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| While energy prices have gone down, most items working people depend on are still rising today. (Source: Bureau of Labor Statistics; Caption: The Militant) |
All three articles are from the August 7th issue of The Militant (published by the Socialist Workers Party, SWP). and two of them are only indirectly about the economy. The first piece is entitled Why do liberals claim that US capitalism is on the upswing? and is authored by The Militant's economics correspondent, Brian Williams. The second, by Seth Galinsky, is headlined Teamsters union says tentative agreement reached with UPS. Finally, there is an editorial under the banner Cuba’s socialist revolution points way forward for working people.
Mr. Williams gets it mostly right--but tells only one side of the story. He agrees with Republican partisans that the economy is going to hell in a handbasket, with this lede (links mine)
If you go by what the liberal big-business media are saying, the economy is on the verge of a boom, with prices dropping and fears of a wrenching recession fading away. Among a plethora of articles pushing this view include: “Everything’s coming up soft landing,” by New York Times economic whiz Paul Krugman, and “US economy shifts into disinflation mode,” by Reuters.
Not true, claims Mr. Williams, and he cites the above chart as evidence, saying
But this doesn’t mean that prices of goods essential for working people don’t continue to bite us. Rents rose by 8.3% over the past year. Prices for grocery items workers need kept going up — cereals, up 16%; jelly and jam, up 17.5%; mayonnaise, 23%; applesauce, 22%, for example.
Some of the steepest rises were for the cost of insuring a vehicle, up 17% in June. And the cost of keeping your car running rose 12.7% from a year earlier.
He's right in holding Mr. Krugman to account, who claims that fuel, food and rent can be ignored in any meaningful measure of inflation.
There are plenty of voices in the media who, like Mr. Williams, argue that we're heading for a recession. Indeed, the whole Republican party makes that claim, for obvious electoral reasons. The popular website Zerohedge.com makes that case in spades. And they might be right.
On the other hand, it may be no recession is on the near horizon. A popular meme today is, instead of a "soft-landing", there will be "no-landing", that is the economy will continue to grow at a rate proportional to population growth and new technology, i.e., 1 - 2%. But the cost will be continued inflation at or above 3%. My opinion (today; I change my mind every week or so) is this is the most likely outcome, though I'll hazard inflation will be more like 5%.
Mr. Williams makes a huge error, for which we can fault Marxism to which he is beholden. He writes,
Bosses and government spokespeople claim that the biggest problem with inflation is it impels workers to fight for higher wages, leading to what they claim is a “wage-price spiral.” This just isn’t true. When workers organize and use unions to fight and win higher wages, it just means profits go down. Profits are what the bosses steal from the fruits of our labor.
Marxism claims that capital should cost nothing. This will never be true, no matter who owns it. The statement that higher wages always come out of profits is also usually wrong. Most often higher wages result in higher prices, just as the "bosses" claim.
He goes on to say that "...workers’ real wages are currently 3.2% lower than in December 2020." Perhaps this is true--there are uncertainties in measurement that make it debatable. But more important, there have been pandemic-driven changes in the economy that confound any simple comparison. For example, consumer preferences have changed from goods (which manufacture pays relatively high wages) to services (which pay relatively low wages). This will result in lower overall wages, but not because of inflation.
More, Mr. Galinsky, writing about the UPS settlement with the Teamsters Union, writes
According to the Teamsters’ press release, all current full- and part-time UPS workers will get a $7.50 per hour wage increase over the life of the contract, starting with $2.75 more this year. That comes to about an average of 6.5% a year.
Six and one half percent is well over the rate of inflation. Unions do best when there is a labor shortage, forcing all companies to pay more for labor, whether they're unionized or not. Walmart, Amazon and Starbucks have all raised their wages recently. No union is required to get a hefty raise.
I think The Militant fundamentally misunderstands the union movement. Unionists are not revolutionaries in the making. They're certainly not communists. Any union member will understand that a company has to make a profit in order to stay in business (see, e.g., here). The last thing they want is for the company to go bankrupt, as is happening with Yellow Freight, putting nearly 30,000 teamsters out of a job. At their core, unions are pro-company and pro-capitalist. They resent organizations like the SWP, who see unions merely as a tool to help the vanguard party take state power. See, e.g., the Labor Notes movement.
Finally, the editors reprint an excerpt from Castro's speech titled History will absolve me. This speech was delivered in 1953, It is an agenda for the "revolution," which at that point was still in the future. It is entirely appropriate to compare Castro's promises with the outcome today. What follows are some quotes (taken from the excerpt of the speech published by the editors), with my comments in red (which are so obvious they're hardly necessary).
- When we talk about the people, in terms of struggle, we mean the 600,000 Cubans without work, who want to earn their daily bread honestly without having to emigrate from their homeland in search of a job. Since the "revolution" millions of people have fled the island in search of jobs and a better life, with more arriving in the US every day. 1.2 million Cuban-Americans live in Miami alone.
- The 500,000 farmworkers who live in miserable huts, who work four months of the year and starve the rest, sharing their poverty with their children; who don’t have an inch of land to till and whose lives would move any heart not made of stone. Nothing has changed here. Farmworkers still live in miserable huts, still don't own any land, and still lack enough food to live well on.
- The 400,000 industrial workers and laborers whose retirement funds have been embezzled; whose gains won in the past are being taken away; whose homes are hellish shacks that resemble the worst barracks; whose wages pass from the hands of the boss to those of the moneylender; whose future is a cut in pay and loss of a job; whose life is endless toil; whose only rest is the grave. Today industrial workers and laborers have no retirement funds, and their salaries are less than $100/month. A UPS employee earns that much in under five hours.
- The 20,000 small merchants, crushed by debt, ruined by the crisis, and dealt the final blow by a plague of thieving, venal officials. Today small merchants are crushed by even more venal officials, and are not allowed to run even the smallest businesses without bureaucratic oversight and corruption.
- The 10,000 young professionals: doctors, engineers, lawyers, veterinarians, school teachers, dentists, pharmacists, journalists, painters, sculptors, and others who leave school with a degree, looking for a way to fight, full of hope, only to find themselves at a dead end with all doors closed and deaf to their pleas and outrage. With all doors closed to them in Cuba, these are the people who have fled to Miami and have turned that city into the financial and cultural capital of Latin America.
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