Sunday, February 27, 2011

From Dairyland to Cheese-Eater, let's unite!

While the international media have been focusing on the protests in the Arab world, I personally find the uprising in Wisconsin even more baffling. I have never seen anything like it.

For nearly two weeks now, tens of thousands of people have been demonstrating in the Capitol in Madison, Wisconsin against governor Walker's anti-union bill.
And the crowd, initially made of teachers, firefighters and other public workers has been growing to reach 70,000 demonstrators yesterday (NYTimes / UPI)

It is pretty clear that behind the pretext of budget deficit lies an ideological battle :
-Although the unions have already agreed to the budget cuts in exchange for keeping their collective bargaining rights, governor Walker refuses to back down.
-When Walker was pranked by a journalist posing as David Koch from the Koch Industries (one the richest men in the US and major funders of dozens of right-wing groups) he came out as a clear ideologue out there to get "the bastards" , not even blinking an eye when it was suggested he might plant some trouble makers into the demonstrators, acknowledging he "thought" about it. (source)

The unions are not without fault and deserve a lot of their criticisms - either in France or the U.S. but without unions to bargain, it is a return to a feudal type of relationships between workers and corporations.

The most bizarre part of the Wisconsin story so far is this one:
Wisconsin State troopers were dispatched early Thursday morning to the homes of the 14 Democratic state senators who have been in hiding over the last week to delay a vote on effectively ending collective bargaining rights for most public workers. (

Interesting development yesterday - the police who were supposed to throw out the demonstrators have actually joined them. (Salon).
And the protests are spreading to Missouri, Ohio, and across the nation.

Whereas what is going on in Wisconsin is very different from say, the protests in the Arab world, it is not very different from what we have seen in Europe. No wonder why the ordinary folks are upset!
The European governments may not have cracked down on unions yet, like Walker does, but the story has been essentially the same :
Brutal cuts in public services by politicians who claim they have no choice because of the state deficit and debt, but there is a sense of unfairness and injustice: it was NOT the teachers, fire fighters, policemen, and college students that caused the economic recession that devastated government budgets, it was Wall Streets and the banks, (ThinkProgress).with the complicity of politicians in many cases.
In every country affected by damaging cuts, it is the ordinary folks who pay the price for something in which they had no say, meanwhile major corporations and banks continue to make millions and not necessarily pay the taxes they owe to pay.) I realize that this may sound awfully far-left, like the words of some neo-marxist and be reassured I am not.

My favorite example (among many others one could find) is that of Goldman Sachs in Greece :
Goldman Sachs arranged swaps that effectively allowed Greece to borrow 1 billion Euros without adding to its official public debt. While it arranged the swaps, Goldman also sought to buy insurance on Greek debt and engage in other trades to protect itself against the risk of a default on those swaps. Eventually, Goldman sold the swaps to the national bank of Greece.
Despite its role in creating swaps that may have allowed the Greek government to mask its growing debts, Goldman has no net exposure to a default on Greek debt, a person familiar with the matter says. (Businessinsider)
In other words, Goldman Sachs caused higher risk credit for Greece by secretly lending the Greek government money and acquiring credit protection on the trades on the cheap to protect itself from the risk only it knew. Wicked indeed!

In the debt crisis in Greece, just like in the subprime crisis in America, it is those instruments - the financial derivatives - developed by banks such as Goldman Sachs, JP Morgans and the likes that caused the economic crisis - NOT the public services, however costly they might be. (NYTimes)

Now what about the situation now....
It is undeniably true that there is no money left in state coffers, and so politicians on either side of the Atlantic are asking ordinary folks to sacrifice their education, health system and other public services while many corporations are getting away without paying taxes by rigging the tax code to their advantage.

Thinkprogress assembled a short but far from comprehensive list of these tax dodgers (see here) : they include Bank of America, Boeing, Citigroup, Exxon-Mobile, GE, Wells-Fargo, etc...
France is far from immune - while high profile dodgers such as L'Oreal owner Bettenocurt (with the complicity of French politicians) have made the headlines - more than 60 large French companies have been investigated for tax dodging among which are Michelin, Total or Adidas. (The Guardian)

One might argue that in good times everyone, even the little guy, benefited from economic growth and so it is normal they too should accept cuts in public services. Except it is not true. Not in the U.S. anyway :
In 2007, when the world was on the brink of financial crisis, U.S. income inequality hit its highest mark since 1928, just before the Great Depression. (Hufftington)(see here too)

This whole narrative given to us by Republican ideologues is beyond 'myth', it is a lie. Just like the idea that public employees are overpaid at the expense of taxpayers. Here's a study showing the opposite. Food for thought and discussions if anything.

And the same lies are being told all over the world by the same people who are either blind or so greedy they don't give a dam.

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