Wednesday, July 29, 2015

8 Reasons to Like President Obama

My friends on the Right are fond of dissing President Obama. Sometimes it's taken to ridiculous extremes: he's a traitorous Muslim who wasn't even born in the USA and wants to turn our nation into a Godless, communist state.

I don't much care for Mr. Obama. I think Obamacare is a disaster, I believe he's mismanaged much of our foreign policy, and I think his instincts about the virtues of government are wrong. The Affirmatively Furthering Fair Housing rule recently promulgated by HUD is a travesty.

But for all that he is not the devil incarnate. I do not believe he has single-handedly destroyed the Republic. Indeed, there are some things he's done that I support, and other things for which he has been falsely blamed.

So in the interests of both civility and fairness, here are some of the things I like about President Obama.

1) While there have been political scandals galore, I can't think of any examples where either Mr. Obama himself or any of his closest advisers are implicated in a personal scandal. No major figure in his administration has been caught with his hands in the cookie jar or with his pants down (though a partial exception may apply to Hillary and her e-mail). In this, Mr. Obama is more like the preceding Bush administration, and quite unlike the Clinton administration. Mr. Obama appears to be a man of considerably personal integrity.

2) Though his foreign policy has been incompetently conducted--often grotesquely so--many of his instincts look right.

Walter Russell Mead, for example, has long advised the President to actively support the moderate rebels against Assad, saying back in February, 2013,
President Obama had an opportunity to intervene in Syria before it spiralled so far out of control. Indeed, that was precisely what a number of his top military and political advisors urged the President to do: arm the moderate rebels and work with allies to boot out Assad.
Now it's too late, he'd argue--the moderate rebels have long since been sidelined and our influence has diminished to zero. It surely would've been better if we'd kept those moderates alive and well.

No doubt Mr. Obama's policy of benign neglect has been poorly executed--what drawing red lines and then erasing them. (He should never have drawn them in the first place.) But the strategy itself makes sense. The truth is that America has no dog in that fight. The moderate rebels never were a trustworthy bunch. The only reliable side in the war is the Kurds, and we've been doing what we can to help them out.

3) While I think our precipitous withdrawal from Iraq was a big mistake, given that, our policy is as good as can be expected. Some of my friends on the Right want us to take the fight to ISIS in some big way. That would involve another years-long war in Iraq, with thousands of American casualties, and with no imaginable exit strategy. And for what reason? ISIS is not really engaged against the United States--their enemy is Shi'a Islam. Conflict against us is for propaganda purposes only, involving pinprick, lone wolf attacks like that in Chattanooga. ISIS surely has no interest in provoking us to attack them head-on--they're smarter than that (at least I hope so).

4) And speaking of lone wolves, my Rightist friends want to glamorize them and turn them into Batman-style villains. While I have no doubt that the ISIS crowd warms to their antics, it is unlikely that these atrocities are organized from afar. They really are lone wolf attacks. We need to avoid making those losers look like heroes. The Obama administration is entirely correct in painting them as mentally-ill, cowardly, stupid idiots. The last thing we need is martyrs for a cause.

5) Mr. Obama's instincts on immigration are correct, as I've written before. We do need to find a way to legalize most of the undocumented people now living in the US--there is no other choice. We also need to greatly increase legal immigration while simultaneously restricting the illegal sort. However, I wish he hadn't implemented it as an executive order. Immigration is too important to manage administratively. It has to be worked out through the democratic process, however time-consuming and messy. His failure to do so leads to the rise of politicos like Donald Trump. Similarly, Obama is correct on free trade.

6) The President's policy on Cuba is absolutely the right thing to do. We should have started normalizing relations back in 1991. Though to be fair, our failure to do so is mostly the fault of the Cubans.

7) On the Iran deal I simply don't know enough to judge. If the sanctions regime is stable and can be maintained, then Bibi Netanyahu is correct and the Iran deal is a bummer. On the other hand, sanctions coalitions are intrinsically unstable and will eventually disintegrate (see, e.g., Cuba, where the coalition fell apart decades ago). It may be that sanctions against Iran are already in the process of disintegrating. In that case getting the best deal we can while it's still possible is a good strategy. But I don't know how solid the sanctions really are.

8) Mr. Obama is frequently blamed for making life worse for African-Americans. No doubt their financial and housing circumstances have deteriorated since Obama took office. But I don't think the President is the primary culprit. The problems are much bigger than him, and include structural changes in the economy, including, e.g., the decline in employment at both the post office and the military. While HUD's recent regulations will certainly make things worse for Black people, that hasn't happened yet; that's a landmine for the next president.

