Congressional Democrats and Republicans ratified the NDAA in a series of House and Senate votes in November and December that beat back nearly all efforts to set limits to the presidential power to arrest and imprison without trial or charge. As Republican Senator Lindsey Graham emphasized during the congressional debate, the legislation defines the entire world to be part of the battlefield against Al Qaeda, including the territory of the United States itself, making every human being on the planet, including every American citizen, a potential prisoner of the American military.

The NDAA effectively revokes the oldest democratic right, habeas corpus, which bars arbitrary imprisonment by requiring that the government present evidence to a judge or court to justify taking a person into custody. This right was first asserted in England during the Middle Ages and finally established and codified in the course of the English Revolution of the 17th century, which shattered the arbitrary power of the monarchy and established the supremacy of parliament.

Under the new law, the president of the United States can designate any individual, whether an American citizen, resident alien, or citizen of any other country, to be arrested and detained for life by the US military. The law defines a "covered person" in the following terms: "A person who was a part of or substantially supported al-Qaeda, the Taliban, or associated forces that are engaged in hostilities against the United States or its coalition partners, including any person who has committed a belligerent act or has directly supported such hostilities in aid of such enemy forces."

This goes far beyond terrorists linked to the 9/11 attacks, the purported target of the Bush and Obama administrations' "war on terror," to include anyone defined by the president as "engaged in hostilities against the United States or its coalition partners." This could include Kurdish separatists in Turkey (a US NATO ally), Palestinian protesters in Israel, the West Bank or Gaza, and anyone engaged in resisting the ongoing US wars in Afghanistan, Pakistan, Yemen and Somalia, or any future wars initiated by Obama or his successors.

It could include youth in Tahrir Square fighting the Egyptian military dictatorship (the second largest recipient of US military aid and a key US ally), workers on strike against the governments of Greece, Spain or Italy (all NATO allies), or those opposed to the stationing of US military forces anywhere in the world, including Obama's latest deployment of 2,500 US Marines in Australia.

It could well include domestic opponents of US military action, including opponents of the repressive actions of the military-intelligence apparatus at home. There have been repeated attempts by spokesmen for the political right to smear antiwar groups and the Occupy Wall Street protesters as allies of terrorists--and therefore potential targets for military incarceration.

First under Bush and then under Obama, the US government has advanced, with full sanction by the federal courts, an extremely broad reading of what constitutes "material support" to include anyone who engages in political activity that is in any way aligned with the actions of a supposedly "terrorist" organization. In several cases, the US government has even brought "material support" prosecutions against human rights activists who have advised nationalist movements fighting US-backed governments on how to shift from guerrilla war to electoral politics.

The American Civil Liberties Union denounced Obama's signing of the legislation. Obama "will forever be known as the president who signed indefinite detention without charge or trial into law," ACLU Executive Director Anthony Romero said in a statement. "Any hope that the Obama administration would roll back the constitutional excesses of George Bush in the war on terror was extinguished today," he added.

Obama sought to conceal the implications of this massive attack on democratic rights by claiming to oppose the applicable provisions of the bill even as he was signing them into law. The weasel-worded statement issued by the White House only underscores the duplicity of the Obama reelection campaign, in which the Democratic president will seek to appeal to youth, minorities and popular antiwar sentiment, while carrying out policies even more militaristic and anti-democratic than those of the Republican Bush.

In the signing statement, Obama claims to have "serious reservations with certain provisions that regulate the detention, interrogation, and prosecution of suspected terrorists." He continues: "I want to clarify that my Administration will not authorize the indefinite military detention without trial of American citizens. Indeed, I believe that doing so would break with our most important traditions and values as a Nation."

The language is carefully crafted. Obama admits that the NDAA represents a repudiation of the democratic traditions associated with the American Revolution and the Civil War. He makes an extremely limited promise--no military detention without trial of a US citizen--which does not bind any successor and which he can break just as easily as he broke his promise to close the Guantanamo Bay concentration camp.

The promise is an easy one to make, since even the Bush administration abandoned its lone attempt to carry out "indefinite military detention without trial of American citizens," in the case of Jose Padilla, turning him over to the federal courts rather than risk a Supreme Court ruling on the issue.

But in signing the law, Obama has asserted his right to carry out such indefinite detention of an American citizen in the future, and thus the right of any future president to do so. This amounts to giving a green light to the abrogation of habeas corpus, with the dimensions of the breach in democratic rights dependent solely on the arbitrary whim of the executive power.

Even more ominously, Obama has already asserted an even more drastic power--the "right" to assassinate any American citizen designated by the president as an "enemy combatant," without trial or charge. The White House authorized the drone missile assassination of Anwar al-Awlaki four months ago, claiming the US-born Islamic preacher was a leader of Al Qaeda in the Arabian Peninsula. A few weeks later, the CIA murdered Awlaki's 16-year-old son, also a US citizen, with the same weapon.

Much of the White House signing statement criticized the NDAA's detention provisions as too restrictive of the executive branch, essentially declaring that Obama wanted the flexibility to decide on military or civilian detention facilities and judicial processes on a case-by-case basis. An aide, speaking to the press in Hawaii, where Obama is vacationing, said that the president would be "making sure that none of these congressional provisions impede the ability of the counter-terrorism and law enforcement and military professionals who are keeping this country safe."

The White House statement specifically criticized "unwarranted restrictions on the executive branch's authority to transfer detainees to a foreign country." The Obama administration has continued the practice of "extraordinary rendition" in which individuals are seized by the US military or intelligence services overseas and transferred to third countries for torture and interrogation.

Obama also objected to any limitation on US military flexibility in transferring prisoners in Afghanistan to the custody of the Afghan government--another instance in which prisoner interrogation and torture have been "outsourced."

There is an intrinsic connection between the main purpose of the NDAA--to authorize and fund the Pentagon's operations for fiscal year 2012--and the sections on military detention of prisoners both inside and outside the United States. The legislation includes new US sanctions against Iran aimed at choking off the country's oil exports, an act of economic warfare, while financing the worldwide operations of American imperialism. It demonstrates that militarism and aggressive war abroad go hand in hand with authoritarianism and dictatorship at home.

The Senate's 86-to-13 vote in favor of the legislation followed its approval in the House of Representatives Wednesday. It also came after the announcement by the White House that President Barack Obama would not exercise his power to veto the measure, which is included in the National Defense Authorization Act (NDAA), a $662 billion package to fund Washington's war machine.

The bill mandates that anyone accused of being a terrorist be "detained without trial until the end of hostilities" in a military prison. While it requires such treatment for non-citizens, it authorizes it for citizens arrested on US soil, if the president decides they merit this extra-constitutional punishment.

This piece of legislation enshrines in law the worst of the crimes carried out under the Bush administration and provides legal sanction for an American military-police state. The sweeping bipartisan support it received in both houses of Congress has provided definitive proof that there exists no constituency for the defense of democratic rights within the American political establishment and its two big business parties.

For that matter, the passage of a law that shreds the founding principles of the American republic has raised barely a murmur of concern from the corporate-controlled mass media. They have no intention of making this a matter of public debate. For millions of American working people, however, the action is of the gravest importance.

The Senate's vote came precisely 220 years to the day after the passage of the Bill of Rights, the first ten amendments to the US Constitution, on December 15, 1791.

These amendments spelled out basic democratic freedoms--including freedom of speech and of the press; freedom from unreasonable search and seizure; the right to due process; and the right of anyone accused of a crime to a speedy and public trial by an impartial jury. They were passed in order to codify the democratic gains of the American Revolution and to protect the people of the new republic from a return to the abuses that had been carried out against them under the colonial rule of the British monarchy. They represented a concretization of the "inherent and inalienable" rights proclaimed by the Declaration of Independence to "life, liberty and the pursuit of happiness".

With virtually no debate, and in the name of an unending "global war on terror", the Senate and the House have passed legislation that allows for the abrogation of all of these rights by a president endowed with police state powers that would amaze even old King George.

Indeed, despite the attempts of liberal and pseudo-left groups to promote illusions that Obama would veto the legislation because of concerns over its assault on democratic rights, the Democratic president's only worry was that it might call into question the sweeping powers that he and his predecessor, George W. Bush, have already seized. Thus, the White House intervened directly in the debate to assure the removal of language included in an earlier draft of the legislation explicitly stating that American citizens arrested on US soil would not be subject to indefinite military detention.

Obama had already made it clear that he upholds the power of the president to throw anyone he chooses into a military prison without charges or trial. Indeed, he has gone substantial steps further than his predecessor in the White House, asserting the right to act as judge, jury and executioner in the state murder of American citizens deemed to be terrorists. He has exercised this supposed right in the extra-judicial execution of Anwar al-Awlaki and others.

Many of the Democrats who voted for the legislation voiced muted reservations about the military detention provisions. Typical was Senate Majority Leader Harry Reid, who allowed that the bill was "not perfect", but represented "a major accomplishment in support of our troops". There is a definite logic to such arguments: the unending US wars of aggression abroad are inseparable from the assault on democratic rights and social conditions at home.

Both arise out of the historic crisis of US capitalism. This crisis finds its sharpest expression in the historically unprecedented social polarization that has become the defining feature of American society. The immense divide between the financial oligarchy that monopolizes wealth together with economic and political power, and the working class, the vast majority of the population, which confronts declining living standards, mass unemployment and steadily deteriorating social conditions, has never been so stark.

Based on this malignant social foundation, democratic rights and democratic forms of rule become increasingly untenable. The ruling elite is compelled to seek a new framework for defending its wealth and power, one that is decidedly at odds with the principles laid down in the US Constitution and Bill of Rights.

The creation of this new framework has been in progress for over a decade. Following a protracted period characterized by the decay of American democracy and the growth of social inequality came the stolen election of 2000, with the right-wing majority of the US Supreme Court installing a president who had lost the popular vote.

Then the events of September 11, 2001, which have yet to be seriously investigated or explained by the American government, provided the pretext for launching two wars of aggression and enacting--with bipartisan support--a plethora of repressive legislation, from the Patriot Act to the Homeland Security Act, together with the adoption of torture, targeted assassination, extraordinary rendition, domestic spying and unlawful detention as official state policy.

These methods have been continued and intensified by Obama, who won his 2008 election victory in no small part due to popular revulsion for the actions of his predecessor. That they have now been openly enshrined in law by the Democratic-controlled Senate demonstrates that they were not merely the excesses of a single president or the product of a specific right-wing ideology.

Rather, they are the outcome of the class contradictions within American society and the historic crisis of US capitalism. With the financial meltdown of 2008 and the continuous deepening of the most severe crisis since the Great Depression of the 1930s, the slide towards the methods of police state dictatorship has only accelerated.

While supporters of the measures passed by the Senate Thursday invoked the supposedly ubiquitous threat of terrorism, their insistence that the United States itself be defined as a "battlefield" has a more far-reaching significance.

The explosive development of the Occupy Wall Street protests and the nationally coordinated campaign of police repression used to disperse them are only a precursor of far greater social struggles to come. Masses of working people are being pushed into class struggle by increasingly intolerable conditions of life.

The ruling oligarchy knows that its policies of making the working class pay for the crisis of the profit system must give rise to revolutionary social opposition and it is preparing accordingly. The working class must do likewise, mobilizing its independent political power in struggle against the threats of police state dictatorship and the capitalist profit system from which they arise.

Child poverty as a whole rose in Oregon by 2.4 percent, to 21.6 percent--identical to the national level--or one out of five in 2010. For African American children, this figure rose 13.6 percentage points over the previous year. This represents a staggering 36 percent increase, bringing the total to 49.3 percent, or from one out of three to one out of two in poverty. Hispanic children experienced an increase of 6.2 percent to 35.7 percent. Native American child poverty level expanded from 35.1 percent to 41.0 percent. Asian children saw greater poverty with an increase from 14 percent to 15.9 percent.

According to the Census Bureau, the poverty level for a family of four is $22,314. This derisory number is based on a 50-year-old "food-basket" model that has failed to keep pace with rising costs and does not address modern necessities, such as Internet access for job searches or student homework, or telephone service. Despite such a low income threshold, 120,000 additional Oregon residents fell into poverty from 2007 to 2010, according to the Oregon Center for Public Policy.

The study cites Oregon as among 10 states with higher childhood poverty rates. Others were Arkansas, Louisiana and Mississippi, states that have long had higher levels of poverty in general and, as well, have right-to-work laws restricting unions. The AFL-CIO has historically pointed to those laws as restricting their ability to organize workers and achieve better pay for them. Also included in the 10 states, however, are Ohio, Wisconsin and Michigan, all industrial states with a long history of unionization.

Census data on school district poverty show two Portland-area districts as rising to the third- and fourth-highest poverty level among large school districts in the state. Reynolds and David Douglas, both at 27 percent in 2009, rose sharply to 32 percent and 31 percent, respectively. The largest school district in the state, Portland Public Schools, now stands at the highest poverty level since 2005, at 18 percent.

Oregon's official unemployment level has stubbornly clung to midway between 9 and 10 percent for most of this year after hitting a high of 11.6 percent in the second quarter of 2009. Unemployment--almost twice that of the low point in 2007--and underemployment have taken their toll, not just with increased poverty, but also with the attendant social miseries of homelessness and hunger.

Currently, approximately 2,000 workers are exhausting their unemployment benefits every month in the state, a figure that is forecast to climb sharply to 13,400 in January and 12,500 in February. This figure is disputed as too small by the National Employment Law Project, which predicts that 32,000 Oregon workers--along with 2 million workers nationally--will run out of benefits by January.

These conditions are what have driven Oregon to the top state in the nation for food stamp use. Data released by the Census Bureau earlier this month show almost 18 percent of the state's residents relied on the Supplemental Nutrition Assistance Program (SNAP) last year. In 2010, 23 percent more residents relied on the program at some point in the year than in 2009.

Oregon also holds the ill-starred distinction of being the state with the highest child food insecurity level in the nation. Based on US Department of Agriculture (USDA) findings, the food bank alliance Feeding America rated Oregon number one in childhood "food insecurity". The USDA defines a household as food-insecure when family members are unable "to consistently access the adequate amount of nutritious food necessary for a healthy life." According to the study, over 29 percent of children in this state are in situations where obtaining food regularly is a challenge. Arizona, Arkansas, Texas and Georgia are the next four states with high childhood food insecurity.

As of August of this year, more than 785,397 Oregonians were receiving food stamps. This represents an increase of more than 350,000 additional recipients since 2007. At the end of September, the Oregon Food Bank announced that it had, for the first time ever, distributed more than a million emergency food boxes in Oregon and southwest Washington in its fiscal year ending June 30.

Homelessness, according to a January 2011 one-night count, increased 29 percent over that of two years previously. Over the course of the night, 22,116 homeless people were identified. Joblessness and high rent were the two leading reasons cited for their loss of housing. Thirty percent of the homeless--6,686--were children, and 612 of those reported that they were unaccompanied by an adult.

Washington launched its war of aggression against Iraq on March 20, 2003 using two false pretexts: that Iraqi leader Saddam Hussein was linked to the Al Qaeda terrorists who carried out the September 11, 2001 attacks that killed nearly 3,000 people in the United States, and that Iraq possessed stockpiles of "weapons of mass destruction" that would be supplied to Al Qaeda for further attacks.

These claims were deliberately manufactured lies, employed by the Bush administration, with the complicity of congressional Democrats, to justify the military conquest and occupation of one of the great strategic prizes in the planet--a country with the world's third-largest oil reserves, located at the head of the Persian Gulf and providing a launching pad for future US military action throughout the region.

More than eight years later, after 4,483 deaths of US soldiers and the slaughter of an estimated one million Iraqis, the most ambitious goals of US war planners and foreign policy strategists have not been realized. The hostility of the Iraqi population to the US occupation stymied efforts to exploit the country's huge oil resources and ultimately made it impossible to maintain a colonial-style puppet regime.

Despite the collaboration of the bourgeois politicians, both Shiite and Sunni, whom the US invasion brought to power, the Obama administration has been unable to revise the Status of Forces Agreement negotiated by the Bush administration in 2008. The last US soldiers, outside of a token force of Marines guarding the US Embassy, will depart Iraq before Christmas and all US military bases will be abandoned.

This made the appearance by Vice President Joseph Biden, representing the US government at the ceremonies, something less than an exercise in triumphalism, despite his claim, in an address to US soldiers and military contractors at Camp Victory, that their sacrifices had enabled the United States to "win the war."

The discussions conducted between Biden and Iraqi officials focused in large measure on ways and means of maintaining a prominent role for the US military in Iraq, under the guise of "training" Iraqi forces. Whether this takes the form of US military "trainers" rotating in and out of the country or Iraqi forces receiving training from US forces stationed in neighboring countries, where the American military presence is to be increased, appears not to have been resolved.

Biden himself personifies the right-wing, pro-war stance taken by the congressional Democrats. He voted for the war resolution in October 2002 and, in his capacity as the leading Democrat on the Senate Foreign Relations Committee, backed the war and offered his own strategic advice--including a notorious proposal for the de facto partition of Iraq along ethnic and sectarian lines, which foreshadowed the policy actually employed by the US military in fomenting civil war.

The congressional Democrats shifted to a supposed "anti-war" stance only in order to co-opt and derail the mass popular opposition to the war, which propelled them to a congressional majority in 2006 and gave Obama victory in the 2008 presidential campaign. Once in office, however, Obama continued the Bush policy in Iraq, kept Bush's defense secretary Robert Gates at the Pentagon, and escalated Bush's other war in Afghanistan.

In his remarks at Camp Victory, Biden declared, "The tide of war is receding." Nothing could be further from the truth. American militarism has suffered a bloody nose in Iraq and is stalemated as well in Afghanistan. But there has been no change in the basic strategy of American imperialism, which is to make use of its residual superiority in military force to offset its long-term economic decline.

The formal US pullout from Iraq is part of a redeployment of US military assets in the wider region, as well as a shift in the focus of US foreign policy from southwest Asia to the Far East and the rising challenge of China. The US Central Command, which controls US operations in the Middle East and Central Asia, has more forces at its disposal today than during the heaviest days of fighting in Iraq under the Bush administration.

This includes not only the 100,000 US troops in Afghanistan--triple the number deployed under Bush--but tens of thousands of additional troops in Turkey, Kuwait, Qatar, Bahrain and Oman, as well as US bases in Djibouti, across the Red Sea from Yemen, and in the naval flotillas on duty in the Persian Gulf, the Arabian Sea and the Indian Ocean. The sphere of operations also includes a wide swath of north and east Africa, where the US-NATO forces overthrew and murdered Libyan leader Muammar Gaddafi and US Special Forces have been deployed in Uganda and Somalia.

The most immediate target of US imperialist aggression is Iran, and all the discussions conducted by Biden during his eight-day trip through the Middle East focused on stepping up US efforts to isolate Iran economically and politically. After leaving Iraq, Biden travelled to Turkey for talks with Prime Minister Recep Tayyip Erdogan on the crisis in neighboring Syria, on a common policy in post-occupation Iraq, and on Iran, where Turkey has resisted US pressure for greater economic sanctions.

The menacing US posture towards Iran was underscored Sunday by the shooting down of an unmanned US spy plane, a remotely operated RQ-170 drone, over eastern Iran, near the Iran-Afghanistan border. Iranian officials said the spy plane, equipped with stealth technology, was now being examined by the Iranian military. US officials confirmed the loss of the drone, although they claimed it had crashed after a malfunction rather than being shot down.

In Washington, the US Senate passed by a vote of 100-0 an amendment to a defense authorization bill that greatly escalates the financial sanctions against Iran, potentially barring the central banks of China, Russia and most European countries from doing business in the United States because they do business with Iran's central bank.

The unanimous vote came despite entreaties by the Obama administration that such a move could disrupt its efforts to tighten economic sanctions against Iran--and also exacerbate the financial crisis in Europe.

The bipartisan unity in the Senate demonstrates the real position of the Democratic Party. Like the Republicans, the Democratic Party is unbreakably committed to the defense of the American financial aristocracy. Despite the occasional anti-war noises of its "left" wing and demagogues like Congressman Dennis Kucinich, the Democratic Party is one of the two parties of American imperialism.

The struggle against war and militarism requires first and foremost a break with the Democratic Party and the mobilization of American workers and youth in an independent political movement against the capitalist system, based on a socialist and internationalist program.

In reality, no one sought to investigate the real cause of the decline of these countries: the rule of corrupt bureaucracies that misappropriated state-owned property to secure their own privileges while politically oppressing the working class and seeking integration into the capitalist world market.

If one analyses the current crisis of European capitalist states using the same criteria as those applied to Stalinist Eastern Europe, one must conclude that capitalism has failed, and in a much more spectacular manner. What is currently taking place in Greece--and in a similar manner in Portugal, Ireland and Spain--is a historic collapse. Even Marx could not have contemplated such a shocking indictment of the workings of the "free market." The country was first ruined economically with austerity measures and is now being thrown to the international financial sharks even as it is driven toward a total meltdown.

The austerity programs imposed by the social democratic PASOK government of George Papandreou at the behest of the European Union (EU) and the International Monetary Fund (IMF) have decimated the living standards of broad layers of the population and destroyed many jobs. As could be expected, such measures have plunged the Greek economy into a deep recession and exacerbated the budget deficit and debt crisis--a vicious circle with no escape.

The EU and the IMF respond to the Greek crisis by prescribing more of the same medicine, forcing the Greek government to conduct a fire sale of state assets. Public buildings and public enterprises such as rail, postal, telecommunications, water, ports, airports, roads and lotteries are to be placed under the control of a holding company and sold off to the highest bidder. The consequences of such privatization measures are well known: job cuts, wage cuts, higher prices, poorer services and soaring profits for the new owners, while the state loses an important part of its revenue.

The Papandreou government has also announced a further round of spending cuts. Every tenth vacancy in the public service is to be filled, instead of the previous rule of one in five. Entire authorities are to be closed and public investment slashed. The result will be a further intensification of the recession.

Those arguing most insistently for more austerity are precisely the governments that have benefited most from the introduction of the euro--first and foremost, the German government. Finance Minister Wolfgang Schäuble has threatened to stop any assistance to Greece if the promised spending cuts are not strictly imposed. The result of such action would be immediate bankruptcy for the country.

Schäuble is supported by the German tabloid press and a gaggle of ministers. They all stir up hatred against the "lousy Greeks" who "lived beyond their means," and demand that "their" debts not be paid with "our" money.

The issue, however, is not "you" and "us," not "Germans" against "Greeks." The Greek crisis is not a national, but rather a class question. The same financial interests seeking to squeeze the last cent out of the Greek population are also behind the attacks on wages and social benefits in Germany, France, England and throughout Europe. The Greek austerity measures are part of a massive counterrevolutionary offensive aimed at slashing every social program benefiting the working class.

Money is anonymous. It is difficult to chart precisely how funds are diverted from the Greek working class into the pockets of the rich and super-rich. But there can be no doubt that this is what is taking place.

According to the recent "Global Wealth Report" compiled by the Boston Consulting Group, the worldwide assets of private investors in cash, shares, securities and funds rose last year by 8 percent to $122 trillion. This is an increase of more than $20 trillion compared to the peak prior to the financial crisis two-and-a-half years ago.

So while millions of workers are suffering from the consequences of the international financial crisis, those responsible are doing better than ever. The number of households worldwide that own more than $1 million dollars increased last year by 1.5 million, to a total of 12.5 million. Although they constitute less than one percent of the world's population, they own 35 percent of global assets.

The greatest concentration of wealth is to be found in the most indebted country in the world, the United States. While the American working class faced an unprecedented attack on its living standards, the invested capital of richer Americans rose 10 percent last year to $38.2 trillion. The European leader in this respect is the United Kingdom ($7.9 trillion), where the government has introduced an austerity program of over £100 billion. Then comes Germany, with $7.4 trillion. This latter sum is 17 times the entire public debt of Greece.

The redistribution of assets is accompanied by an intensification of national antagonisms. The euro threatens to become a victim of the conflict over the Greek debt issue, which in turn calls into question the very existence of the European Union. Europe threatens to fall back into the rival states and power blocs that triggered two world wars in the last century.

