalists. His control over the media and the educational institutions was total.

Rule Under Erdoģan

Erdoğan’s pre-emptive coup, purge and power grab will result in a monolithic state which Erdoģan will shape into his long-sought version of an Islamist regime. The new regime announced a ‘State of Emergency’, which places all Turks under strict compliance with Erdoğan’s policies.

Erdoğan’s “New Order” will launch large-scale operations against the Kurds, with no respect for the Syrian or Iraqi national borders. Erdoğan will ensure compliance with Islamist decrees designed to enforce conformity. He will succeed in imposing a dictatorial ‘Presidential’ regime. And parliament, if necessary will be bypassed; his ‘electoral’ mandate will be ensured.

In the immediate aftermath, mass detentions will strengthen the state – and Erdoğan’s generals, allied religious authorities and street thugs will call the shots.

Unleashing force and violence against his domestic enemies, however, may lead to internal disputes among the new predators over the spoils of victory. The economic elite may accept the New Order, but only if and when Erdoğan tones down his rhetorical attacks on the US and the EU.

Erdoğan has yet to develop a strategy on replacing the purged (‘Gulenist’) professionals within the civilian economy and public bureaucracy – especially the schools and judiciary. The impetuous reversals of his reckless policy of confrontation with Russia, Syria, Israel, Iran, Iraq and the Kurds are likely to generate new layers of discontent, especially among his current military commanders.

Erdoğan’s New Order arises from the breakdown of civil society and long-term alliances. He may remain in power in Ankara but he will be viewed as more of a local political thug than a partner among the regional big powers.

Erdoğan’s external allies will exploit his isolation and radical bombast to forge lucrative alliances.Israel will push for favorable gas and oil deals; Russia will insist that Erdoğan abandons his ISIS allies. The US will demand he cease attacks on the Kurds. The EU will use the ongoing purge and re-institution of the death penalty to finally declare Turkey unfit to join the European Union. Bankers and foreign investors will wait for Erdoğan to stop his rampage over the financial sector and ‘get serious’ about the economy.

Erdoğan’s dream of lifetime rulership presiding over an Islamic Neo-Ottoman caliphate, buttressed by street mobs, praetorian guards and crony capitalists makes for an unstable and unruly Turkey. Erdoğan’s military loyalists have their own rivalries and ambitions. Now that Erdoğan has established his ‘military road to power’, he has set a clear precedent for other ‘Erdoğan’s’ to take the same route.

In the short-run Erdoğan needs to restart the economy, stabilize the political system and establish a semblance of international order.

Erdoğan cannot and probably will not prolong tensions with the US over the Gulen affair. Glen will remain in Pennsylvania, in the CIA’s ‘regime change’ pocket. Meanwhile, he has eliminated most of the Gulenist agents capable of working with the US as a fifth-column. The question is whether he now moves back to his role as a ‘valued’ NATO junior partner, or if he will launch an intensified war against the US’s strategic Kurdish allies?

Erdoğan’s ties with Russia are precarious. There is no reason for the Russians to trust him. He has fallen somewhere between the need for reconciliation with Russia and the desire to continue his proxy war against the government of Syria.

In the end Erdoğan may have secured power and undertaken a vast domestic purge of his enemies, but he has lost the regional war while bearing the consequences of millions of war refugees and a deeply entrenched jihadi terrorist threat within Turkey.

Jul 232016
 

By Eric Toussaint, CADTM, 99GetSmart

Bolivar Boulevard, Venezuela - Luis Robayo/AFP

Bolivar Boulevard, Venezuela – Luis Robayo/AFP

From the start of the struggle for independence, Simón Bolívar |1|, like other independentist leaders, launched a policy of internal indebtedness (which ended up benefiting the local ruling class) and external indebtedness toward Britain and its bankers. In order to borrow abroad, he engaged part of the nation’s wealth as collateral and agreed to free-trade agreements with Britain. The bulk of the sums borrowed never reached Latin America because the bankers in London skimmed off enormous commissions, charged actual interest rates that were abusive, and sold the securities for well below their face value. Certain Latin American representatives appointed by the independentist leaders also withheld large commissions at the source, or else simply stole part of the amounts borrowed. As for the rest, another large share of the borrowed amounts was used directly to purchase weapons and military equipment from British merchants at exorbitant prices. Out of what eventually made it to Latin America – that is, only a small percentage of the loan amounts –, large sums were misappropriated by certain of the new authorities, military leaders and the local dominant classes. A series of quotations from Simón Bolívar accompanied by commentary by Luis Britto clearly show that the Libertador gradually became aware of the debt trap into which he and the new independent States had fallen. Simón Bolívar did not seek to enrich himself personally by taking advantage of his functions as head of State, unlike many leaders who came to power thanks to struggles for independence.

The terms of external indebtedness were highly favourable to Britain 

In November 1817, Simón Bolívar appointed a special envoy to London to obtain external financing on credit. In the letter of accreditation he wrote, he granted enormous powers: “And in order that he may propose, negotiate, adapt, conclude and sign in the name and under the authority of the Republic of Venezuela any pact, convention and treaty founded on the principle of its recognition as a free and independent State, and in order to provide support and protection, stipulating to that end all the necessary conditions for indemnifying Great Britain for its generous sacrifices and provide it with the most positive and solemn proofs of a noble gratitude and perfect reciprocity of services and of sentiments” (Luis Britto, p. 395). Luis Britto |2| makes the following comment: “The accreditation is conceived in very broad terms: it is possible to agree to “any condition necessary.” The representative and the lenders may make use of it with the greatest freedom.” (Britto p. 395). Initially, the debts contracted were exclusively to serve the war effort.

Referring to the creation of Gran Colombia (Venezuela, Colombia, Panama, Ecuador) in 1819, Britto notes: “This integration has as its consequence the amalgamation of the debts contracted by each of the political bodies. Accordingly, Article 8 of the Constitution clearly stipulates: “All debts which the two peoples have contracted separately shall be recognised jointly and severally as the national debt of Colombia; and all the goods of the Republic shall be collateral for their repayment.” Britto continues: “Not only were the debts constitutionally consolidated; by virtue of the Constitution, all public commodities of the nascent political body were to constitute guarantees. Unfortunately this operation was not carried out with the transparency that would have been desirable, since the registers of the operations were incomplete and confused.”

Rosa Luxemburg, nearly a century later, considered that these loans, while necessary, had served as an instrument of subordination of the young States being created: Though foreign loans are indispensable for the emancipation of the rising capitalist states, they are yet the surest ties by which the old capitalist states maintain their influence, exercise financial control and exert pressure on the customs, foreign and commercial policy of the young capitalist states.” |3| I have analyzed the link between the policy of indebtedness and free trade agreements in the first half of the 19thcentury in Latin America in “How Debt and Free Trade Subordinated Independent Latin America,”.

The new elites profit from internal debt and refuse to pay taxes 

The British Consul, Sir Robert Ker Porter, mentions conversations with Simón Bolívar in his journal, and in the entry for Wednesday 15 February, 1827, observes that “Bolívar confesses to an internal debt of 71 millions of dollars, in paper, to be paid by the Govt. Hundreds of individuals have speculated deeply, and most usuriously in the paper…” According to the Consul, the paper was sold for US dollars by persons in urgent need at 60% of its value, and in certain cases 25% and even 5% of its face value. He goes on to explain that according to his sources almost no officials had kept any cash, spending it all in this “immoral and antipatriotic speculation.” He says that Vice-President Santander is said to possess two million in these bonds, which he is said to have purchased for $200,000 (see Britto, op. cit. p. 378). Luis Britto adds the following comment: “These speculators are in turn closely related to numerous officers and republican politicians, who are making large fortunes at the expense of the blood of their troops” (p. 380). And he adds: “The mere announcement of rigorous tax measures strikes fear into the hearts of civil servants like the Intendant Cristóbal Mendoza, who suddenly tendered his resignation.” (p. 380).

The national debt will oppress us 

The words written by Simón Bolívar in a letter sent on 14 June, 1823 to Vice-President Francisco de Paula Santander (the one mentioned by the British Consul in his notes in 1827) are striking: “In the end we will do everything, but the national debt will oppress us.” And, referring to the members of the local ruling class and the new powers: “The national debt engenders a chaos of horrors, calamities and crimes and Monsieur Zea is the spirit of evil, and Méndez the spirit of error, and Colombia is a victim whose entrails these vultures are tearing to shreds: they have already devoured the sweat of the Colombian people; they have destroyed our moral credit, and in exchange we have received meagre support. Regardless of the decision taken regarding this debt, it will be horrible: if we recognise it, we cease to exist, and if we do not… this nation will be the object of opprobrium.” (Britto, p. 405). We see clearly that Simón Bolívar, who had become aware of the debt trap, rejects the prospect of repudiation.

