Notes from the front – of the week 9/12/2014

Jim Crow alive and well in the US

Tens of thousands took to the streets nationwide across the US in response to the exposure of the depth of the structural racism embedded in US society through the impunity with which the US state kills black people.

The movement on the streets, triggered by the grand jury decision in St Louis not to prosecute the police killer of Michael Brown, took on a new dynamic following a similar decision in the New York case of Eric Garner. In New York the guilty were let off despite video evidence that this unarmed black man was choked to death by a police officer.

Demonstrations took place in New York, Washington, California, Chicago, Boston, Cleveland, Miami, Phoenix and beyond, taking up as slogans the last recorded words of Eric Garner – ‘This stops today’ and ‘I can’t breathe’ – expressing disgust with an entire system that oppresses and kills African-Americans.

Fundamentally the US justice system never abandoned the ‘Jim Crow’ system of legalised discrimination against African-Americans, which the 1960’s civil rights movement fought to abolish. Whilst the civil rights movement achieved some very important advances, the organised discrimination against the majority of black Americans continued. It remains systematic across all areas of human existence. Infant mortality, life expectancy, poverty, unemployment and income distribution are all stacked against Black people who are grotesquely over-represented in the penal system and particularly on death row.

This is the truth of the ‘American dream’. Unbelievable prosperity side-by-side with ‘Third World’ levels of poverty in the black ghettos of American cities, inevitably accompanied by an increasingly militarised police presence, which accords no rights – not even the right to life – to the 13 percent of the population that is black

Britain – the US’s auxiliary – builds up its base in Bahrain

Britain’s agreement with the Bahrain dictatorship to expand its naval base is just a reassertion of Britain’s old colonial role in the region.

Britain ‘handed’ independence to its former ‘protectorate’ in 1971, but this was just a formality. All that actually happened was that Britain transferred control of its main naval base in Bahrain to the US and installed a monarchy that is a compliant puppet of the West.

This regime, closely backed by the West, rules through sectarian and brutal repression of the island’s majority Shia population.

The US Fifth Fleet, responsible for naval and marine operations across the Middle East, is based in Bahrain.

The proposed expansion of the British base was immediately denounced by the opposition movement in Bahrain, with demonstrations taking place last week against it. Behind the announcement lies the fact that, with the US aiming to shift more of its military resources to the Asia-Pacific theatre to counter the rise of China, Britain is coordinating with the US to help fill any gap in the Persian Gulf.

What is left of British naval forces are becoming effectively integrated as a subordinate arm of the US Navy. In November Britain had already announced that US fighter planes will operate off the British aircraft carriers currently being built. The expanded base in Bahrain in effect integrates Britain’s navy further into the US Fifth Fleet.

Rising US dollar ramps up the pressure on emerging economies

It is not just the fall in world commodity prices that is creating problems for the economies of many countries dependent on the export of oil and other basic goods. Since the end of quantitative easing the dollar has been gaining rapidly against the currencies of most other countries in the world, hitting a seven-year high this week. This means debts denominated in US dollars become more expensive if they have to be financed by weaker domestic currency incomes.

This combination creates a double-whammy for many countries: falling incomes because of falling prices and therefore earnings from commodities exports; and rising debt servicing costs meaning capital flows out of the country. This is impacting on countries including Russia, Venezuela, Nigeria and other African countries, Mexico and many more.

A recent report by the Swiss-based Bank for International Settlements highlighted the growing risks of this toxic combination to what it calls ’emerging market’ economies, mainly former colonies and the semi-colonial world, which are particularly vulnerable to sharp movements in the value of the dollar.

Behind the rise of the dollar is the relative decline of the US economy on a global scale. For several decades the US domestic economy has been unable to generate the resources to maintain and grow domestic living standards, fund a huge level of armed forces and fund any increase in spending or investment.

However because it is the most powerful economy in the world, and the dollar is the main reserve currency, it has the capacity to make up this shortfall by instead sucking capital from the rest of the world. Fluctuations in the value of the dollar are one means to this end. The upshot is an outflow of capital from other countries, with the commodity producing countries the most vulnerable. There is already capital flight from Russia, and many others face rising interest rates and big currency devaluations that will boost inflation.

For countries facing a dollar rising against the domestic currency it means their international dollar debt interest payments become more difficult and the risk of default or bankruptcy increases. The US is the source of these problems, just as a giant parasite weakens any organism. Decisive counter-measures, such as capital controls, nationalisations and even debt renunciation are called for to combat it.