The growth of nationalism is a result of conflicting interests between European powers striving to ensure that their neighbors bear the brunt of the crisis. At the same time, nationalism is being deliberately fueled by the ruling class to divide the working class. To the extent that Greeks, Germans, immigrants and/or Muslims are made a scapegoat for the crisis, the ruling elite is able to cover its tracks and block solidarity across borders.

The working class must take up the gauntlet and confront these threats. There is no lack of outrage, anger and opposition among workers throughout Europe. All these traits were evident in the numerous strikes and protests in Greece and the recent demonstrations in Spain. What is lacking is political perspective and leadership.

The former workers' organizations--the reformist parties and trade unions--have long since gone over to the other side. The social democratic parties accept the dictates of finance capital and are instrumental in imposing austerity measures upon the working class--as is the case in Greece, Spain and Portugal. The unions regard the austerity programs as inevitable, sabotage any resistance and firmly reject any international solidarity. At the most they organize impotent national protests aimed at letting off steam and preventing opposition from getting out of control.

Added to this are the many ex-left groups, which tie workers to the old, bankrupt parties and trade unions, claiming that all one can do is pressure them to adopt another course. This is a delusion and a lie.

There is no solution to the current crisis within the framework of the nation-state and capitalism. Either the "rescue" of the euro through drastic austerity programs or its collapse following a number of state bankruptcies would have disastrous consequences for the working class. As long as the banks and large corporations remain in the hands of private owners and serve their interests, governments will continue their assault on the jobs, wages and social and democratic rights of the workers.

Resistance requires a coordinated, cross-border approach, based on a socialist program. The working class is not responsible for the capitalist crisis and must categorically reject all attempts to make it pay the tab. The various right and "left" bourgeois governments prevailing in Europe must be replaced by workers' governments that put the interests of society above the profit interests of big business. The European Union, a tool of the corporations and banks, must be replaced by the United Socialist States of Europe.

This is the program fought for by the International Committee of the Fourth International and its European sections.

The visit follows the announcement Monday in Rome that the Italian government has recognized the council in Benghazi as the sole legitimate government of Libya. Italy is only the third nation to take this step, following recognition of the TNC by France and Qatar, the oil-rich Persian Gulf emirate.

In announcing the recognition, Italian Foreign Minister Franco Frattini also stated that Paolo Scaroni, the chief executive of the Italian oil and gas company, ENI, had visited Benghazi two days earlier for talks with the TNC. The foreign ministry subsequently corrected his remarks, saying that he had held a telephone conference with the leadership of the Benghazi council.

The oil executive, Frattini said, "had contacts with the Libyan National Transitional Council to restart cooperation in the energy sector and get going again the collaboration with Italy in the oil sector."

Last month, on the eve of the US, France and Britain launching their missile and bombing attacks on Libya, Scaroni had derided economic sanctions against the Gaddafi regime as "shooting ourselves in the foot" and stressed ENI's desire to resume operations in the North African country "whatever political system there is in the future." The company, which has been active in Libya since 1955, is the top foreign oil operator and the country's largest foreign investor, having reached a $28 billion deal with the Libyan government in 2007 to extend its contracts for oil production until 2042.

ENI is extremely close to the Italian government. Its turn to the "rebels" may merely be a matter of the company hedging its bets. On the other hand, it could reflect insider knowledge as to US-NATO plans either to escalate the war or to effectively partition Libya, with eastern oil fields and facilities under the nominal control of the TNC.

The Italian recognition and ENI's forging of ties to the Benghazi council came just a day before a Liberian-registered oil tanker, owned by a Greek shipping conglomerate, docked at the Libyan crude export terminal of Marsa el-Hariga, near Tobruk.

The tanker, the Equator, is capable of carrying 1 million barrels of crude, which would sell for over $100 million on the world market. Its shipment will represent the first export of oil from Libya since the country was plunged into civil war six weeks ago. The Greek shipping company carrying the oil has refused to say who is paying for it or where it is going.

There are reportedly three million barrels of crude stored at the terminal, which belongs to the Arab Gulf Oil Corporation (AGOCO), a subsidiary of Libya's National Oil Corporation. The Transitional National Council has claimed that AGOCO's fields in the east are producing up to 120,000 barrels a day, roughly one third of the output before the civil war broke out. Libya as a whole was producing 1.6 million barrels a day and exporting 1.3 million before the fighting.

Energy analysts are highly skeptical of these claims. As the business information company IHS noted, "the exodus of foreign skilled workers as well as most Libyan workers, who abandoned the country's often remote desert oilfields in order not to either be caught out by fighting or left stranded as water and food supply chains broke down, this meant that production in AGOCO fields, as at all other fields in Libya, has fallen to almost zero."

Nonetheless, the Benghazi council has announced its intention to sell what oil it has to fund its operations and to buy arms, with Qatar acting as a middleman in getting the oil onto the world market.

Asked about Qatar's role, in an interview with the Wall Street Journal, Libya's energy minister, Shukri Ghanem commented bitterly, "Rather than calling for unity and reconciliation, everyone would like to participate in the loot."

Ghanem insisted that the priority should be a cease-fire and warned that continuation of the fighting could lead to the "strangling" of Libya's oil industry.

Last week, the European Union's foreign affairs representative, Catherine Ashton, stressed that "there is an oil embargo against the whole of Libya" which applied equally to areas held by the Gaddafi regime and those under control of the armed opposition.

Washington took the opposite position, insisting that so long as the money for the oil exports was not funneled into the state-owned National Oil Corporation, the exports from eastern Libya would be allowed.

The United Nations special envoy for Libya, Abdul Ilah al-Khatib, delivered a report to the Security Council April 4 in which he said that the council in Benghazi had "raised concerns about the lack of funds, as well as issues relating to the marketing and sale of oil and gas in Libya." He also said that the council wanted to begin securing "loans guaranteed against oil and gas sales and [Libya's] frozen overseas assets."

By Tuesday, the EU reversed its position on the Libyan sanctions, with a foreign affairs spokesman insisting, "The oil and gas embargo is specifically targeted against the Gaddafi regime" and so long as revenues did not go to the government in Tripoli, "we have no issues with oil and gas commercial practices."

The abrupt turnaround, combined with the discussions between the Italian oil giant ENI and the "rebels," suggests that a scramble by the major Western powers and energy conglomerates for control of Libyan oil is well under way.

It is in this context that the visit to Benghazi by the US delegations--and by French and British ambassadors before it--is taking place. The US envoy, Chris Stevens, the former number-two official at the now-closed embassy in Tripoli, is to discuss, among other matters, "the financial needs of the council" and "how the international community can assist," an administration official told the Associated Press. No doubt, such "assistance" will be tied to lucrative contracts for the American branch of Big Oil.

Washington, Paris and London had expected to secure unfettered control over Libyan oil by means of regime change, forcing the downfall of the Gaddafi regime. However, this task has proven more difficult and protracted than anticipated.

The "rebels" have been incapable of mobilizing forces able to defeat the military units loyal to Gaddafi. On Wednesday, they were once again driven out of Brega, site of an oil refinery and Mediterranean port, despite NATO air strikes early in the day that demolished vehicles used by the Gaddafi forces. The panicked retreat by the opposition forces took them at least 15 miles east toward Ajdabiya.

The new setbacks led to a protest by one of the commanders of the armed opposition that NATO was not supplying sufficient air cover. Abdel Fattah Younes, who was previously Gaddafi's interior minister, condemned NATO for acting too slowly in delivering bombardments and warned, "Either NATO does its work properly or I will ask the national council to raise the matter with the Security Council."

NATO rejected the complaint, insisting that it has maintained the same pace of operations since assuming nominal command of the Libyan intervention. "The pace of operations since NATO took over has not abated," said a spokesman for the US-led alliance. "We have conducted 851 sorties in the past six days ... we are fulfilling our mandate."

Meanwhile, Brigadier General Mark van Uhm, a senior NATO staff officer, said in Brussels, "The assessment is that we have taken out 30 percent of the military capacity of Gaddafi."

Washington and NATO have claimed to be operating under the mandate of a UN Security Council resolution authorizing "all necessary measures" to protect civilians. But the obvious implication of van Uhm's statement is that continuous bombardments have been carried out with the aim of obliterating Libya's military and defending the so-called rebels.

This air war, however, has proven insufficient, given the US and NATO-backed opposition's disorganization and lack of forces.

A report from Libya by Al Jazeera reveals that covert measures are being taken in an attempt to change this situation. Citing the testimony of a member of the armed opposition, the network reported that oppositionists are being trained at a secret facility in eastern Libya by both US and Egyptian special forces units.

The "rebel" also said that weapons are being funneled in across the Egyptian border, in violation of a UN arms embargo, including "state-of-the-art" heat-seeking missiles.

The report further exposes the lies told by the Obama administration. The US president has publicly assured the American people that there will be no "boots on the ground" in Libya, and that arming the "rebels" is something that has neither been ruled in or out. It is now evident that both have already taken place as Washington escalates the predatory war.

A poll released Tuesday pointed to rising popular opposition within the United States to the war launched by the Obama administration against Libya. Only 25 percent believed that the intervention is worth the nearly $600 million spent thus far on the US military action, according to the poll, conducted for The Hill. The same poll indicated only 19 percent support for arming the so-called rebels. A separate Quinnipiac University survey found that 47 percent of registered voters are against the war compared to 41 per cent who support it.

The recession, which officially lasted from December 2007 to June 2009, saw the share of total household wealth going to the bottom 80 percent of the population fall by 2.2 percentage points to 12.8 percent. The wealthiest 1 percent increased its net worth to 225 times that of the typical household, the highest ratio on record.

About one quarter of households have zero or negative wealth. With homeowners' equity down 35 percent since 2007, the banking industry now owns the majority of the nation's housing stock.

Data gathered by economist Emanuel Saez of the University of California, Berkeley reveals that in 2008 the top one-hundredth of one percent of households--1 in 10,000--took home an average of $27 million per household, while the average for the bottom 90 percent was $31,244. The average worker earned 1/185th of the amount taken in by a typical CEO.

According to the Congressional Budget Office, the top 1 percent of income tax filers, those who made nearly $2 million in 2007, saw their share of the national after-tax income increase by about 130 percent as compared to 1979. The bottom four quintiles saw their share decline by between 10 and 30 percent.

Also in 2007--before the catastrophic decline in home values, the major source of wealth for most families--1 percent of households controlled 34.6 percent of the national wealth, while the bottom 90 percent shared 26.9 percent.

As Karl Marx noted in Capital, "Accumulation of wealth at one pole is... at the same time accumulation of misery, agony of toil, slavery, ignorance, brutality, mental degradation at the opposite pole." So it is in America in the second decade of the 21st Century.

A recent report from the Food Research and Action Center finds that a record 44.2 million people in the US, one in seven, relied on food stamp programs in January, up by more than 4.7 million in one year. One in five Americans struggled to find enough to eat in 2010, according to the group.

One in four US children live below the official poverty level, 16 million in all, and 1.5 million children experience homelessness each year. Untold millions of households subsist without heat, light or running water.

This immense accumulation of wealth by a tiny share of the population alongside the impoverishment of growing sections of the working class permeates every aspect of life--economics, politics and culture. In the political arena, it expresses itself in the drive by the entire political establishment--both the Democratic and Republican parties and every level of government--to accelerate the concentration of wealth in the hands of the financial aristocracy.

President Obama has ruled out any government jobs programs or serious relief for the unemployed, six million of whom have been without work for six months or longer. In December, he signed into law an extension of Bush-era income tax cuts for the wealthy and the lowering of estate taxes for multi-millionaires.

At the same time, he has vowed to freeze discretionary social spending and at the end of November signed an order freezing the pay of all federal workers for two years. This was followed by the announcement of a systematic drive to further weaken regulations on corporations--the very process that set the stage for the financial collapse of 2008 and the BP Gulf oil disaster of 2010.

Military and domestic security spending alone is spared the budget axe. Fiscal austerity is declared to be "job creation," along with wage cutting to boost corporate profits and exports.

Obama's oft-proclaimed devotion to "the private sector" and the "free market," under conditions of the crisis and decay of American capitalism, translates into a historic rollback in workers' wages and living standards toward those that prevailed prior to the mass struggles of the 1930s that established the CIO industrial unions and toward those that prevail today in cheap labor havens in Asia, Eastern Europe and Latin America.

The unions, based on their defense of the profit system, have been transformed into adjuncts of the corporations and the government for suppressing the working class and imposing ever more brutal cuts in wages, benefits and jobs.

All of this has merely laid the groundwork for a new stage in the ruling class offensive against working people. By refusing to provide financial assistance to deficit-ridden states and cities, the Obama administration is tacitly supporting unprecedented cuts by state governments in education, Medicaid and vital services and an attack on the basic democratic rights of the working class, including collective bargaining and the right to strike.

Mirroring Obama's policy of military aggression overseas, the single-minded focus of his domestic policy has been to protect and expand the fortunes of the rich. In the midst of the worst social crisis since the Great Depression, corporate profits shattered records in 2010, climbing to $1.68 trillion, up 36.8 percent in a year. The stock market added $1 trillion in value in 2010, and CEO pay and bonuses have climbed back to the obscene heights of the pre-crash years, paced by hedge fund manager John Paulson's $5 billion compensation last year.

Analyzing data on the staggering level of social inequality in America, Nobel Prize-winning economist Joseph Stiglitz recently warned of the dangers to the ruling class of a social explosion. In a Vanity Fair article entitled "Of the 1%, by the 1%, for the 1%," he wrote: "In recent weeks we have watched people taking to the streets by the millions to protest political, economic and social conditions in the oppressive societies they inhabit. As we gaze out at the popular fervor in the streets, one question to ask ourselves is this: When will it come to America?"

The recent events in Wisconsin herald a new period of mass working class struggle in the US. But the sabotage of the movement in Wisconsin by the trade unions and their "left" allies shows just as sharply the need to break with the Democratic Party and advance a revolutionary program that not only rejects the ruling class demand that the working class pay for the failure of the capitalist system, but lays out the social rights of workers--to jobs at good pay, health care, education and housing--and the political fight for a workers' government to secure those rights.

It is to discuss such a perspective that the Socialist Equality Party is holding a series of conferences this month on "The Fight for Socialism Today," beginning this weekend in Ann Arbor, Michigan. The World Socialist Web Site encourages its readers and all those looking for the means to fight back against the ruling class offensive to make plans to attend.

Tom Eley

Click here to register or obtain information about the conferences.

Economists had predicted that the earlier GDP figure would be upwardly revised to 3.3 percent. All of these growth rates are well below what is needed to significantly lower the current official jobless rate of 9 percent. The same applies to the 2011 rate of 3.4 to 3.9 percent forecast last week by the Federal Reserve Board.

That forecast appears unduly optimistic in light of Friday's dismal fourth quarter report and the likely recessionary impact of skyrocketing oil prices.

The Commerce Department's Bureau of Economic Analysis attributed the slower growth to sharply lower state and local government spending than had been previously estimated, reflecting the effect of sweeping cuts in social spending as state and local governments move to impose the burden of budget deficits on the working class. Commerce had originally reported a drop of 0.9 percent, but revised this to a fall of 2.4 percent.

The other major factor in the downward revision was a smaller rise in consumer spending than previously reported. That component was downwardly revised from a growth rate of 4.4 percent to 4.1 percent.

Major European economies reported even more dismal growth rates for the fourth quarter than the US. Britain on Friday revised its previously reported drop of 0.5 percent to minus 0.6 percent. Germany expanded by only 0.4 percent and France by 0.3 percent.

These figures are all the more ominous under conditions of an oil price panic resulting from the disruption in Libyan supplies and the ongoing wave of social upheavals in North Africa and the Middle East. In the last week crude prices have risen more than 10 percent and breached $100 a barrel. Since February 15, crude oil prices have soared 18 percent.

Experts are predicting that gasoline prices in the US will jump by another 25 to 50 cents over the next several weeks and some are warning that prices at the pump could hit $5 a barrel by this summer's peak driving season. The impact of such a price shock on tens of millions struggling to pay their bills under conditions of mass unemployment and a relentless attack on wages and benefits will be devastating.

The surge in oil prices will, moreover, accelerate the already galloping rise in the price of food and other basic commodities. The inevitable effect will be a further contraction in consumer spending, more bankruptcies and foreclosures, and greater social protest.

The Obama administration has absolutely no policies to provide relief for growing social distress or create jobs for the millions who are clamoring for work. On the contrary, it is committed to intensifying the attacks on social programs, wages and benefits at the federal as well as the state and local levels.

The budget Obama released this month calls for $700 billion in social spending reductions over the next decade and he is currently negotiating with the Republicans to make even deeper cuts. This is meant to be a prelude to an attack on basic entitlement programs such as Medicare and Social Security.

At the same time, the US policy of effectively printing hundreds of billions of dollars as a trade and currency war measure against its international rivals (and a means of supplying US corporations and speculators with virtually free credit) adds further fuel to the commodity price bubble.

On the implications of the oil price surge, David Kotok, chairman and chief investment officer at Cumberland Advisers, wrote in a note to clients Thursday that "the risk of recession in the US and European economies is rising daily."

World food prices have already surpassed their 2008 peak, and the US Department of Agriculture on Thursday forecast record farm-gate prices for corn, wheat and soybeans in the crop year that begins with the 2011 harvests. The USDA added that food inflation would surge in the second half of this year as wholesale prices filtered through the supply chain and impacted retail prices.

Several other reports released this week pointed to the lack of any genuine recovery in the basic US economy. The Commerce Department reported Thursday that sales of new homes declined 12.6 percent in January from December. The sharp drop brought the seasonally adjusted rate to 284,000, not far from the record low of 274,000 set last August.

Earlier in the week, the S&P Case/Shiller home price index was released, showing a 1.0 percent decline in home prices in December from the previous month. Case/Shiller also reported that home prices nationally had fallen back nearly to their post-crash low point of early 2009.

In a conference call, Robert Shiller, the Yale University economist who co-founded the index, said there was a "substantial risk" of home prices falling another 10 to 25 percent.

Also on Thursday, the Commerce Department reported that durable goods orders in January other than for aircraft fell 3.6 percent. Because of a sharp increase in the volatile aircraft sector, the overall figure rose 2.7 percent. But a key measure used by economists to gauge business spending on new equipment--non-defense capital goods excluding aircraft--fell 6.9 percent.

Long lines of workers marched through Cochabamba in a steady downpour, while thousands of factory workers, teachers, health care workers, other public employees and students took over the center of the capital of La Paz, punctuating their chanting of demands with explosions of dynamite.

Reelected in December 2009 by a landslide 62 percent majority, Morales has seen his popularity rating slide to barely one third. The country has been rocked by a series of escalating protests that began at the end of last year, with the government's shock announcement of an end to fuel price subsidies.

The action sent gasoline prices soaring by 72 percent and diesel by 82 percent. The decision was rescinded in the face of violent protests, and now Morales is saying that he intends to introduce an end to the subsidies more gradually.

Despite this tactical retreat, the damage done by the brief price hikes proved to be sustained, unleashing an inflationary spiral that has seen the prices for virtually all basic foodstuffs climb between 10 and 50 percent.

Protests have escalated steadily as a result. Last month saw 5,000 people march through the southwestern town of Llallagua in two separate protests organized by miners and by the local farmers unions. Poorer peasants who had come in from the countryside for the demonstration looted stores, while police did not intervene.

Then on February 10, Morales was forced to flee the mining city of Oruro where he had gone to participate in a ceremony commemorating a colonial-era uprising. Miners, workers and the unemployed stormed the ceremony, tossing dynamite to protest deteriorating economic conditions. A presidential spokesman announced that Morales and other officials had left the city and returned to La Paz. "The government has decided not to respond to such shameful and painful provocations," he said.

Bolivia's unions issued a statement last week insisting that as a result of the inflationary spiral, the canasta familiar, or basic monthly expenses, for a Bolivian family, has risen to 8,300 bolivianos ($1,100)--approximately 11 times more than the present $96 monthly minimum wage in South America's poorest country. They demanded that wages be increased accordingly.

Morales' response only inflamed sentiments against the government. He called the demands "laughable," insisting that the wages would be increased by only slightly more than 7 percent, the official inflation rate. Bolivians maintain that this rate does not begin to reflect the real double-digit increases in prices of basic necessities.

"It makes me laugh when" they demand "a wage increase of 40, 50 or even 70 percent," said Morales, who added that when he was president of Bolivia's coca growers union, "our demands were always reasonable."

Morales continued, "It is important to think first of the future of the fatherland before regional or sectoral interests," effectively equating the demands of masses of Bolivian workers and poor for food with the reactionary agitation of ruling elites, like those in Santa Cruz, seeking secession from the country.

Pedro Montes, the president of the COB (the Bolivian Workers Federation, the country's main trade union), publicly acknowledged that the union leadership had been forced to call the general strike out of fear that the mass spontaneous protests were becoming uncontrollable.

"We can't control the protest of the workers over the rising cost of living they are experiencing," said the COB leader. "That's why they are going into the streets to protest and express their discontent over hunger, misery, unemployment and over having nearly empty stomachs."

In earlier protests, particularly in the volatile town of El Alto, outside of La Paz, populated largely by impoverished workers who have emigrated from the countryside, popular anger was turned against the COB itself because of the union leadership's support for and close integration into the Morales government. Union offices were attacked by workers hurling bricks and stones.

It was in El Alto that the mass uprising of 2003 that toppled US-backed President Gonzalo Sanchez de Lozada was centered. That struggle, in which 63 Bolivian workers were shot to death by troops, began over a corrupt deal to sell off the country's gas resources to the US and Chile. It laid the basis for Morales' rise to the presidency two years later.

Hailed as the first indigenous president of the country, Morales came to office as the candidate of the Movement towards Socialism, or MAS. Since his election, he has regularly proclaimed his opposition to capitalism and his commitment to a "communitarian socialism".

His vice-president, Álvaro Garcia Linare, a leftist professor and former guerrilla who comes from Bolivia's upper middle class, has been somewhat more circumspect, declaring the government's aim to be the creation of "Andean-Amazonian capitalism," meaning state promotion of capitalist development.

In reality, the country's social structure has remained little changed, while its economy continues to be dominated by multinational corporations centered on the extraction of Bolivia's mineral wealth under some of the most favorable conditions for foreign capital existing on the continent.

In the first years of Morales' presidency, an unprecedented rise in raw material prices made possible some minimum social assistance programs, but the impact of the world capitalist crisis and resulting downturn in foreign investment and production have created the conditions for new social explosion.

Morales recently reappointed all but three of his cabinet ministers--rejecting demands for the sacking of those most responsible for the drastic fuel price increases last December--and has attempted to portray his government as essentially stable.

There are growing signs of divisions, however, as popular unrest mounts. The Bolivian president's former spokesman and close political associate, Alex Contreras, denounced Morales for his economic policies in statements to the Bolivian media.

"The president, with these measures, appears to be ruling in the interests of the agro-industrial sector, the multinational enterprises and the black-marketers, who speculate in and profit basic foodstuffs like sugar, rice, flour and others," Contreras said.

Gonzalo Flores, one of Bolivia's representatives to the UN's Food and Agriculture Organization, blamed the government's policies for the food crisis, which he said had resulted in "a large part of the population not having access to sufficient food to maintain a healthy life." He said that up to 25 percent of Bolivia's children suffered from stunted growth because of inadequate nutrition.

Meanwhile, Morales' erstwhile supporters in the COB and in the peasants' union CSUTCB have called attention to the fact that the ruling party, the Movement for Socialism, has become increasingly dominated by political operatives drawn from the parties of the Bolivian right, including members of such fascistic forces as the Santa Cruz Youth Union.

Wisconsin Governor Scott Walker and the Republican-controlled state legislature are moving to slash wages, gut health benefits and undermine pensions, while at the same time imposing a legal straitjacket on public employees, stripping them of collective bargaining rights over anything but wages, and requiring any wage rise above the rate of inflation to be approved by a statewide referendum vote.