Two months later, Simón Bolívar again wrote to Vice-President Santander on the subject of the debt and referred to the situation of the new authorities in Peru: “The government of Riva Agüero is the government of a Catilina associated with that of a Chaos; you cannot imagine worse scoundrels or worse thieves than the ones Peru has at its head. They have devoured six million pesos in loans, scandalously. Riva Agüero, Santa Cruz and the Minister of War alone have stolen 700,000 pesos, solely in contracts let for equipping and embarking troops. The Congress has demanded to be shown accounts and has been treated like the Divan of Constantinople. The manner in which Riva Agüero has behaved is truly infamous. And the worst thing is that between the Spanish and the patriots, they have brought about the death of Peru through their repeated pillaging. The country is the most costly on earth and there is not a maravedí left for its maintenance.” (in Britto, p. 406)

Simón Bolívar, pushed to the wall by the creditors, was prepared to cede public commodities to them. In 1825, he offered to repay the debt by transferring a part of Peru’s mines, which had been abandoned during the war of independence (see Britto p. 408 and following); in 1827, he attempted to develop a quality tobacco crop to sell to Britain to pay the debt (Britto, p. 378-382); in 1830 he offered to sell unused public land to the creditors (Britto, p. 415-416).

Simón Bolívar threatens to denounce the oppressive debt system to the people 

On 22 July, 1825, Simón Bolívar wrote to Hipólito Unanue, Peru’s Prime Minister: “The masters of the mines, the masters of the Andes of silver and gold, are seeking loans of millions in order to poorly pay their little army and their miserable administration. Let all this be told to the people, and let our abuses and our ineptness be forcefully denounced, so that it may not be said that government protects the abominable system that is ruining us. I repeat, let our abuses be denounced in the “Government Gazette”; and let pictures be painted there that offend the imagination of the citizens.” (Britto, p. 408).

In December 1830, Simón Bolívar died in Santa Marta (on the Caribbean coast of Colombia), at a time when Gran Colombia was in strife and abandoned by the ruling classes of the region.

Translated by Snake Arbusto and Christine Pagnoulle

Thanks to Lucile Daumas for her French translations of quotations in Spanish, which served as basis for the English translations (by CADTM).

Footnotes

|1| Simón Bolívar, who was born 24 July, 1783 in Caracas, Venezuela and died on 17 December 1830 at Santa Marta, Colombia was a Venezuelan general and politician. He is an emblematic figure, with the Argentine José de San Martín and the Chilean Bernardo O’Higgins, of the emancipation of the Spanish colonies in South America from 1813. He participated decisively in the independence of present-day Bolivia, Colombia, Ecuador, Panama, Peru and Venezuela. Bolívar also played a part in the founding of Gran Colombia, which he wished to see become a great political and military confederation including all of Latin America, and of which he was the first President.

The honorary title of Libertador was given him initially by the Cabildo of Mérida (Venezuela), then ratified in Caracas (1813), and is still associated with him today. Bolívar encountered so many obstacles in bringing his projects to fruition that he referred to himself as “ the man of difficulties” in a letter to Francisco de Paula Santander in 1825.

As a major figure of universal history, Bolívar is today a political and military icon in many countries in Latin America and around the world, who have given his name to many squares, streets and parks. His name is also borne by a State of Venezuela, a department in Colombia, and even a country – Bolivia. Statues of him are found in most large cities in Latin America, but also in New York, New Orleans, Lisbon, Paris, London, Brussels, Cairo, Tokyo, Québec, Ottawa, Algiers, Madrid, Tehran, Barcelona, Moscow and Bucharest.

Wikipedia entry: https://en.wikipedia.org/wiki/Sim%C3%B3n_Bol%C3%ADvar

|2| Luis Britto García is a Venezuelan man of letters, playwright, historian and essayist born in Caracas on 9 October 1940. In 2010 he published, in Spanish, a work devoted to Simón Bolívar: El pensamiento del Libertador – Economía y Sociedad, BCV, Caracas, 2010 http://blog.chavez.org.ve/temas/libros/pensamiento-libertador/. In May 2012, Luis Britto García was appointed to the Venezuelan Council of State, “the highest circle of advisers to the president,” by President Hugo Chávez. See: https://en.wikipedia.org/wiki/Luis_Britto_Garc%C3%ADa

|3| Rosa Luxemburg. 1913. The Accumulation of Capital, London, Routledge and Kegan Paul Ltd, 1969, Chapter 30 II, p. 89 https://www.marxists.org/archive/luxemburg/1913/accumulation-capital/

Author

Eric Toussaint is a historian and political scientist who completed his Ph.D. at the universities of Paris VIII and Liège, is the spokesperson of the CADTM International, and sits on the Scientific Council of ATTAC France. He is the author of Bankocracy (2015); The Life and Crimes of an Exemplary Man (2014); Glance in the Rear View Mirror. Neoliberal Ideology From its Origins to the Present, Haymarket books, Chicago, 2012 (see here), etc. See his bibliography:
https://en.wikipedia.org/wiki/%C3%89ric_Toussaint He co-authored World debt figures 2015 with Pierre Gottiniaux, Daniel Munevar and Antonio Sanabria (2015); and with Damien Millet Debt, the IMF, and the World Bank: Sixty Questions, Sixty Answers, Monthly Review Books, New York, 2010. Since the 4th April 2015 he is the scientific coordinator of the Greek Truth Commission on Public Debt.
Jul 172016
 

By James Petras99GetSmart

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Introduction

The European Union is controlled by an oligarchy, which dictates socio-economic and political decisions according to the interests of bankers and multi-national business. The central organs of power, the European Commission (EC), the European Central Bank (ECB) and the International Monetary Fund (IMF) have systematically imposed austerity programs that have degraded working conditions, welfare programs, and wages and salaries.

EU policies demanding the free immigration of non-unionized workers to compete with native workers have undermined wage and workplace protections, union membership and class solidarity. EU financial policies have enhanced the power of finance capital and eroded public ownership of strategic economic sectors.

The European Union has imposed fiscal policies set by non-elected oligarchs over and against the will and interests of the democratic electorate. As a result of EU dictates, Greece, Spain, Portugal and Ireland have suffered double-digit unemployment rates, as well as massive reductions of pensions, health and educational budgets. A huge transfer of wealth and concentration of decision-making has occurred in Europe.

Rule by EU fiat is the epitome of oligarchical rule.

Despite the EU’s reactionary structure and policies, it is supported by Conservatives, Liberals, Social Democrats, Greens and numerous Leftist academics, who back elite interests in exchange for marginal economic rewards.

Arguments for the EU and their Critics

The pro-EU power elite base their arguments on concrete socio-economic interests, thinly disguised by fraudulent ideological claims.

The ideological arguments backing the EU follow several lines of deception.

They claim that ‘countries’ benefit because of large-scale transfers of EU payments. They omit mentioning that the EU elite secures the privatization and denationalization of strategic industries, banks, mass media and other lucrative national assets. They further omit to mention that the EU elite gains control of domestic markets and low wage labor.

The EU argues that it provides ‘free movements’ of capital, technology and labor – omitting the fact that the flows and returns of capital exclusively benefit the powerful imperial centers to the detriment of less advanced countries and that technology is controlled and designed by the dominant elites which also monopolize the profits. Furthermore, the ‘free flow of labor’ prejudices skilled productive sectors in less developed countries while reducing salaries, wages and benefits among skilled workers in the imperial centers.

The EU: A Self-Elected Dictatorship of Empire Builders

‘Integration into the EU’ is not a union of democratic participants; the decision-making structure is tightly controlled by non-elected elites who pursue policies that maximize profits, by relocating enterprises in low tax, low wage, non- unionized regions.

European integration is an integral part of ‘globalization’, which is a euphemism for the unimpeded acquisition of wealth, assets and financial resources by the top 1%, shared, in part, with their supporters among the top 25%.

The EU promotes the concentration of capital through the merger and acquisition of multi-national firms which bankrupt local and national, medium and small scale industries.

Political and Academic Satraps of the EU Elites

The European Union’s oligarchy has organized a small army of highly paid politicians, functionaries, advisers, experts and researchers who support the European Union in a manner not unlike NGO workers in the developing world – answerable only to their ‘foreign’ paymasters.

Numerous Social Democrats draw stipends, travel expenses, lucrative fees and salaries as members of commissions and serve on impotent ‘legislative’ assemblies.

Academics advise, consent —and draw duplicate salaries from membership in the EU bureaucracy. Journalists and academics ‘front’ for the EU oligarchy by playing a leading propaganda role. For example, they have been busy slandering British pro-democracy, anti-EU voters by (1) calling for a new referendum and (2) questioning the right of the working class electorate to vote on issues like the recent EU referendum.

The leading financial press adopts a demagogic pose accusing the pro-democracy voters of being ‘racists’, ‘nativists’, or worse, for ‘opposing Eastern European immigration’.

In fact, the vast majority of workers do not oppose immigrants in general, but especially those who have taken once-unionized jobs at wages far below the going rates for established workers, on terms dictated by employers and with no ties or commitment to the community and society. For decades British workers accepted immigrant labor from Ireland because they  joined unions at wage rates negotiated by union leaders, won by long workers struggle and voted with the majority of English workers. Under the EU, Britain was flooded with Eastern European workers who acted as ‘scabs’ displacing skilled British workers who were told it was ‘progress’. This acted to destroy the prospects of their own children entering a stable, skilled labor market.

The financial press’s lurid descriptions of the British workers’  anti-EU ‘racism’ against Polish immigrant labor ignores the long history of Warsaw’s virulent hostility to immigrants–namely the refugees from the wars in the Middle East. The Polish government and population exhibit the most furious opposition to sheltering the thousands of Middle East and African war refugees, while claiming that they are not ‘Christians’ or might pose cultural or even terrorist threats against the ethnically pure Polish population.

