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	Workers Vanguard No. 941	28 August 2009

For a Workers Party to Fight for a Workers Government!

The California Budget Crisis and the Bankruptcy of American Capitalism

Deadly Cuts Starve the Poor, Kill the Sick, Gut the Unions

OAKLAND—On July 20, California’s Republican governor Arnold Schwarzenegger and the Democratic-controlled state legislature declared an agreement resolving the latest budget crisis, which had brought the state to the brink of total financial collapse. The $26.3 billion shortfall is to be made up by gouging funding for welfare, health care and education. Hundreds of thousands of state workers have been handed unilateral wage cuts of 14 percent through mandatory three-day furloughs each month. A similar program is also being imposed on all employees of the University of California system, at the same time that funds for student grants are cut and tuition hiked.

Health care services for poor children, the elderly and AIDS patients have been slashed. Some 60,000 of the poorest children in the state will lose health coverage in October, while nearly 670,000 children may lose their health care by next July. Even the wantonly cruel “welfare to work” program was cut by millions, leaving little more than food stamps for poor mothers and their children. With nearly $10 billion in cuts to public education, the jobs of thousands of teachers and school workers are to be axed, while already out-of-control class sizes balloon. Local services and infrastructure spending, such as for public housing, will also be cut; to balance its budget the state is demanding, for example, $100 million back from the city of San Jose.

Signing off on the budget, Schwarzenegger wielded his pen to chop nearly half a billion dollars more in services for the poor, disabled and elderly in line-item vetoes. In a display of the vicious calculus of capitalist austerity and the murderous state repression that enforces it, the governor vetoed any cuts in funding to build a new death row at San Quentin, where prisoners will now be double-celled while they await death at the hands of the state’s executioners.

Projecting that these budget cuts “would make California more like a struggling Third World state than 21st century America,” an article in Time magazine (19 June) pointed out that this is hardly an isolated phenomenon: “States across the nation are suffering the effects of lost tax revenue in the worst economic downturn since the Great Depression. California’s woes are similar and different in kind, played out on a grand scale in a state that boasts the world’s eighth largest economy and a Hollywood star in the lead role.” Once the symbol of the “American Dream,” with “rags to riches” myths spun out courtesy of Hollywood, California today is a microcosm of the larger financial meltdown of American capitalism, with the cost being extorted from the working class, blacks, immigrants and the poor.

The speculative binges of American capitalism, where profits extracted from the exploitation of labor were squandered in various get-rich-quick schemes as opposed to investment in industry or infrastructure, have played out with a vengeance in California. Silicon Valley was the birthplace of the speculative “dot.com” bubble, which went splat in 2000-01. The “Golden State” was also a leader of the housing construction boom, employing the labor of heavily immigrant construction workers to build these homes, which were made “affordable” to minorities and working people through subprime mortgage scams. That bubble burst in 2007, triggering the present international financial crisis.

California now has one of the highest foreclosure rates in the country. The unemployment rate—officially 11.9 percent but over 20 percent when the actual number of jobless and underemployed workers is calculated—rivals that of Michigan, which has been ravaged by tens of thousands of new job losses with the financial collapse of GM and Chrysler. The reduction in Pacific Rim trade has slashed the workload in the California ports, with an accompanying decline in domestic transport. While the devastation in human terms is enormous, for the Democratic and Republican rulers of the state it is measured only in lost revenue from sales, income and property taxes.

Though reflecting the overall international capitalist economic crisis, the California budget deficit is also derived from the continuing impact of the passage of Proposition 13 in 1978, which put a cap on property tax increases. Prop. 13 was a de facto racist referendum against social programs seen as benefiting blacks, Latinos and other minorities. In the words of one of its white middle-class backers: “It’s these social services that annoy the heck out of me—social services for the colored, the Mexicans and so forth. Who wants to pay it all in taxes that go for things like that?” Though billed as beneficial to homeowners, the actual major beneficiaries of Prop. 13 were large commercial property owners who have reaped annual windfalls of millions. Clauses mandating a two-thirds majority to raise taxes or to pass a budget were designed to ensure that it stayed that way, effectively giving veto power to a handful of politicians—in the current pass, Republicans—to block the passage of any budgets or taxes.