No such controls are proposed, of course, for the gargantuan salaries of corporate CEOs or the windfall profits of the banks and big business. Nor will there be any limits imposed on the financial institutions that handle the issuing of state bonds--headed by Citigroup, the lead underwriter. The "sacrifices" decreed by the governor apply only to working people: Walker has actually increased the state deficit to provide tax cuts for Wisconsin-based corporations.

Tens of thousands of workers throughout Wisconsin have already gone into action against this assault on fundamental social and democratic rights. They have marched through the city of Madison on a daily basis, packed into the halls of the State Capitol, and staged protests and walkouts throughout the state.

Wisconsin state employees, school teachers, firefighters and other local government workers have been joined by private sector workers, university and high school students, and thousands of other working people who correctly recognize that the destruction of living standards and basic rights for public employees will have devastating consequences for the entire working class.

This class mobilization must be intensified and extended on the broadest possible basis, through the organization of a general strike of all workers in Wisconsin to put a stop to the attack on public employees. To wage such a struggle requires the building of new organizations, rank and file action committees of workers and students to unite public sector and private sector workers as well as youth in the workplaces, schools and neighborhoods.

The working class cannot allow this struggle to be channeled behind the perspective advanced by the state AFL-CIO and the teachers union WEAC, of putting pressure on Democratic and Republican state legislators to delay or block the legislation. Workers should oppose and denounce the position taken by the union leaders, that cuts in pay and benefits are acceptable provided that the unions themselves are involved in negotiating them.

There is a vast social gulf between the instinctive and heartfelt opposition to the cuts on the part of rank-and-file workers, and the posturing and demagogy by the union officials, who support the cuts so long as their own role and income from dues checkoff, and the salaries and the perks of the privileged bureaucracy, are maintained.

Thus Marty Beil, head of the Wisconsin State Employees Union, said yesterday: "We are prepared to implement the financial concessions proposed to help bring our state's budget into balance, but ... we will not--I repeat we will not--be denied our rights to collectively bargain." This only begs the question, however: what is there to bargain over if one starts by agreeing to all the concessions?

AFL-CIO President Richard Trumka declared at Friday's rally in Madison that the unions recognize and accept the economic reasons for cuts in state government. Who gave them that right? Trumka does not speak for workers struggling to get by on their existing salaries, under conditions of accelerating inflation, or facing the gutting of healthcare and pension plans. He speaks for the fifth column of highly paid officials who have transformed the unions into the enforcers of corporate and government demands for austerity and wage cutting.

The main goal of Trumka & Co. in Wisconsin is to prevent an uncontrollable explosion in which the working class actually demonstrates its enormous social power and exposes the weakness and isolation of the ultra-right politicians like Governor Walker. There is no question that the vast majority of the population of Wisconsin sympathizes with the state workers and will support them in a serious and sustained struggle. The AFL-CIO regards such an offensive by the working class as a disaster to be prevented at all costs.

The AFL-CIO aims to divert workers away from an all-out struggle against the Walker administration by boosting illusions in the Democratic Party, hailing the protest stunt by Democratic state legislators who have temporarily blocked the legislation by leaving the state and preventing a quorum. It will seek to shut down the growing strike movement in favor of appeals to the courts, the Obama administration and, ultimately, a campaign for the Democrats in the 2012 elections.

The truth is, however, that the Democratic Party is conducting identical attacks on workers at the local, state and federal level. The brutal attacks on Wisconsin workers are not unique to their state, but are taking place in every region of the country. Democratic governors in New York, North Carolina, Illinois and California are demanding similar cuts in wages and pensions, slashing jobs and attacking democratic rights such as the right to strike.

As for Obama, he has already demonstrated his class solidarity with Governor Walker by imposing a two-year freeze on federal workers and targeting public school teachers for attacks on seniority and job security. The Obama administration is now proposing a budget that demands working people pay, through cuts in domestic social spending, for the deficits produced by the bailout of Wall Street, tax cuts for the wealthy, and imperialist wars in Iraq and Afghanistan.

The only difference between the two parties is that the Democrats make use of the unions as an instrument for enforcing the cuts, while the Republicans propose to dispense with the unions altogether. This difference is of utmost importance to the union officials--their incomes and privileges are at stake--but the end result for the workers is the same.

Workers in Wisconsin and those who support them nationwide must recognize that the first requirement of a real struggle against the destruction of jobs, wages, benefits and democratic rights is a political break with both the parties of big business, the Democrats as well as the Republicans. The working class must mobilize all the oppressed--workers, youth, the unemployed, the elderly--in the building of a new mass political party based on a socialist program.

Many of the workers demonstrating in Wisconsin have carried signs comparing Walker to ousted Egyptian dictator Hosni Mubarak, and expressing the desire to carry out a rebellion that is as powerful and liberating as that conducted by Egyptian workers over the last month. There is a profound objective truth expressed in this instinctive identification with the struggles of the international working class.

Like the workers in Egypt, the workers in Wisconsin are being propelled into struggle by the crisis and breakdown of the world capitalist system. Like them, they are as yet without the organizations, leadership and political program that are necessary for victory. Only the Socialist Equality Party and the World Socialist Web Site are working on an international basis to build the revolutionary alternative that is required.

The Hong Kong-based South China Morning Post declared that the similarity of the current Egyptian unrest and the 1989 events in China was "too obvious to be ignored". Explaining the sentiment in Chinese ruling circles, political scientist Liu Junning told the newspaper: "It is unbelievable to imagine that autocracies controlled by political strongmen can easily become unstable and be overthrown almost overnight."

At first sight, China and Egypt appear to be poles apart--geographically, culturally and economically. But as Financial Times columnist Gideon Rachman noted, "there are some elements in the Egyptian uprising that might ring a few bells in Beijing: popular fury at corruption, the destabilising effect of rising food prices, youth unemployment, the ability of the Internet to mobilise popular protest, the gap between a ruling elite and the people they are trying to govern."

Rachman sought to reassure his readers that "it is highly unlikely that the political contagion that has spread from Tunisia to Egypt will leap across continents to Asia." But what Rachman identifies is precisely the deep social divide, class antagonisms and popular alienation from the political establishment that is characteristic of the situation in country after country around the world--including in China. The prospect of an Egyptian-style uprising in China, with its highly concentrated working class of 400 million, strikes terror in the hearts not only of the Chinese ruling elites but of the world's financial aristocracy, which depends so heavily on the Chinese cheap labour.

The Wall Street Journal was well aware that China was not "immune" to the contagion of "Nile fever". It explained what it meant by citing a recent animation video made in China showing the masses, depicted as rabbits, rising up in anger over corruption and killing Communist Party bureaucrats. If inflation continued to worsen, the mouthpiece of Wall Street wrote, "history suggests China's stability could prove to be a mirage."

In many ways, the class tensions in China are just as acute as in Egypt. China boasts the world's second largest group of billionaires--up by 69 to 189 in 2010--after the US, while its per capita GDP is only two-thirds that of Egypt. The gulf between rich and poor has been exacerbated by sharply rising prices for food and other basic necessities. Young people, including university graduates, are finding it increasingly difficult to obtain a job. Like the Egyptian youth, young Chinese workers form the bulk of the country's 384 million Internet users, providing them with a global outlook and far greater social aspirations than previous generations.

The working class has always been an international class facing the same forms of class oppression. However, the global integration of the processes of production over the past three decades has drawn together workers around the world to an unprecedented extent. In many cases, Chinese and Egyptian workers are exploited by the same global corporations, as well as the similar oppressive regimes that serve the corporate elite. That is why the revolutionary upheavals in Egypt strike a chord among Chinese workers and youth--and terror into the ruling establishment.

The Wall Street Journal's reference to "Nile fever" is reminiscent of the panicked fear of "Bolshevik infection" that struck the bourgeoisie around the world following the seizure of power by the Russian working class in October 1917 under the Bolshevik leadership of Lenin and Trotsky. Just as workers now are beginning to draw inspiration from Egypt, the Russian revolution met an enthusiastic response among workers around the world, including in China.

The tragic defeat of the 1925-27 Chinese revolution holds great lessons for workers in Egypt and internationally. The Bolsheviks had led the Russian working class to power on the basis of Trotsky's Theory of Permanent Revolution, which insists on the political independence of the proletariat from all sections of the perfidious national bourgeoisie. In China, Stalin subordinated the working class to the bourgeois Kuomintang, claiming it was leading the Chinese revolution. The result was the Kuomintang massacre of workers and peasants.

The events in China in June 1989 contain similar lessons. At the height of the upsurge, as workers joined protesting students in Tiananmen Square and other cities, Chinese leader Deng Xiaoping appeared powerless. He feared the army would split, he would be placed under house arrest and the regime would collapse. But the protest movement lacked a revolutionary leadership. Rather than take the political initiative, the leaders of the Beijing Workers Autonomous Federation tailed behind the petty bourgeois "democrats" of the student movement who promoted the fatal illusion that reformers in the Communist Party leadership would make "democratic" concessions. Deng used the breathing space to mobilise troops and tanks from the remote provinces to bloodily crush the protests.

Egyptian youth and workers should draw the necessary conclusions from these terrible defeats of the Chinese working class. The fight for basic democratic rights is intimately bound up with the struggle against capitalism. No faith should be put in the bourgeois opposition parties, such as the Muslim Brotherhood and leaders like Mohamed ElBaradei who, no less than the Mubarak dictatorship, defend the present social order. The working class must rely on its own independent strength and start to build its own organisations, above all a political party that will fight for a workers' government and socialist policies.

Chinese workers and youth, who took the first steps in the strike wave of last April and May, can draw inspiration from the determination and courage of their counterparts in Egypt. The struggles in China and Egypt for democracy cannot be separated from the fight for international socialism. It is an urgent necessity for workers in Egypt, China and around the world to build sections of International Committee of Fourth International, which alone embodies all the strategic experiences of the working class of the past century. It is the only revolutionary tendency on the planet capable of leading the international working class to take power and establish a social order based on genuine social equality and democracy.

The subpoena, issued December 14, covers all official Twitter accounts of WikiLeaks, as well as the personal accounts of Brigitta Jonsdottir, a member of the Icelandic parliament, and WikiLeaks collaborators Rop Gonggrijp and Jacob Appelbaum. The order also requests all information on Pfc. Bradley Manning―who the US government claims leaked information through WikiLeaks―and WikiLeaks founder Julian Assange.

The government is demanding that Twitter hand over mailing addresses and billing information, IP addresses used to access Twitter, as well as bank records and credit card information.

The subpoena provoked an uproar in Iceland, where the foreign minister summoned the US ambassador for an explanation. "[It is] very serious that a foreign state, the United States, demands such personal information of an Icelandic person, an elected official," said Interior Minister Ogmundur Jonasson in a press interview with the Icelandic National Broadcasting Service.

This concern is heightened, Jonasson said, when "put [in] perspective and concerns freedom of speech and people's freedom in general."

Ms. Jonsdottir denounced the subpoena in a telephone interview with the WSWS on Sunday. "There is no criminal case against me because I have done nothing in violation of any law," she stated.

"The US government is trying to criminalize whistleblowing and publication of whistleblowing," Jonsdottir added. "They want to make it tantamount to spying, and if they succeed in doing that, journalists could be prosecuted just for doing their jobs."

Jonsdottir and Gonggrijp, together with Julian Assange, are listed as the producers of the Collateral Murder video released in April, which shows the slaughter of unarmed people, including two Reuters journalists, by a US helicopter gunship in Baghdad in 2007.

In addition to the information on WikiLeaks and its collaborators, the subpoena also demands "non-content information associated with the contents of any communications ... stored by or for the accounts(s), such as destination email addresses." If Twitter posts are interpreted as messages, that means that Twitter will be obliged to turn over the names of all of WikiLeaks' followers.

WikiLeaks issued a warning on its Twitter feed Sunday that "all 637,000 @wikileaks followers are a target of US gov subpoena against Twitter."

The subpoena ordered Twitter not to disclose that it had been served with the subpoena. Twitter's lawyers asked the district court to remove those secrecy provisions, which it did on January 5. Twitter then advised the subjects that if they did not challenge the subpoenas in court within 10 days, it would turn over the requested material.

Thus far, Twitter is the only social networking site that has reported being subpoenaed in relation to the investigation of WikiLeaks. However, WikiLeaks and Ms. Jonsdottir said they suspect Facebook, Google and other companies received similar subpoenas, but quietly complied.

"If Twitter had not fought to unseal the subpoena, then we would never have known any of this," said Jonsdottir. "I'm waiting for similar letters from Facebook, Google and Skype, because I would like to know if they have also been subpoenaed."

WikiLeaks issued a statement demanding that Facebook and Google make public any subpoenas they received. "Today, the existence of a secret US government grand jury espionage investigation into WikiLeaks was confirmed for the first time as a subpoena was brought into the public domain," the organization said in a statement.

Jonsdottir said there would be a worldwide uproar if any country besides the United States demanded this type of information of a foreign MP. "I am in the International Network of Parliamentarians on Tibet. What would the world think if China demanded my computer records based on the idea that I was supporting terrorist monks?" she said.

Julian Assange condemned the court order in a statement Saturday. "If the Iranian government was to attempt to coercively obtain this information from journalists and activists of foreign nations, human rights groups around the world would speak out," he told the Associated Press.

There is reason to suspect that the US government has already collected part of this data through its illegal wiretapping and secret subpoenas. As Jacob Appelbaum, a security specialist listed in the subpoena, posted on his Twitter page, "I wonder if the subpoena is merely a front to legally introduce evidence captured by the confirmed NSA wiretaps two blocks from Twitter HQ."

Jonsdottir and WikiLeaks have said they intend to wage a legal fight to keep Twitter from handing over the data.

The explanation of the events of January 8 that now predominates is that Jared Lee Loughner opened fire on Congresswoman Gabrielle Giffords, severely wounding her and killing six other people, because he was a deranged lunatic, and that there was no political motivation involved.

Loughner is undoubtedly disturbed, but he was calm and responsive Monday afternoon at his arraignment in a Tucson federal court, where he was charged with murdering federal judge John Roll and congressional aide Gabe Zimmermann, and attempting to murder Giffords. He will also face state murder charges for the killing of four other victims of the shooting spree.

The mental state of the shooter in no way exhausts the analysis of Saturday's atrocity. It is merely the starting point, and a rather obvious one, since only a deranged individual would be capable of opening fire on a group of innocent people, including, among the dead, a nine-year-old girl and three elderly people in their 70s.

Loughner's actions raise questions about what medical treatment is available for the mentally ill―virtual none, even in a case like this where college classmates were fearful that he might turn to violence―and about the widespread availability of weapons like the Glock 19, whose sole purpose is mass, indiscriminate mayhem through the firing of dozens of rounds in a few seconds.

But the most important issue is what led Loughner to target a Democratic congresswoman. Understanding this necessarily requires an examination of the political circumstances that shaped the gunman's actions.

Here the central role was played by the ultra-right media campaign mounted by Fox News, talk show hosts like Glenn Beck and Rush Limbaugh, and the Tea Party wing of the Republican Party, including one Republican Senate candidate who called for a "Second Amendment solution" to political issues―i.e., the use of firearms.

As the World Socialist Web Site explained yesterday (See "Arizona assassination spree tied to political right"), the political conceptions in Loughner's Internet postings are expressed in the vocabulary of the ultra-right media and the Tea Party, including his references to gold and silver backing for US currency, the predominance of the English language, and attacks on sections of the US Constitution, like the 14th Amendment, targeted by the ultra-right. He also reportedly remarked that a young woman who had an abortion was a "terrorist for killing the baby."

Moreover, both Fox News and the New York Times have reported, citing law enforcement sources, that Loughner may have links to a white supremacist publication called American Renaissance. Ongoing investigation may well develop more evidence of connections to the extreme right―a prospect that makes the "deranged individual" explanation even less credible.

Those media outlets that are the most directly implicated in creating the political climate for the January 8 attack are the most strident in self-justification. In their programs Monday, both Glenn Beck and Rush Limbaugh heaped scorn on efforts to link the attack to their right-wing hate campaigns.

The Wall Street Journal, in its editorial Monday headlined "Murder in Tucson," wrote: "Jared Lee Loughner is a mentally disturbed man who targeted Congresswoman Gabrielle Giffords and anyone near her in Tucson on Saturday because she was prominent and they were tragically accessible... Whatever confused political motives he expressed seem merely to be part of the maelstrom of his mental sickness."

After denouncing suggestions that there was a political motivation to the attack, the Journal, part of the Murdoch media empire along with Fox News, essentially demanded that President Obama provide the right wing with a political amnesty. He should "lift the level of public discourse by explaining the reality of Mr. Loughner's illness and calling out those on the right and left who want to blame the other side for murder."

A companion column by pundit Glenn Reynolds compared the charge of right-wing moral responsibility for the Tucson massacre to the anti-Semitic "blood libel" of the Nazis.

The Washington Post published an editorial warning against "the temptation ... to infuse the terrible attack with broader political meaning―to blame the actions of the alleged 22-year-old gunman, Jared Lee Loughner, on a vitriolic political culture laced with violent metaphors and ugly attacks on opponents."

The Post published two columns by right-wing pundits, one headlined "Stop Blaming the Tea Party For the Arizona Tragedy," the other declaring it "noxious to associate Saturday's shooting with conservative campaign rhetoric, even that which is over the top." The Post's liberal columnist E.J. Dionne tut-tutted over violent rhetoric from the far right but joined in the consensus: "The point is not to 'blame' American conservatism for the actions of a possibly deranged man, especially since the views of Jared Lee Loughner seem so thoroughly confused."

The New York Times, typically, tried to have it both ways, editorializing, "It is facile and mistaken to attribute this particular madman's act directly to Republicans or Tea Party members. But it is legitimate to hold Republicans and particularly their most virulent supporters in the media responsible for the gale of anger that has produced the vast majority of these threats, setting the nation on edge."

The last assertion is a deliberate cover-up of the real source of the "gale of anger" building in America, which is the economic collapse that has devastated the lives of tens of millions of people, and for which no faction of the capitalist political establishment, Democrat or Republican, liberal or conservative, has any solution.

A long news analysis in the Times provides valuable details on the ideological connections between Loughner and several of the more bizarre factions of the far right, but it nonetheless declares that the assassin's political motivation cannot be known with certainty: "Investigators will have to wrestle with the difficult question of whether Mr. Loughner's parroting the views of extremist groups was somehow more a cause of the shootings or simply a symptom of a troubled life."

This is, if anything, even more insidious than the flat denial of responsibility by the Wall Street Journal. The Times shows how close Loughner's connections were to the ultra-right―"parroting the views of extremist groups"―and then asserts that no conclusion can be drawn.

Does anyone believe that if the attacker had been a Muslim who used the language of Al Qaeda in his Internet postings the American media would condemn as a "rush to judgment" the conclusion that this was an instance of "Islamic terrorism"?

As part of the push-back by the right wing, there have been public denunciations of the sheriff of Pima County, Clarence Dupnik, who heads the local investigation into the Tucson massacre. At his first press conference, Dupnik made a forthright denunciation of "the vitriol and rhetoric that we hear day in and day out from the people in the radio business and some people in the TV business," which he said contributed to the crime. Referring to a series of measures against immigrants, he said that the state of Arizona has "become the Mecca for prejudice and bigotry."

Republican Senator Jon Kyl of Arizona denounced these comments in an appearance Sunday on the CBS interview program "Face the Nation." "I didn't really think that that had any part in a law enforcement briefing," Kyl said. "It was speculation, and I don't think we should rush to speculate."

A Tucson talk-radio host, Jon Justice, called for Dupnik's resignation, accusing him of him of "inciting through pure rhetoric."

By Monday, much of the media, including liberal and Democratic Party spokesmen, had repudiated Dupnik's comments. James Carville, a longtime Democratic campaign operative and media pundit, said on CNN, "It's unfair to smear an entire state," adding, "There's no evidence that links the Tea Party to this."

Carville's remark typifies the political cowardice of the entire Democratic Party and liberal media establishment. They want to avoid any comprehensive exposure of a process that has been under way for more than three decades in American politics: the integration of the Republican Party with elements of an ultra-right and semi-fascist character, steeped in racism, anticommunism and hostility to democratic rights.

These right-wing elements exercise a degree of influence in American political life out of all proportion to their actual support in the population, because it serves the interests of the financial oligarchy to build them up as a means of shifting politics ever more to the right and creating the rudiments of a fascist movement to be thrown against the working class.

The Democratic Party is complicit in this process, even when the latest phase in this process―the media promotion of the Tea Party―culminates in direct violence against a Democratic Party officeholder.

In a comment published last month, Jeffrey Garten, undersecretary of commerce in the Clinton administration and now Yale University international trade and finance professor wrote: "As the first decade of the 21st century comes to a close, leaving the steady growth of last century's second half a distant memory, what does the future hold for the global economy? For the next several years, we can expect exceptional turbulence as the waning days of the global economic order we have known plays [sic] out chaotically, possibly destructively."

The focus of immediate attention is Europe where, according to a comment by former International Monetary Fund chief economist Simon Johnson, published in the New York Times on December 30, "most experienced watchers of the eurozone are expecting another serious crisis in early 2011, tied to the rollover funding needs of its weaker governments."

But as Johnson went on to warn, the turbulence will not stop at the Atlantic. "When the financial markets are done with Europe, they will come to test the fiscal resolve of the United States." Notwithstanding the belief of the entire American elite that "we are different from the Europeans because we issue the dollar and therefore have some special privileges" the age of American predominance, he insisted, was now over.

The Financial Times also pointed to the likelihood that the European financial crisis would spread in the next few months. "Last year brought the eurozone debt crisis. Greece and Ireland had to be bailed out and big question marks still hang over Portugal and Spain. But the focus is now likely to widen. The question for 2011 is how much of the western world will be caught up," it noted on January 3.

The FT comment cited a survey conducted by a major US investment bank of its largest institutional investors, who were asked when they thought the debt crisis afflicting Europe would reach the United States. Fewer than 10 per cent said "never".

As economic and financial problems deepen in Europe and the US, the still growing Chinese economy, far from providing a new foundation for global economic expansion, may itself become the source of a new wave of international turbulence.

Rising inflation has led authorities to lift interest rates, sparking concerns that if these increases are too rapid, they will cause a collapse of the investment and real estate bubble--much of it promoted by local government authorities--that has played such a central role in Chinese economic growth over the past two years.

According to Beijing university professor Michael Pettis: "Debt levels are worryingly high and starting to act as a serious constraint on rebalancing. It is becoming increasingly difficult for the People's Bank of China to raise interest rates without causing a great deal of financial distress in government related entities."

The deepening problems within the Chinese economy, while exacerbated by the global financial crisis, are rooted in long-term processes. According to a comment by a former member of the monetary policy committee of the Peoples' Bank of China, Yu Yongding, published in the December 23 edition of the China Daily, the "East Asian growth pattern" that formed the basis of China's progress over the past three decades "has now almost exhausted its potential." Consequently "China has reached a crucial juncture" and "without painful structural adjustments, the momentum of its economic growth could be lost."

The actions of the United States are fuelling the escalating turbulence in the world economy.

For much of the post-war period the US functioned as the anchor of the world capitalist economy. Today it is one of the main sources of destabilisation as it seeks to overcome its mounting economic problems at the expense of its rivals.

The US Federal Reserve's policy of so-called "quantitative easing," which sees it pumping billions of dollars into the global financial system--increasing the availability of cheap finance and pushing down the value of the US dollar--is sending shock waves through the world economy.

One of the immediate consequences has been renewed speculation in food and other basic commodities, such as oil. This week, the UN's Food and Agriculture Organization issued a warning that food prices had now surpassed the levels reached in the price hikes of 2007-2008.

Faced with "hot money" inflows sparked by quantitative easing, a number of countries have sought to impose new financial controls. Brazil has just announced new banking regulations to try to curb the inflow of finance, while Chilean authorities have intervened in money markets to try to hold down the value of the peso.