Some of the British workers’ hostility toward Polish workers has a recognized historical basis. They have not forgotten that Polish strike breakers took the side of  ‘Iron Lady’ Thatcher’s militarized assault against unionized UK miners during the great coal strikes and even offered to export coal to aid the Conservative government in breaking the strike. As such, EU-Polish immigrant workers are not likely to integrate into the militant British working class culture.

The Polish regime’s aggressive promotion of the economic sanctions against Russia has further undermined English jobs linked to that large and growing market.

The financial press ignores the fact that Polish immigrants ‘scab’ on unionized British workers in the construction industry, undercutting long-established UK plumbers, electrical workers, carpenters and laborers – who have multiple generational ties to their communities and work. The EU elites use the importation of Polish workers to strengthen the reactionary labor policies of the employers

After the fall of Communism, Polish workers backed a succession of right-wing regimes in Warsaw, which privatized and denationalized industries and eroded their welfare system leading to their own impoverishment. Poles, instead of fighting against these neo-liberal regimes at home, headed for England and have been helping the British bosses ever since in their own anti-labor campaigns to reduce wages and decrease worker access to decent, affordable housing, public services, education and medical care.

The Eastern Europeans became the willing recruits of the EU reserve army of labor to raise profits for industrial and finance capital thus further concentrating wealth and power into the hands of the British oligarchs.

To label British workers’ antipathy to these EU policies over the free entry of cheap immigrant labor, as ‘racist’, is a blatant case of blaming workers for opposing naked capitalist profiteering. It is not hard to imagine how the Poles would react if skilled Syrian electricians were taking their jobs!

The pro-EU prostitute press claims that the pro-democracy voters are ‘anti-globalization’ and a threat to England’s living standards and financial stability.

In fact, labor votes in favor of trade but against the relocation of English industry overseas. Labor votes for for greater investment in the UK and greater regional diversity of productive, job-creating sectors, as opposed to the concentration of capital and wealth in the parasitic finance, insurance and real estate sectors concentrated in the City of London.

The EU-City of London-financial oligarchy have priced labor out of the housing market by promoting the massive construction of high-end luxury condos for ‘their kind of immigrant’, i.e. the millionaire and billionaire Chinese, Russian, Indian, Eastern European and US plutocrats who flock to London’s famous tax-evasion and money-laundering expertise.

The scribes of the EU-City oligarchy who claim that exit from the EU will lead to a cataclysmic breakdown are blatantly scaremongering. In fact, the stock and bond market, which declined for less than a week, rebounded sharply, as trade, production and demand were scarcely affected by the vote.

The hysteria-peddlers among the financial press resounded . . . in the minds and pockets of the City of London speculators. They rightly feared that their own lucrative financial operations could relocate overseas.

Conclusion

If and when the EU – City end their oligarchical control over the British economy, workers will gain an opportunity to debate and elect freely their own representatives and have a say in their own government. Leaving the EU is just the first step. The next move will be to change the rules for immigrant labor to accord with the standards of wages and conditions set by UK trade union organizations.

The following steps would include subordinating the banks to the needs of industry, investment in public housing for workers and the development of local technology for domestic producers.

The cleavage between productive labor and the EU parasites and their political hangers-on requires a new political leadership with a democratic foreign policy, which precludes overseas wars and imperial alliances.

The break with the EU logically and persuasively argues for a break with NATO and an opening toward free trade with Russia, China and the new dynamic global markets. The end of the EU can help weaken the strategic partnership between the European and City of London oligarchs. No doubt, the latter will not go without a class war of unprecedented ferocity, involving financial lockouts, manufactured fiscal crises, street mobs and parliamentary coups at the top of their agenda.

Only if the democratic electoral majority becomes a cohesive and combative class movement, in and out of Parliament, can they convert the referendum from a temporary electoral win to a stable basis for structural transformation.

Only a democratic majority can implement a fair and equitable immigration policy that strengthens labor and welfare policies and which would be based on the traditional values of British trade unionism and not on some criteria parroted by the ‘house servants’ for the lords of the EU-London ‘Downton Abbey’.

Jul 132016
 

By James Petras and Robin Eastman-Abaya, MD, 99GetSmart

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Introduction

The white working class in the US has been decimated through an epidemic of ‘premature deaths’– a bland term to cover-up the drop in life expectancy in this historically important demographic. There have been quiet studies and reports peripherally describing this trend – but their conclusions have not yet entered the national consciousness for reasons we will try to explore in this essay. Indeed this is the first time in the country’s ‘peacetime’ history that its traditional core productive sector has experienced such a dramatic demographic decline – and the epicenter is in the small towns and rural communities of the United States.

The causes for ‘premature death’ (dying before normal life expectancy – usually of preventable conditions) include the sharply increasing incidence of suicide, untreated complications of diabetes and obesity and above all ’accidental poisoning’ – a euphemism used to describe what are mostly prescription and illegal drug overdoses and toxic drug interactions.

No one knows the total number of deaths of American citizens due to drug overdose and fatal drug interactions over the past 20 years, just as no central body has kept track of the numbers of poor people killed by police nationwide, but let’s start with a conservative round number – 500,000 mostly white working class victims, and challenge the authorities to come up with some real statistics with real definitions. Indeed such a number could be much higher – if they included fatal poly-pharmacy deaths and ‘medication errors’ occurring in the hospital and nursing home setting.

In the last few years, scores of thousands of Americas have died prematurely because of drug overdoses or toxic drug interactions, mostly related to narcotic pain medications prescribed by doctors and other providers. Among those who have increasingly died of illegal opioid, mostly heroin, fentanyl and methadone, overdose, the vast majority first became addicted to the powerful synthetic opioids prescribed by the medical community, supplied by big chain pharmacies and manufactured at incredible profit margins by the leading pharmaceutical companies. In essence, this epidemic has been promoted, subsidized and protected by the government at all levels and reflects the protection of a profit-maximizing private medical-pharmaceutical market gone wild.

This is not seen elsewhere in the world at such a level. For example, despite their proclivity for alcohol, obesity and tobacco – the British patient population has been essentially spared this epidemic because their National Health System is regulated and functions with a different ethic: patient well being is valued over naked profit. This arguably would not have developed in the US if a single-payer national health system had been implemented.

Faced with the increasing incidence of returning Iraq and Afghanistan veterans dying from suicide and overdose from prescription opioids and mixed drug reactions, the Armed Forces Surgeon General and medical corps convened ‘emergency’ US Senate Hearings in March 2010 where testimony showed military doctors had written 4 million prescriptions of powerful narcotics in 2009, a 4 fold increase from 2001. Senate members of the hearings, led by Virginia’s Jim Webb, cautioned not casting a negative light on ‘Big Pharma’ among the largest donors to political campaigns.

The 1960’s public image of the heroin-addicted returning Vietnam War soldier that shocked the nation had morphed into the Oxycontin/Xanax dependent veteran of the new millennium, thanks to ‘Big Pharma’s’ enormous contracts with the US Armed Forces and the mass media looked away. Suicides, overdoses and ‘sudden deaths’ killed many more soldiers than combat.

No other peaceful population, probably since the 1839 Opium Wars, has been so devastated by a drug epidemic encouraged by a government. In the case of the Opium Wars, the British Empire and its commercial arm, The East India Company, sought a market for their huge South Asian opium crops and used its military and allied Chinese warlord mercenaries to force a massive opium distribution on the Chinese people, seizing Hong Kong in the process as a hub for its imperial opium trade. Alarmed at the destructive effects of addiction on its productive population, the Chinese government tried to ban or regulate narcotic use. Its defeat at British hands marked China’s decline into semi-colonial status for the next century – such are the wider consequences of having an addicted population.

This paper will identify the (1) the nature of the long-term, large-scale drug induced deaths, (2) the dynamics of ‘demographic transition by overdose’, and (3) the political economy of opioid addiction. This paper will not cite numbers or reports – these are widely available. However they are scattered, incomplete and generally lack any theoretical framework to understand, let alone confront, the phenomenon.

We will conclude by discussing whether each ‘death by prescription’ is to be viewed as an individual tragedy, mourned in private, or as a corporate crime fueled by greed or even a pattern of ‘Social-Darwinism-writ-large’  by an elite-run decision making apparatus.

Since the advent of major political-economic changes induced by neoliberalism, America’s oligarchic class confronts the problem of a large and potentially restive population of millions of marginalized workers and downwardly mobile members of the middle class made redundant by ‘globalization’ and an armed rural poor sinking ever deeper into squalor. In other words, when finance capital and elite ruling bodies view an increasing ‘useless’ population of white workers, employees and the poor in this geographic context, what ‘peaceful’ measures can be taken to ease and encourage their ‘natural decline’?

A similar pattern emerged in the early ‘AIDS’ crisis where the Reagan Administration deliberately ignored the soaring deaths among young Americans, especially minorities, adopting a moralistic ‘blame the victim’ approach until the influential gay community organized and demanded government action.

The Scale and Scope of Drug Deaths

In the past two decades, hundreds of thousands of working age Americans have died from drugs. The lack of hard data is a scandal. The scarcity is due to a fragmented, incompetent and deliberately incomplete system of medical records and death certificates – especially from the poorer rural areas and small towns where there is virtually no support for producing and maintaining quality records. This great data void is multi-faceted and hampered by the problems of regionalism and a lack of clear governmental public health direction.