This is not an insignificant list, but it pales in comparison to what I dislike about Obama. Needless to say, I didn't vote for him in either 2008 or 2012, nor will I be voting for the Democrats in 2016.

Further Reading:

Saturday, July 25, 2015

Precarious Taxis

This post has two parents: an interview with Charlie Post, reprinted in International Viewpoint, the official publication of the Fourth International. (I have added them, belatedly, the This Blog's Beat.) And also Mayor DeBlasio's fight with Uber, which he has now lost decisively.

Mr. Post takes issue with the word precariat as a useful descriptor of social reality. That's a portmanteau of the words precarious and proletariat, and denotes those who work part-time, and/or without benefits, and without any job security. Mr. Post doesn't dispute the growth of the precariat workforce, but he sees it as in no way distinct from earlier historical patterns.
If you look at the condition of workers before the First World War, say in the 1890s, the vast majority of working people lived an incredibly precarious existence. I was doing some research on skilled workers in Victorian England, the so-called labor aristocracy. Most of these people were working half the year, subject to long bouts of unemployment, and if they were out of work they could lose housing. ... The sense of what most people alive today thought was “the norm,” was actually the historical exception.
Mr. Post attributes the recent rise to "neoliberalism," an ill-defined term that suggests a capitalist offensive to lower workers' standard of living.
When I was much younger, in my late teens and twenties, I was first radicalizing in the 1970s, and I had a lot of friends who’d get jobs at the post office or the Brooklyn Navy Yard. They knew that if they got laid off or fired for political activity, they could collect unemployment, get food stamps, probably get on Medicaid, or they could pick up another job quickly. Since the successful neoliberal offensive, we have seen that it is much harder to get full-time employment that have social benefits, and in general the welfare benefits have degraded or disappeared. 
The consequences of getting laid off or fired today are much more severe today than they were just a few decades ago.
While Mr. Post's friends were working at the Brooklyn Navy Yard, I was a cab driver in Chicago. I began working for Checker Cab Company and had to join the International Seafarers Union. This was a corrupt, mob-run outfit whose only function was to collect dues from the drivers. For the first couple of months they took about a third of my paycheck as an "initiation fee"--the best way to rip off a precariat worker. After that it was a mere 10% fee. With Checker I was paid a commission off the meter, along with tips.

After a year or so at Checker Cab, I moved over to Flash Cab, a non-union, "Jewish" company operating mostly on the city's far north side. They ran a good radio dispatch service. There I rented the cab for a twelve hour shift and paid for my own gas, keeping whatever was left over. That was sometimes over a hundred dollars (a lot of money in the '70s), and occasionally I lost money. Typically I earned about $30 for a ten-hour day.

I drove a cab partly for the money, partly because it gave me proletarian street cred (I was a union member after all, though they were too cheap to send me a card), and mostly because I enjoyed it. Neither company offered me any benefits.

So I'm familiar with the precariat.

An Uber-funded study (which I'm inclined to believe) shows that Uber cars are slightly cheaper than Yellow taxis, and in any event are much faster and more reliable. (See here.) I've been thinking about driving for Uber as a part-time retirement job.

There is much debate over whether Uber drivers earn more or less than cabbies. I don't know. But the Uber folks have many advantages: 1) They're safer. All customers come with a pre-approved credit card. No money changes hands in the car. 2) They can set their own work hours. I had a lot of flexibility working for Flash, but my shift started at 5pm, whether I liked it or not. Uber drivers have no such restrictions. 3) Uber drivers are earning equity in their car. Indeed, that's an important consideration for me. I can work for Uber for a year or two, and at the end I'll have a car for the rest of my life, clear and free.

So Mr. Post will have us believe that this is all an evil plot by neoliberals to screw the working class. I don't think so, though everything comes with trade-offs. But there is one, undisputed beneficiary from all of this change: the consumer. Consumers get better taxi transport at similar or lower prices from drivers with an equity stake in providing good service. They come out a winner no matter what.

And that's what Mr. Post (or any Marxist) does not understand. The beneficiary of a precarious workforce is neither the neoliberal capitalist nor the employee, but rather the consumer. The purpose of a capitalist economy is to sell as much high-quality stuff as possible at the lowest possible price to the most consumers. In that, Uber is indisputably better than the over-regulated Yellow Cab industry.

So here's a more concise definition of the precariat. A precarious worker is somebody whose income is sensitively determined by market signals. Or, put another way, there's no buffer between the worker and the market. The cab driver, the shop keeper and the restaurateur are all members of the precariat, as are their employees, e.g., at McDonald's or Walmart.