Today, immigrants and black people are being hit particularly hard. As the economy spirals downward, immigrant labor, whether in construction or in the sweatshops of the Los Angeles region, is being increasingly driven out, while the anti-immigrant witchhunt continues under the Obama White House. The Immigration and Customs Enforcement (I.C.E.) raids on factories under the Bush regime, rounding up and deporting immigrant workers, have been replaced by “desktop raid” computer checks of Social Security numbers. The result has been an increase in the number of deportations, with some 215,000 people deported so far this year, more than double the figures for the same period in 2007 under Bush.

More than 200 unionized immigrant workers at the Overhill Farms food processing plant in Vernon, a suburb of Los Angeles, lost their jobs in May following such a check. As described by the Los Angeles Times (12 June): “There were no frantic scenes of desperate workers fleeing la migra through the gritty streets of the industrial suburb southeast of downtown Los Angeles. For more than 200 Overhill workers, however, the effect was devastating: All lost steady jobs last month and now find themselves in a precarious employment market, without severance pay or medical insurance.” Down with all I.C.E. raids—stop the deportations! Full citizenship rights for all immigrants! Organize the unorganized!

In the Bay Area, the city of Oakland, with its substantial black and Latino population, never recovered from the last “jobless recovery,” or, more to the point, from the destruction of most of the area’s manufacturing base in the deindustrialization of America in the 1980s. According to the 2000 census, some 20 percent of all households in the city live on less than $15,000 a year. Nationwide, the official unemployment rate among blacks has risen from 8.9 percent in the first quarter of 2008 to 14.5 percent in July. But these figures are no real measure of the joblessness and destitution in this country’s inner cities, where blacks have long been the uncounted “surplus population” of American capitalism.

Obama’s “Economic Recovery” Fraud

Only a few short months ago, the International Socialist Organization (ISO) was celebrating the end of “the conservative dogmas and prejudices that drove government policy during more than a quarter-century of right-wing dominance—tax cuts are good, ‘big government’ is bad, welfare is worse” (Socialist Worker online, 3 March). The cause for this jubilation was Democratic president Barack Obama’s federal budget proposals, which the ISO editorial declared would “increase spending on programs for the poor, set a goal of ‘universal’ health care coverage, expand access to higher education.” The ISO’s delusions to the contrary, the fact that the already paltry sums spent on such programs are being cut even further in states across the country is more than testimony to the cynical fraud of Obama’s economic “stimulus package.”

A Wall Street Democrat, Obama increased the federal deficit by a trillion dollars to bail out the bankers, auto bosses and other sinking titans of American capitalism. The message for everyone else was “sacrifice”—a program enforced by the venal sellouts who head the unions in this country. Like the leaders of the United Auto Workers, who forked over gains won through decades of hard struggle in order to bail out the Big Three auto producers, the heads of the Service Employees International Union (SEIU), representing many of California’s city and government workers, also accept that the working class must play its part in paying for the economic meltdown.

In the midst of the California budget crisis, the unions who run and maintain the BART transit system in the Bay Area were locked in a contract battle with the transit bosses, who are demanding $100 million in concessions. The BART unions have a lot of social power, with the ability to shut down a transit system with some 350,000 daily riders. The multiracial membership of BART’s unions is a living link to masses of black and immigrant poor. Championing demands addressed to their needs—from the fight for free, mass transit to free, quality health care for all—would win the BART unions plenty of allies.

But this is the polar opposite of the strategy of the pro-capitalist trade-union misleaders. When Oscar Grant, a young black man, was killed on New Year’s Day by a BART cop in a train station, the misleaders of BART’s unions did not even issue a statement of protest, much less mobilize their members, in opposition to Grant’s coldblooded execution. Doubtless this is because BART’s killer cops are organized in a “union” affiliated with the SEIU. The cops are enforcers of capitalist class rule against working people and the oppressed and have no place in the workers movement. Cops, prison guards and security guards out of the unions!

A real fight in defense of BART’s workforce and the Bay Area’s black and minority masses would pose a direct challenge to the economic and political prerogatives of the capitalist ruling class. Instead, in a cringing display of their fundamental belief in the capitalist profit system, the BART union misleaders have danced to the bosses’ tune by shouldering their “share” of responsibility. When the membership of the Amalgamated Transit Union Local 1555, representing BART drivers and station agents, twice voted down a massive giveback deal, the big guns of the California Federation of Labor and the local labor councils, as well as black Democratic Party Congresswoman Barbara Lee, were brought in to enforce class peace. Hours before the ATU ranks were set to strike at 12:01 a.m. on August 17, a new version of the same sellout was announced by the ATU tops. Another vote is now scheduled for August 25.