Pointing to the deepening divisions in the world economy, Nobel laureate economist Joseph Stiglitz noted that the coordinated policy response of the major powers to the economic crisis in 2009 was now a "faint memory".

"Worse," he continued, "America's quantitative easing is now viewed as an update of the policies that marked the Great Depression. The world is waking up to the way that exchange rates can be used in self-promotion at the expense of others--discouraging imports and enhancing exports.... Such beggar-thy-neighbour policies didn't work in the 1930s, because countries responded in kind. Today the same will happen."

The eruption of currency wars threatens to fracture the world market in the same way that tariff barriers in the 1930s divided the world into a series of hostile economic blocs, leading to the eruption of war by the end of the decade.

Mounting tensions between the major powers are being accompanied by an increasingly ferocious assault on the social position of the working class. The unleashing of state violence against students, youth and workers by governments in Britain, Greece, Spain and France in order to impose the austerity measures being dictated by banks and financial markets is only a foretaste of what is to come as the ruling classes everywhere seek to make the working class pay for the historic bankruptcy of the profit system.

Just as the breakdown of the capitalist order proceeds across borders and continents, so the working class must develop its own global response. The task ahead is to develop a unified movement of the international working class that will take political power and establish workers' governments, placing key economic and financial resources in public hands and reorganising the economy to meet social needs. That is the perspective of the International Committee of the Fourth International.

These events deal a shattering blow to all claims that the working class is a spent force and the class struggle is a relic of the past. Once again, the immense social power of the working class is beginning to find expression. The basic division of modern society, between the bourgeoisie and the working class, is asserting itself under conditions of a historic breakdown of world capitalism.

By all accounts, the strikes against legislation that would raise the retirement age are expanding. As the week began, petrol stations throughout the country were running out of fuel as a result of a strike by refinery workers. Truck drivers have joined in, slowing traffic on the country's major highways. Hundreds of high schools are shut down by student protests. Mass demonstrations are planned for Tuesday, following similar days of action over the past week that brought more than 3 million people onto the streets.

The expansion of strike action is the response of the working class to the repressive measures of the Sarkozy government, including the use of riot police to break up oil workers' blockades of refineries. The efforts of the workers to expand the struggle and exercise their social power bring them into ever more open conflict with the trade unions, which are looking to wind down the mass actions.

The strikes have the overwhelming support of the French population. Polls show 70 percent in favor of the strikers. Among young people aged 18-24, support is as high as 84 percent. The popularity of Sarkozy, in contrast, is at record lows.

The events in France are world events. They are part of a growing mood of resistance in every country. In Europe, there is increasingly determined opposition to the austerity measures introduced throughout the continent following the debt crisis in the spring. This has included one-day general strikes in Greece and Spain. In Italy over the weekend, hundreds of thousands marched in Rome to protest austerity measures.

The reemergence of the working class into struggle is not limited to Europe. China has been rocked by strikes of auto workers; textile workers have staged mass actions in Cambodia and Bangladesh; and Foxconn workers in India have struck in defiance of police repression. In the United States, there is a brewing rebellion of auto workers against brutal wage cuts worked out between the auto companies, the government and the United Auto Workers union.

The ruling class is not backing down. The response of the Sarkozy government to the spreading strikes is to dig in its heels, insisting that the cuts must go forward. Behind Sarkozy stand the French and European banks, which have warned that failure to push through the cuts will call into question the credit rating on French debt. On a world stage, the financial and corporate elite is determined to impose the full cost of the crisis of the capitalist system on the working class.

These events show that there will be no peaceful restabilization of the world economy following the financial panic of September 2008. The breakdown of world capitalism has ushered in a new period of social upheaval and revolution.

The open conflict between the working class and the state, which represents the banks and corporations, poses in every country the question of power. In whose interests will society be run? The continued rule of the capitalist class--on the basis of private ownership of the means of production--means the ever greater impoverishment of the population, the destruction of democratic rights, and ever wider and more bloody military conflagrations.

The alternative is for the working class to take political power and reorganize the world economy on the basis of social need, ending the dictatorship of the banks and corporations over every aspect of economic and political life.

This question of political power is not one for the distant future. It arises organically and necessarily out of the new stage in the class struggle. The demands of the French workers and the demands of their class brothers and sisters internationally cannot be met in any other way.

The biggest obstacle to resolving the crisis in the interests of the French workers is not the Sarkozy government, which is weak and isolated. It is rather the trade union leadership and its allies in the Socialist and Communist parties and the other supposedly "left" middle-class organizations that work to keep opposition confined within the framework of the capitalist system and its political representatives. By blocking the road to a political struggle for power, they work to demobilize the struggle and demoralize the workers.

Whether it is the New Anti-Capitalist Party in France--which claims in its most recent statement that as a result of the strikes, "the government will be forced to capitulate"--the Left Party in Germany, SYRIZA in Greece or the International Socialist Organization in the US, the aim of all these tendencies is the same: to prevent workers from understanding the situation they confront, mobilizing their strength and fighting for political power.

For the struggle in France to be successful, it will have to break free of the stifling grip of the unions and take an independent path. Workers need to build new, democratic organizations of struggle--committees of action--to fight for the broadest unity of all sections of the working class and the active participation of students, youth, professionals and oppressed middle-class layers in an industrial and political offensive against the government and the ruling class. The committees of action will campaign for the development of a general strike to bring down the Sarkozy government and replace it with a workers government based on a socialist program.

The key issue is the building of a new leadership in the working class to arm the movement with a clearly worked out revolutionary program. What Leon Trotsky wrote 72 years ago in the founding program of the Fourth International applies with full force today: the crisis of mankind is reduced to the crisis of revolutionary leadership. The resolution of this crisis requires the building of the International Committee of the Fourth International in every country.

Articles have now appeared in the Hong Kong and Chinese press exposing these headline wage rises as bogus. The China Times, a business newspaper, pointed out on July 4 that, despite increases in the basic wage levels at Foxconn, its 800,000 employees are actually worse off than before. The announced pay rises added up to 122 percent but a drastic cut in overtime, accompanied by intensified workloads, means an actual income decline of nearly one third.

An assembly line worker told China Times: "After hearing about the wage increases, I was excited for a long time, thinking I could get 2500-2600 yuan [a month], but the result is no more overtime and the income drops sharply." He explained that he used to earn 1,900 yuan ($US280) a month with overtime, but in June earned just 1,300 yuan. At the same time, his workload increased from assembling 15 components per hour to 16-17.

Other firms in the southern Chinese province of Guangdong are using the Foxconn ruse. A worker at an auto parts factory in Foshan, where strikes in Honda's plants took place, told the China Times that he was "forced to have pay increase". The worker explained: "Before the wage increase our basic salary was 850 yuan [a month] with a 80 yuan full attendance bonus, but after lifting our basic pay to 920 yuan, there were no more bonuses." In other words, the pay increase was in reality a pay cut.

Workers at a toy factory in Dongguan's Houjie township complained of similar tricks. Their boss promised them 200 yuan more a month, but started to charge them 150 yuan a month for food that had previously been provided without charge. So the wage rise amounted to just 50 yuan a month, or $US7.40.

At Foxconn, the wage rises were part of a carefully orchestrated public relations exercise, not only aimed at placating workers. It also reassured major international companies such as Apple, Nokia and Sony that their corporate image was not going to tarnished by the exposure of the inhumane, sweatshop conditions where their products were manufactured.

The South China Morning Post Magazine in June pointed to the widespread discontent among workers in Foxconn's giant complexes in Shenzhen that house 420,000 employees. The pay increase of 33 percent for Foxconn's Shenzhen workers to 1,200 yuan a month was only a little higher than the local minimum wage. A worker explained: "Foxconn are very smart; they say it's a pay rise but we actually earn less. It's meaningless. They will increase daily quotas to make up for lost time. It's always the same."

Another worker told the newspaper: "I am still required to work 11 hours a day, from 7.30 am to 7.30 pm, seven days a week ... Although the company guaranteed at least one day off every week after 13 suicide attempts, the policy hasn't been carried out. One of the few improvements was that our supervisor broadcast pop songs after we complained that all work and no play made workers dull boys. But even that was cancelled after just a few days."

Production line managers continue to enforce a demerit system for petty offences that results in pay deductions. Lu Bingdong, 22-year-old worker, is part of a line with a daily quota of 21,000 Apple iPhones. He explained: "You can lose points for having long [finger]nails, being late, yawning, eating, sitting on the floor, walking quickly. There's a whole load of things. Just one point means losing my monthly bonus."

Foxconn, like many smaller companies, operates on thin profit margins. Major Western corporations have refused to pay higher prices for their products. Professor Lin Jiang of Sun Yat-sen University told the China Times that a wage increase of more than 5 percent would be unbearable for most enterprises in Dongguan. The large headline wage increases were therefore "mirages" for workers.

Foxconn, one of the world's Fortune 500 corporations, recorded a share price fall of nearly 7 percent on June 30, after announcing net losses of $18.7 million in the first half of 2010. Foxconn's share price has plunged by more than 50 percent this year, amid investor concerns about labour unrest and losses. Morgan Stanley has downgraded Foxconn's stock to "underweight", while JPMorgan warned that 2010 will be "a bad year" for the company as one of its major clients, Nokia, faces a stagnant market for its smart phones, partly due to the deepening economic crisis in Europe.

Foxconn is pressing ahead with long-held plans to relocate from Shenzhen to inland areas where official minimum wages are much lower. A huge new plant housing 300,000 workers is proposed in Henan province, where the local minimum wage is only 600 yuan a month, even after a 33 percent increase this year. Meanwhile the two plants in Shenzhen will be merged, with some production being transferred to factories in Chengdu or Tianjin, where wages are lower. For all Foxconn's hype about giving workers back their "dignity" with higher pay, its reaction is to seek out cheaper labour.

Other employers are exploiting the cheap labour of tens of thousands of illegal immigrants from Vietnam, Cambodia or Burma. They earn less than $5 or 34 yuan a day and receive no bonuses, overtime or other benefits. A shoe factory owner in Dongguan, who employed over 200 Cambodian and Lao workers or a quarter of his total workforce, was cited by Forbes magazine on July 1: "They are hard workers and obedient employees. They could work 15 to 16 hours a day and work for a month without any break."

Jeff Joerres, chief executive of Manpower, one of the world's largest recruitment companies, told the Financial Times last week that large capital-intensive American companies were thinking twice about investing in China. Their concern was not only workers' demands for higher wages, but the danger of political instability associated with labour unrest. Joerres referred to the greater attractiveness of Vietnam and other cheap labour platforms--with the implicit message to Beijing that it must suppress strikes to remain competitive.

Peter Morici, a former chief economist for US International Trade Commission, told Investor's Business Daily on July 2 that US corporations would find "China to be a much more hostile place do business" as the unrest of workers spread. The newspaper noted that the conventional wisdom of investors was that China's authoritarian government "could keep workers in check". But Charles Wolf, a senior Rand Corp economist, warned that the regime was not all-powerful. "They have their hands full with a lot of things, and controlling labour unrest is one of them," he said.

Rural discontent is also emerging. Farmers began a protest on June 24 against inadequate compensation for land requisitioned for industrial projects at Deyang in Sichuan province. More than 300 protestors were injured and 200 arrested after a violent crackdown by 1,000 armed police against 5,000 villagers on July 3.

The four-day strike by workers at the Japanese-owned Tianjin Mitsumi Electric Co. ended last Saturday after management apparently made limited concessions to workers' demands for higher wages and better conditions. A two-day strike that halted production at a Honda assembly plant in Guangzhou ended yesterday. The facility manufactures the Honda Jazz for export to Europe. But like earlier strikes, none of the underlying issues have been resolved. The attempts by Foxconn and other companies to dupe their employees by offering large wage rises with one hand, and taking them back with another will only breed resentment and anger, fuelling even more determined strikes and protests in the future.

There is magic about those sun-sparkled coasts, translucent, shimmering, sapphire sea, later turning peach, apricot, deep blush, then seeming near blackberry as the sun falls and the dusk, then dark, takes over. Then the great pelicans sit sentry, on remains of old breakwaters, silhouetted against the moon's silvered light.

An all time memory is of the Mexican coast on the Gulf. One day remains apart, on some special mental shelf for treasures, oft taken down, wondered at, minutely re-savoured. Four of us hired a boat for the day, the others wanted to fish for marlin, I to relish the glittering ocean and sun. Lying below the little open wheelhouse, the old, toothless boatman and I quickly formed a bond. His boat was his life, he was an extention of it and it of him. His eyesight was phenominal. "Look, look", he'd say, pointing somewhere into the distant horizon: "tuna .." I could see nothing, but a few miles towards the spot, sure enough, the ocean boiled and churned with the great shoal.

Shark fins often glided along side the boat, their sleek elegance visible below the surface

Another: "look ..", a pointed, gnarled finger, and there would be the unmistakable spout from a whale, then a great, seemingly ocean-shuddering, roll or two. The Gulf hosts twenty nine marine mammal species, alone, including blue, beaked, fin, dwarf sperm and humpback whale. On 16th June, the first whale, a sperm whale, was found dead off Mississipi. Whales are thought to live up to one hundred and thirty years. The July 1st issue of "Nature" reveals remains of a sperm whale in Peru, thought to be thirteen and a half million years old. The whale is also thought to possibly be the world's oldest species. If the oil industry turns out to be the biggest threat they have ever faced, that will be quite a first.

As ever, the old man of the sea, saw the dolphins before I did : "look, look, look ...." they leapt, in their joyous pairs, in perfect synchrony. As the boat neared, they surrounded it, cavorting in fours, sixes, eights, twelves, higher and higher, over and over. Attempting to capture the images, the lens appeared less than clear, then I realized it was not the lens, but the tears streaming down my face, in response to witnessing overwhelming minutes of beauty beyond imagination. Suddenly, was a certainty of feeling blessed, to understand poet John Gillespie Magee's words : "...in the sunlit silence, put out my hand, and touched the face of God."

Fifty dolphin have so far, been reported found dead. Experts estimate only one tenth of species which die will be washed up. The full toll of big oil's "collateral damage", now, previously and in the future, will likely never be known.

When my friends hauled in a huge marlin, which had fought for its life with wile and valor, the old man of the sea said again: "Look. Watch." The great creature lay in the sun, gasping on the deck, its body glittering all over, in sequin-like, opalescence. "Watch", he repeated. In seconds, the lights started to go out and the magnificent creature became just a very large, dark, lump of flesh. Killing for sport is another obscenity.

As the sun lowered, we headed for the shore. Approaching it, the boatman ("Watch...") put his arms above his head, steering with his knees. Instantly, the sky darkened with birds, appeared seemingly from no where. They called, swooped, rose, fell, circled. He leant in to the bait bucket and threw the remains, bit by bit, in to the air. Every morsel was expertly caught. Not one missed, dropped. The bucket empty, his hands went back on the wheel, the birds did a farewell fly past and departed in to the dusk. In the shallower waters shoals of vibrantly coloured fish, darted between the delicate coral reefs.

Bird species of the region include albatrosses, petrels, shearwaters, frigatebirds, cormorants, gannets, boobies, gulls, terns and skimmers. With temperatures of one hundred degrees and birds becoming oil covered, experts warn they are boiling, alive. The thick, tarry oil, absorbs the heat

The many turtle species lay their eggs on or near the beach where they were born. Conservationists are removing eggs to unpolluted shores hundreds of miles away, where hopefully they will survive but another extraordinary natural miracle will have been severed. Four hundred and thirty two turtles have been found dead since April.

The Gulf's Loggerhead turtle's hatchlings follow the light of the moon to reach the ocean and swim to safety, away from land's predators, when they emerge from the egg. For the tiny moon followers, the ocean itself has become their ultimate predator.

Inspite of the scale of this environmental death warrant, Louisiana Governor, Bobby Jindal, supports a legal action to reverse the Presidential six month moratorium on deep water drilling, in place to allow time to determine the exact cause of the spill, thus, hopefully, avoiding a repetition. Jindal views the cost in jobs as too high. Oil jobs, that is. And as the hurricane season has moved in with the great winds spreading unleashed deadly pollutants, farther and wider.

Dahr Jamail, in Louisiana, writes of a poignant, differing view. Locals have erected white crosses, each representing something loved and lost: "Family time, crabs, white trout, camping, diving, walking the dog on the beach, sea shells, sea turtles, dolphins, barbecues, shrimp, shark, sand between my toes, boogie boarding, mullet, marsh, palm trees." (Christian Science Monitor, 22nd June 2010.) The crosses will undoubtedly multiply.

Mexico's ancient mariner was utterly in tune with with his universe and all which shared it with him. A reverence a million miles from those who think only to ravage it.

Among the principal factors leading up to the April 20 oil rig explosion, and the subsequent uncontrolled eruption from the bottom of the Gulf of Mexico, was the absence of any regulations on the profit-driven operations of the energy industry. Government agencies under both Bush and Obama pushed for the expansion of deep-sea oil drilling and rubber-stamped all the decisions made by BP.

One measure of this influence is money. Through a combination of large individual gifts, Political Action Committees and other indirect channels, the oil and gas industry pumped over $250 million into federal campaign coffers over the past 20 years, according to a new report from the Center for Responsive Politics.

This does not include lobbying. The industry spent $174 million last year alone on lobbying the federal government, the third largest of 121 industries. BP, for its part, spent $16 million last year. All told, since 1998 the oil lobby has committed $1 billion to exert its influence on public policy.

"The oil and gas industry has long been one of the most influential in Washington. They are truly a powerhouse industry," Center for Responsive Politics Communications Director Dave Levinthal told the WSWS.

Levinthal explained, "At any time there are dozens of pieces of legislation on the table and lots of diverging interests. Still, the confluence of all this oil industry money in politics above all purchases access. It gets company executives into the game. The amount of influence they get one can only dream of if you don't have millions to spend."

One direct result is that the industry has been allowed to regulate itself. The federal agency with responsibility for oversight and regulation of oil drilling, the Minerals Management Service (MMS), routinely allows extensive offshore drilling without requiring obligatory environmental reviews and permits. MMS waived basic safety precautions that might have prevented the spill.

While the public disgust in the wake of the disaster has skyrocketed, it has not stalled the collusion between government and Big Oil. In fact, the opposite is true. Halliburton, the energy company involved in making the cement casings for the rig, which may have ultimately contributed to the explosion, last month ramped up its political spending to the highest levels since just before the 2008 elections.

Just one week prior to appearing before an investigative subcommittee of the House of Representatives Energy and Commerce Committee, Halliburton donated $1,500 to the campaign fund of the ranking Republican, Joe Barton (Texas), according to a report by Politico.

In May, Halliburton also contributed donations of $1,000 on Senator Mike Crapo (Idaho) of the Environment and Public Works Committee, and Senator Richard Burr (North Carolina) of the Energy and Natural Resources Committee. Both committees are holding their own hearings to investigate the oil disaster.

Along similar lines, Democratic Senator turned lobbyist John Breaux, who now represents some clients in the oil and gas industry, is working to ensure oil industry representation on the five member "independent" presidential commission to investigate the spill. Breaux told the New Orleans newspaper Times-Picayune, "The commission shouldn't consist of all environmentalists, or all industry people. You need to have a mix."

One of Obama's two choices to head the commission is former Environmental Protection Agency chief William Reilly, who currently sits on the board of directors of oil giant ConocoPhillips.

Congressional donations, not surprisingly, are highest to committee members who play integral roles in crafting legislation affecting the oil industry. Members of the Senate Energy and Natural Resources Committee received an average of about $52,000 from individuals and groups associated with the oil and gas industry this election cycle. However contributions are near ubiquitous: 78 percent of House members and 84 percent of Senators received funding from oil and gas this past election cycle.

Both parties have received millions, though donations to Republicans have outweighed Democrats over the years about three to one. Nonetheless, President Obama was the second largest recipient of all candidates for federal office from the oil industry in 2008, pulling in just shy of one million. Only Republican presidential challenger John McCain received more.

BP executives, however, contributed twice as much to Obama, the largest single recipient of the company's funds.

This current election season, several candidates have already received over $100,000 from the oil industry. Democratic Senator Blanche Lincoln (Arkansas) leads the way with over $280,000 collected thus far. Lincoln currently sits on the Energy and Natural Resources Committee. Republican Senators David Vitter and Lisa Murkowski--from the oil states of Louisiana and Alaska, respectively--both pulled in over $200,000 to date.

The influence extends beyond the executive and legislative branches of government. According to the National Law Journal, seven of the 12 federal judges in the Eastern District of Louisiana have recused themselves from hearing oil spill cases, citing connections to the oil industry.

The ties uniting government officials with the oil industry are intertwined further by the "revolving door" between political office and industry employment. Just within the Department of Interior, these connections are everywhere.

The Obama administration appointed Sylvia Baca, a BP executive, to serve as a Deputy Assistant Secretary for Land and Minerals Management. Baca was appointed last June by Obama's Interior Secretary, Ken Salazar, who himself has extensive ties to the oil industry and has long promoted off-shore oil drilling.

Bush administration Interior Secretary Gale Norton, after leaving the government took a position as general counsel for Royal Dutch Shell.

Outside the Interior Department, Obama's Energy Secretary, Steven Chu, headed a research institute at the University of California, Berkeley, which was funded by BP with a $500 million grant. On becoming Energy Secretary, Chu selected BP's chief scientist, Steven Koonin, to be the DOE undersecretary for science.

One of the most egregious examples is Steve Griles, who served as Deputy Secretary of the Interior Department and a representative on Dick Cheney's energy task force. After leaving office to start up his own energy lobbying firm, Griles was convicted of obstructing justice in the investigation of lobbyist Jack A. Abramoff. A federal judge sentenced Griles to 10 months in prison.

The movement between political positions and lobbying firms is very widespread. Of BP's 37 registered lobbyists identified by Center for Responsive Politics, 22 have held positions within the executive or legislative branches or as senior staffers.

Acting Inspector General Mary Kendall underscored these connections in an investigation released last month that confirmed allegations of MMS employees accepting gifts from oil and gas companies and other misconduct. In the report she wrote, "Of greatest concern to me is the environment in which these inspectors operate--particularly the ease with which they move between industry and government."

Mandy Smithberger, from the watchdog group Project on Government Oversight put it more bluntly in an interview with the Associated Press. "To say that MMS has had a revolving door problem doesn't even begin to describe how profoundly this agency has entangled itself with industry. The revolving door has spun so readily in this case that the lines between the regulators and the regulated are now virtually nonexistent."

Speaking at the West Point military academy late last month, President Obama was even more upbeat, declaring that as US troops depart, "a strong American civilian presence will help Iraqis forge political and economic progress" towards establishing "a democratic Iraq that is sovereign and stable and self-reliant".

The reality is entirely different. Even after the September deadline, the US military will maintain a huge military presence of 50,000 troops, ostensibly in "non-combat" and "training" roles, to prop up a puppet regime in Baghdad, which, three months after the national election, is yet to be formed. While the character of the American occupation of Iraq is changing, its underlying purpose--to maintain the country firmly under US domination--remains the same.

In his comments last Friday, General Odierno declared that the "drawdown" was ahead of schedule--600,000 containers of gear and 18,000 vehicles moved out; and the number of bases down from 500 last year to 126 and set to decline to 94 by September 1. What is actually underway, however, is not a withdrawal, but a vast consolidation in preparation for the long-term occupation of the country by US forces.

The Stars and Stripes newspaper noted in an article on June 1 that the ratification of the US-Iraq security agreement in November 2008 governing the drawdown was followed by a massive expansion of base construction work. "In all, the military finished $496 million in base construction projects during 2009, the highest annual figure since the war began and nearly a quarter of the $2.1 billion spent on American bases in Iraq since 2004. An additional $323 million worth of projects are set to be completed this year."

While the number of US bases may be declining, the Pentagon is establishing what are known as "enduring presence posts"--including four major bases: Joint Base Balad in the north, Camp Adder in southern Iraq, Al-Asad Air Base in the west and the Victory Base Complex around Baghdad International Airport. These are sprawling fortified facilities--Balad alone currently houses more than 20,000 troops. In addition to the 50,000 troops that will remain, there will be up to 65,000 contractors after September 1.