Osborne’s austerity trap for Labour

The level of new austerity measures announced in the Autumn Statement is approximately 50 per cent larger than all the austerity measures enacted to date under the Tory-led Coalition. It is questionable whether even a deeply reactionary government could implement them.

They can only even be attempted by mounting a ferocious assault on living standards, public services and workers’ rights and organisations, which is likely to lead to protest and social unrest in different forms.

Just six months before a general election this was primarily a political statement. Labour’s minimal criticisms of government policy, and its very limited alternatives such as the Mansion Tax and some unspecified borrowing for investment, have been answered by much higher stamp duty on luxury homes and a road building programme (which is largely re-announcements for mainly Tory-held seats).

But as Labour has not broken from austerity, Osborne has largely stripped it even of its limited lines of attack. It was left to establishment stalwarts who do not disagree with austerity to embarrass the government about its record, the BBC, the Office for Budget and the Institute for Fiscal Studies.

Worse, Labour had already committed to implementing Tory plans in the first year of the next government even before knowing what they were. It has also adopted the aim of a balanced budget in a single parliament. Without a plan for massive investment this is signing up to austerity measures that even the Tories would struggle to implement.

The economic and political consequences will be severe. When Labour carried out a Tory spending freeze in an expanding economy after 1997 it lost one and a half million votes in two years. Now the economy is stagnating and real incomes are falling. The economic impact will be even deeper.

Osborne has set a Tory austerity trap for Labour and the latter seems intent on jumping in head first.

US maintains grip in new Kiev government

On 2 December the Kiev-based Ukrainian parliament appointed a new pro-NATO government with Arseniy Yatsenyuk, the US’s preferred Prime Minister, remaining in charge.

Continuing the military assault on the eastern provinces, breaking economic ties with Russia, and implementing the IMF’s further restructuring is crashing Ukraine’s economy. This risk undermining support for the present course of the Kiev government or strengthening either those favouring compromise with the East or bringing in maverick and unreliable political currents.

In order to maintain the current political course therefore requires a cabinet entirely subservient to the US. The degree of US direction of the Kiev government is given away by the fact that three of the newly appointed ministers are foreign nationals, who only acquired Ukrainian citizenship on the day they joined the cabinet.

The Finance Minister is a former US diplomat and private-equity executive, the Economy Minister is a former investment banker from Lithuania and the Health Minister held a similar post in Georgia.

Only pro-US politicians allied with Ukraine’s overt fascist and far-right will relentlessly pursue the anti-Russian agenda, regardless of the damage it inflicts on the Ukraine and the EU.

Swedish Social Democrats show how not to fight the racist right

Sweden’s minority Social Democrat-led government is in crisis less than three months after coming to office in an inconclusive general election.

The Social Democrats had already weakened their own position by only including the Greens in their coalition and by excluding the radical Left Party, meaning the government block had fewer Parliamentary representatives than the Parliamentary grouping of the right-wing parties.

However its conduct of the budget negotiations that followed is likely to prove even more damaging, as it has allowed the right to set the agenda.

As a minority government it was obliged to open negotiations with the four mainstream parties of the right grouped together as the Alliance for Sweden, which responded by attempting to force the Social Democrats to adopt the right’s budget.

All the mainstream parties had proclaimed their unwillingness to do any deal with the ex-fascist Swedish Democrats, whose militant anti-immigration racist politics gained 13 percent of the vote in the September general election. This fell apart when the racist party voted for the Alliance’s budget, effectively ending the Social Democrat-led government, which announced it would call a new election at the earliest possible date, which constitutionally is March next year.

The support from the far-right for the Alliance’s budget moves the party into the mainstream. So-called ‘moderates’ like Carl Bildt, the 1990s Swedish Prime Minister who remains close to the US since his role in promoting the break-up of Yugoslavia, argued that this far-right support for the Alliance’s budget was better for Sweden.

Overall, in part due to refusing to work with the Left Party, the Social Democrats allowed the right to set the agenda and handed the initiative to the Alliance, who had no such reservations about accepting the support of the openly racist Democrats.

The big winners in the new elections in March are likely to be the Swedish Democrats once again, who have brought down a social democratic government.

There are evident lessons here for Britain.