Here is an object lesson in the role of the trade-union bureaucrats as the “labor lieutenants of the capitalist class”—a role that is today expressed in the union tops’ prostration before the Obama administration. When the capitalist rulers declare “there is no money,” the labor tops salute and offer to sacrifice their members’ wages and work and living conditions, accepting without question that the bank vaults of the capitalists, where there is plenty of money, are sacrosanct private property. By the same token, they turn their back on the fight for black rights and the defense of immigrants, who have been first on the chopping block of capitalist austerity.

The bankruptcy of capitalism now on naked display poses the very survival of the working class. To combat unemployment, it is necessary to shorten the workweek at no loss in pay and spread the available work around, as part of the struggle for jobs for all. Wages must rise with prices to guard against the ravages of inflation. There must be a massive program of public works at union wages to rebuild the crumbling infrastructure and schools and to build decent public housing. To unmask the exploitation, robbery and fraud of the capitalist owners and the swindles of the banks, workers should demand that the capitalists open their books, making clear to all the squandering of human labor which is the result of capitalist anarchy and the naked pursuit of profits.

All must have full access to medical care at no cost. Benefits for the unemployed must be extended until they have jobs, with all pensions completely guaranteed by the government. Such demands, the elements of which were laid out in the 1938 Transitional Program, the founding document of the Trotskyist Fourth International, will not be granted by the rapacious capitalist rulers. The capitalist state exists to defend the rule and profits of the bourgeoisie. It cannot be reformed or wielded to serve the interests of working people. The catastrophe of joblessness, threatening the disintegration of the working class, can be effectively fought only by a workers movement led by those committed to the struggle for socialist revolution and the establishment of a workers government where those who labor rule.

If the unions are to be organizations of struggle by the working class against the ravages of capitalism, there must be a political struggle against the labor bureaucrats who subordinate the class interests of the proletariat to those of its exploiters and their political parties. The labor traitors have tied the hands of the unions for decades through their alliance with the capitalist Democratic Party. What is needed is to forge a class-struggle leadership of the unions that can arm the workers to carry out the necessary battles against American capitalism. This in turn will be part of building a multiracial revolutionary workers party dedicated to the overthrow of this decaying capitalist-imperialist order.

Down With the Racist War Against Immigrants and Blacks!

Over the past few decades, California has been a virtual petri dish for right-wing ballot initiatives particularly targeting immigrants and blacks—while also taking aim at others deemed “outcasts” and “deviants,” such as gay people who want to get married. The passage of Proposition 13 in 1978 was the harbinger of a broader right-wing tax revolt across the country. This was codified at the federal level with the presidential election of former California governor Ronald Reagan in 1980, whose “supply side economics” slashed taxes for the rich and upper-income suburbanites while stealing money from welfare mothers and inner-city schoolchildren.

Prop. 13 was also the harbinger of a series of deeply reactionary propositions taking aim at immigrants, blacks and working people. Among these was 1994’s Prop. 187, which cut off all education, health care and other social benefits for “illegal” immigrants (most of these provisions were later overturned by the courts). Two years later, the passage of Proposition 209 outlawed even token affirmative action programs that gave blacks and other minorities limited access to higher education and government jobs and contracts. The slashing of such social programs has been matched in inverse proportion by increasing state repression and terror aimed at containing the seething anger and discontent of those who have been cast on the scrapheap of American capitalism.

The U.S. leads the world in the number of people who are behind bars—many of them targets of the racist “war on drugs”—and California leads the nation. Since the early 1980s, the state’s prison population has jumped from 20,000 to 167,000. A big boost came with the passage of the 1994 “three strikes you’re out” Prop. 184 (heavily funded by the California prison guards association), which mandates life sentences for a third felony offense no matter how minor. An example is Curtis Wilkerson, who is now in jail for life for his “third strike”—stealing a pair of socks.

California’s prisons are now so overcrowded that a federal three-judge panel recently ruled that they violated the constitutional amendment against “cruel and unusual punishment.” In 2005, a U.S. district judge found that one California prisoner a week died due to lack of adequate medical facilities. But a budget-cutting proposal to cut money from prisons through the early release of 27,000 elderly and sick inmates to non-prison hospitals, and allowing other “nonviolent” inmates to serve their last year of time under house arrest, has provoked howls of protest from right-wing Republicans.