Seen this way, it's obvious that precarious workers benefit consumers. And that's why Mr. Post is wrong when he regards the trend as an "offensive" against the working class that will lower their standard of living. To the contrary, it will raise the standard of living of consumers, which also includes all workers. Cheaper cab fares for everyone!

The opposite of a precarious worker is somebody whose income does not depend on market signals at all. This certainly includes most government employees, who get paid whether or not they actually do anything useful. Mr. Post and I, for example, are both employees of public colleges. We're not precarious, but instead we're parasites. Our income derives from scamming eighteen-year-olds and mooching off the taxpayer.

Mr. Post favorably cites a fellow academic, a certain Kevin Doogan. Mr. Doogan is the author of New Capitalism, a book that sounds interesting. It's so good, in fact, that it's a top 1,740,000 best seller on Amazon. You'd think it'd be in the bargain basement by now, but no, even on Kindle it costs nearly $20!

Mr. Post is himself an author of The American Road to Capitalism, followed by a very long subtitle. That's done better, in the top 1,300,000 books sold. It's not available on Kindle, but you can buy a paperback copy of your very own for under $29.

That's how out of touch these guys are. They're not writing for actual readers. Instead they're just sucking up to referees and tenure committees.

Your tax dollars at play.

Further Reading:

Friday, July 17, 2015

Book Review: Grover Cleveland

An Honest President, a biography by H. Paul Jeffers, is sadly out of print. It deserves to be re-issued.

Grover Cleveland is probably the best president you never heard of. His obscurity is due in part to his name. These days, Grover is a Sesame Street character--nobody with that name could possibly do anything important or significant. Today he's known for factoids: as the only president to serve non-consecutive terms, and also to get married in the White House. The newly minted First Lady, 21-year old Frances, proved to be a popular political asset.

It didn't have to be that way. Born Stephen Grover Cleveland, he was the fifth of nine children of a Presbyterian minister. Distant ancestors lent their name to the city in Ohio. The family moved around as the father changed pulpits, but Stephen (as he was known then) mostly grew up outside of Syracuse, NY. Untalented academically (and also lacking money) he didn't go to college, but instead at age 18 moved to Buffalo and apprenticed himself to a law firm.

A tall, gregarious, friendly man, he enjoyed free time playing cards, drinking beer, and eating sausages at the city's many German pubs. And so he came by his trademark girth, earning the nickname "Big Steve." Only when he decided to enter politics--around age 30--did he start using his middle name. Big mistake.

Beyond his native friendliness, two other traits characterized Cleveland: uncompromising integrity, and a formidable work ethic. These together, along with the good fortune that accompanies any political rise, greased his way to the top. He started as an assistant district attorney for Erie County. His first elective office was Erie County Sheriff, where he served for several years. And then in rapid succession he became Mayor of Buffalo, Governor of New York, and finally President of the United States, elected in 1884. While he won the popular vote in 1888, he lost the electoral college to Benjamin Harrison, before famously reclaiming the White House again in 1892.

Cleveland was the first Democrat president since James Buchanan, who lost to Lincoln in 1860. The Republicans, despite having won the Civil War and abolishing slavery, had squandered their reputation through grotesque corruption. Not that the Democrats were any better--they ran urban machines such as Tammany Hall.

Both parties contained reformist elements that opposed the spoils system. Republican reformists were known as the Mugwumps, led by the youthful Teddy Roosevelt. The Democratic reformers included Grover Cleveland, twenty years Roosevelt's senior. And so Roosevelt and Cleveland became unlikely political allies, beginning in New York while Cleveland was governor and Roosevelt a leader in the state Assembly. It's probably an overstatement to say that Cleveland was Roosevelt's mentor, but they maintained a lifelong alliance and mutual respect, if not always friendship.

Among the prominent causes they both supported was a true civil service. When Cleveland took office the federal government employed about 125,000 employees. Almost all of those served at the discretion of the president. The Democrats--out of office since 1860--wanted to fire all the Republicans and replace them with Democrats. Cleveland was besieged with office seekers--it took up most of his time. He vowed to hire the most competent people for the jobs, regardless of party. Since he was not beholden to the Tammany Hall machine, he could get away with that.

Roosevelt was appointed as a commissioner of civil service under the Harrison administration. When Cleveland returned to the White House, he kept Roosevelt on in that position. At the end of his second term he vetoed the Tenure in Office bill--legislation intended to save the jobs of patronage employees when a new president came in office. As he left office, civil service was well established.