SKULL_RX_iStock_000007073329Large-400x400Early in the crisis, medical professionals and coroners were largely in ‘denial’ and under pressure to certify ‘unexpected’ deaths as ‘natural due to pre-existing conditions’ – despite overwhelming evidence that there had been reckless overprescribing by the local medical community. Fifteen to twenty years ago, the victims’ families, isolated in their little towns, may have derived some short-term comfort from seeing the term ‘natural’ attached to their loved-one’s untimely death. Understandably, a diagnosis of ‘death by drug overdose’ would evoke tremendous social and personal shame among the rural and small-town white working class families who had traditionally associated narcotics with the urban minority and criminal populations. They thought themselves immune to such ‘big city’ problem. They trusted ‘their’ doctors who, in turn, trusted ‘Big Pharma’s’ assurances that the new synthetic opioids were not addicting and could be prescribed in large quantities.

Despite the local medical community’s slowly growing awareness of this problem, there was little public attempt to educate the at-risk population and still fewer attempts to rein in the over-prescribing brethren physicians and private ‘pain-clinics’. They, or their nurse practitioners and PA’s, did not counsel patients on the immense dangers of combining opioids and alcohol or tranquilizers. Many, in fact, were not even aware of what their patients were prescribed by other providers. It is common to see healthy younger adults with multiple prescriptions from multiple providers.

Through the last few decades under neoliberalism, rural county heath department budgets were stripped because of business-promoted austerity programs. Instead, the federal government mandated that they implement expensive and absurd plans to confront ‘bio-terrorism’. Often, health departments lacked the necessary budget to pay for the costly forensic toxicology testing required for documenting drug levels in suspect overdose cases among their own population.

fda-drug-approvalFurther compounding this lack of quality data, there was no guidance or coordination from the federal and state government or regional DEA regarding systematic documentation and the development of a usable database for analyzing the widespread consequences of overprescribing legal narcotics. The early crisis received minimal attention from these bodies.

All official eyes were focused on the ‘war on drugs’ as it was being waged against the poor, urban minority population. The small towns, where over-prescribing doctors formed the pillars of the local churches or country clubs, suffered in silence. The greater public was lulled by media mis-education into thinking that addiction and related deaths were an ‘inner city’ problem, one that required the usual racist response of filling up the prisons with young blacks and Hispanics for petty crimes or drug possession.

But within this vacuum, white working class children were starting to dial ‘911’…because, ‘Mommy won’t wake up…’.  Mommy with her ‘prescribed Fentanyl patches’ took just one Xanax too many and devastated an entire family unit. This was the prototype of a raging epidemic. All throughout the country these alarming cases were growing. Some rural counties saw the proportion of addicted infants born to addicted mothers overwhelm their unprepared hospital systems. And the local obituary pages published increasing numbers of young names and faces besides the very elderly –never printing any ‘cause’ for the untimely demise of a young adult while devoting paragraphs for a departed octogenarian.

Recent trends demonstrate that drug deaths (both opiate overdose and fatal mixed interactions with other drugs and alcohol) have had a major impact on the composition of the local labor force, families, communities and neighborhoods. This is reflected in the lives of workers, whose personal life and employment has been severely impaired by corporate plant relocations, downsizing, cuts in wages and health benefits. The traditional support systems, which provided aid to workers damaged by these trends, such as trade unions, public social workers and mental health professionals, were either unable or unwilling to intervene before or after the scourge of drug addiction had come into play.

The Dynamic Demography of Drug-Induced Death

Almost all publicized reports ignore the demography and differential class impacts of prescription-related drug deaths. The majority of those killed by illegal drugs were first addicted to legal narcotics prescribed by their providers. Only the overdose deaths of celebrities manage to hit the headlines.

Most of the victims have been low wage, unemployed or under-employed members of the white working class. Their prospects for the future are dismal. Any dream of establishing a healthy family life on one salary in ‘Heartland America’ would be met with laughter. This is a huge national population, which has experienced a steep decline in its living standards because of deindustrialization. The majority of fatal overdose victims are white working age males, but with a large proportion of working class women, often mothers with children. There has been little discussion about the impact of an overdose death of a working age woman on the extended family. They include grandmothers in their 50’s living with three generations under one roof. In this demographic, women often provide critical cohesion and stability for several generations at risk – even if they had been taking ‘Oxy’ for their chronic pain.

Apparently the US minority population has so far escaped this epidemic. Black and Hispanic Americans had already been depressed and economically marginalized for a much longer period – and the lower rate of prescription drug deaths among their populations may reflect greater resilience. It certainly reflects their reduced access to the over-prescribing private-sector medical community – a grim paradox where medical ‘neglect’ might indeed have been ‘benign’.

While there may be few class-based studies looking at comparative trends in ‘overdose deaths’ among urban minorities and rural/small town whites from sociology, public health or minority-studies university departments, anecdotal evidence and personal observation suggest that minority urban populations are more likely to provide assistance to an overdosing neighbor or friend than in the white community where addicts are more likely to be isolated and abandoned by family members ashamed of their ‘weakness’. Even the practice of ‘dumping’ an overdosed friend at the entrance of an emergency department and walking away has saved many lives. Urban minorities have greater access and familiarity with the chaotic big-city emergency rooms where medical personnel are skilled at recognizing and treating overdose. After decades of civil rights struggles, minorities are possibly more sophisticated in asserting their rights regarding use of such public resources. There may even be a relatively stronger culture of solidarity among the marginalized minorities in rendering assistance or an awareness of the consequences of not taking someone’s neighbor to the ER. These urban survival mechanisms have been largely absent in the white rural areas.

Nationwide, US doctors had long been dissuaded from prescribing powerful synthetic opioids to minority patients, even those in significant pain. There are various factors here, but the medical community has not been immune to the stereotype of the Hispanic or black urban addict or dealer. Perhaps, this widespread medical ‘racism’ in the context of the prescription opioid epidemic has had some paradoxical benefit.

Whatever the reason, urban minority addicts, while experiencing overdose in large numbers are more likely to survive an opiate overdose than small town or rural whites, unfamiliar with narcotics and their effects.

In the rural and small-town (deindustrialize) US heartland there has been an enormous breakdown in community and family solidarity. This has followed the destruction of a century-old stable employment base, especially in the manufacturing, mining and productive agricultural sectors. Only post-Soviet Russia experienced a similar pattern of declining life expectancy from ‘poisoning’ (alcohol and drugs) following the nationwide destruction of its socialized full employment system and the breakdown of all social services. Furthermore the loss of the tough Soviet police apparatus and the growth of an oligarch-mafia class saw the tremendous in-flooding of heroin from Afghanistan.

The growth of opioid addiction is not based on ‘personal choice’, nor is it the result of shifts in cultural life styles.  While all class and educational levels are included among the victims, the overwhelming majority are younger white working class and the poor. They cover all age groups, including adolescents recovering from sports injuries, as well as the elderly with joint and back pain. The surge of addiction is a result of major shifts in the economy and the social structure. The regions most affected by overdose deaths are those in deep, prolonged and permanent decline, including the former ‘rust belt’ regions, small manufacturing towns of New England, Upstate New York, Pennsylvania and the rural South and agricultural, mining and forestry regions of the west.

This is the product of private executive decisions to (1) relocate productive US companies overseas or to distant, non-union regions of the country, (2) force once well-paid employees into lower paid jobs, (3) replace American workers with skilled and unskilled foreign immigrants or poorly paid ‘temps’, (4) eliminate pension and health benefits and (5) introduce new technology – including robots- which cuts the labor force by rendering human workers redundant. These changes in the relationship of capital to labor have created enormous profits for senior executives and investors, while producing a surplus labor force, which puts even greater pressure on young first-time workers and workers with seniority. There have been no effective job protection/ sustainable job creation programs to address the decades of declining well-paid employment. Good jobs have been replaced by minimum wage, service sector ‘MacJobs’ or temporary poorly paid manufacturing jobs with no benefits or protections. All across this devastated heartland, expensively touted programs, such as ‘Start-Up New York’, have failed to bring decent jobs while spending hundreds of millions of public money in free PR for state politicians.

The drug addiction epidemic has been most deadly precisely in those regions of industrial job loss and working wage decline, as well as in the depressed, once protected, agricultural and food processing sectors where union jobs have been replaced by minimum wage immigrants. The loss of stable employment has been accompanied by a slashing of social services and tremendous cuts in benefits – just when such services should have been bolstered.

Precisely because the so-called ‘drug problem’ is linked to major demographic changes resulting from dynamic capitalist shifts, it has never been the focus of elite-run government and corporate foundation grant research – unlike their fixation on the ‘radicalization of Muslims’ or ‘trends in urban crime’. Research tended to focus on ‘minorities’ or merely nibbled at the periphery of the current phenomenon.  Good studies and data would have provided the rationale and basis for major public programs aimed at protecting the lives of marginalized white workers and reversing the deadly trends. The decade-long, nation-wide absence of research and data into this phenomenon has justified the glaring absence of an effective governmental response. Here the ‘neglect’ has not been ‘benign’.