A 20 August column titled “Priority Test: Health Care or Prisons?” by New York Times columnist Nicholas Kristof decries the fact that California spends over six times more locking up each prisoner in overflowing and decrepit jails than it does per child in the Oakland school district. Kristof asks, “Would we rather use scarce resources to educate children and heal the sick, or to imprison people because they used drugs or stole a pair of socks?” It is indeed a measure of the increasing depravity of American capitalism that it will spend exponentially more imprisoning people than educating them or providing even a modicum of health care to keep them alive. But it is a calculus based on what the U.S. bourgeoisie sees as necessary to preserve American capitalism.

When it comes to the education of those they exploit, the capitalist rulers expend only as much as they can realize back in profit. And if educating the sons and daughters of white workers has increasingly become an expendable overhead, the children of black people are deemed an expendable population by America’s rulers. Once a reserve army of labor to be maintained, albeit minimally, for the American bourgeoisie today the black ghetto poor are not worth “wasting money” on to keep alive, much less educate. The American working class cannot liberate itself without at the same time leading the fight to smash the chains of black oppression.

For a Workers Government!

The budget-slashing offensive by California’s Republican and Democratic Party rulers has provoked predictable cries from the reformists to “tax the rich.” A 26 July article on the Web site of the Party for Socialism and Liberation (PSL) opines that “the budget crisis would be relatively easy to solve under a different economic system.” Leaving unnamed what such a system would be, the PSL goes on to offer its own accounting advice for resolving the budget crisis, “even under capitalism,” through greater taxes on corporations and the rich as well as imposing a “moratorium” on debt service to the banks. They even go so far as to name the sums that could be saved through such endeavors. The aim of such reformist pipe dreams is to conceal the reality that the bourgeois state and its political representatives exist to defend capitalist rule and profit, not to provide for the well-being of the working class and the poor.

Not to be outdone, the International Socialist Organization came up with a scheme whereby Obama could preserve the military might of U.S. imperialism and still find lots of spare cash for social programs: “Cut the military budget in half, and the U.S. could create a generous social safety net and still be the largest military power in the world” (Socialist Worker online, 3 March)! It would be hard to find a more cringing statement of the reformists’ fundamental faith in the capitalist state, to say nothing of social-patriotic chauvinism against the Iraqi, Afghan and other oppressed peoples of the world who are on the receiving end of U.S. imperialism’s military might.

Like the trade-union bureaucrats, whom they serve as water boys, these putative “socialists” promote politics that are determined by what is practical and possible under capitalism. In opposition to the capitalists and their reformist agents, Trotsky argued:

“If capitalism is incapable of satisfying the demands inevitably arising from the calamities generated by itself, then let it perish. ‘Realizability’ or ‘unrealizability’ is in the given instance a question of the relationship of forces, which can be decided only by the struggle. By means of this struggle, no matter what its immediate practical successes may be, the workers will best come to understand the necessity of liquidating capitalist slavery.”

America’s capitalist rulers arrogantly presume they can get away with starving the poor, killing the sick and aged and further impoverishing working people and the oppressed without provoking any social protest. This calculation, which owes much to the role of the trade-union bureaucracy in enforcing class peace and suppressing labor struggle, is nonetheless foolish. While the capitalist rulers bray that Marxism has proved to be a “failed experiment,” they cannot eliminate the class struggle, which is born of the irreconcilable conflict of interests between labor and capital.

People cannot stand having no future for themselves or their children, or being oppressed like slaves, with poverty, disease and homelessness threatening millions. There is tremendous pressure building at the base of this society, which can and will explode. Harnessing and directing this anger toward the eradication of a system based on exploitation and rooted in racial oppression is, at bottom, a question of leadership. The key to unlocking the social power that lies in the hands of the multiracial working class is to break the chains forged by the trade-union misleaders that have shackled labor to its exploiters. To fight the economic catastrophe threatening the working class and the increasingly vicious oppression of blacks and immigrants requires forging a multiracial revolutionary workers party. Such a party would not only fight to defend the interests of workers, blacks, immigrants and others against the ravages of capitalism, but would lead the struggle to expropriate the parasitic bourgeoisie through socialist revolution and the establishment of a workers government where those who labor rule.