Under the 2008 agreement, the US military handed over internal security functions to Iraqi forces last year, but, under the guise of "training" and "support", retains tighter supervision of the army and police. Moreover the Iraqi government can always "request" US troop assistance in mounting operations. As Odierno explained in a letter to US personnel on June 1, even after all US combat troops leave, "we will continue to conduct partnered counter-terrorism operations and provide combat enablers to help the Iraqi Security Forces maintain pressure on the extremist networks."

The 2008 agreement sets December 31, 2011 as the deadline for all US troops to quit Iraq, but the construction of huge new US bases indicates a long-term US military presence under a Strategic Framework Agreement that is yet to be negotiated. As Stars and Stripes pointed out, "the nascent condition of the Iraqi Air Force... could lead the Iraqi government to request that a US training force remain in the country beyond 2011, most likely at Balad."

Accompanying the troop drawdown is a buildup of civilian operations centred on the US embassy in Baghdad. The new embassy, situated in the fortified Green Zone, is the largest and most expensive in the world. Opened in January 2009, the complex includes 21 buildings, occupies 0.4 square kilometres and houses 1,000 regular employees as well as up to 3,000 additional staff. The embassy's No 2 diplomat Cameron Munter told the Washington Post last month: "Our commitment will not be on the scale of numbers and money that the military has. But it will be extraordinarily substantial."

The Post also touched on certain sensitive projects that would not be handed over to embassy staff, including "the collection of intelligence, initiatives to counter what the military calls 'malign Iranian influence', and the integration of tens of thousands of former insurgents the military turned into Sunni paramilitary groups." In other words, the US military will remain actively involved in monitoring and manipulating the sectarian divisions that Washington has exploited since the 2003 invasion to assert its control.

The "ending" of the insurgency, trumpeted by the Pentagon and White House, has involved the ruthless suppression of opposition to the US occupation, resulting in the deaths of more than a million Iraqis, another two million driven into exile, and tens of thousands detained and tortured. Iraqi "democracy" rests on a police state apparatus developed and honed by the US military. The "legitimate and credible" election in March was only open to those parties and politicians that accepted the occupation.

Seven years of war has had a devastating impact on the Iraqi people. Unemployment and underemployment remain high. According to last month's Brookings Iraq Index, as of last year, only 20 percent of the population had access to proper sanitation, 45 percent to clean water, 50 percent to more than 12 hours a day of electricity, 50 percent to adequate housing and 30 percent to health services. A 2007 World Bank survey found that 23 percent of people were living in poverty on less than $US2.20 a day.

The criminal US invasion of Iraq was not aimed at helping the Iraqi people. Rather, its purpose was to subjugate the country in order to establish control over its vast energy reserves and to transform it into a base for wider American strategic objectives in the Middle East and Central Asia. Having bloodily suppressed resistance in Iraq, the Obama administration is pulling its troops out in order to expand its neo-colonial war in Afghanistan and for new military aggression in other parts of the globe.

Being left behind is an extensive American civilian and military apparatus that will continue to control the levers of power in Baghdad, bully the Iraqi government into line on matters concerning US interests, keep a watchful eye on the country's festering sectarian tensions and leave the door open to a rapid return of US troops.

In a May 9 piece, Times columnist Thomas Friedman denounces workers in the US and Western Europe for believing in the "tooth fairy" and expecting government services without paying for them. In America, Friedman says, the baby-boom generation, which supposedly had inherited the prosperity of the post-war years, had "eaten through all that abundance like hungry locusts."

"After 65 years in which politics in the West was, mostly, about giving things away to voters, it's now going to be, mostly, about taking things away. Goodbye Tooth Fairy politics, hello Root Canal politics."

Describing what he has in mind, two days later Friedman wrote about his meeting with Greek Prime Minister George Papandreou in a rooftop restaurant in Athens. Praising Papandreou for defying mass protests, the Times columnist hails the government for carrying out a "revolution," including raising the retirement age and slashing wages and pensions for public sector workers, imposing regressive consumption taxes and wiping out two-thirds of the country's publicly owned companies.

Another May 11 article, appearing on the front page of the Times, is entitled, "In Greek Debt Crisis, Some See Parallels to U.S." Its author, David Leonhardt, led the newspaper's campaign to promote Obama's health care overhaul, explicitly supporting limits on medical treatments ordinary people could receive. ("In truth, rationing is an inescapable part of economic life").

"It's easy to look at the protesters and the politicians in Greece--and at the other European countries with huge debts--and wonder why they don't get it," Leonhardt writes. "They have been enjoying more generous government benefits than they can afford...

"Yet in the back of your mind comes a nagging question: how different, really, is the United States?... Both countries have a bigger government than they're paying for. And politicians, spendthrift as some may be, are not the main source of the problem.

We, the people, are."

It is rich to hear demands for sacrifices and lectures about "the people" living beyond their means, particularly from the likes of Leonhardt and Friedman. The latter, who is paid $50,000 per speaking engagement, is married to the heir of a multi-billion dollar real estate fortune. According to the Washingtonian magazine, the couple owns "a palatial 11,400-square-foot house" in suburban Washington, DC, valued in 2006 at $9.3 million.

In these circles it is taken for granted that massive cuts must be imposed on the living standards of the working class, but not a word is said about the hundreds of billions that are funneled into the personal fortunes of the financial aristocracy and the subordination of the entire economy to increasing their piles of wealth.

The events of the last several years have revealed to the world that the greatest burden on society is not ordinary working people but the anti-social activities of an unproductive and parasitic financial elite. The grotesque consumption and appropriation of social wealth by this oligarchy is not a minor factor in the crisis of the global capitalist system itself.

The bankrupting of whole countries--chiefly through the transferring of the bad debts of the financial speculators onto the books of various governments--is being used to demand austerity from workers and ever-greater riches for the elite.

The four biggest US financial firms--Bank of America, Citigroup, Goldman Sachs and JPMorgan Chase--made money from trading every single day during the first quarter of the year, according to their financial filings. The banks, which all benefited from the Wall Street bailout, reaped hundreds of millions in profits from betting on the movement of currency, commodity and sovereign debt markets, including in relation to Greece.

At the same time, the value of corporate shares has risen, chiefly through a campaign of job cutting, wage and benefit concessions and a staggering 3.8 percent increase in worker productivity in 2009. As a result, corporate CEOs, who took stock options in lieu of pay increases when profits were down, are now cashing in, according to an Associated Press report, entitled, "America's top CEOs are set for a once-in-a-lifetime pay bonanza." Yahoo's Carol Bartz, for example, received a $47.2 million package during her first year on the job, 90 percent of which came from stock awards and options.

While these vast personal fortunes have been made, there has been no recovery in the wages and benefits workers have lost during the recession. The Organization for Economic Co-operation and Development (OECD) reported that real wages fell last year by 2.7 percent in Japan and Ireland, 1.1 per cent in Germany and 0.8 percent in the US.

The unbridled greed of America's ruling elite--and the complete subservience of the political establishment, from Obama on down, to its needs--can only be compared to the ancien régime in France. The parasitism and extravagance of the aristocracy became a major factor in the country's breakdown, and ultimately the eruption of the French Revolution in 1789.

Workers must reject the demand for austerity. The working class did not create this crisis and must not pay for it. Instead, the ill-gotten gains of the ruling elite must be confiscated and used to meet the interests of society as a whole, instead of gutting social programs and destroying jobs.

This must include a multi-trillion dollar program of public works to put the unemployed to work--at decent wages and full medical care--to rebuild the cities and suburbs, repair the nation's infrastructure and provide high quality housing, medical care and education for all.

In the midst of the Great Depression, the founder of the Fourth International, Leon Trotsky, argued in the Transitional Program that it is "impossible to take a single serious step in the struggle against monopolistic despotism and capitalistic anarchy--which supplement one another in their work of destruction--if the commanding posts of the banks are left in the hands of predatory capitalists. In order to create a unified system of investment and credits, along a rational plan corresponding to the interests of the entire people, it is necessary to merge all the banks into a single national institution. Only the expropriation of the private banks and the concentration of the entire credit system in the hands of the state will provide the latter with the necessary actual, i.e., material, resources--and not merely paper and bureaucratic resources--for economic planning."

The nationalization of the banks, however, will produce positive results, Trotsky explained, "only if the state power itself passes completely from the hands of the exploiters into the hands of the toilers."

For this to be realized the working class must build its own mass political party, independent of and irreconcilably opposed to the two parties of big business, and dedicated to the fight for a workers' government to replace capitalism with socialism.

It has now become abundantly clear that the nearly $1 trillion package cobbled together by European finance ministers and the International Monetary Fund was not merely aimed at staving off the bankruptcy of Greece and other European Union member states gripped by sovereign debt crises.

It was designed to effect a massive transfer of social wealth from the masses of the population to the international banks and investment firms. And it is to be paid for by compelling governments across the continent to implement the kind of draconian attacks that have brought hundreds of thousands of Greek workers into the streets in strikes and mass protests.

The European bourgeoisie is acting on the cynical adage of "never let a crisis go to waste." It has seized upon the dramatic events in Greece and the threat of a worldwide financial meltdown, largely the product of the financial elite's own speculative activities, to ram through an assault on conditions of life for European workers that is without precedent since the continent lay in ruins at the end of World War II.

An unannounced corollary to the agreement on the bailout package reached in Brussels early Monday was the immediate implementation of austerity measures in Spain and Portugal, whose public deficits have made them the targets of international financial speculators seeking super profits by bidding up interest rates on the countries' debt offerings.

After the Spanish stock market rose a dizzying 14.4 percent on Monday, "It has belatedly dawned on Spaniards that the Iberian peninsula, not Greece, is the main target of the financial 'bazooka' unveiled by the European Union and the International Monetary Fund," the Financial Times commented Wednesday.

With the euro zone's third largest public deficit, Spain has been increasingly targeted by financial speculators and forced to pay ever higher interest rates to secure foreign credit.

The country's social democratic Prime Minister José Luis Rodriguez Zapatero went before parliament on Wednesday and announced a series of austerity measures, including: a 5 percent pay cut for public employees, followed by a wage freeze; the freezing of most pension payments; the elimination of the so-called cheque-bebé, a 2500-euro government subsidy for families with new babies; elimination of a program funding elder care and public funding for prescription drugs.

Also to be slashed are over 6 billion euros in public investment, including on public transportation projects. Billions more will be eliminated in funding to local governments and development aid, necessitating still further layoffs and cutbacks.

Under conditions in which the country's official unemployment rate already stands at over 20 percent, the austerity program will mean millions more being thrown on the unemployment and a further turn by the country's economy towards slump as consumption is curtailed.

Portugal followed suit on Thursday with its own proposal for across-the-board cuts in public spending and increases in regressive valued-added taxes.

"If we fail to show we can implement credible measures to cut the deficit, the tap of overseas financing will be turned off," Fernando Teixeira dos Santos, Portugal's finance minister, told members of parliament during a debate on the proposed austerity package.

The social democratic government of Prime Minister José Sócrates did not spell out where the budget ax would fall, but indicated that it would include reductions in funding for local governments, and that the plan comes on top of already announced measures that include an elimination of public sector jobs, cuts in unemployment benefits, a freeze on salaries, and the sale of publicly owned enterprises.

The European Commission, speaking for the European and international banks, warned Bulgaria, Cyprus, Denmark and Finland Wednesday that their budget deficits have grown too large, and that they will be subjected to "excessive deficit procedures" (EDPs), imposing deadlines for slashing public spending.

Meanwhile, the International Monetary Fund, working together with the EU, has approved the latest tranche of a "rescue package" for Romania, or more precisely for international financial interests holding Romanian debt.

The condition for releasing the latest outlay from the 20 billion euro package (12 billion euros have been paid out thus far) was the government's approval of an economic plan to reduce the public deficit to 4.4 percent of GDP by next year, compared to 7.2 percent for 2009.

The Romanian government produced a proposal for a devastating round of budget reductions that includes cutting public workers' pay by 25 percent and slashing state pensions by 15 percent. It is estimated that the austerity measures could mean the wiping out of as many as a quarter of a million jobs.

The announcement provoked demonstrations by workers and pensioners throughout the country and scenes of older retired workers clashing with security forces in the capital of Bucharest. Strikes have been called for next week.

The official unemployment rate in Romania already stands at 10 percent, while according to some estimates fully two thirds of the population is living at or below the poverty line.

These unprecedented attacks are to be carried out throughout Europe. In Germany, Roland Koch, deputy leader of Chancellor Angela Merkel's Christian Democratic Party and considered a likely candidate to succeed the ailing Wolfgang Schauble as finance minister, warned that no cutbacks could be "considered taboo" as Germany confronts its own 10 billion euro fiscal deficit, as well as the cost of its 123 billion euro contribution to the EU rescue package.

Koch, the minister president of the state of Hesse, called for reconsidering a policy that provides for kindergarten for all children under the age of three. The proposal has provoked outrage. "Anyone who starts talking about such cuts is acting like an arsonist," Christine Haderthauer, Bavaria's social affairs minister, told the Passauer Neue Presse. "If we have to take the red marker specifically to the areas of education and family, we're playing the lottery with our future."

Meanwhile, economists are predicting that the decline in the value of the euro will slash the real wages of the working class in Germany and throughout Europe. "We can expect inflation to rise sharply over the next few years," German economist Wolfgang Brachinger told the British Guardian. "The euro is losing value, and consumers will have to dig deeper in their pockets as a result."

In Britain, with the new Tory-Liberal Democrat coalition just beginning to unveil its right-wing agenda of "emergency" measures, the governor of the Bank of England, Mervyn King, stated that there could be no delay in implementing a deficit-reduction program.

King described the crisis in Greece as an opportunity to "tackle the excessive fiscal budget deficit." He added, "The bigger risk at present, given the experience of the last two weeks, would be for a new government not to put in place clear and credible measures to deal with the fiscal deficit."

On the other side of the Atlantic, the Obama administration's chief budget official sounded a similar note, warning that Washington must take action to slash its deficit, which is expected to exceed $1.5 trillion this fiscal year, or "wind up facing the sorts of choices that Greece now faces."

"I would prefer to be addressing this sooner rather than later," said Peter Orszag, the White House budget director in an interview Wednesday with the Reuters news agency. Orszag declined to discuss specific measures, saying that the administration wants to allow a bipartisan commission on the deficit formed by Obama to complete its work.

The panel is taking aim at so-called entitlement programs, including Social Security, Medicare and Medicaid. It is co-chaired by Alan Simpson, a former Republican Senator from Wyoming, and Erskine Bowles, a former Clinton administration official and investment banker. Bowles sits on the board of directors of Morgan Stanley, the Wall Street investment firm, where he chairs its compensation committee, approving eight-figure salaries and bonuses for top executives.

That such an individual could combine these two roles underscores the class character of the economic policies being pursued, not only by the Democratic administration of Barack Obama in the US, but by governments throughout Europe and internationally. All of them are attempting to impose the full burden of the financial crisis on the backs of the working class, while transferring massive amounts of social wealth to the financial parasites who are responsible for it.

The media has largely kept quiet on the human impact of the disaster, with only the occasional local paper bearing a story on one or another of the missing workers.

One of those killed on the rig was Karl Kleppinger, 38, of Natchez, Mississippi, who leaves behind a wife, Tracy, and a 17 year-old son, Aaron. The World Socialist Web Site spoke with the Kleppingers' attorney, Steve Gordon, whose law firm, Gordon, Elias, & Seely L.L.P., is representing the family against British Petroleum, rig operator Transocean, and other rig subcontractors.

"The human tragedy has been less visible, because the workers who were killed came from all over the Gulf Coast, from Texas, Louisiana," Gordon said.

Gordon said that Kleppinger was a "simple man" who had fought in the first Gulf War before beginning work on oil rigs.

"Karl was a floor hand, worked for Transocean for 10 years," Gordon said. "He never missed one hitch." Gordon said that Karl once volunteered to rescue a deep-water drill ship in the gulf and helped save the vessel from going under, even though he was never trained as a diver.

The family is suing the company for damages under the Merchant Marine Act, also known as the Jones Act, which requires the owners of ships and oil rigs to pay reparations to families killed in "unseaworthy" craft or under unsafe conditions.

Gordon said that the Kleppingers' employer, Transocean, bears the main responsibility for his death, but that other parties are guilty of negligence, including BP and Halliburton, which was contracted to do cementing work on the rig.

"The impetus of these companies is profit, not safety," Gordon said. "As a result, a horrific event occurred that will affect the lives of a lot of people, and certainly the environment for decades."

"The companies like to say that there is a safety culture." Gordon added, "But the safety culture is subordinate to the profits culture."

Gordon said that in the immediate aftermath of the explosion survivors were held offshore and not allowed to talk to their families until 3:00 in the morning on Thursday, 29 hours after the blast.

"The company lawyers took statements from them and would not let them talk to their families," Gordon said. "So for about 17 hours they played around with these guys. They're not even admitting they did it."

Gordon said several other lawsuits are being launched by survivors and the families of the victims.

Thus far BP has admitted responsibility for all environmental damage due to the spill, but the company has refused to accept responsibility for its role in the deaths of the workers.

The men killed in the disaster leave behind mourning families and communities. They include:

• Adam Weise, who was mourned at a vigil attended by hundreds of people in his community of Yorktown, Texas, last week. "Adam was my baby, just 24 years old," the man's mother, Arlene Weise told reporters.

• Aaron Dale Burkeen, a 37-year-old resident of Neshoba County, near Philadelphia, Mississippi. A local paper reported that Burkeen was responsible for getting the other crew members to safety before leaving, but was unable to get off the rig in time. He is survived by a wife and two children, ages 14 and 6.

• Donald Clark, 49, of Newellton, Louisiana, was scheduled to leave the rig on April 21, the day after the explosion.

• Roy Kemp, 27, Jonesville, Louisiana, leaves behind two daughters, one three years old, the other three months old, and his wife, Tracy.

• Jason Anderson, of Bay City, Texas, also leaves behind two children.

• Stephen Curtis, 39, of Georgetown, Louisiana, is also survived by two children. He had been working in the oil industry for 17 years, following in the footsteps of his father, Howard, who worked as a diver-welder for 34 years.

• Gordon Jones, 28, of Louisiana, leaves behind a son and a pregnant wife, Michelle.

• Blair Manuel, 56, of Gonzales, Louisiana, worked as a chemical engineer on the rig. He had three daughters and was engaged to be married.

• Dewey Revette, 48, from State Line, Mississippi, worked for Transocean for 29 years as a driller, and was also a father.

• Shane Roshto, 22, was from Franklin County, Mississippi. His widow, Natalie Roshto, has also launched a lawsuit against Transocean, BP, and Halliburton.

These men add to a large death toll on Gulf Coast oil rigs in recent years, giving the lie to claims that offshore oil drilling is now a safe industry. A recent review by federal regulators found that on Gulf of Mexico oil rigs there have been, since 2001, 69 workers killed, 858 fires and 1,349 injuries.

A search of its web site reveals that the White House has issued no statement of condolence for the victims of this most recent disaster.

The sale follows months of negotiations between DMC executives, Detroit Mayor Bing, Wayne County Executive Robert Ficano and Vanguard. As part of the agreement the city of Detroit and county and state authorities are pledging to create a "renaissance zone" that will free Vanguard from virtually all taxes.

The sale of DMC is part of a national drive to subordinate every aspect of health care to the demands of private profit. It will inevitably mean that the health care safety net, already severely strained by a huge increase in the number of uninsured, will be further eroded.

The move is also part of Bing's campaign to privatize city services and downsize and depopulate broad sections of the city. Detroit Medical Center has long served as a place of last resort for those without medical insurance. Nonprofit hospitals are required to provide a certain minimum of uncompensated care and other benefits to the local communities they serve to maintain tax-exempt status.

Nashville, Tennessee-based Vanguard has purchased 15 hospitals over the past 10 years in four states, turning them into for-profit operations.

Detroit Mayor Dave Bing said he was "elated" by the agreement. "To be able to get the private sector and this organization to come together to make this kind of commitment and investment in the city of Detroit is a watershed day," Bing said. "No doubt about it."

DMC CEO Mike Duggan hailed the agreement, saying it would permit the system to compete more effectively. "The nonprofit hospital model is killing health care in the city of Detroit," he declared.

Vanguard says it will invest $850 million in capital improvements over the next five years at DMC hospitals. DMC Board Chair Steve D'Arcy called the deal, "the largest single private investment in the city's history." He said the conversion to a for-profit model would allow the DMC to compete with suburban hospitals.

The DMC operates eight Detroit-area hospitals with 1,734 licensed beds and has annual revenues of $1.9 billion. It is affiliated with the Wayne State University School of Medicine and the Barbara Ann Karmanos Cancer Institute.

Access to health care in Detroit has declined drastically over the past several decades. In 1995 there were 12 nonprofit hospitals in the city. Now there are only six, four of which are run by the DMC. In 2007, St. John Detroit Riverview Hospital closed, the only hospital on Detroit's impoverished east side.

While Vanguard says it is committed to keep all the system's hospitals open and to maintain its policies on charity care for 10 years, there is little doubt that the conversion of the DMC to for-profit status will have a serious negative impact on the delivery of health care to the uninsured and underinsured In Detroit, the poorest big city in the United States.

The largest shareholder in Vanguard is Blackstone Group, a private equity firm that has played a significant role in the restructuring and downsizing the auto parts industry.

Private equity firms like Blackstone are notorious for focusing on short term gains for wealthy shareholders, slashing jobs and shutting down less profitable operations of the companies they take over. Blackstone reported profits of $329.4 million in the fourth quarter of 2009.

The plan to sell DMC to a for-profit hospital chain evoked expressions of concern from health care professionals because of its implications for the provision of health services to the poor.

Addressing the growing national trend toward the conversion of nonprofit hospitals to for-profit entities Dr. Quentin Young, national coordinator and CEO for Physicians for a National Health Program commented, "The people who run the hospital do their best to placate the people who own the hospital. More often than not it's based on denial of care to sick people."

He continued, "Once you go for-profit, you can pretty much do whatever you want. You can limit services, you can exclude people; not in emergencies, but you can define your patient load." For-profit, or investor-owned, hospitals, he said, "aggravate intensely the shortcomings of the American health system."

The tax abatement to Vanguard for the purchase of the DMC will further starve Detroit of revenue in the face of a $300 million plus deficit. The city administration is in the midst of a drive to slash city services, including a proposal to shut down services in some of the most impoverished areas of Detroit.

As part of his proposed cuts Mayor Bing is considering the closure of the Herman Kiefer health complex in Detroit that serves some 2,000 people daily, providing the only access to poor Detroiters for vaccinations, HIV testing, substance abuse treatment and other services.

Meanwhile, Detroit Public Schools Emergency Financial Manager Robert Bobb has announced plans to shut down another 45 public schools while encouraging the expansion of charter schools.

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The Blackstone IPO: $4 billion payday for private equity bosses

President Barack Obama has done nothing to reverse decades of wage stagnation, mounting poverty, and attacks on the social welfare system. On the contrary, following George W. Bush, he has seized on the crisis to redistribute wealth to a tiny financial elite through the ongoing bailout of the finance industry.

This demonstrates a fundamental political reality: no reform that benefits the broad masses can come from a government and two-party system so openly in the clutches of Wall Street. The financial aristocracy's grip over all the levers of state power must be broken by the working class, independently mobilized behind a socialist program.

The impoverishment of the working masses amidst the current economic crisis is documented by a recent report from Northeastern University analyzing unemployment in 2009, based on income data for the previous year.

Unemployment in the fourth quarter of 2009 for those in the bottom 10 percent of household earnings was at the Depression level of 31 percent. A broader measure of unemployment, the labor market underutilization rate--which combines unemployment, underemployment, and those who have fallen out of the workforce because they have ceased actively searching for work--was over 50 percent among the bottom decile of earners, for the second decile, 37.6 percent, and for the third and fourth lowest income deciles, 17.1 percent and 15 percent, respectively. For the top 10 percent of earners, the underutilization rate was 6.1 percent.