In parallel with the increase in opioid addiction, there has been an astronomical increase in the prescription of psychotropic drugs and anti-depressants to the same population – also highly profitable to ‘Big Pharma’. The pattern of prescribing such powerful, and potentially dangerous, mood altering medications to downwardly mobile Americans to ‘treat’ or numb normal anxieties and reactions to the deterioration in their material condition has had profound consequences. Such individuals, often on unemployment assistance or MEDICAID, may be expected to follow a complex daily regimen of up to nine medications – besides their narcotic pain medications, while trying to cope with their crumbling world.

Where a dignified job with a decent wage would effectively treat a marginalized worker’s despair without unpleasant or dangerous ‘side effects’, the medical and mental health community has consistently sent their patients to ‘Big Pharma’. As a result, post-mortem toxicological analyses often show multiple prescribed psychotropic medications and anti-depressants in addition to narcotics in cases of opioid overdose deaths. While this may constitute an abdication of the medical provider’s responsibility to patients, it is also a reflection of the medical community’s utter helplessness in the face of systemic social breakdown – as has occurred in the marginalized communities where drug overdose deaths concentrate.

Demographic studies, at best, identify the victims of drug addiction. But their choice to treat their despair as an ‘individual problem’ occurring in a ‘specific, immediate context’ overlooks the greater political and economic structures, which set the stage for premature death.

The Political Economy of Overdose Deaths

When the remains of a young working class overdose victim is wheeled into a morgue, his or her untimely demise is labelled a ‘self-inflicted’ or ‘accidental’ opioid overdose and a great cover-up machine is turned on: The sequence leading up to the death is shrouded in mystery, no deeper understanding of the socio-cultural and economic factors are sought. Instead, the victim or his/her culture is blamed for the end-result of a complex chain of elite capitalist economic decisions and political maneuverings in which a worker’s premature death is a mere collateral event. The medical community has merely functioned as the transmission belt in this process, rather than as an agent for serving the public.

The vast majority of overdose fatalities are, in reality, victims of decisions and losses far beyond their control. Their addictions have shortened their lives as well as clouded their understanding of events and undermined their capacity to engage in class struggle to reverse this trend. It has been a perfect solution to the predictable demographic problems of brutal neoliberalism in America.

Wall Street and Washington designed the macro-economy that has eliminated decent jobs, cut wages and slashed benefits. As a result millions of marginalized workers and the unemployed are under tremendous tension and resort to pharmacologic solutions to endure their pain because they are not organized. The historical leading role of trade union and community organizations has been eliminated. Instead, redundant workers are ‘charged by Big Pharma’ to dig their own graves and class leaders are nowhere to be found.

Secondly, the workplace has become much more dangerous under the ‘new economic order’. Bosses no longer fear unions and safety regulations: many workers are injured by the accelerating pace of work, longer hours, faulty job training and lack of federal supervision of working conditions. Injured workers, lacking any judicial, trade union, or public agency protection rightly fear retaliation for reporting their work injury and increasingly resort to prescription narcotics to cope with acute and chronic pain while continuing to work.

When employers allow workers to report their injuries, the low coverage and limited treatments available, encourage providers to over-prescribe narcotics on top of other medications with potentially dangerous interactions. Many pain clinics, contracted by employers, are eager to profit from injured clients while pharmaceutical companies actively promote powerful synthetic narcotics.

A vicious chain is formed: The pharmaceutical industry’s mass production of narcotics has been among its most profitable products. Corporate pharmacy chains fill the prescriptions written by tens of thousands of ‘providers’ (doctors, dentists, nurses and physician assistants) who have only a limited amount of time to actually examine an injured worker. The deteriorating work conditions create the injury and the workers become consumers of Big Pharma’s miracle relief – Oxycontin or its cousins – which a decade of drug salesmen had touted as ‘non-addicting’. A long line of highly educated professionals, including doctors and other providers, pathologists, medical examiners and coroners carefully paper over the real cause, the corporate decision makers, in order to protect themselves from corporate reprisals should they ‘blow the whistle’. Behind the scientific façade there is a Social Darwinism that few are willing to confront.

Only recently, in the face of incredible numbers of hospitalizations and deaths from narcotic overdose, the federal government has started to release funds for research. Academic-medical researchers have started to collect and publicize data on the growing epidemic of opiate deaths; they provide shocking maps of the most affected counties and regions. They join the chorus in urging the federal and state agencies to become more actively involved in usual panacea: ‘education and prevention’. This beehive of activity has come two decades too late into the epidemic and reeks of cynicism.

Funding for research into this phenomenon will not result in any effective long-term programs for confronting these small community-based ‘crises of capitalism’. There is no institution willing to confront the basic cause: the devastation of capitalist– labor relations in post-millennial America, the corrupt nature of state-corporate-pharmaceutical linkages and the chaotic, profit-driven character of our private medical system. Very few writers ever explore how a national, public, single-payer, health system would have clearly prevented with epidemic from the beginning.

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Conclusion

Why does the capitalist-state and pharmaceutical elite sustain a socio-economic process, which has led to the large-scale, long-term death of workers and their family members in rural and small town America?

One ready and convincing hypothesis is that the modern dynamic corporate elite profits from the results of ‘demographic change by overdose.’

Corporations gain billions of dollars in profits from the ‘natural decline’ of redundant workers: slashing social services and job benefits, such as health plans, pension, vacation, job training programs, allowing employers to increase their profits, capital gains, executive bonuses and raises. Public services are eliminated, taxes are reduced and workers, when needed, can be imported – fully formed – from abroad for temporary employment in a ‘free labor market’.

Capitalists profit even more from the technology gains – robots, computerization, etc. – by ensuring that workers do not enjoy reduced hours or increased vacations resulting from their increased productivity. Why share the results of productivity gains with the workers, when the workers can just be eliminated? Dissatisfied workers can turn inward or ‘pop a pill’, but never organize to retake control of their lives and future.

Election experts and political pundits can claim that white American workers reject the major establishment parties because they are ‘angry’ and ‘racist’. These are the workers who now turn to a ‘Donald Trump’. But a deeper analysis would reveal their rational rejection of political leaders who have refused to condemn capitalist exploitation and confront the epidemic of death by overdose.

There is a class basis for this veritable genocide by narcotics raging among white workers and the unemployed in the small towns and rural areas of American: it is the ‘perfect’ corporate solution to a surplus labor force. It is time for American workers and their leaders to wake up to this cruel fact and resist this one-sided class war or continue to mourn more untimely deaths in their own drug-numbed silence.

And it is time for the medical community to demand a ‘patient-first’ publicly accountable national health system that rewards service over profit, and responsibility over silent complicity.

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Please note James Petras new collection of essays with Clarity Press:

THE END OF THE REPUBLIC AND THE DELUSION OF EMPIRE

            ISBN: 978-0-0072870-5-9, $24.95/ 252 pp./ 2016

Jul 082016
 

By James Petras99GetSmart

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Introduction

Amid raging corruption, social pathologies and outright political thuggery, a new gang of vassal regimes has taken-over Latin America. The new rulers are strictly recruited as the protégé’s of US financial and banking institutions. Hence the financial press refers to them as the “new managers” – of Wall Street.

The US financial media has once again provided a political cover for the vilest crimes committed by the ‘new managers’ as they launch their offensive against labor and in favor of the foreign and domestic financiers.

To understand the dynamics of the empire’s new vassal managers, we will proceed by identifying (1) the illicit power grab (2) the neoliberal policies they have pursued (3) the impact of their program on the class structure (4) their economic performance and future socio-political perspectives.

Vassals as Managers of Empire

Latin America’s current vassalage elite is of longer and shorter duration.

The regimes of longer duration with a historical legacy of submission, corruption and criminality include Mexico and Colombia where oligarchs, government officials and death squads cohabitate in close association with the US military, business and banking elites.

Over the past decades, 100,000 citizens were murdered in Mexico and over 4 million peasants were dispossessed in Colombia. In both regimes over ten million acres of farmland and mining terrain were transferred to US and EU multinationals.

Hundreds of billions of illicit narco earnings were laundered by the Colombian and Mexican oligarchy to their US accounts via private banks.

The current political managers, Peña in Mexico and Santos in Colombia, are rapidly de-nationalizing strategic oil and energy sectors while savaging dynamic social movements – hundreds of students and teachers in Mexico and thousands of peasants and human rights activists in Colombia have been murdered.

The new wave of imperial vassals has seized power throughout most of Latin America with the direct and indirect intervention of the US. In 2009, Honduras President Manuel Zelaya was ousted by a military coup backed by Secretary of State Hillary Clinton. Zelda’s program of agrarian reform, regional integration (with Venezuela) and constitutional elections was abolished. Zelda was replaced by a US vassal, Roberto Micheletti, who proceeded to murder several hundred landless rural workers and indigenous activists.

Washington moved to organize a constitutional cover by promoting a highly malleable landowner, Porfirio Lobo Sosa, to the presidency.

The State Department next ousted Paraguayan President Francisco Lugo who governed between 2008-2012. Lugo promoted a moderate agrarian reform and a centrist regional integration agenda.

With the backing of Secretary of State Clinton, the Paraguayan oligarchy in Congress seized power, fabricated an impeachment decree and ousted President Lugo. He was briefly replaced by Vice President Federico Franco (2012-2013).