Cleveland strongly opposed the free silver movement, supporting instead a strict gold standard. Free silver granted citizens the right to mint silver coins, and required the government to redeem them for gold coins at below market rates. The effect would have been to empty the US Treasury of gold reserves, and create massive inflation. Farmers liked it because it would have given them more money, which they confused with more wealth. Cleveland understood the true economics, leading a newspaper critic to dub him the "elephantine economist."

Cleveland lobbied for lower tariffs and (relatively) free trade. Tariffs in those days were a major revenue source for the federal government, and couldn't be completely eliminated (as they mostly are today). But Cleveland understood that restricting trade hurt American consumers and American exporters. The gains from additional trade more than outweighed the harm to some companies. This is a battle we are still fighting today.

At the end of his second term, he was confronted by Eugene V. Debs and the Pullman strike. Cleveland was supportive of unions, and felt that workers should be paid more. But he was aghast that the Pullman workers were members of the railway workers union, when in fact they weren't really railway workers. When a relatively small and solvable dispute turned into a massive strike that crippled the entire economy, Cleveland had no choice but to call in the army--the first time since the Civil War. It raised economic and constitutional issues, but at the end his move was very popular with the public.

My Trotskyist friends are correct that (in those days) the proletariat had its hand on the throat of the economy. The advantage of industrial unions was precisely that they maximized that leverage. But the counter-argument is that they made it impossible for the government to compromise. The only option left was to break the union. That's what Cleveland did, not necessarily because he wanted to, but because he had to.

On these four issues--civil service, free silver, tariffs, and strikes--Grover Cleveland was on the side of angels. Or at least that's how it looks to my modern eyes. But hidden in that reservoir of pragmatic, common sense loomed a big problem which Cleveland never imagined. Because the advent of good government, midwifed by Cleveland, led gradually but ineluctably toward a demand for big government.

Cleveland's acolyte, TR, began the charge, starting innocuously enough by rigorously enforcing blue laws as a New York City police commissioner. And then the camel's nose gets under the tent with the otherwise laudable National Park Service. But the real villain--the man who turned Grover's good deeds into a monster--was Teddy's cousin, Franklin Delano Roosevelt.

Today's Progressive movement is as much a child of Teddy and Franklin as it is of Karl Marx. Good government has begat big government--something that Mr. Cleveland would never have countenanced. I like Mr. Cleveland, but even for him the law of unintended consequences reigns supreme.

I really enjoyed Mr. Jeffers' book. The salacious details of Cleveland's personal life are alone worth the read. But it has one postmodern quirk that strikes me as strange. For some reason Mr. Jeffers never reports his subject's birthdate. Never mind--Wikipedia to the rescue: March 18th, 1837.

Further Reading:

Tuesday, July 7, 2015

Barry Sheppard & Free Trade

Barry Sheppard--former honcho in the Socialist Workers Party (SWP) and long-time supporter of the Khmer Rouge--peeks out from under his rock with an article opposing free trade, specifically NAFTA and the Trans Pacific Partnership (TPP).

In this he has good company, including pretty much the entire Democratic Party, which he purports to despise. Other allies include such worthies as Donald Trump, Pat Buchanan, and (sadly) many of my Tea Party friends.

I, on the other hand, support free trade because trade creates wealth, and restrictions on trade create poverty. It doesn't surprise me at all that Mr. Sheppard supports increased poverty, what with him being a socialist and all. There are, by my count, only two reason to oppose trade: rent-seeking and xenophobia. The Teamsters union is a good example of the former, while Misters Trump and Sheppard represent the xenophobic opposition, as I'll describe below.

Unlike Mr. Trump, who is at least an honest xenophobe, Mr. Sheppard hides behind myriad other rationalizations. He'll claim he is in favor of trade, but only under narrow circumstances--conditions so onerous and utopian as to be completely impossible. In this he is worse than Pat Buchanan, who at least supports trade between similar countries (i.e., the US can buy Canadian wheat as long as the Canadians buy American wheat).

Mr. Sheppard is most exercised because of what we American "imperialists" have allegedly done to Mexico. He accuses us of selling cheap corn to Mexico, putting semi-subsistence farmers out of business. Of course every other Mexican can buy corn for cheap--how is this a bad thing? (Mr. Sheppard claims that despite cheap corn, tortilla prices have risen. Somehow I doubt that's true, but even if it is I don't see how it's because of NAFTA.)