The data is indicative of "a true Great Depression," according to the report, yet "there was no labor market recession for America's affluent."

The sharp polarization that reveals itself in fabulous wealth for a handful, on the one hand, and unemployment, wage cuts, homelessness and hunger for broad layers of working people on the other, marks an intensification of longer-term trends.

According to the Economic Policy Institute (EPI), "While many middle-income families have lost jobs, homes, and retirement savings during the latest recession, their economic woes date back much further." In the 30 years before 2008--the onset of the current crisis--nearly 35 percent of total income growth in the US was cornered by the top one-tenth of 1 percent of income earners. The bottom 90 percent shared only 15.9 percent of income growth in the same period.

According to the United Nation's Gini coefficient, which measures the national distribution of family income, the US had the highest level of inequality of the highly industrialized countries, based on the data available in 2008. It was ranked as slightly more unequal than Sri Lanka, and on a par with Ghana and Turkmenistan. In the Central Intelligence Agency World Fact Book's Gini ranking for 2008, the US fell just behind Cameroon.

The apologists for US capitalism have long claimed that, though inequality may be great, America is a land where anyone can go "from rags to riches" by "pulling themselves up by their boot straps."

Not so, according to a new report from the Organisation for Economic Co-operation and Development (OECD), which concludes that in the US "mobility in earnings, wages and education across generations" is at or near the lowest of the advanced economies. The US joined Italy and Britain as the countries where a worker's father's earnings are most determinant of his or her own wages. Moreover, in the US the role of parents' educational level on the educational achievement of their children was more pronounced than any other country, the report reveals.

The vast polarization of wealth in the US will only intensify. According to the Obama administration's rosy economic estimates, unemployment will not return to its pre-crash levels before the end of the decade. More realistic observers, however, acknowledge that mass unemployment will be a fixture of US life, and higher-paying jobs destroyed in the recession will never return. Combined with declining home values, skyrocketing health care and higher education costs, chronically high unemployment will result in steadily rising poverty.

But for the CEOs and bankers perched at the pinnacle of US society, the economic crisis has proven an out-and-out bonanza, a recent New York Times report reveals. John G. Stumpf, the head of the bank Wells Fargo, took home $18.7 million in 2009. Jamie Dimon of JPMorgan was number two in banker pay with $17.6 million in compensation. Lloyd Blankfein, whose Goldman Sachs has reaped windfall profits in the financial collapse, was awarded "only" $10 million.

These big name bankers are only the tip of the iceberg. "There are probably thousands of people that are in the Millionaire Club--or even the Ten Millionaire Club--that have gotten no heat," Wall Street compensation expert Alan Johnson told the Times.

Obama defends these obscene pay packages. "I, like most of the American people, don't begrudge people success or wealth," he said of the eight-figure rewards for the same financial executives whose firms have benefited from trillions in taxpayer support. "That is part of the free-market system."

In fact "most of the American people" not only begrudge these ill-gotten gains. They wonder why they have yet to see news footage of bankers and traders arrested and hauled from their plush offices. Now working class anger is becoming increasingly trained on the political system, which, as a year's experience with the Obama administration has taught, does the bidding of Wall Street regardless of which party controls the White House and Congress.

The antidote to the plundering of society that has gone unchecked for decades is the nationalization of the banks and their transformation into public institutions, democratically controlled by working people. The ill-gotten gains of the lords of finance must be expropriated and used to put in place a program of full employment, free universal health care, free higher education, and infrastructure development.

The fight for this program requires the mobilization of the working class in the US and internationally, independent of the Democrats and Republicans and all the political formations that defend the existing capitalist set-up.

In the US, triple-digit losses on the Dow Jones Industrial Average were recouped in the final hour, resulting in small gains for the Dow and the other major indexes in volatile trading, following a sharp selloff on Thursday.

The Dow ended the day with a 10-point gain, following a 268-point plunge on Thursday. The index, which was below the 10,000 mark for most of the day, has lost 6.5 percent over the past two weeks.

All of the major European indexes closed down, with France's CAC-40 falling the most--3.4 percent, its biggest one-day drop since November 26. The Pan-European Dow Jones Stoxx 600 Index was off 2.2 percent, its lowest close since November 3.

Japan's Nikkei fell 2.89 percent and the Shanghai Composite was off by 1.87 percent.

Stocks were down for the second day in Greece, Portugal and Spain, three heavily indebted eurozone countries whose ability to redeem bondholders--including major European and US banks--is increasingly in doubt. Prices of government bonds of all three countries continued to fall and interest rates rose further, as global investors increased pressure on the three governments to impose draconian austerity measures on their respective populations.

The cost of credit default swap (CDS) contracts on the debt of the three countries rose even more dramatically. Credit default swaps--now a multi-trillion-dollar market--are a form of unregulated derivatives in which CDS sellers guarantee the value of bonds held by CDS buyers. Rising CDS prices reflect eroding confidence in corporate or government bonds insured by the sellers of the CDS contracts.

The CDS market is a hotbed of speculation, since investors, including banks and hedge funds, can bet on the price of CDS contracts without holding the underlying bonds. The threat of sovereign default, most immediately by Greece, but also by Portugal and Spain, has provided an opportunity for speculators to drive up the price of insuring the countries' bonds by speculating on the likelihood of a default, thereby further undermining confidence in the countries' debt and increasing the prospects of such an outcome.

All three countries have pledged to impose sweeping cuts in public-sector jobs and wages and in social benefits, along with new consumption taxes, in line with demands from the European Union that they sharply reduce their budget deficits, currently 10 percent or more of their respective gross domestic products.

Greek President George Papandreou of the social-democratic PASOK party, who was elected last year on the basis of promises to reverse the right-wing policies of the preceding conservative government, this week announced plans for an across-the-board freeze on public sector wages along with a cut in allowances, which amounts to a wage cut of 4 percent. He also called for a pension "reform," which entails raising the retirement age, as well as higher fuel taxes.

The social-democratic Portuguese and Spanish governments have pledged to impose similar austerity measures.

Signs of mounting resistance by the working class in these countries are playing an enormous role in the tremors rippling through the global financial markets. There is a growing sense in governments and board rooms around the world that a major confrontation with the working class is coming, with potentially revolutionary implications.

The banks and the media are demanding that heads of state and parliaments demonstrate the "political will" and "political consensus" necessary to impose historic attacks on the working class. These phrases are euphemisms for a degree of ruthlessness that implies a readiness to employ state repression. However, the financial markets are at once skeptical over the willingness of political leaders to employ the required measures and anxious over the outcome of such a confrontation.

On Thursday, Greek workers launched the first in a series of strikes to protest the government's austerity package. Customs and tax officials began a 48-hour strike that shut ports and border crossings throughout the country. Strikes by other public and private-sector workers have been called for next week.

Greek farmers have been blockading highways in protest against government austerity proposals.

A major cause of the global stock selloff that began Thursday was the announcement by the Greek unions of a one-day general strike set for February 24. The unions had initially indicated their willingness to assist the PASOK government in carrying out its austerity plans, but have been forced by pressure from the working class to call the strike actions.

Union leaders hope to use the partial labor mobilizations to defuse popular anger and channel it behind nationalist slogans, while they maneuver to work out a deal with the government acceptable to the banks and the European Union. However, there are fears within ruling circles that the unions may not be able to contain the anger of workers and young people, who are already facing mass unemployment and declining living standards.

Portuguese and Spanish unions are also threatening to call strikes and protests.

Among other factors that precipitated the stock selloff was the failure of the Portuguese government to find buyers for the full amount of a government bond offering on Wednesday, and the defeat of its austerity package at the hands of opposition parties in parliament.

The debt crisis of the weaker countries in the 16-nation eurozone, including Ireland and Italy in addition to Greece, Portugal and Spain, is raising questions about the viability of the euro itself. There is increasing public speculation that the 11-year-old currency could collapse under the pressure of the economic and financial crisis.

In recent weeks, the euro has fallen precipitously against the US dollar and the yen. On Friday, it fell to $1.3620. It has declined 9 percent against the dollar since December.

This does not reflect any inherent strength of the US currency. On the contrary, looming above the debt crisis in Europe is the far greater crisis of the world's biggest debtor--the United States. It is no accident that the European crisis has erupted in the aftermath of last week's budget announcement by President Obama. The US budget plan revealed that the current deficit is $1.6 trillion, equivalent to 10.6 percent of the country's' gross domestic product, a record high since the end of World War II.

This approaches Greece's deficit ratio of 12.7 percent of GDP, is higher than that of Spain and twice the eurozone average. The US budget, moreover, projects trillion-dollar deficits for years to come.

As in every other industrialized country, the American state responded to the financial crash of 2008 by taking on the debts of its banks and essentially bankrupting its treasury in order to preserve the wealth of its financial elite. The Obama administration, no less than the governments of Europe, is demanding that the cost be borne by the general population in the form of sweeping cuts in basic social programs and a reduction in consumption--i.e., a permanent and dramatic decline in working class living standards.

Unlike in previous international financial crises, such as the Asian debt crisis of the 1990s, the United States cannot play the role of lender of last resort. The United States has irretrievably lost its previous position as the dominant world economic power, and its decline is reflected in growing challenges to the role of the dollar as the world reserve and trading currency.

At last month's World Economic Forum in Davos, French President Nicolas Sarkozy in his keynote speech said he would use his upcoming presidency of the Group of 20 nations to push for a new international monetary system in which the dollar would no longer be the primary reserve currency. And on Wednesday, Moody's Investors Service warned that the United States faces the loss of its triple-A sovereign credit rating unless Obama moves to slash the federal deficit by carrying out more draconian spending cuts than he has thus far announced.

It is the erosion of US economic power and solvency that lends to the sovereign debt crises in Greece, Portugal and other European countries such an explosive and universal character.

The recent rise in the dollar is the result of a "flight to safety" by investors who fear a collapse in world asset bubbles and consider US Treasury bonds, along with German government debt, to be a temporary haven. In important respects, the short-term reversal in the dollar's decline is an expression of a deepening of the crisis on world financial markets.

As a number of economists warned last year, the US policy of flooding financial markets with cheap credit on the basis of near-zero interest rates and the electronic equivalent of printing a trillion dollars--designed to prop up the major US banks and enable them to record bumper profits despite double-digit unemployment--fueled a huge wave of speculation on risky assets such as stocks, bonds, commodities and currencies. These economists predicted that a major rise in the value of the dollar would pull the rug out from under this speculation, which was based on the assumption of a continued decline in the dollar, and force a rapid and destabilizing selloff of inflated assets.

It now appears that this collapse in asset bubbles has begun.

The author also recommends: Speculative recovery sows seeds of an even greater economic crash
[10 November 2009]

Unnamed sources who spoke to Newsweek magazine said the Obama Justice Department's Office of Professional Responsibility (OPR) has concluded that John Yoo and Jay Bybee, who penned the infamous memos, used "poor judgment" but will not be subject to disciplinary action. Yoo and Bybee worked in the Justice Department's Office of Legal Counsel, along with Steven Bradbury, who is also named in the report.

The conclusions of the OPR report provide yet another demonstration of President Barack Obama's defense of the anti-democratic and criminal practices of the Bush administration in the "war on terror," and the current administration's resolve that no one--especially those at the highest levels of government--will be held to account.

An earlier version of the OPR report completed in December 2008 concluded that Yoo, presently a University of California at Berkeley law professor, and Bybee, now a federal appeals court judge on the 9th Circuit, violated professional standards when they drafted an August 2002 legal opinion authorizing brutal methods by the CIA in the interrogation of suspected terrorist detainees.

The OPR recommended referral of their cases to state bar associations, which could have revoked their law licenses. Bybee also could have faced an impeachment inquiry before Congress. However, under a new review of the OPR report ordered by Attorney General Eric Holder shortly after he took charge of the Justice Department, the two will not face even these weak sanctions.

In early 2009, the Obama Justice Department began to water down the conclusions of the OPR probe, which was initiated in mid-2004 during the Bush administration following disagreements between the Office of Legal Counsel and White House lawyers over the Bush administration's defense of "enhanced interrogation" techniques justified by the Yoo-Bybee opinions.

David Margolis, a 34-year career prosecutor at the Justice Department, was eventually tasked by Holder with reviewing the final version of the OPR report. It was reportedly Margolis who downgraded the report's initial findings against Yoo and Bybee from "professional misconduct" to "poor judgment."

As recently as December, Obama administration lawyers under the direction of Holder supported the dismissal of a case brought against Yoo by Jose Padilla, the US citizen held incommunicado and tortured for more than two years after his arrest at Chicago's O'Hare Airport.

Earlier last year, Obama administration attorneys supported the dismissal of suits brought by a wide range of victims, including those subject to "extraordinary rendition," targets of government eavesdropping, and detainees transported from the Middle East to US military bases in Afghanistan.

The Justice Department's defense of Yoo and Bybee testifies to the Obama administration's continuation of the police-state structures developed under Bush. The memos drafted by Yoo, Bybee and Bradbury were solicited by the Bush White House to provide pseudo-legal justification for systematic torture that was already being carried out by CIA interrogators.

The memos made the gruesome and legally absurd argument that "enhanced interrogation techniques" such as waterboarding, threats of death, sleep deprivation, extreme variations of temperature, and the use of psychotropic drugs do not rise to the level of torture unless they inflict pain equivalent to "major organ failure" or death.

Since authoring the memos, Yoo has gone on to write three books in which he defends his doctrine that the president as the "commander in chief" in wartime possesses unlimited powers, including the right to authorize torture and other illegal acts. In one of his August 2002 memos, he asserted that CIA agents accused of torturing Al Qaeda suspects could claim they were acting in "self-defense" to prevent future terror attacks.

Newsweek notes that the OPR report is "sharply critical" of the "legal reasoning used to justify waterboarding"' and other torture methods used by CIA interrogators after September 11, and that it will provide "many new details about how waterboarding was adopted and the role that top White House officials played in the process."

This is, however, merely window dressing for a cover-up of war crimes and crimes against the democratic rights of the American people and tacit sanction for the continuation of such practices. Obama has frequently touted his "ban" on torture, but this remains an empty and cynical gesture under conditions where the government protects former government officials who authorized these crimes.

There are two major reasons why the Obama administration continues to block any prosecution of those responsible for authorizing torture. First, the Democratic Party is complicit in the crimes of the Bush administration. Democratic congressional leaders were briefed by Bush officials on the torture practices and violations of democratic rights and international law, and supported them.

Second, such policies continue under the current administration.

One year after assuming office, Obama has broken his pledge to close the Guantanamo detention camp and blocked suits by Guantanamo detainees challenging their detention. He has explicitly defended the Bush administration policies of indefinite detention, extraordinary rendition, and military tribunals. The US military prison at Bagram Air Base in Afghanistan continues to hold hundreds of prisoners, without charge or trial, under barbaric conditions.

Obama is going one step further than Bush by seeking to establish a military prison in Illinois where prisoners will be held indefinitely without charge or trial and subjected to treatment defined by international and US law as torture. He is thereby institutionalizing on US soil the illegal, police-state methods improvised by Bush.

Obama has moreover upheld the Bush doctrine of pre-emptive war, with Yemen becoming the latest target of US threats, along with Iran.

The administration's de facto support for John Yoo and his torture memo accomplices is of a piece with these policies, which are supported by both big business parties. Under conditions of expanding militarism abroad and deepening social inequality at home, there is no section of the political establishment committed to the defense of democratic rights.

Democratic rights can be defended only through the independent mobilization of the working class against the Obama administration, the Democrats and Republicans, and the capitalist system which is the source of war and repression.

The conference offered nothing concrete in terms of new assistance, instead scheduling a donors meeting at the United Nations in March. Much of the rhetoric coming out of the gathering seemed to bear little relationship to the situation on the ground in Haiti, where 150,000 people have been confirmed dead, hundreds of thousands more are wounded and over 1.5 million are homeless.

Prime Minister Jean-Max Bellerive, representing what remains of the Haitian government, together with foreign ministers from Europe and the Americas spoke of respect for Haitian sovereignty, subordination of foreign military forces to humanitarian efforts, and allowing Haitians to determine and lead their own reconstruction efforts.

Some leading officials, including International Monetary Fund Director Dominique Strauss-Kahn, have gone so far as to speak in terms of a "Marshall Plan" for Haiti.

In reality, Haiti is now being run by the US military, which has deployed over 13,000 troops and unilaterally taken control of the country's airport and port facilities. The Pentagon has dominated the provision of relief, which it has subordinated to the number one priority of deploying combat-equipped US soldiers and Marines, much to the detriment of injured and hungry Haitians waiting for life-saving medical supplies and food.

The US newsweekly Time gave expression to the real situation, referring to the top US military commander in the country, US Lt. Gen. Ken Keen, as "the de facto king of Haiti." Meanwhile, the Haitian people have seen or heard nothing of Haitian President René Préval.

Behind the talk of Haitians determining their own future and the country's government leading the way, what is being discussed is a plan worked out in the months before the earthquake that is dictated by the profit interests of US banks and corporations, together with those of Haiti's wealthy elite.

Speaking to reporters en route from Washington to Montreal, US Secretary of State Hillary Clinton referred to this plan, while praising the work of her husband, former President Bill Clinton, in seeking to implement it in his position as United Nations envoy to Haiti.

"He had just had a conference with 500 businesspeople," she said. "They were signing contracts, they were making investments."

She continued: "So we have a plan. It was a legitimate plan, it was done in conjunction with other international donors, with the United Nations. And I don't want to start from scratch, but we have to recognize the changed challenges we are now confronting."

The plan, worked up at the behest of the UN last year, is aimed at expanding the Haitian economy through the development of free trade zones based on garment sweatshops in which Haitian workers would be paid near-starvation wages.

The initiative was based on a report prepared for the UN last year by Oxford University economics professor Paul Collier. The report perversely cast Haiti's poverty--the deepest in the Western Hemisphere--as its number one asset in the global capitalist economy.

"Due to its poverty and relatively unregulated labor market, Haiti has labor costs that are fully competitive with China, which is the global benchmark," Collier wrote.

This "asset" is something that both Washington and Haiti's parasitical ruling elite have jealously guarded. Former President Jean-Bertrand Aristide was overthrown twice--in 1991 and 2004--in bloody coups orchestrated by the CIA in conjunction with Haitian factory owners, in large measure for proposing to raise the country's minimum wage.

After his election for a second term in 2000, Aristide doubled the minimum wage and banned piece work in the garment factories, provoking fierce opposition from the owners of these enterprises. Andy Apaid, the Haitian-American owner of the largest sweatshops in Haiti and one of the Clintons' key allies in the new "development" plan, was a key figure in the 2004 coup, which saw Aristide abducted and bundled out of the country by US troops and thousands of Haitians massacred by right-wing death squads.

Last year, following mass demonstrations by students and workers in which several people were killed and wounded, President Préval was forced to accept an increase in the minimum wage that had been passed by the Haitian legislature. However, he enacted a sub-minimum wage for the garment assembly industry of $2.98 a day--approximately one-twentieth of the minimum wage in the US.

While such a system will make super-profits for garment manufacturers and further enrich Haiti's native oligarchy, it will do nothing to alleviate the country's grinding poverty and will only deepen its pervasive social inequality, the worst in the hemisphere. Garment assembly involves importing pieces of clothing that are put together in free trade zones and then exported out again, with virtually no impact on the local economy.

While Secretary Clinton indicated that this slave labor blueprint is the one Washington is still working off of in the wake of the January 12 earthquake, she allowed that the catastrophe would require making some modifications.

Clinton praised Bellerive for talking about "decentralizing" the Haitian economy. "As part of our multilateral efforts to assist Haiti, we should look at how we decentralize economic opportunity and work with the Haitian government and people to support resettlement, which they are doing on their own as people leave Port-au-Prince and return to the countryside from which most of them came," she said.

The Haitian authorities, backed by Washington and the UN, have begun implementing a plan to move hundreds of thousands of predominantly poor people out of Port-au-Prince and into resettlement camps. Ground has been cleared for one of these at Croix-des-Bouquets, eight miles from the capital, which would house 10,000 people. Other sites are being chosen, with the idea that those evacuated from the capital will be permanently housed there.

In a society in which social divisions are so stark, the so-called reconstruction plan for Haiti is inevitably developing along class lines. It may well emerge that the new resettlement camps will serve as captive labor for free trade zones erected in close proximity.

Meanwhile, Port-au-Prince will be reconstructed as a smaller city, geared to the interests of the country's wealthy. This was hinted at in a statement by the Haiti's ambassador to Washington, Raymond Joseph. Speaking on a C-SPAN television broadcast about the tragedy that has been inflicted upon the Haitian people, he said, "There is a silver lining. What was not politically possible was done by the earthquake. We will rebuild differently."

Such social re-engineering in the interests of a native ruling class and foreign capital, and at the expense of the broad masses of Haitian workers and poor, will inevitably provoke social upheavals and resistance. This is why Washington has placed getting "boots on the ground" ahead of saving the lives of the earthquake's victims.

A brief article published on the inside pages of the business section of the January 1 New York Times ("With Bigger Bonuses, An Upside for Banks") notes in passing that the three top Wall Street banks will pay out an estimated $49.5 billion in cash bonuses and stock awards.

Those banks--Goldman Sachs, JPMorgan Chase and Morgan Stanley--received a combined $45 billion in cash under the $700 billion Troubled Asset Relief Program (TARP) passed by Congress in October of 2008. Along with the rest of the banks, they have benefited from trillions of dollars in nearly interest-free loans, debt guarantees, securities purchases and other subsidies from the Treasury and the Federal Reserve Board.

The government has further underwritten bank profits and surging bonuses by keeping interest rates at near-zero and pumping trillions of dollars of cheap credit into the financial markets, while placing no restrictions on the ability of the banks to resume the speculative practices that precipitated the financial crash of 2008.

Meanwhile, the American people have lost $11 trillion in wealth, primarily through the collapse of home values. For their part, the banks have sharply curtailed lending over the past 15 months, draining more than $3 trillion of credit from the economy.

In the fall of 2008, the Bush administration, with the support of then-presidential candidate Barack Obama and congressional Democrats, sought to sell the bailout to the public on the grounds that it would enable the banks to resume lending. However, the TARP law imposed no strings on the bailed out banks, allowing them to do with the money what they wanted, without even requiring that they tell the government how they were using their cash windfalls.

The curtailment of lending by the banks has played a major role in deepening and prolonging the recession. Instead of increasing credit to businesses and consumers, the banks have made large--in some cases, record--profits through speculative trading in stocks, bonds, currencies and commodities.

The same article in the Times cites Robert Willens, an accounting and tax analyst in New York, who estimates that US banks will hand out $200 billion in total compensation, a figure that does not take into account the hedge fund industry.

To place this sum in perspective, it is roughly equal to the annual median salary of 4 million American workers.

All of the major banks have been allowed by the Obama administration to repay their TARP cash injections, thereby freeing them from minor restrictions on executive pay imposed on banks that continue to hold TARP money.

According to Willens, the banks will reap $80 billion in tax savings from the $200 billion in compensation, since most employee compensation is a tax deductible expense under existing tax laws. The biggest tax break will go to Goldman Sachs, which expects to award its employees a record $23 billion in bonuses. Goldman will save about $9 billion in federal income taxes on the bonuses it pays out for 2009.

Altogether, Goldman, JPMorgan Chase and Morgan Stanley will gain nearly $20 billion in tax breaks from their employee compensation this year.

Indicative of the year-end bonanza for bankers, the Times reported in a separate article on January 1 that Wells Fargo, the fourth largest US bank by assets, which received $25 billion in TARP cash, plans to pay its top four executives a combined $25 million in bonuses. These are to be paid entirely in stock options, rather than cash.

In awarding the bonuses in stock rather than cash, Wells Fargo is following the example of other big banks, including Goldman Sachs. Under prodding from the administration, banks are paying a greater portion of executive compensation in deferred stock, supposedly to tie pay awards to long-term growth rather than short-term gains. However, as the Times points out, "If banks... continue to rebound from the financial crisis, their shares--and the executive payouts--could surge."