In 2013, Washington backed Asuncion’s notorious crime boss, for President, one Horacio Castes – convicted for currency fraud in 1989, drug running in 1990, and most recently (2010) money laundering.

The Honduras and Paraguayan coups established (in miniature) the precedent for a new wave of ‘big country’ political vassals. The State Department moved toward the acceleration of banking takeovers in Brazil, Argentina and Peru.

In rapid succession, between December 2015 and April 2016, vassal managers seized power in Argentina and Brazil. In Argentina, millionaire Mauricio Macri ruled by decree, by-passing constitutional legality. Macri fired scores of thousands of public service workers, closed social agencies and appointed judges and prosecutors without Congressional vote. He arbitrarily arrested social movement leaders – violating democratic procedures.

Macri’s Economic and Finance Ministers gained millions of dollars by ‘buying into’ multinational oil companies just prior to handing over private options on public enterprises.

The all-encompassing swindles and fraud carried out by the ‘new managers’ were covered up by the US media, who praised Macri’s professional team.

Moreover, Macri’s economic performance was a disaster. Exorbitant user fees on utilities and transport for consumers and business enterprises increased three to ten-fold, forcing bankruptcy rates to soar and households to suffer light and gas closures.

Wall Street vulture funds received seven billion dollar payment from Macri’s managers, for defaulted loans purchased for pennies over a dollar, twenty-fold greater then the original lenders.

Data based on standard economic indicators highlights the worst economic performance in a decade and a half.

Price inflation exceeds 40%; public debt increased by twenty percent in six months.  Living standards and employment sharply declined. Growth and investment data was negative. Mismanagement, official corruption and arbitrary governance, did not induce confidence among local small and medium size businesses.

The respectable media, led by the New York Times, the Financial Times, the Wall Street Journal and the Washington Post falsified every aspect of Macri’s regime. Failed economic policies implemented  by bankers turned cabinet ministers were dubbed long-term successes; crude ideologically driven policies promoting foreign investor profiteering were re-invented as business incentives.

Political thugs dismantled and replaced civil service agencies were labelled ‘a new management team’ by the vulgar propaganda scribes of the financial press.

In Brazil, a  phony political power grab by  Congressional opportunists ousted elected President Dilma Rousseff. She was replaced by a Washington approved serial swindler and notorious bribe taker, Michel Temer.

The new economic managers were predictably controlled by Wall Street, World Bank and IMF bankers. They rushed measures to slash wages, pensions and other social expenditures, to lower business taxes and privatize the most lucrative public enterprises in transport, infrastructure, landholdings, oil and scores of other activities.

Even as the prostitute press lauded Brazil’s new managers’, prosecutors and judges arrested three newly appointed cabinet ministers for fraud and money laundering. ‘President’ Temer is next in line for prosecution for his role in the mega Petrobras oil contracts scandal for bribes and payola.

The economic agenda by the new managers are not designed to attract new productive investments. Most inflows are short-term speculative ventures. Markets, especially, in commodities, show no upward growth, much to the chagrin of the free market technocrats. Industry and commerce are depressed as a result of the decline in consumer credit, employment and public spending induced by ‘the managers’ austerity policies.

Even as the US and Europe embrace free market austerity, it evokes a continent wide revolt. Nevertheless, Latin America’s wave of vassal regimes remain deeply embedded in decimating the welfare state and pillaging public treasuries led by a narrow elite of bankers and serial swindlers.

Conclusion

As Washington and the prostitute press hail their ‘new managers’ in Latin America, the celebration has abruptly given way to mass rage over corruption and demands for a shift to the political left.

In Brazil, “President” Temer rushes to implement big business measures, as his time in office is limited to weeks not months. His time out of jail is nearing a deadline. His cabinet of ‘technocrats’ prepare their luggage to follow.

Maurice Macri may survive a wave of strikes and protests and finish the year in office. But the plunging economy and pillage of the treasury is leading business to bankruptcy, the middle class to empty bank accounts and the dispossessed to spontaneous mass upheavals.

Washington’s new managers in Latin America cannot cope with an unruly citizenry and a failing free market economy.

Coups have been tried and work for grabbing power but do not establish effective rulership. Political shift to the right are gyrating out of Washington’s orbit and find no new counter-balance in the break-up of the European Union.

Vassal capitalist takeovers in Latin America generated publicist anesthesia and Wall Street euphoria; only to be rudely shocked to reality by economic pathologies.

Washington and Wall Street and their Latin America managers sought a false reality of unrestrained profits and pillaged wealth. The reality principle now forces them to recognize that their  failures are inducing rage today and uprisings tomorrow.

Jul 072016
 

By Michael Nevradakis99GetSmart

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Dear friends of Dialogos Radio & Media,

While our radio programming is off the air during the summer months, our presence in the written press continues uninterrupted, with a series of new articles and interviews on Greece, Brexit, and more:

Life in a Modern Day Debt Colony: The Truth about Greece (99getsmart.com)

It’s time somebody told you the truth. The truth about Greece. A detailed piece highlighting the realities of life in a debt colony.

Before The Brexit: Greek Voters Said ‘No’ To Austerity Measures, Got More Austerity Measures (Mint Press News)

Our piece on the one year which has passed since the Greek referendum, the manner in which the referendum result was unclear but was nevertheless betrayed, and the differences with Britain’s recent referendum.

Beyond Racism & Xenophobia: Brexit Supporters Reject The EU’s Neoliberal, Anti-Democracy Empire (Mint Press News)

Our piece analyzing the real reasons behind “Brexit” and the true undemocratic nature of the European Union.

Greg Palast On US Election Fraud And Neoliberalism Gone Amok In Latin America And Greece (Truthout)

Our interviewwith investigative journalist and bestselling author Greg Palast, on Greece and the realities of austerity and the euro, on events unfolding in Latin America, and on election fraud in the United States.

Στα Ελληνικά, σας προωθούμε το πρόσφατο άρθρο μας για τις διαφορές ανάμεσα στο Ελληνικό δημοψήφισμα της 5ης Ιουλίου του 2015, και το πρόσφατο Βρετανικό δημοψήφισμα:

Η Διαφορά του Βρετανικού Δημοψηφίσματος με το Ελληνικό «Όχι»

Thanks – ευχαριστούμε,

Dialogos Radio & Media

Διάλογος Radio & Media

Jul 022016
 

By James Petras99GetSmart

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Introduction

Over the past fifty plus years, over 125 mass shootings/massacres have occurred within the United States but not one perpetrator has been identified as a trained member of an international Islamist terrorist organization.

A review of the massacres will shed considerable light on the political, cultural and socio-psychological features of US society. The frequent and intensely bloody nature of these mass shootings are a distinctly US phenomenon. The high proportion of fatalities over wounded survivors is a reflection of the availability of high-power weapons in the US and the poorly coordinated police response – where SWAT teams place ‘force protection’ over saving lives.

Method and Scope

Until very recently, civilian-initiated massacres were an infrequent phenomenon in US society up. In order to understand the rise of civilian-initiated massacres as an American phenomenon, we will first set out approximately 20-year time frames, then list the number of massacres in each time period, examine the number of fatalities and the political and social ethos within each time frame. It would be interesting to look at the ratio of fatalities to wounded survivors in order to gauge the effectiveness of the police/medical response.

We can identify three time frames: the early period between 1960-1980; the middle period between 1981-1998; the most recent period between 1999-2016.

Political Dynamics of Massacres

There is a clear and consistent increase in the number of massacres and fatalities over the entire half century. From 1960 to 1980, there was one large massacre resulting in at least 14 fatalities and 32 wounded.

In the subsequent period between 1981-1998 the number of massacres jumped four-fold and the number of fatalities increased four-fold from fourteen to seventy-one.

In the most recent period (1999-2016) the number of massacres almost doubled again and the number of fatalities increased two and a half times.

The number of massacres and victims have ‘taken off’ in the last few years. There are grounds to believe that we have moved from massacres as a rarity to a transitional period, to a significant upsurge which has become the ‘new norm’ for mass killings.

Myths: State Propaganda and Social Realities

Large, civilian-initiated massacres were rare (The Texas University Tower in 1967) during the two decades (1960-1980) despite this being a time of mass popular protest against the war and racism, cultural revolts, labor unrest and community-based collective action.

During these tumultuous years, the political-cultural climate encouraged mass collective action directed at changing government policy. Individual political, social and local grievances or psycho-cultural resentments were channeled through well-structured community based organizations. State propaganda was challenged by a widespread system of robust opposition media, well-publicized critical voices and familiar places of revolt. Domestic massacres, when they occurred were more often perpetrated by the State – as in the massacres against the Black Panther leadership, or shooting of students at Jackson State and Kent State Universities.

The growth of civilian-initiated massacres as public events began to find prominence between 1980-1998, a time of growing elite dominance over everyday life and the retreat of collective expression.

This ‘middle’ or ‘transitional period’ was characterized by state and media emphasis on individual justifications and resentments, together with the growing cult of private greed– the ‘animal spirits’ of the market – and the promotion of military revivalism, through Reagan’s invasion of Grenada, and George Bush’s destruction of Panama and Iraq.

The previous political culture, which had absorbed grievances and offered outlets for individual aggression, was in retreat.