So we Americans have been selling corn for cheap--what have we gotten in return? Mr. Sheppard oddly doesn't mention it, but surely cheap auto parts is part of the answer. Tens of thousands of Mexicans got jobs in factories making it possible for Americans to buy better cars at cheaper prices. So that's a real trade: cars for corn. Much better than wheat for wheat, which doesn't accomplish much.

Still, Mr. Sheppard claims that Mexico has somehow gotten the short end of the stick. But the facts don't bear that out. The Council on Foreign Relations (a good, short summary of NAFTA's effects) points out that in 1993 the US ran a trade surplus with Mexico totaling $1.7 billion, morphing into a trade deficit of $61.4 billion in 2012. Further, in direct contradiction of what Mr. Sheppard claims, Mexican farm exports to the US have tripled since NAFTA's implementation.

But, wails Mr. Sheppard, "[b]etween 1995 and 2005, 1.1 million peasants lost their land, and another 1.4 million others dependent of the farm sector were driven out of work." Peasant is just a euphemism for a semi-subsistence farmer, scratching out a $1/day living on a piece of land too small to support mechanization. This is the lifestyle that Mr. Sheppard recommends to Mexicans? Rather odd coming from a man who shops in air-conditioned comfort at someplace like Whole Foods.

Of course we shouldn't be all that surprised. Mr. Sheppard did, after all, support the Khmer Rouge, who took the peasant fetish to completely irrational extremes, forcing all city dwellers into the countryside where they could enjoy the benefits of subsistence farming.

Mr. Sheppard blames us Americans for many imaginary evils, but he fails to ding us for our deserved faults. Among NAFTA's terms is the agreement that truck drivers can deliver goods in all three countries without hindrance. For example, Canadian truckers can carry goods from Canada to their destination in the US, and also from the US back to Canada. (They are not allowed, so I understand, to carry goods strictly within the US.) Judging from the number of Canadian trucks on the interstate near my house, this clause is widely exercised.

However because of the staunch opposition of the Teamster's Union and American trucking companies, such privileges have not yet been extended to Mexican truckers. They are only permitted to carry product a few miles into the US, after which it has to be reloaded onto an American truck. These continued regulations are a direct violation of NAFTA, and have resulted in compensatory tariffs being leveled against us by Mexico. They increase prices for American consumers and needlessly impoverish Mexican truckers.

The Teamsters and their corporate allies, refusing to admit to narrow selfishness, instead claim that Mexican truckers are unsafe. And presumably Mr. Sheppard agrees with them, given that he both opposes NAFTA and is pro-union. Apparently Mexicans are congenitally unsafe, because there is no other reason to make this claim.

So, like Donald Trump, the Teamsters' union, and some trucking companies, Mr. Sheppard thinks it is impossible for Mexicans to drive safe trucks safely in the USA. This is nothing but xenophobia, which brings me back to where we started.

About the TPP, Mr. Sheppard writes
The TPP will further the interests of the rich at the expense of workers and peasants. It will codify new regulations to facilitate more neoliberal changes to the economies of these countries. At the same time, it will further the interests of the imperialist countries involved--which include the U.S., Australia, Canada, Japan, and New Zealand--at the expense of the oppressed nations of Brunei, Chile, Malaysia, Mexico, Peru, Singapore, and Vietnam. Capitalists in these latter countries will benefit as junior partners with the imperialists at the expense of their workers and peasants.
Leave aside the odd categorization--where New Zealand is "imperialist" while Singapore is not. The upshot of this is we don't want no Gooks selling crap in the USA. It's a sentiment that Donald Trump certainly agrees with--Mr. Sheppard should give him a call. Beyond this, the principal beneficiaries of free trade are not capitalists, but first consumers (who get cheaper prices), and then workers (who get jobs).

As for me, I'm not a xenophobe. I support free trade.

Down with Poverty!

Further Reading:

Thursday, June 25, 2015

Against Reformism in Greece

Trotskyists are uncompromising. The class line cannot be crossed. Accordingly they oppose popular fronts like Syriza, which consist of unprincipled alliances with bourgeois parties. That Syriza's coalition partner is a small, center-right outfit called ANEL simply demonstrates the perfidy.

Nevermind that the Left wing of Syriza is a sundry mob of Maoists, pseudo-Trotskyists, anarchists, etc. Nevermind that Alexis Tsipras has resolutely refused to compromise with the Troika on core issues. True Trotskyism, as expressed by Socialist Action, regards the whole movement as nothing but a bourgeois front, just waiting to sell out the working class as soon as politically expedient.

The global organization of Trotskyists is something called the Fourth International. The Greek section of the Fourth International is a grouplet that not even I had previously heard of: OKDE-Spartacos. If bombastic proclamations are a mark of revolutionary fervor, then these folks take the cake. Their statement is reprinted in Socialist Action. (The translation isn't very good.)