Since the government has made clear that it will impose no genuine reforms or restrictions on the banking industry, and will spend unlimited sums to protect the wealth of the Wall Street elite, the bankers have every reason to believe that stock bonuses will prove more lucrative than cash.

The government's undiminished commitment to rescuing Wall Street was underscored on Christmas eve, when the Treasury announced that it was removing a $400 billion cap on government aid to the mortgage finance giants Fannie Mae and Freddie Mac and approving cash pay packages of $6 million each to the CEOs of the government-controlled firms.

Surging bank profits and bonuses go hand in hand with a dizzying rally on the US stock market. In a year that saw the permanent destruction of millions of jobs, all three major US stock indexes recorded massive increases. The Dow Jones Industrial Average ended 2009 up 18.8 percent for the year. The broader Standard & Poor's 500 stock index surged 23.5 percent, and the technology-heavy Nasdaq rose 43.9 percent.

From their lows in early March, the stock indexes recorded even more staggering gains in a "rally many investors had not seen in their lifetime," according to the January 1 Washington Post. The Dow rose 59 percent, the S&P 500 soared 65 percent and the Nasdaq was up 79 percent.

Financial stocks were up 15 percent for the year, including Bank of America, whose share price quadrupled from its March low. Ford stock increased 532 percent from its low point in March.

In all, the value of US stocks increased by $5.6 trillion from the market's nadir, the resulting windfall going disproportionately to the wealthiest investors.

A major factor in the stunning rebound in the financial markets was the refusal of the government to impose any serious reforms in the wake of the worst financial crash since the Great Depression. As the Wall Street Journal noted in a year-end review on January 4: "But more than a year after Lehman Brothers, American International Group Inc., Fannie Mae, Freddie Mac and Washington Mutual collapsed or were saved by the government and financial markets swooned, it is striking how little on Wall Street has changed."

The scale and character of the government bailout was summed up aptly by Simon Johnson, the former chief economist at the International Monetary Fund, in a review of recent books on the financial crash. Writing in the December 27 Washington Post, Johnson said, "The Wall Street executives kept their jobs, their bonuses and their pensions; they benefited from unprecedented rule changes and unlimited monetary and fiscal support; and their firms became even bigger and more dangerous to the economic health of society...

"The executives of our largest banks ran their firms into the ground, taking excessive risks that even now they fail to understand fully. But, as these individuals saw it, unless they personally were saved on incredibly generous terms, the world's economy would grind to a halt."

The Obama administration and the Democrats, no less than Bush and the Republicans, agreed that their chief mission was to rescue the personal fortunes of these executives and the financial oligarchy they represent.

But unlike in the Great Depression, when limited reforms were put in place in response to the crisis, the Obama administration, Congress, and state and local governments are taking no serious measures to provide relief. On the contrary, the two parties of big business are exacerbating the crisis through budget cuts at the state and local level and the federal government is preparing new austerity measures.

Unemployment: At over 10 percent, the official US jobless rate reached in October and November was the highest since June of 1983. A broader measure of unemployment, taking into account those who have fallen out of the official workforce, reveals that something approaching one in five workers is unemployed or underemployed.

The economy has not added jobs since December 2007, and in that same time span has lost 7.2 million jobs overall. Coupling these losses with population growth--the economy must add about 150,000 jobs per month to break even--the net jobs deficit in the period is well over 10.5 million.

It is widely acknowledged that most of the jobs lost will not return for years, if ever. Even by the optimistic forecast of the Federal Reserve Board, the jobless rate will remain above 7 percent through 2011. Those without jobs face long periods of unemployment, the most recent figures showing that 38.3 percent of the unemployed have been without work for 27 weeks or longer.

Data for November show that all 50 states have witnessed an increase in unemployment since the end of 2008. Michigan continued to have the highest official jobless rate at 14.7 percent. Detroit, its principal city and the longtime hub of US auto production, had an official unemployment rate of 27 percent. The real rate approaches 50 percent, a number in line with the worst levels of big city unemployment during the Great Depression.

In California, 12.3 percent of the official workforce was unemployed in November. The most populous US state had by itself shed 617,000 jobs over the previous year.

What remains of the US social safety net is woefully unprepared to meet this crisis, with jobless benefits reaching well under half of unemployed workers. In December nearly ten million workers in the US were receiving jobless benefits, not quite half of these in the form of extended or emergency relief. There were some 5.6 million workers who had both exhausted their unemployment benefits and given up looking up for work.

Those fortunate enough to keep their jobs in 2009 saw their hours, wages and benefits cut, even as employers drove up their productivity. In real terms, average weekly wages fell by 1 percent last year, while worker productivity was ratcheted up by 8.1 percent in the third quarter and 6.4 percent in the second.

Foreclosures and bankruptcies: Increasing numbers of unemployed and financially stressed workers have been unable to meet their mortgage payments. During the third quarter, the number of US homes in foreclosure surpassed one million. In October, a survey by the Mortgage Bankers Association found that about one in ten mortgages was at least one payment behind, while 4.47 percent were in the process of foreclosure.

Most of the recent increase in foreclosures has occurred outside of the subprime loan market, among households that had previously qualified for loans based on stable employment and income.

The Wall Street Journal reported on Monday that filings for personal bankruptcy rose to 1.41 million in 2009, up by almost one third. The newspaper called the increase "a surge largely driven by foreclosures and job losses."

Poverty and hunger: Poverty and hunger, already on the rise in 2008 before the brunt of the economic crisis hit, have intensified.

Analysis of the 2008 US census using criteria favored by the National Academy of Sciences shows that 47.4 million Americans, 15.8 percent of the population, were living below the official poverty line. The official government tally recorded 39.8 million people in poverty in 2008, or 13.2 percent of the population. One in five US children was living in poverty in 2008, according to the official data.

The real poverty rate is far higher, since the income threshold set by the government--$22,000 for a family of four--is absurdly low.

Judy Putnam, a spokesperson for the Michigan League for Human Services, discussed with the World Socialist Web Site her organization's new study "Michigan by the Numbers: Hard Times Continue." According to Putnam, 22 percent of the state's children under five are growing up in poverty. For African American children, the figure is 45 percent, with half the children in Detroit growing up poor.

"Many of those who would have received cash assistance in past recessions are not getting it now," Putnam said. "Only a third are getting cash assistance compared with two-thirds before 'welfare reform' in 1996. All of these folks who need assistance have been squeezed off the safety net. People in Michigan are heavily dependent on food stamps and, if they qualify, for unemployment benefits. But unlike previous recessions only the very, very poor qualify for cash assistance."

The evidence of widespread hunger in the US is unmistakable. In December, the National Conference of Mayors released a study of 27 major cities conducted between October 2008 and September 2009. The report revealed the largest increase in those seeking food assistance since 1991.

In November, the United States Department of Agriculture reported that a record 49.1 million Americans, one sixth of the population, lacked dependable access to adequate food in 2008.

Also in November, Feeding America, a national food assistance organization, released details of an economic impact survey of some of its 63,000 member food charities. It found that between summer 2008 and summer 2009, demand for food charity rose by over 30 percent nationally.

Many of those reliant on food assistance have no other source of income, a new analysis of state data by the New York Times reveals. Six million Americans, or 1 in 50, report no income beyond what they receive in food stamps through the joint federal-state Supplemental Nutrition Assistance Program (SNAP).

According to a recent study published in the Archives of Pediatrics and Adolescent Medicine, about half of US children will rely on food stamps at some point during their childhood. The figure is 90 percent for black children.

Homelessness and utility cutoffs: With a bitter cold snap settling over much of the nation last week, those suffering homelessness and utility cutoffs found themselves in dangerous conditions.

The caseload of the government's Low-Income Home Energy Assistance Program (LIHEAP) increased by 25 percent in 2009, and is projected to increase by another 20 percent in 2010.

Among the 27 major cities surveyed by the US Conference of Mayors report, 19 reported an increase in family homelessness between the autumns of 2008 and 2009. The largest increases were in Dallas (20 percent), Boston and Kansas City (22 percent each), and Charleston (41 percent).

Across the US, shantytowns reminiscent of the "Hoovervilles" of the 1930s have emerged. People in these encampments live in tents or shacks built of old wood, scrap metal, cardboard and other waste, with no running water, electricity, plumbing, or garbage removal.

An indelible scene took place in Detroit on October 5, when an estimated 50,000 city residents formed a long line stretching around the Cobo Hall convention center after hearing rumors that the city was dispensing assistance for utility bills and housing payments. City officials said only a tiny fraction of those seeking assistance would receive help.

Conditions of the youth: The economic crisis has exacted perhaps its greatest toll on the youth. All of the data related to hunger, homelessness and unemployment show that young people are disproportionately affected.

A study by the Pew Research Center published in November shows that one in ten adults under the age of 35 has moved back to his parents' home as a result of the recession. Overall, half of those aged 18 to 24 now live with their parents. Only about half of young people have jobs, the lowest figure on record dating back to 1948.

A recent study showed that less than half of students graduate on schedule after signing up for a two- or four-year college program, and that most who quit or delay their studies do so on account of economic hardship.

Those who do graduate enter the worst market for degree holders in 30 years, and with record levels of student debt. The average college graduate in 2008 carried a burden of $23,000 in student loan debt, while the unemployment rate for college graduates aged 20 to 24 reached 10.6 percent in the third quarter.

Meanwhile, one in ten male high school dropouts, ages 16 to 24, is currently either in prison or juvenile detention. Among black male high school dropouts, more than a fifth are incarcerated, a study by researchers at Northeastern University shows. For the population as a whole, the Justice Department recently reported that 1 in 31 US adults is behind bars or on probation or parole.

The response of the government: The response of state and local governments to this social catastrophe is drastic reductions in social services and job cuts, under conditions where the Obama administration refuses to provide emergency aid to help cover budget deficits.

The total deficit of the states from 2009 to 2012 is now estimated at $460 billion, a figure that is likely to grow as more state capitals adjust estimates for rapidly declining tax revenue.

"Anything and everything's on the table," said Todd Haggerty, a policy associate with the National Conference of State Legislators. States have "cut the fat, cut the muscle and are now cutting bone. The easy decisions have already been made."

The fiscal situation confronting the states is expected to deteriorate sharply next year when funds from the federal economic stimulus package, the American Recovery and Reinvestment Act, are exhausted.

Like the states, the federal government faces a fiscal catastrophe, with cumulative US budget deficits expected to top $10 trillion by the end of the new decade, according to the Obama administration's rather optimistic forecast. Cuts in spending must be put in place, in part, to convince creditors, especially China, that the US "can get its finances back in order," the Wall Street Journal wrote Monday in a feature on the annual gathering of the American Economic Association.

The response of the Obama administration is to call for an unprecedented program of fiscal austerity and sharp cuts in social spending, to be announced in his State of the Union address early next month and outlined in the new federal budget proposal shortly thereafter. Obama's repeated insistence on the need for Americans to reduce their consumption--even as trillions more are allocated for the banks and for ever-expanding wars in Central Asia and the Middle East--is code language for a deepening of the assault on the working class.

The discussion of possible deficit reduction measures includes regressive taxes such as a national sales tax and sweeping cuts in entitlement programs on which millions of people rely, such as Medicare and Social Security.

Such measures are on top of the administration's health care overhaul, which will reduce costs for corporations and the government while slashing benefits and increasing out-of-pocket expenses for millions of working people.

This despite the fact that leading military commanders and politicians are clearly intent on using the massacre to circumvent the restrictions imposed on the German military as a consequence of the crimes it committed in the Second World War.

It is now regarded as certain that a German colonel, Georg Klein, gave the order for an air strike on two hijacked tankers in the early hours of September 4, with the intention of killing the people who had gathered near the vehicles.

There was no immediate danger to German soldiers or the German field camp located seven kilometers away. Apparently, the colonel hoped to strike down the leaders of local militias who were opposing the international occupation force. In a note to his superiors written one day after the attack, Klein acknowledged that he intended to "annihilate insurgents through the use of air strikes."

In its edition of last week, Der Spiegel names some of the targets: "Mullah Shamsuddin, an experienced commander of the Pashtun," as well as the "four Taliban leaders Mullah Abdul Rahman, Maulawi Naim, Mullah Siah and Mullah Nasruddin." The latter were "local leaders, who each commanded around 15 fighters and controlled small areas around Kunduz," the magazine reports.

They had been tracked down and pursued over the preceding days by members of the top-secret KSK unit. Klein consulted with at least one KSK soldier before he gave the command to attack. This indicates that he clearly hoped to "annihilate" one or several of the local leaders.

In so doing--even though he may not have spoken directly with his superiors--Klein "had good reason to believe that his superiors and the German government would approve of his robust actions," notes Der Spiegel on the basis of its investigation.

Two state secretaries, August Hanning (Interior Ministry) and Peter Wichert (Defense Ministry), traveled to Kabul on October 21, 2008 in order to confront the government of Hamid Karzai, following an escalation of attacks on German soldiers. On their return to Berlin, they had confidential discussions with representatives from the Chancellery and the Interior, Defense and Foreign ministries over how to proceed. Der Spiegel comments on the discussions: "Hanning is for a harder course, he wants to hunt down those backing the Taliban. Hunt down or be hunted, that is the alternative according to Hanning."

Since this initial meeting there have been further discussions by this group aimed at organizing a behind-the-scenes transformation of the role of the German army. In May 2009, KSK units began hunting down alleged Taliban for the first time.

In April, the Defense Ministry had deleted an exception from the NATO operations plan which prohibited German troops from practicing "the use of deadly force" except in cases of self-defense. During the summer, the deployment rules were changed accordingly.

The so-called "pocket cards" carried by every German soldier were reworded to allow soldiers to respond with deadly force "against individuals who are planning, preparing or supporting attacks, or who exhibit other forms of hostile behaviour."

The term "other forms of hostile behavior" is so broad that it allows German soldiers to retaliate against practically anyone opposed to the presence of the German military. Colonel Klein therefore could quite rightly feel he had the backing of his superiors when he gave his order to attack and "annihilate" insurgents on September 4.

In adopting a policy of deliberate liquidation, the German army is reverting to methods which are characteristic of modern colonial warfare and stand in flagrant violation of elementary principles of law. "Targeted killing" has become an established military term. Entire books and numerous legal papers have been devoted to the topic. A search for "targeted killing" on Google generates over one million hits.

A contribution on the web site of the Council on Foreign Relations, the most important foreign policy think tank in the US, defines the term as follows: "Targeted killings are used by governments to eliminate individuals they view as a threat. Generally speaking, a nation's intelligence, security or military forces identify the individual in question and carry out an operation intended to kill him or her. Though questionable, the practice has been used by defense and intelligence operations by governments around the world and has been viewed with increased legitimacy since the start of the so-called war on terror."

In other words, "targeted killing" is aimed at the execution of political opponents without accusation or judgment. Denunciation by a secret service is sufficient to arrive at and carry out a death sentence. The weapons used--precision bombs as in Kunduz, remote-controlled missiles or remote-controlled explosive devices--are such that the victims (and those around them) have no chance to defend themselves.

Such methods are not new. But for a long time they were regarded as the reserve of the secret services of totalitarian regimes. The Soviet secret service GPU, for example, regularly hunted down and killed political opponents of Stalin abroad. During the Cold War, the CIA also carried out assassinations of selected politicians, but was later required--at least officially--to abandon such practices. In 1981, an executive order of the president declared: "No person employed by or acting on behalf of the United States Government shall engage in, or conspire to engage in, assassination."

In the course of the 1980s and 1990s, however, these guidelines were increasingly abandoned. In 1986, US President Ronald Reagan ordered a missile attack on the house of the Libyan head of state, Muammar Al Gaddafi, in Tripoli, and in 1998, president Bill Clinton ordered missile attacks on an alleged terrorist camp in Afghanistan and a factory in Sudan. The justification for the attack on Gaddafi was the bombing of a disco in Berlin frequented by US soldiers, while the strikes ordered by Clinton were prompted by attacks on US embassies in Kenya and Tanzania.

A pioneer of the policy of "targeted killing" is the Israeli government. Already in the 1970s, the Israeli secret service Mossad had hunted down and murdered alleged terrorists. It directed its operations, in particular, against the political leadership of the Palestinian nationalist movement. Several leaders of Yasser Arafat's Fatah were murdered by Israeli commandos. Following Fatah's arrangement with Israel in the 1993 Oslo Agreement, the leaders of Hamas, as well as the Lebanese Hezbollah and Amal, were targeted by Mossad.

According to a report in the Middle East Quarterly, in the first twelve months of the Intifada rebellion that began in the occupied areas in September 2000, Israel carried out "at least forty cases of assassinations of middle- and high-level Palestinian activists." The Israeli armed forces proceeded with the utmost brutally, bombing cars on public roads in densely populated areas or destroying houses, killing entire families of the targeted victims. Due to their flagrant illegality, the Israeli murders were a source of international criticism, but behind the scenes the Israeli government could rely on official backing, particularly from the US.

The attacks of September 11, 2001 were used by the Bush administration to drop any official reservations standing in the way of targeted killings. Since then, the cold-blooded liquidation of political opponents, purported to be "terrorists" or "Taliban," has become common practice of the American forces occupying Iraq and Afghanistan. This policy has been extended into Pakistan, where opponents of the US or the Pakistani government have become the targets of remote-controlled US drones.

Bush's successor Barack Obama has not only continued this policy, he has intensified it. "It is a slight exaggeration to say that Barack Obama is the first president in American history to have run in part on a political platform of targeted killings--but not much of one," writes law professor Kenneth Anderson in a contribution for the Brookings Institution. He adds in praise: "Obama was right as a candidate and is correct as president to insist on the propriety of targeted killings--that is, the targeting of a specific individual to be killed, increasingly often by means of high technology, remote-controlled Predator drone aircraft wielding missiles from a stand-off position. The strategic logic that presses toward targeted stand-off killing as a necessary, available and technologically advancing part of counterterrorism is overpowering."

Although there is no shortage of pundits prepared to justify this practice, it is patently illegal. Not only does it violate the abolition of the death penalty in numerous civilized countries, it also contravenes the basic and internationally recognized legal principle that nobody may be executed without a valid trial.

There is no limit once targeted killings have been recognized as legitimate. Where is the dividing line between a terrorist and a freedom fighter? How is one to differentiate between legitimate and illegitimate resistance? In which countries are targeted killings permissible--they have been deemed acceptable by imperialist governments in relation to Afghanistan, Pakistan, Iraq Sudan and recently Yemen--and in which countries are they not? It is the arbitrary decisions and geo-strategic interests of aggressor governments that determine how the lines are drawn.

Under such conditions, the turn of the German army to a policy of targeted killings must ring the alarm bell. The German army was responsible for the most abominable crimes on its Eastern front during the Second World War. It murdered huge numbers of civilian hostages in retaliation for fallen German soldiers, carried out the summary execution of partisans and prisoners of war, and participated in the annihilation of the Jews. Most of these crimes remained unpunished because they were allegedly not covered at the time by international law. After the war, however, numerous provisions were introduced into international law to prevent a recurrence of such atrocities. These provisions are now being systematically circumvented and undermined.

While millions are facing the loss of their jobs and their homes, corporate profits have reached their highest levels in five years.

The number of prime-rate mortgage borrowers in default doubled from a year earlier, according to figures released Monday by the Office of Thrift Supervision (OTS) and the Comptroller of the Currency (OCC). The portion of such "prime" mortgages in serious delinquency reached 3.6 percent in the third quarter, up 19 percent from three months before.

The report surveyed the 34 million home loans made by banks under the purview of the OTS and OCC, which amount to about 65 percent of all mortgages issued in the US. Given that the figures only covered this share of US mortgages, the real number of foreclosures is undoubtedly well over 1 million.

The total percentage of "nonperforming" mortgage loans climbed for the sixth straight quarter, reaching 13 percent of all mortgages in the survey. The percentage of mortgages that are "seriously delinquent" reached 6.2 percent, while 3.2 percent of all mortgages were in foreclosure.

Extrapolating from the survey of all US mortgages, 6.8 million of US households were behind on their mortgage payments in the third quarter. These figures do not count those families who have already lost their homes. A loss rate of 3.2 percent on the $6 trillion in loans measured by the report would represent write-downs of some $192 billion.

Meanwhile, the study found that despite mortgage modification programs promoted by the US government, homeowners whose banks modified their mortgage terms continued to default at extremely high rates. Nearly half of all participants in such programs still went on to default on their mortgages.

This is partly due to the fact that the overwhelming majority of such modifications have been temporary. The Obama administration reported this month that while 700,000 three-month trial modifications were issued as part of its "Home Affordable Modification Program," only 31,382 had been made permanent as of November.

The report followed findings by First American CoreLogic, a real estate information firm, that the number of foreclosed homes about to go on the market has reached 1.7 million. The backlog of such homes has grown by 55 percent in the year to September, according to a report issued last week by the California-based company.

The flood of foreclosed homes has pushed down home prices, with the average selling price of a previously occupied home falling to $172,600 last month, a 4.3 percent decrease from a year ago, according to the CoreLogic report. In separate figures, the Federal Housing Finance Agency said its index of housing prices was down 10.8 percent from its peak in April 2007.

Plummeting home prices, together with extensive government tax incentives, helped push up the number of existing home sales by 7.4 percent last month, to a three-year high, according to a survey released Tuesday by the National Association of Realtors. Lawrence Yun, the vessociation's chief economist, said that the jump was due to "a rush of first-time buyers" who wanted to take advantage of the Obama administration's tax credit before it was set to expire last month.

On November 7, the White House extended the program that provides new homebuyers with up to $8,000 in tax credits, to April of next year. Economists warn that home sales will likely plunge following the program's expiration.

Meanwhile, the employment situation, which has become the principal cause of the housing crisis, remains dire. The Washington Post reported Tuesday that in 25 states unemployment benefit programs have already run out of money due to record numbers of people losing their jobs. The state's unemployment insurance programs have had to borrow $24 billion from the federal government to continue functioning.

By 2011, according to government figures, 40 states will have exhausted their benefit pools and will need to borrow an additional $90 billion from the federal government to keep afloat.

The Obama administration has explicitly denied states' requests for further aid, forcing them to consider cuts to benefit payments that are already too low to cover essential needs. The shortfall has brought calls for cuts to unemployment benefits, with a state panel in Kentucky recommending last week that the state reduce its benefits for the jobless by about 9 percent.

Virginia has borrowed $89 million from the US government to cover benefit payments, and Maryland owes the government $85 million. South Carolina, which has a 12 percent unemployment rate, owes the federal government $649 million for unemployment payments.

Meanwhile, the rate of US economic growth in the third quarter was once again revised downward this week, to 2.2 percent. The figure was originally reported as 3.5 percent by the US Commerce Department, but was lowered to 2.8 percent last month. The US economy shrank at a rate of 0.7 percent in the second quarter.

Corporations, however, are reaping the benefits of the so-called recovery. In its latest report, the Commerce Department revised third-quarter corporate profits upward, from 10.6 percent to 10.8 percent, representing the largest gain in over five years.

Far from signaling any amelioration of the economic conditions confronting the broad mass of working people, the rise in profits has been driven by reduced labor costs stemming from layoffs and increased productivity. During the last quarter, labor costs fell at a rate of 2.5 percent, the steepest 12-month decline in seven years.

This decline is a function of stagnant and declining wages, along with the threat of unemployment being used to intensify the exploitation of those still on the job. Productivity has risen by 8.1 percent, the highest rate in six years.

The attack on the largely abandoned city of Now Zad comes in preparation for an assault on a larger and more populous city, Marja, which the US military says is a center of Taliban resistance in Helmand province. The commander of the operation in Now Zad, Brig. Gen. Larry Nicholson, said the model for the coming attack on Marja will be the US destruction of the Iraqi city of Fallujah, in 2004, in which thousands of civilians were killed. It is not clear when such an attack might take place.