The elites, led by President Reagan, established the culture of the ‘Lone Ranger’ (or lone wolf), vindicating grievances with his ‘righteous rifle’. The conflation of the Second Amendment of the US Constitution with the worship of the lone vigilante helped to create the contemporary mass killer.

The political culture of resistance was replaced by the pathology of resentment; protests directed at political targets were replaced by violent terror directed at diffuse apolitical publics – the amorphous innocents.

The transition period established several key determinants that led to the subsequent massification of massacres.

First, the political-cultural elites deliberately and systematically discredited the social context of mass popular protest, ridiculing popular discontent and suppressing dissent while enhancing the image of the power of the individual. The cult of the ‘individual over the collective’ morphed into a deranged Ayn Randian Atlas with his semi-automatic 9 mm.

Secondly, the transitional political culture renewed and enhanced the role of state violence in resolving conflicts and extended the notion of social violence downward into the mass of society.

Under the guardianship of the political and media elites, the 1980’s and 1990’s did not encourage or permit any effective mass cultural alternative to violence.

The deregulation of the economy and the Clinton regime’s open-ended policy of conquest (or ‘regime changes’) through massive bombing of overseas adversaries led to a massive policing of both foreign (imperial clients) and domestic civil societies, which fed into the pathological tendencies of individuals who set out to vindicate their private grievances.

The first two decades of the 21st century witnessed a sharp increase in domestic civilian-initiated massacres with an even greater proportion of fatalities. The cumulative effects of mass murders of previous decades, found expression in a rising spiral of massacres.

The 21st century is the epoch of multiple serial killings at every geographical region, from global, regional, national and local levels. The bloody consequences of lawless imperial wars of aggression and pillage (with such psychotic justifications as ‘regime change’ or ‘humanitarian intervention’ especially under the First Clinton Dynastic Regime) are features of everyday life. Military budgets have skyrocketed at the international and national level and are mirrored by multi-million arms purchases by individuals at the domestic civilian level.

Military metaphysics and quasi-religious public displays of superhuman ‘avengers’ wrapped in the national flag have permeated every cranny of society – from mega-million dollar sporting extravaganzas to school assemblies, business meetings (like the Rotary Clubs) and workplace gatherings.

Millions have entered the war zones; daily police killings of citizens, especially African American and marginalized youth, have become the norm. Meanwhile hundreds of thousands of immigrants are demonized, assaulted, dragged from their homes or workplaces, incarcerated and deported with barely the shirt of their backs – leaving sundered families and communities.

Most important, the US imperial state has brutalized and, directly or indirectly, massacred millions of Muslim civilians, citizens of once-sovereign nations, throughout the Middle East, South Asia, and North Africa and even in the immigrant ghettos, raising lawlessness to a new and more diffuse level.

The pathology of the American state, with its embrace of state-sponsored massacres, has created mass psycho-phobia against Muslim people and is in the process of stirring up the boiling pot of even more brutal civilian massacres. It must be emphasized that American citizens, overwhelmingly non-Muslim, have committed the vast majority of mass shooting in America. Even those mass shooting committed by self-described Islamists have involved US-born Muslims or converts who have shown an affinity and commitment to the dominant gun ethos of America. None have been ‘trained abroad’, none have proved to be ‘soldiers’ of some remote international Islamist movement. Most have learned their requisite ‘skills’ at ‘for-profit’ US shooting ranges and all have imbibed the national gun ideology over community and mass collective action.

Only two of the most recent seven large massacres have a remote link to Islam – and these assassins were not directly related to overseas, organized terrorist groups but had been ‘self-radicalized’ in the context of the individualist US gun culture. Omar Mateen, who massacred scores of unarmed young, mostly Hispanic, people at a gay club in Orlando, Florida clearly had much more in common (spiritually and operationally) with the Norwegian mass murderer, Anders Breivik (who shot and killed over seventy youth at a multi-cultural summer camp in 2011) or with Adam Lanzo (who killed 20 small pupils and 6 teachers in Connecticut in 2012), than with any fighting units in Syria or Afghanistan.

Conclusion

The personal-political grievances of mass murderers have everything to do with their cultural and psychological isolation, resentment and deep spiritual commitment to the dominant arms culture of America: these massacres have become their self-prescribed psycho-therapy. The dominant political and police institutions naturally use these for propaganda to advance the imperial agenda, rather than encourage positive collective expressions of grievances to address social issues.

Today there is no collective social expression with highly credible, committed mass activists as there had been during the 1960-70’s, when large-scale civilian initiated massacres were very rare. The notorious 1967 mass shooting in Austin Texas by a former Marine champion sharpshooter (one shot per kill) was followed by meticulous expert examination of the circumstances and context. Today, there are no political collective or community responses like that of the Texas tower sniper. During the 1980-90’s, the elites encouraged and promoted voracious aggressions against rival markets and whole nations, which the financial press pundits have celebrated as expressions of the ‘animal spirits’, the triumph of the ‘fittest’, most individualistic capitalism. From 2000 to the present, the mass media has saturated its audiences with military solutions to individual grievances. The psychopathology of the mass murderers is reflected in the state writ-large.

Jun 302016
 

By Pierre Gottiniaux for CADTM, 99GetSmart

Street art in loiza, Puerto Rico - photo by Denise Rowlands (CC)

Street art in loiza, Puerto Rico – photo by Denise Rowlands (CC)

The island of Puerto Rico, which is part of the Commonwealth of the United States, is staggering under the weight of an unsustainable debt of nearly $73 billion. Its neo-colonial legal structure prevents it from restructuring its debt and protecting itself from the rapacious creditors who have already begun to secure their positions, working in the shadows to get Washington to make the “right decisions”– meaning those that will bring the island’s population to their knees. And yet, a debt audit commission is now revealing that a large part of Puerto Rico’s public debt was issued unconstitutionally and could be considered illegal under US law.

Causes of the indebtedness

The USA has made Puerto Rico into a tax haven for its companies, who also use the island as a pool of cheap labour. Puerto Rico provides a full tax exemption for US companies that are based there, and also the possibility of returning revenue to their parent companies without paying taxes. But that tax advantage, which a large number of companies were profiting from, ended in 2006 by decision of the federal government. That led to a large number of companies and investors – and therefore employers – leaving the island.

Puerto Rico provides another advantage to investors, and it is still in force: a tax exemption on revenues from public debt securities. That exemption is in force for all American public entities, but in the case of Puerto Rico it provides a unique, threefold advantage: exemption from federal taxes, state taxes, and local taxes, even for non-residents of Puerto Rico (whereas for US states – Puerto Rico being a territory and not a state – the exemption from state and local taxes is only applicable to residents of the state and/or municipality where the investment is made). That’s what we mean by a threefold exemption. And it amounts to threefold losses for the government of Puerto Rico. US investment funds have taken full advantage of this system.

Another major cause of the growth of Puerto Rico’s debt is the difference in treatment between the social-security systems: The Puerto Rican government receives significantly less from the federal government, proportionally, than the 50 states, for a population who are much poorer on average and therefore much more in need of such support. And this is despite the fact that the island’s population pays the same taxes as “continentals.” The compensatory outlay the government has been forced to make in recent decades accounts for over a third of Puerto Rico’s current debt ($25 billion out of $73 billion) |1|. Many cuts have already been made to public and private social-security programmes (cuts in wages, increased payroll taxes, lower coverage rates, etc.), with devastating consequences, because behind those programmes there are women and men who can no longer afford to receive care (see the “People are literally dying because of Wall Street greed” video campaign) |2|.

Another factor is the crisis in 2007, which made investors wary of anything that might involve risk; Puerto Rico’s situation, a year after the end of the tax advantage mentioned above, was not an encouraging one. The sudden recession in 2009, which followed the crisis of 2007, also heavily impacted Puerto Rico’s tourist industry, further shrinking an already strangling economy. Lastly, the failure of Detroit in 2013 prompted many investors to shun public debt securities, because they were suddenly no longer considered “untouchable” – that is, exempt from restructuring and payment default.

For all these reasons – and the list is not exhaustive – Puerto Rico’s budget has been in deficit for 16 consecutive years and the government has been borrowing to compensate. In exchange for the loans, it has imposed austerity measures aimed at reducing the deficit, with the sole result of plunging the population into ever-increasing poverty, forcing an ever-increasing number of people to emigrate. Puerto Ricans have US citizenship and can therefore travel and take up residence freely throughout the country. The result is that the island’s population is inexorably dwindling, year after year, aggravating the situation further; Puerto Rico’s demographic balance is now negative. And needless to say, the first ones to leave are university graduates, since there are no longer any employment opportunities for them on the island. That only accelerates the deterioration of the situation and is dragging the government – and the population who suffer the consequences – into a deepening spiral of indebtedness and austerity.