Of course no proclamation is complete without a list of demands at the end. These range from the stupid to the ridiculous. I've copied them below, along with my comments.

  • No new austerity measures, no new agreement, no negotiations
Why should there be no negotiation? What can one possibly lose by talking? Even Trotsky negotiated at Brest-Litovsk. Otherwise, this sounds also like Syriza's strategy. If Syriza is going to sell out the working class, then they've only got a few days left to do it.
  • Reduction of working hours, along with raises in wages and pensions
Greeks already don't work very hard--that surely is part of the problem. And where is the money for the wage & pension increase going to come from? Our Trotskyist friends don't say.
  • Stop paying off the debt and fully cancel it
Greece has long since stopped paying off its debt, and nobody is suggesting that they start now. The only issue is how the debt going to be refinanced so that the country doesn't default. Greek bailouts consist of money lent by European banks, which is then paid back to European banks to avoid the appearance of default. There is no advantage to anybody in letting Greece default--certainly not to the Greeks. By advocating default, OKDE shows why they are such a small, irrelevant organization.

Far from asking Greece to repay its debts, the Troika is merely insisting that it break even, i.e., run a primary surplus. That's a reasonable request, but the country can't do that with stifling regulations, a retirement age at 50 or 55, and a completely bloated public sector. (Some argue that Greece also needs to cut defense spending.) These misnamed "austerity" measures will bolster the Greek economy and enrich Greek consumers.

  • Expropriation of banks and big enterprises, with no compensation for capitalists, and operation under workers control
Greek banks are broke and continue to exist only by the generosity of the ECB. Expropriating them will yield no assets--only debts. And of course the ECB won't continue to put in money. Regarding "big enterprises", it's not clear that Greece actually has many of those, and decapitating a company hardly improves its chances of success. See, e.g., Zimbabwe.
  • Self-management of closing factories and enterprises
Good luck with that. I don't care who manages it, but without access to either capital or markets no business can flourish.
  • Disengagement from the euro and the EU, for an anticapitalist internationalist perspective For the self-organization, the government and the power of the working people
So 70% of Greeks want to stay in the Euro no matter what. That's because their standard of living depends on it. If Greece is forced out of the Euro instant poverty will follow. I've always said that Trotskyists are pro-poverty, but rarely is it so dramatically illustrated.

Frankly, this is just pathetic. There is such a thing as intelligent Trotskyism--I've remarked on it many times on the blog. But that Socialist Action reprints the foolish ramblings of silly people is beneath their dignity.

Further Reading:

Friday, June 19, 2015

The Minimum Wage

Recent articles in the Trotskyist press and elsewhere have covered the Fight for $15, a serious effort to raise the minimum wage. Let's review.

An early report appeared in Socialist Viewpoint, in April 2013. That article covered the demonstration by fast food workers in Chicago demanding a near doubling in the minimum wage to $15/hour. The march set the tone for the fight as it spread nationwide. While the marchers included some fast food employees, the organizers and majority of attendees appeared to be members of already existing unions, notably the SEIU.

At the time I didn't think anything would come of it--the very idea of doubling the minimum wage seems outlandish. But I confess it's gotten more traction than I expected. Since then, Seattle, San Francisco, and most recently Los Angeles have agreed to raise wages to $15/hour. Chicago will raise its to $13, and other cities are making lesser pledges.

In addition, Walmart, McDonalds, and Target have all agreed to give their employees a raise, albeit not to $15. So something is going on. The Militant reported on this last March, which elicited my comments here. What gives?