On Friday morning, hundreds of soldiers were flown from the north into the Now Zad valley in Helmand province, while a second force moved on foot from the south in an offensive dubbed "Cobra's Anger." British forces launched an ancillary attack from the east. About 150 Afghan soldiers were reportedly attached to the operation, which involved helicopters and MV-22 Osprey aircraft.

ABC News footage showed unopposed US forces flattening buildings with heavy artillery fire. The pro-US governor of the province, Daood Ahmadi, said on Friday that so far the bodies of four Taliban fighters have been found as a result of the operation. (The Pentagon and the Kabul government routinely describe all those killed by US military operations as Taliban.) There were no reports of NATO casualties.

Coming only three days after Obama announced his 30,000 soldier "surge" to Afghanistan--most of which will be sent to the south of the country--the attack in Helmand is a precursor to the sort of operations that will take place in the coming years' fighting in Afghanistan. Cobra's Anger shows that Obama's war strategy will be characterized by the use of overwhelming violence to terrorize and intimidate the Afghan population.

"There is no question that this is meant to be a signal to the Taliban in terms of what the Taliban can expect in upcoming days in terms of how this strategy will be implemented," said Steven Chao, Al Jazeera correspondent in Afghanistan.

The short-term tactical aim of the operation, military spokesmen claim, is to destroy Taliban "safe havens," to cut off north-south and east-west supply lines, and to root out "more than 100 hardline insurgents" from the Now Zad area.

The insurgents of Now Zad, though small in number, were able in the summer to entrench themselves in "positions so solid that a fixed frontline runs just a few hundred yards (meters) north of the Marines" in their Marines' Forward Operating Base, the Associated Press reports.

Neither the British, who were stationed in the area for years, nor the Americans have been able to hold Now Zad. "British troops who were once stationed there left graffiti dubbing the town 'Apocalypse Now-Zad,' a play on the title of the 1979 Vietnam War movie Apocalypse Now," according to the AP. "The British base was nearly overrun on several occasions with insurgents coming within yards (meters) of the protection wall. The area was handed over in 2008 to the Marines, who have struggled to reclaim much of the valley."

Before the US invasion in 2001, there were 30,000 inhabitants in the city of Now Zad, a center of poppy cultivation for the opium trade. Now, it is a "ghost town," and "virtually empty," according to press accounts.

Taking the Now Zad area is preparation for an assault on Marja, a large town in the region where many Afghans fled in the wake of Marine attacks on their villages this summer--attacks that were made possible by Obama's ordered dispatch of 21,000 more soldiers after his inauguration.

The Marines, including Gen. Nicholson, "have made no secret that, together with the Afghan national army, they plan to rout the Taliban from Marja in a sweep akin to that of the November 2004 battle of Fallujah, Iraq," the Los Angeles Times reports.

"Marja is that last major sanctuary in Helmand province, the last place where the enemy has freedom of movement," Nicholson told the LA Times. "We're going to take that away from him." Elsewhere Nicholson has called Marja a "cancer in Helmand."

"Marja is much larger than Fallujah and split up with irrigation canals that will make troop and vehicle movements difficult," the LA Times writes. "Also, it is heavily populated, raising the specter of civilian casualties if the Marines begin a vigorous house-by-house assault."

Nicholson was a regional commander with the Marines when the US military attacked and destroyed Fallujah, during which thousands of civilians were trapped and subjected to an intense bombardment that included the use of the chemical weapon white phosphorus, which burns through clothing and skin on contact. The onslaught destroyed about 70 percent of the city's structures.

Like Marja today, Fallujah was singled out because it was a center of resistance to the US occupation of Iraq. The horrific attack on the city, one of the great war crimes of modern history, served as a collective punishment to its residents and as an object lesson to the rest of Iraq, and indeed the world, in what becomes of those who resist the dictates of American imperialism. (See "Fallujah and the laws of war".)

That the US military is openly preparing a Fallujah-style attack on Marja should be taken as a warning. In the coming years, the Obama administration's "surge" will produce a bloodbath and war crimes in Afghanistan that will surpass those perpetrated by the Bush administration on Iraq. It is urgent that the working class in the US and other NATO countries mobilize against Obama's offensive--and against those "left" forces who supported his election and now remain silent in the face of his administration's crimes.

Obama has also recently authorized the Central Intelligence Agency (CIA) to expand its use of Predator drone attacks in Pakistan, the New York Times recently wrote in a favorable piece on the destructive assassination program. The missile attacks have killed hundreds in the past two years--at least 400 by the CIA's unofficial tally. The real figure is likely close to 1,000.

In gross violation of international law and the sovereignty of Pakistan, the drones carry out missile strikes against alleged Taliban and Al Qaeda supporters. The flights are operated from consoles resembling video game machines at CIA headquarters in Langley, Virginia. While the US--which officially denies the existence of the attacks--claims that those killed are almost all Taliban or Al Qaeda, it provides not a shred of evidence to back up these assertions.

Washington's stepped-up drone attacks and its dragooning of Islamabad into launching full-scale military operations against the tribes of its border regions have destabilized Pakistan and provoked a wave of terrorist attacks.

The latest of these came Monday when four militants using grenades and automatic weapons targeted a mosque used by Pakistan's top generals at Friday prayers, killing 36 with guns and grenades before blowing themselves up. Among the dead were two generals and several other army officers.

The brazenness of the assault took Pakistan's government and military brass by surprise. It took place in a highly fortified area of the city Rawalpindi, which is the headquarters of Pakistan's military and a large suburb of Islamabad, and was the third such attack in Rawalpindi in two months. On October 10, a group of gunmen attacked army headquarters. A day-long battle ensued that killed 23, including the militants.

More than 400 have died in militant attacks across Pakistan since October.

Research of the Johns Hopkins Children's Center, published October 30 in the Journal of Public Health, indicates that uninsured children were far more likely to die in the hospital than those with insurance. The study took in over 23 million hospital records from 37 states from 1988 through 2005 and accounted for a number of factors. When researchers compared death rates by underlying illnesses, the uninsured seemed to have an increased risk of dying, regardless of their medical condition.

Johns Hopkins researchers cautioned that because the study considered only deaths during hospitalization, not deaths after discharge or children who might have died without ever being hospitalized, the death toll is likely a conservative estimate.

Fizan Abdullah, the lead author and a pediatric surgeon at Johns Hopkins, said in a press statement about the study, "If you are a child without insurance, if you're seriously ill and end up in the hospital, you are 60 percent more likely to die than the sick child in the next town who has insurance."

The study revealed 104,520 patient deaths out of 22.2 million insured hospitalized children, a mortality rate of 0.47 percent. In comparison, out of 1.2 million uninsured children, 9,468 died in the hospital, a rate of 0.75 percent. In order to find out how many of these deaths would have been prevented by health insurance, researchers applied a statistical simulation to the uninsured group by projecting the expected number of insured patient deaths based on the severity of their medical conditions.

Among the uninsured, 3,535 more children died than was accountable by disease severity. After applying this rate of excess deaths to the total number of child hospitalizations in the US over the study period--117 million--researchers found there were more than 16,787 deaths among some 6 million uninsured children who were hospitalized.

Insured children were found to be charged more for treatment, which the Johns Hopkins Children's Center noted was "most likely explained by the fact that uninsured children tend to present to the hospital at more advanced stages of their disease, which in turn gives doctors less chance for intervention and treatment, especially in terminal cases."

Parents of uninsured children were also "more likely to seek treatment through the Emergency Room, rather than through a referral by a doctor," the researchers noted, "likely markers of more advanced disease stage and/or delays in seeking medical attention."

Some 7.3 million children in the US lack health insurance, a substantial segment of the estimated 47 million uninsured Americans. According to the Kaiser Family Foundation, the average cost of insuring a family is over $13,000--more than double the costs of a decade ago and far out of reach for most working class families.

At the same time that insurance and medical costs have spiked, budgets have been slashed for public health clinics, preventive care programs, and other services comprising the social safety net for the poor and uninsured.

The Johns Hopkins study follows a Harvard study on health insurance and adult mortality in the US, released last month, which found that nearly 45,000 deaths each year were associated with the absence of insurance among working-age Americans. This figure translates into an average of one death every 12 minutes.

Researchers arrived at this figure after a 13-year study of more than 9,000 people and accounting for a multitude of factors, including education, income, smoking, drinking, and obesity. After accounting for all of these factors, the uninsured group still had a 40 percent higher risk of death than those with insurance. Reflecting the enormous increase in medical costs over the past two decades, the report notes that in 1993, the uninsured were considered to have a 25 percent higher risk.

According to the Harvard study, "The increased risk of death attributable to uninsurance suggests that alternative measures of access to medical care for the uninsured, such as community health centers, do not provide the protection of private health insurance." The researchers add, "Despite widespread acknowledgement that enacting universal coverage would be life saving, doing so remains politically thorny."

A supplemental study from the Harvard team, released October 20, suggested that uninsured people with chronic illnesses often go undiagnosed and undertreated. Based on medical data of some 16,000 non-elderly adults, researchers found that of those who were uninsured and suffering from diabetes, fully 46 percent did not know they had the disease. Fifty-two percent of uninsured patients were not aware of their high cholesterol conditions.

Researchers stressed that along with the dearth of care for the uninsured, the large underinsured population also confronted a lack of access due to unaffordably high co-payments and deductibles.

Their target is the Tehrik-i-Taliban, an alliance of tribal-based militia groups opposed to the US occupation of Afghanistan and the pivotal logistical support that Pakistan's government has provided the occupation, first under the US-backed dictator General Pervez Musharraf and since March 2008 by the Pakistan People's Party-led coalition government.

The US's guiding role in the Pakistani offensive was underscored by the sudden descent on Islamabad early this week of Gen. Stanley McChrystal, Obama's Afghan war chief, and Gen. David Petraeus, the head of the US Central Command.

Taking its cue from the White House, Capitol Hill and the Pentagon, the US media has been full of commentary lauding the widening civil war in Pakistan. Typical was a column by the Washington Post's David Ignatius titled "Pakistan Fights Back: The Offensive in South Waziristan is the Latest Sign It's Finally Taking the Taliban Seriously."

No matter that this offensive is being waged by the Pakistani military to assist the US in pursuing its geopolitical ambitions and with callous indifference to the lives and livelihoods of ordinary Pakistanis.

As was the case in last spring's offensive in Swat and adjoining districts of Pakistan's North West Frontier Province, homes and schools are being flattened by bombs and artillery barrages and tens of thousands have been forced to flee for their lives.

South Waziristan and the Federally-Administered Tribal Agency (FATA) of which it is part constitute Pakistan's most socio-economically deprived region. Sixty percent of the population survives on less than the official subsistence-level poverty line.

Islamabad has historically treated FATA as a quasi-colonial dependency, giving it substantially less per capita aid than other regions and until little more than ten years ago denying the vast majority of its inhabitants the right to vote. In seeking to quell support for the Afghan insurgency and enforce the British-imposed Durand Line that divides the Pashtun of Afghanistan and Pakistan, Pakistani authorities have regularly made use of regulations inherited from the British Raj sanctioning collective tribal punishments.

The violence in FATA--including repeated US drone missile strikes--has displaced more than one million people, or close to a third of its 3.5 million residents.

The enthusiasm in Washington for the bloodletting in South Waziristan exemplifies the bloody mindset that prevails within the US ruling elite. It also speaks to their shortsightedness and recklessness.

In pursuit of its twin objectives of securing a commanding US presence in oil-rich Central Asia--a region from which it was historically barred by the existence of the Soviet Union--and containing a rising China, US imperialism is destabilizing the entire region and sowing the seeds of future wars.

Iran, China, Russia, India and Pakistan either border or fall in the immediate neighbourhood of Afghanistan and all, understandably, maintain that they have a major stake in the outcome of the ever-expanding Afghan war.

Moreover, all are acutely aware that under the Bush administration the US undertook to fundamentally reshape the geopolitics of Asia by aggressively courting India, including offering it a "global strategic partnership" and help in becoming a "world power."

Toward that end, the US secured for India a unique exception in the world nuclear regulatory regime that allows New Delhi to engage in civilian nuclear trade, although it developed nuclear weapons in defiance of the Nuclear Non-Proliferation Treaty. As Pakistan has repeatedly protested, the Indo-US nuclear accord has changed the balance of power in Asia by providing its arch-rival India with the means to concentrate its indigenous nuclear program on the development of its nuclear arsenal.

Russia and China have cooperated with the US-NATO intervention in Afghanistan. Russia is now allowing the transit of war material across its territory. But Moscow and Beijing share the objective of severely limiting US influence in Central Asia. That common interest has found expression in the Shanghai Cooperation Organization as well as in their attempts to coordinate their response to Washington's campaign to bully and threaten Iran over its nuclear program.

As in Iraq, Iran has reached a shaky modus vivendi with the US military forces in Afghanistan. But under conditions where Washington is threatening Iran with crippling economic sanctions, including an international gasoline import embargo, and the Obama administration is considering a Pentagon request to increase the US's Afghan troop strength to 100,000, Teheran cannot but feel anxious.

Teheran has accused the US, Britain and elements within Pakistan of complicity in two bombings last weekend in the eastern Iranian province of Sistan-Baluchistan that killed more than 40 people, including six high-ranking members of the Iranian Revolutionary Guard Corps.

The Pakistani elite, and especially its military, have for decades enjoyed a mercenary relationship with US imperialism at the expense of the Pakistani people. Beginning with Ayub Khan in the mid-1950s and continuing through the only recently removed Musharraf, Washington has sponsored a succession of right-wing military dictatorships in Pakistan.

But of the major states in the region, Pakistan is the one whose internal equilibrium and strategic interests are most immediately threatened by the US war to subjugate Afghanistan and its attempt to make India a pivot of its drive to counter China.

So as to choke off support for the insurgency in Afghanistan, Islamabad has been pressed by Washington, through financial inducements and repeated violations of its sovereignty, to wage war in much of the country's northwest. And the US has made clear that it expects that the military operations will soon be expanded to include the volatile western province of Baluchistan.

Previous military offenses in South Waziristan ended in failure, not just because of the tenacity of the resistance, but because many of the Pashtun troops reportedly balked at killing their brethren. There are reports that in the current offensive, the Pakistani military is using predominantly non-Pashtun troops, but in a country riven by ethno-linguistic and communal frictions, this could well stoke centrifugal tendencies.

Less than two years ago, the Musharraf dictatorship unraveled under the combined impact of mounting economic crisis, popular opposition to its support for the US wars in Afghanistan and Iraq, and its denial of basic democratic rights. The PPP-led government that replaced it has only implicated Pakistan more deeply in the Afghan war, been forced to accept an IMF readjustment plan, and, so as to secure the military's support, left Musharraf and his cronies at liberty.

Within Pakistan's political establishment and military there is enormous apprehension and resentment at the extent to which Islamabad is being forced to sacrifice what they perceive to be Pakistan's long-term strategic interests to secure US objectives, and to do this even as Washington showers favors on India.

The Pakistani elite is outraged that the US has encouraged India to play an ever greater role in Afghanistan, even as it demands that Islamabad sever all ties with the Pashtun-based Taliban and associated Islamist militia.

For its part, India, anxious to prevent Islamabad from using the US predicament in Afghanistan to gain leverage, has taken an increasingly hard line against Pakistan, demanding that it suppress Kashmir insurgent groups in Pakistan with the same vigor that it is battling the Pakistani Taliban.

The anxieties of the Pakistani elite over their rapidly deteriorating geopolitical position found expression this week in statements from Interior Minister Rehman Malik. First he charged that India is behind unrest in Baluchistan. Later he amplified the charge, saying that New Delhi is behind most terrorist attacks in Pakistan.

Said Malik, "We have solid evidence not only in Baluchistan [that] India is involved in almost every terrorist activity in Pakistan." India, Malik complained, routinely makes threats against Pakistan. He then added, "We are a nuclear state and not so weak. We better know how to retaliate."

The US ruling elite's attempt to offset its economic decline through wars of aggression is destabilizing world geopolitics and throwing fuel on longstanding conflicts. If imperialism is to be prevented from reprising the catastrophes of the 20th century, the international working class must be mobilized against capitalism and the outmoded nation-state system.

However, the current crisis is hitting Portland, and the rest of Oregon, particularly hard, with state-wide unemployment levels competing with hard-pressed California for fourth place nationally.

Just released September figures show a 0.5 percentage point drop in unemployment from Augusts' adjusted figure of 12 percent. The decline is attributed to discouraged workers departing the job market. The economy's continuing weakness was shown with the loss of 10,300 jobs. This crisis of unemployment is exacerbated by cuts in social services, as well as inflated housing prices, despite a glut of housing in the area.

The official Oregon unemployment rate now stands at 11.5 percent, not far below last May's 12.2 percent, the highest level since statistics were kept in 1947. This statistic does not include either the underemployed (those who previously had full-time jobs last year and currently work part-time) or so-called "discouraged workers" (those workers who, it is claimed, have given up looking for employment).

Despite having the fifth highest rate of economic growth for the period of 2005-2006, a mere four years ago, Oregon is now one of many states with negative growth. Manufacturing employment is at its lowest since statistics have been kept, losing over 27,000 jobs, 14.1 percent, in the last year, while construction, despite a gain of 1,000 jobs last month, has still dropped 13,700 jobs, 14.8 percent, from a year ago.

The high point of manufacturing in Oregon was October of 1997 when nearly 230,000 workers were employed in that field. Currently, the number employed is 165,400, a decline of 28 percent.

While Portland has been hit hard, urban areas outside of Portland have been hit even harder, and their economic situation can be regarded as dismal. For the month of August 2009, the cities of Salem, Eugene, Medford and Bend had unemployment rates equal to or greater than that of Portland-Vancouver metro area. Bend, located in Central Oregon, had an unemployment rate of 15.8 percent.

According to an analysis by the New York Times published in July, a broader measure of unemployment reached 23.5 percent in the spring.

Further out, from where the busy interstates of I-5 and I-84 intersect in Portland, these communities have been torn apart earlier, faster, and more severely. Drives through Medford or Salem reveal empty storefronts and foreclosed houses that are difficult to ignore.

The drive to increase the exploitation of workers finds clear and sharp expression in agriculture and construction. At any time during the day in Portland, scores of workers can be seen lining up at day labor hire sites, or even just sitting around in large groups waiting for employers to come by with a truck. A representative of the Oregon Department of Agriculture commented that the recent downturn has "turned a lot of construction workers back into agricultural workers" and remarked sardonically that "there was no shortage of labor in agriculture" this year.

Statistics on day laborers, agricultural workers, and migrant workers is hard to collect due to both the ephemeral and transient nature of such employment, and because many workers in this field are undocumented and subject to constant harassment by the state. Official censuses are performed only once every five years and pressure exists on employers to not divulge their undocumented employees.

Oregon also suffers from a lack of affordable housing, despite massive overbuilding of condos during the recent real estate bubble. Thousands of units, intended for sale as condos, lay empty, particularly near the waterfront and Peal District sections of Portland, and are now, with the collapse of the housing market, being offered as rental properties. Working class neighborhoods in North Portland, St. John's, and the Belmont/Hawthorne area are sure to be next in the sights of developers who seek to drive out workers and replace them with higher rent tenants.

Not even rudimentary cots are available for many of the city's poor, who live in tent cities near the Burnside Bridge and other places along the waterfront and in the vacant-lot remnants of Portland's Chinatown. A recent report shows that about 1,500 homeless are forced to sleep outdoors on any given night. The homeless population in Oregon has exploded in recent years, a shameful fact considering the high number of homeless workers in the years of alleged economic prosperity.

A Housing and Urban Development 2008 analysis released this past summer identifies Oregon as having the highest proportion of homeless in the nation. Homelessness was 0.54 percent in Oregon, followed by Nevada with 0.48 percent.

The official figures of homelessness paint a grim picture: 16,221 homeless individuals on a one-night head count of shelters. This figure is likely only half of the total picture, as according to state statistics, less than half of the state's homeless are sheltered on any given night. While slightly more than half of the homeless are on their own, a significant minority consist of families with children, the overwhelming majority of whom are under age 11.

Further, the curtailment of vast portions of the city's mass transportation system, TriMet, will make it harder for working people. TriMet, which serves not just Portland proper, but several surrounding communities of considerable size (such as Hillsboro which will largely be inaccessible from Portland on weekends), plans to slash service, cutting entire lines, re-routing buses, and reducing the number of buses on the road, making Portland's famously quick and efficient public transportation set to become an overcrowded and unwieldy mess.

Twelve bus lines have been eliminated entirely, weekend or Sunday service was eliminated on an additional twelve, and hours or frequency were cut on no fewer than twenty-nine bus lines. Most telling is the elimination of free access for buses in Portland's famous Fareless Square, a significant area of downtown and certain adjoining areas, where riders have never been required to pay fares. Bus stops along Burnside, one of the main roads that split the city in half between North and South, bear signs reading "Service Temporarily Discontinued," and one wonders for how long.

The cutting of bus lines will heavily impact the poorest workers in the city who cannot afford loans for motorized transportation, nor the extortionist insurance payments which accompany this ownership. Many workers move to Portland precisely because of its mass transit system and rely upon it to get to work. They will be forced to either spend more unpaid time traveling to and from work, or search for new jobs where little are to be found.

In such a climate, demand for social services is rising while the ability of capitalism to cope is dwindling. Oregon, like so many other states, is seeing a decline in tax revenues and a related budget deficit. Oregon is looking at a deficit of between $850 million and $1 billion dollars for the current budget.

Democratic Governor Kulongoski went on record in a public statement calling this "sobering news for Oregon" and speaking of "difficult decisions" for the legislature which will "prioritize the core services performed by government" by "putting partisan politics aside." He ended his thinly-veiled plan of attack on Oregon's working class by saying "[t]oday is truly when the hard work begins."

Kulongowski's statement is filled with poorly concealed euphemisms referring to his impending plan to cut social services throughout the state. State Economist Tom Potiowsky indicated more attacks on social services than Kulongowski, telling the Salem Gazette-Times, "We're falling, basically, into a pit."

Kulongowski and the legislature responded by closing government agencies for ten days over the two-year budget period, with 26,500 workers forced to stay home. An estimated $2 to $2.5 million for each furlough day will be wrung from the pockets of workers who can ill-afford such a cut. The Service Employees International Union spokesman Ed Hershey signaled the union's support for this attack on public workers, saying, "I think the state wisely negotiated over these. If there have to be furloughs, these seem to be days that would least impact services."

These attacks on the living standards of working people include $65 million dollars cut from K-12 education, and $19 million in social services, including day care for the children of low-income workers. While the state has millions of dollars in a reserve fund, Kulongowski has made clear he will veto any attempt by the legislature to tap into that fund.

Food stamp enrollment is up 25 percent (and is 25 percent greater than the national average). Housing foreclosures are the 14th highest in the state, but this statistic is highly misleading, as masses of working people in Oregon choose to rent, due to the relatively lower cost of rentals in the state.

Using the combined metrics of housing foreclosure, unemployment, and food stamp participation, the non-profit Henry J. Kaiser Family Foundation ranked Oregon third on its state economic distress scale, underscoring how deeply Oregon is affected by the sum total of high unemployment, foreclosure rates, and underfunded social services.

However, while the real income of Oregon's lowest 20 percent of population has declined by 17 percent since 1979, that of the wealthiest 1 percent has skyrocketed by 210 percent.

Oregon is one clear example of the inability of capitalism to solve the problems of working people. Condos, built by speculators in hopes of reselling in a Ponzi-like scheme to other speculators, lay empty throughout Portland, while homeless workers huddle in tent cities. The unemployment rate has skyrocketed, even though any attentive person could find dozens of things--in infrastructure repair, social services, and health services to name only the most glaringly obvious--that need doing, and that the workers of Oregon would no doubt be happy to do.

The large urban centers are known to lean heavily Democratic. Salem, the state capital, is dominated by the Democratic Party. The Democratic Party holds all major statewide executive offices (Governor, Secretary of State, Treasurer, Commissioner of Labor and Industries, Superintendent of Public Instruction, and the State Land Board). As well, both houses of the Oregon Legislative Assembly are firmly in the hands of the Democrats. This is the party that leads the current attacks on workers.