The sovereignty problem 

Puerto Rico is a semi-colony of the United States, and its sovereignty is extremely limited. Those limitations are particularly flagrant regarding management of her debt. The federal government has excluded Puerto Rico from filing under Chapter 9, the law that applies to insolvent local governments, which Detroit made use of in 2013. The island’s government tried to pass a law in 2014 called the Recovery Act which would have allowed it to restructure its debt, but the US Supreme Court struck down the law on 13 June 2016. |3|

The question of Puerto Rico’s sovereignty is debated regularly, but there are many obstacles to implementing it. In a referendum held in 2012, a majority of the population voted in favour of statehood – full incorporation into the USA – as opposed to the current status of unincorporated territory or Commonwealth. Most Puerto Ricans have family in the USA and are attached to the country, and therefore massively reject the option of becoming an independent nation. But the federal government, and the American population in general, reject the idea on the grounds that statehood for the island would cost them too much – refusing to deal with the issue of who is responsible for Puerto Rico’s economic situation. And indeed, just days before it struck down the Recovery Act, in early June 2016 the Supreme Court of the US’s rejection of a petition |4| by Puerto Rico’s government reaffirmed the island’s subordinate status.

PNG - 78.9 kb
(results of the 2012 referendum – source Wikipedia)


The threat of default

Concretely, the government of Puerto Rico has already been in default of payment since 2015, but on bonds that are not senior debt since they are not guaranteed by the constitution. On 1 July, if nothing changes, Puerto Rico will default on a senior debt of $2 billion – a default which could set off a wave of judicial reprisals on the part of the creditors, who will inevitably go to court to force repayment of their debts. And, even if Puerto Rico manages to scrape up the money to repay that debt by 1 July, which is highly unlikely, it would automatically result in non-payment of wages and pensions and the shutdown of hospitals and public services, because the government doesn’t have the cash necessary to cover that amount, and could only do it by robbing other budget items.

Who holds Puerto Rico’s debt?

The system of threefold tax exemptions on Puerto Rico’s debt securities made them extremely attractive for US investors, beginning with the numerous investment funds that operate almost exclusively by purchasing municipal bonds and have a large impact on the local economy. There are also a large number of pension funds throughout the USA.

But since the Puerto Rico debt crisis deepened, in 2014, and the ratings assigned by the bond rating agencies began to slip, new participants have gotten into the game – the “vulture funds,” who purchase Puerto Rican debt securities on the secondary market at a fraction of their value (on average 30 cents on the dollar, or 30% of face value), demanding exorbitant interest rates (up to 34%). These funds have a very specific goal: They wait until Puerto Rico defaults on its debt, and then file suit to demand payment of the face value of the securities (the “dollar” they acquired for 30 cents). It’s what they specialise in. They’ve done it with Argentina, with Greece… with all countries who experience over-indebtedness, and it’s made them billions.

The main solution currently being proposed

Currently, the “solution” that has the most chance of actually being adopted is a bill passed by the House of the Representatives of the USA on 9 June 2016, known under the name PROMESA (for Puerto Rico Oversight, Management and Economic Stability Act), which means “promise” in Spanish. The bill has had wide bipartisan support — as much from Republicans as from Democrats —, and in particular from presumed presidential candidate Hillary Clinton. And for good reason, since the bill, which still needs approval from the Senate, is aimed at restructuring only a part of the Puerto Rican bonds in circulation, and the vulture funds are obviously concentrating on another part, which will not be restructured but has the same guarantees under Puerto Rico’s constitution. That is one of the criticisms raised by its detractors, who include Bernie Sanders |5|, the Democrat Senator from Vermont and candidate for the Democratic presidential nomination in 2016, numerous trade unions, and small investors in Puerto Rico, who rightly feel that there is a prejudice towards big investors. But that’s not the only reason.

The PROMESA bill, if does not undergo modifications when it goes before the US Senate, will impose a “fiscal oversight board” made up of seven members, four of whom will be appointed by the Republican Party, two by the Democratic Party, and one by the President, and only one of whose members will be required to be a resident of Puerto Rico. This board will have greater powers than those of the island’s government, in the economic sphere but also in terms of general governance – which harks back to the colonial period, when the governor of the island was an officer of the United States army appointed by the President. It is also reminiscent of the international financial commissions set up in Tunisia in 1869 |6| and in Greece in 1898. |7|

The fiscal oversight board would have the task of negotiating the restructuring of a portion of Puerto Rico’s debt and taking the measures demanded by the creditors to “clean up” the island’s economy, which would mean deepening and extending the austerity measures taken in recent years and which have already caused the closing of 150 schools, the loss of 20% of the jobs on the island, the emigration of nearly 50,000 persons per year, the explosion of inequalities, etc. |8| Currently, more than one out of two children in Puerto Rico already lives below the poverty threshold. The board would fire even more schoolteachers, close more schools, and reduce the minimum wage (there is talk of reducing it to $4.25 an hour for people under age 25) or even eliminate it outright, etc.

Alternatives

There is a coalition in Puerto Rico, bringing together trade unions, community organisations, and activists, which defends the idea of an audit of the debt, on the grounds that a large part of Puerto Rico’s public debt may well be illegal. The coalition, called Vamos4PR (“Let’s Move 4 PR”), has the ear of the government of Puerto Rico, which decided in July 2015 to set up a debt audit commission with the task of analyzing the issuance of Puerto Rican bonds over the last 45 years. Unfortunately, due to a lack of funds, the commission — made up of 17 persons (elected officials, representatives of financial institutions, trade-union representatives, and researchers) — was only able to begin its work in January 2016. It has just filed an initial “pre-audit” report which will serve as the basis for future work, but already provides serious evidence of the illegality of a portion of Puerto Rico’s debt. The audit analyzes the two most recent issuances of Puerto Rican debt securities, in 2014 and 2015 (see the report below this article).

This report comprises extremely important items of information and provides strong arguments in favour of repudiation of a large part of Puerto Rico’s public debt. One can only regret that it is not receiving more discussion and media attention. In any case, the report reveals that a large portion of Puerto Rico’s debt was contracted in flagrant violation of the Commonwealth’s constitution and can therefore be considered illegal.

  • - Puerto Rico issued multimarket bonds in 2014 in order to finance its deficit, but the constitution requires that the Commonwealth maintain a balanced budget and prohibits the government’s using credit to compensate for a budget deficit. Yet Puerto Rico has borrowed more than $30 billion to finance its deficit since 1979. That debt might well be considered illegal by a court.
  • - The constitution requires that Puerto Rico spend no more than 15% of its revenues on debt service; the government devotes between 14% and 25% of its budget to debt repayment. If the final audit demonstrates that Puerto Rico devotes more than 15% of its budget to debt, then the debt could be declared illegal by a court. At that point a determination would have to be made as to what portion of the debt exceeds the limit.
  • - The constitution prohibits the issuance of securities with a maturity greater than 30 years. However the government of Puerto Rico, like most countries, “rolls over” its debt – that is, when a debt reaches maturity, instead of the repaying it, the government contracts another debt to finance the preceding one. The commission gives the example of a debt issued in 2014 to repay a debt issued in 2003, which had itself been issued to refinance a debt from 1987. So the commission will have to determine whether the practice in question is constitutional or not.

The commission will also examine possible illegitimate aspects of the debt, even though it doesn’t identify them as such in its report. Puerto Rico holds approximately 37 billion in CABs – Capital Appreciation Bonds –, which are bonds of a particular type, for which the issuer pays the interest and repays the capital only when the security reaches maturity. For example, one of the bonds Puerto Rico must repay on 1 July is a CAB issued in 1998 with a nominal value of $14 million, for which the estimated total payout is $38 million once the interest is included. The commission will examine this practice in its final report.

A final question the commission will attempt to answer has to do with productivity and the debt’s contribution to economic growth. Puerto Rico has a GDP/debt ratio of 96%. Since the recent increase in the debt has had no positive effect on the economy whatsoever, the commission will analyze the economic impact of the successive debt issues in detail.

Conclusion

It is clear that the PROMESA law will not improve the situation of Puerto Rico’s people, but will worsen it. The federal government is making no attempt to determine the reasons for the island’s over-indebtedness, instead arguing that poor management by a government that overspends requires that the situation be taken firmly in hand, without concessions. And yet there are many reasons why repudiation of the debt may well be justified, and they have been revealed by the audit commission which has in fact only begun a serious analysis of the debt. However the private interests hiding behind this “debt crisis” are powerful and know how to make themselves heard in Washington, which is why there appears to be no possibility of moving beyond the crisis in a positive way without strong popular mobilisation and real political determination.

Translated by Snake Arbusto

Footnotes

|1http://www.nytimes.com/2015/08/03/u…

|2https://www.thenation.com/article/e…

|3| See AFP wire of 13 June, 2016, “USA: Porto Rico débouté en justice sur sa dette”, available (in French) at: http://www.romandie.com/news/USA-Po…

|4http://www.theatlantic.com/politics…

|5| See in particular http://cadtm.org/Un-candidat-aux-presidentielles-US (in French) and also http://cadtm.org/Sen-Bernie-Sanders-From-Greece-to
Concerning the situation in Puerto Rico, Bernie Sanders argues for an audit of the debt that would determine which debts were contracted in violation of the constitution and for extending Chapter 9 to Puerto Rico to enable the island to restructure its debt while being protected from legal action by its creditors.

|6| See http://cadtm.org/Debt-how-France-appropriated

|7| See http://cadtm.org/Greece-Continued-debt-slavery-from

|8| See in particular http://cadtm.org/Puerto-Rico-en-lutte-contre-la (in French) and also http://cadtm.org/Puerto-Rico-must-escape-the-debt

Author

Pierre Gottiniaux CADTM Belgium