The Militant revisits the issue again with a recent report by Alyson Kennedy and Dan Fein, two reporters for whom I have considerable respect. Entitled McDonald's Workers' Fight 'Getting Stronger', it's an account of the demonstrations in front of the company's headquarters in Oakbrook, IL.
“I make around 30 meals per hour and earn $7.25 per hour. I can’t even afford to buy one of the meals I make,” Amy Petite, 21, who works at Wendy’s in Knoxville, Tennessee, told the Militant. 
Demonstrators said that as the movement grows, gains are being made. “We won better hours and five days a week where I work,” said Connie Bennett, a Chicago McDonald’s worker. “Before we were getting three or four days a week.”
Socialist Action highlights the campaign of Kshama Sawant, the socialist Seattle City Councilwoman now running for re-election.
Since her election in 2013, Sawant fulfilled her campaign promise to make Seattle the first major city to pass a $15 an hour minimum wage. And she has taken on a number of other issues that are important to working people. In the city with the fastest rising rents in the country, she has championed the fight for rent control, a Tenant’s Bill of Rights, and the demand that the city build thousands of quality apartments to be rented at below-market rates.
The most substantive article comes from Socialist Viewpoint's contributer, Arun Gupta. He reveals Fight for $15 as astroturf, staged by the SEIU.
For example, one fast-food protest in 2013 was run like a military campaign. The staffing plan included the local organizing leadership, four different media workers, half-a-dozen “diffusers” to soothe any trouble, a photographer, videographer, police liaison, chant leader and energizer, a supply team, drivers, onsite legal, a criminal lawyer on standby, breakfast and lunch coordinators, and people designated to hand out signs, flags, t-shirts, and water. A spreadsheet mapped out protests by the minute, noting times and location for loading vans, picking up workers, talking points for press conferences, skits, prayers, dancing in the streets, and “walk backs” of workers the next day to minimize retaliation. Insiders say to maximize turnout, Fight for 15 will sometimes rent hotel rooms for workers the night before a protest, rent vans to drive them to the start point, and provide meals.
 Mr. Gupta, while a staunch supporter of the effort, is skeptical about its chances of success.
A fundamental goal of labor organizing is to take labor out of competition with itself. But that is nearly impossible when low-skilled, low-wage workers have few rights and number in the tens-of-millions. Fight for 15’s approach is unorthodox, but it is constrained by organized labor’s history. Class-struggle unionism has been abandoned by labor leaders who act as junior partners to corporations, like SEIU and Kaiser Permanente, the UAW and auto companies, the machinists union and Boeing, and the building trades and real-estate developers. Many union leaders are also in the pocket of the Democratic Party despite it being in the pocket of Wall Street.
As said, I share Mr. Gupta's skepticism, and that begs the question. Why has Fight for $15 been as successful as it has? I count several reasons.

1)  I am willing to give the SEIU some credit. Their well-organized public relations campaign has surely had some effect, albeit mostly as public relations. The victories in city councils are probably due mostly to this effort.

2)  $15 per hour has passed in cities that have lots of billionaires, and even more millionaires. These are places where the added costs can be passed on to consumers. That won't work in less fortunate towns, such as Fayetteville, NC or Kokomo, IN. So far from starting a trend, the SEIU has just picked the low-hanging fruit.

3) McDonald's and Walmart are both reevaluating their business models. They need a different kind of workforce to make that happen. So I think the pay raises they offer probably won't go to their current employees, but rather to future employees who will have different skills. The lowest-skilled, least educated people will be laid off.

4) McDonald's is shrinking--this year they are closing more stores than they are opening. Further, all the stores in San Francisco will be closing. While high real estate prices are probably the culprit, the fact is that $15/hour will have no effect on McDonald's there.

My socialist friends all make one important mistake. They implicitly assume that raising wages to $15/hour will have no effect anywhere else in the economy. Only the Wall Street Banksters will suffer negative consequences--their endless stash of cash will be slightly diminished because of higher salaries.

But of course that's not true. Mr. Gupta at least points out that profits are shrinking at McDonald's. There is no stash of cash, and the Banksters will not be the ones who pay the bill. So who's the patsy? There are only two choices: customers or other employees.

Except in billionaire cities, customers simply won't pay up. They don't have the money, and/or they have too many other choices.

That leaves the employees. For everybody that gets a pay raise, somebody else is going to be either unemployed or paid less. That's obviously what is happening at McDonald's and Walmart--both companies are looking to trim their workforces. They can afford to give the remaining people raises.

So I'll stick to my original prediction: The Fight for $15 will fail. It is impossible to nearly double the pay of low wage workers in a low-inflation world where everybody else's salaries are flat. It won't happen.

Further Reading:

Wednesday, June 10, 2015

Louis Proyect's Pro-Poverty Alliance

Louis Proyect kindly posted video from the recent Left Forum meeting in New York. It's a nice summary of the travails of the modern Left.

As a leader of the North Star movement, he provides an introduction to its history and goals. "What we need," he maintains, "is a broad Left Party where people can work together based on a common program" that doesn't require close ideological agreement. Mr. Proyect goes back to Peter Camejo, Lenin, and even the Communist Manifesto for guidance. The latter sounds veritably reformist, calling for a "heavy, progressive, graduated income tax, equal liability of all to work, establishment of industrial armies, especially for agriculture."

Mr. Proyect claims that Lenin's conception of a Leninist Party was much closer to what North Star aspires to than something like the Socialist Workers Party. Socialist movements can't simply imitate ancient Russian history and expect success. Instead they must draw heavily from the heritage of their own time and country. Socialists need to stop waving hammers & sickles around, and end democratic centralism in it's current form.

Channeling Peter Camejo, Mr. Proyect cites as positive examples the Farabundo Marti National Liberation Movement (FNLM) in El Salvador, and the Sandinista National Liberation Front in Nicaragua. Marti and Sandinista were local heroes, not Russian ideologues. Likewise, North Star named itself after the (very obscure) newspaper published from 1847 to 1851 by (nearly as obscure) Frederick Douglass. Current role models include Greece's Syriza, and Spain's Podemos.

And here's the problem. Does Mr. Proyect really think that either the FNLM or the Sandinistas made their countries any richer? Both movements plunged their countries into decades-long civil wars that killed thousands of people. Yes, one can lay significant blame on the Contras and the Salvadoran army, and even the USA, but it takes two to tango. Both nations were left substantially poorer at the end of the Leftists' reign than they were at the beginning. Which is why the Left is no longer in power in either country.

If that's success, then I'd like to know what failure looks like.

Likewise Syriza, which by becoming the government has inherited a poisoned chalice. It can either succumb to the demands of the Troika, or it can take Greece out of the Euro. Contrary to the popular media, the Troika's demands are not unreasonable and will lead to long-term economic growth in Greece. But Syriza's constituency (government employees) will be hurt. Leaving the Euro, on the other hand, will drive the entire population into instant poverty. Please, Mr. Proyect--tell us how this is a positive outcome for the Left.

Two other speakers are worth noting. Kshama Sawant, the global proletariat's representative on the Seattle City Council, was asked to speak on the fly, without prepared remarks, and the result is slightly incoherent. She doesn't like corporations. She's very proud that her campaign received no corporate money from Starbucks. Count me happy--when I buy coffee I really don't want my purchase subsidizing socialist radicals.

But she really hates Starbucks. She didn't explain why, but I'll suppose it's because they pay low wages. In most of the country it's probably around $9/hour, albeit with some benefits. In Seattle they now pay $15 per hour. To Ms. Sawant (a talented software engineer) this sounds like chump change--the baristas are getting exploited.

So here is my question for Ms. Sawant: What salary would Starbucks have to pay before she'd like Starbucks? Obviously $15/hour is not enough.

Here are my reasons for liking Starbucks:

  • I like their coffee. It's better than 90% of the Ma & Pa places. Starbucks is good for consumers.
  • They employ 180,000 people, all of whom get a salary, some benefits and a possible career track.
  • They have greatly expanded the coffee market in the US, to the benefit of farmers in places like Nicaragua.
Ms. Sawant, judging from her language, thinks the world would be a better place if Starbucks went out of business. Needless to say, I don't think the 180,000 people who work there are going to sign on to that crusade.

The best talk was given by the 2014 Green Party candidate for Lieutenant Governor of New York, Brian Jones. He's a card carrying communist--a member of the International Socialist Organization. He's also a member of the teacher's union, NYSUT, an organization dedicated to ripping off the taxpayers in support of their members. Taxpayers like those who work at Starbucks, who pay New York's record high property taxes and sales taxes.

Mr. Jones channels Syriza, and as such epitomizes Mr. Proyect's project. Mr. Jones believes that government employees--and only government employees--are people of good will who have the public's interest at heart. Thus he sees no conflict between higher salaries for teachers and better outcomes for students, despite the fact that there's no empirical correlation.

We need government employees. We need cops, and prison guards, and road maintenance crews, and soldiers. These people are an expense necessary to correct for the failings of human nature.

But government workers don't make us richer--they simply preserve civilization. Wealth comes from people who produce things that consumers want to buy. Starbucks employees make me richer because I enjoy drinking their coffee. On the other hand, I hope I will never require the services of a prison guard. The goal of society is certainly to pay civil servants appropriately--even generously. But frankly, we need as few of them as possible.

Mr. Jones and Syriza have it backwards. Greece has hired way more people than it needs--the Troika wants a lot of them privatized (or fired). New York schools are famous for their rubber rooms--places where useless teachers can hang out because the union won't let us get rid of them. College professors (like me) use the taxpayer's dime to write books that literally nobody is going to read.

So there it is. Mr. Proyect is pro-poverty: he has supported hugely destructive civil wars; he thinks Starbucks employees should all be fired because it's an evil company; he believes that more teachers and more cops and more prison guards will make us richer.

Mr. Proyect is wrong on all counts.

Further Reading: