[Shadow_Group] Fw: [Sea.SA] Socialism Day School, Sat. SCCC

[shadowgroup-l at lists.resist.ca]

                                              *****  SOCIALISM DAY SCHOOL  *****


This Saturday, November 13
11:15 am - 5 pm

Seattle Central Community College
Student Activities Center
1718 Broadway
(across Broadway from the main campus building)
Driving directions below


11:30 am - 1:00 pm WHERE IS U.S. POLITICS HEADED AFTER THE ELECTION?

Reading:  Socialist Alternative Statement on 2004 elections: http://www.socialistalternative.org/election/results.html<http://www.socialistalternative.org/election/results.html>

1:00 - 2:00        Lunch Break (on Broadway)

2:00 - 3:25        IS A SOCIALIST REVOLUTION POSSIBLE IN THE U.S.?

Readings:
a. Parts 1, 2, and 4 of "Why We Need a Labor Party": http://socialistalternative.org/literature/laborparty/<http://socialistalternative.org/literature/laborparty/>

b. 2001 U.S. Perspectives document, paragraphs 1 -94 (see below)

3:35 - 5:00   "THE BATTLE OF CHILE" (amazing documentary on the 1970s revolution in Chile)

Reading:  "Lessons of Chile" (pages 1-25): http://www.socialistalternative.org/literature/chile.html<http://www.socialistalternative.org/literature/chile.html>


DRIVING DIRECTIONS:

>From I-5 north, exit Madison Street a few miles before downtown Seattle.  Right on Madison.  Go about 6 lights.  Left on Broadway.  Pass 3 lights and the Student Activities Center is on your right at 1718 Broadway.

>From I-5 south, exit Union Street.  Turn right at the light when you get off ramp.  Right at next street (Pine). Pass about 5 lights, and turn left on Broadway.  The Student Activities Center is half a block down on your right at 1718 Broadway.


For more info: Call Ramy Khalil at (206) 526-7864


2001 US PERSPECTIVES DOCUMENT

Discussed and approved by August 2001 Socialist Alternative National Committee for distribution and further discussion in local branches.

 
PART ONE: THE END OF THE AMERICAN CENTURY & THE CRISIS OF US CAPITALISM

The Importance of Battle of Seattle

1. The 20th century ended with the explosive events in Seattle. For all the world to see, here was an explosion of anger at the role of the United States in the world. Because the U.S. is the main promoter of the process of globalization, it was natural that the protest against globalization should erupt so explosively on US soil.

2. The consequences of globalization - layoffs of US workers and workers overseas, pollution of the environment, the trampling of human rights and democratic rights, and the concentration of power in the hands of the few - all came to the surface in the explosion in Seattle. The whole premise of US imperialism is being rejected by a small but growing layer of society, with youth at the forefront of this process.

3. This was not just a struggle on single issues. This was a protest against the most central institution of capitalism. It was a coming together of activists from different movements. It was an identification of many of the most pressing problems of our society with the global policies of capitalism, and for some people capitalism itself. This was a profound and important break in the political situation, and it ushered in a new period.

4. The protest against the WTO and subsequent protests go to the heart of the growing crisis of US society. US capitalism can no longer effectively play the world's policeman, and also offer the American dream. This is due to a more than 30-year decline of the US as a world power. The 20th century, a century that seemed to offer such possibilities, has now ended with more poor on the streets, more corruption of the political system, tens of millions living in abject poverty both in inner cities and in poor rural neighborhoods, the highest level of child mortality in the western world, more children living in poverty than in any other major country, and 40 million with no health care. And this is the richest country in the world.

The Post-World War II Period
5. At the end of World War II, in 1945 the US was the undisputed leader of the capitalist world. 80% of the world's gold was in its vaults. It had the most technologically advanced factories in the world. The economies of its rivals were in shambles after the destruction caused by the war.  Europe and Japan were in ruins. 

The US, under Bretton Woods framework, used its power to install free trade as the economic paradigm internationally, while also allowing room for national economic development. Also, the US dollar was established as the benchmark of world currencies. Through the export of capital and goods from its technologically advanced and intact industries, the reach of US imperialism became global. These conditions, linked to the massive union organizing victories of the 1930s and continued militant strikes in the post-war period, allowed the American dream of continuously rising living standards for successive generations to become a reality for a wide section of the US population.

6. The 1950s, 1960s, and 1970s saw the US facing increasing struggles against its policies. The civil rights movement at home, the growing revolt of the peoples of the world against colonialism, and the mass revolt both at home and in the armed forces in Vietnam against the brutal intervention in Vietnam War forced the US to make retreat after retreat.

7. The defeat of the US armed forces in Vietnam was a huge shock to US imperialism. It was its first defeat. It marked a clear limit to the ability of the US to shape world events. This defeat, as well as the black revolt of the 1960s which resulted in the explosion of inner cities in flames, and the radicalization of students and workers during the Vietnam War protests, all shook US society. In the late 1960s and early 1970s wildcat strikes developed, as workers began to move around their union leaders in order to defend their living standards from the ravages of inflation. On top of this the political system was thrown into crisis with the impeachment of President Nixon. The absolute dominance of the US in the western world came to an end. The wings of the Imperial Eagle of US imperialism had been clipped.

The Decline of US Capitalism
8. The world recession of 1973-1975 marked the end of the massive post-war boom internationally, and ushered in a period of systemic crisis and stagnation in the world capitalist economy.  We are still in this period today.  In this new period of global economic crisis, US imperialism has been losing ground and competitiveness to its other imperialist rivals, mainly Japan and Germany.  

9. In the 1970s inflation exploded as the US continued its attempt to maintain Keynesian spending policies at a time of a contracting world economy. This marked a crucial turning point. US big business, along with their bourgeois counterparts around the world, realized that when the post-war economic upswing ended, the only way they could maintain their profits was to attack the working class. The time of crumbs falling from the table of the capitalists was over. Instead, big business demanded that workers give them back. The union leaders joined with the bosses in arguing that workers would have to pay for the crisis.

10. The central program of both parties in the US since the 1970s has been the same neo-liberal offensive - privatization, attacks on unions, tax cuts for corporations and the rich, and the slashing of social programs. On an international scale all ruling parties have been inevitably forced to carry out neo-liberal attacks, regardless of their wishes, intentions or election promises. In this period of capitalist crisis it is only possible to carry out reforms on the basis of a fundamental break with the logic of profit, and capitalism.

11. The recession of 1973-75 marked a fundamental and qualitative turning point in American history - the end of the "American Dream." Throughout the entire history of the USA, the majority of every generation have had a higher standard of living than their parents. The dynamic growth of the US economy had allowed the capitalists to provide key sectors of the US working class with enough concessions to maintain political stability and cut across the development of a mass workers party or socialist movement. It was upon this material basis that the two party system of big business maintained its grip. This was the basis for "American exceptionalism," which has now come to a definitive end. It is on the basis of this new situation that we have seen the slow, yet consistent breaking up and weakening of the two party system.

What About the 1990s?
12.  The combination of the collapse of Stalinism in the USSR and Eastern Europe, and the prolonged economic upswing of the US in the 1990s, has created a very complex objective situation in the 1990s. The 1990s witnessed a retreat in working class consciousness, an unprecedented collapse of the left, the retreat of the trade unions, an intensified neo-liberal offensive and a relatively low level of class struggle. How does this fit into our perspectives of the deep crisis of international capitalism, the end of the American Dream, and the breakup of the two party system? Do the events of the 1990s somehow disprove our perspectives? Have we entered a new period of sustained and organic economic growth and prosperity as the boom of 1990s seemed to indicate?

13. A closer examination reveals that the "economic boom" was not much of a boom, but in fact was a confirmation of our analysis that capitalism is passing through a phase of deep economic crisis. A period of economic crisis does not mean that the boom/bust cycle of capitalism is replaced with only busts. During a period of long-term crisis there are still cyclical upturns followed by cyclical downturns. The key is to see the overall trajectory of development. Which way does the cycle point, as a whole including both booms and busts - up or down?

14. The 1990s "boom" was in fact a hollow or shallow boom, which reflects the endemic crisis of capitalism in this period. Productivity rose a mere 1.9% per year from 1990-97, and 2.9% per year from 1997-2000, falling below the 3.3% per year average growth during the 1950-73 upswing (Socialism Today #56). The growth in GDP from 1990-1999 was only 2.6%. This is only half of the level during the post-war boom of 1950-1975 (Growth rates of the US economy for the following periods were: 1948-1953 5.38%, 1960-69 4.33%, 1980-1990 2.75%). The economic boom of the 1990s was not based on an organic expansion of the productive forces, but was of a parasitical nature. It was based on an increased rate of exploitation of the working class in the US and particularly in the colonial world, a speculative bubble on Wall Street, and unsustainable levels of debt (these points are explained further in the section on the US economy).

15. Unlike previous upswings, however, workers did not see any real gains in wages or living conditions during the 1990s boom. This is a confirmation of our analysis of the nature of the period since the mid-1970s. The driving force in the economy in this period is a parasitical drive by the capitalists to increase the rate of exploitation of labor in order to maintain their rates of profit. Until 1996 wages continued to stagnate or fall, and have barely increased since then.  Clinton accelerated the neo-liberal offensive, delivering the last nails in the coffin of the welfare state. In fact during the 1990s there has been a massive social polarization of US society along class lines. Income inequality is at its highest since the 1930s.

The Power of Working Class
16. Most of the left took to despair at these developments of the 1990s, and have drawn the incorrect conclusion that the balance of class forces has qualitatively shifted in favor of the capitalists. This is an entirely false conclusion. The neo-liberal program has been born out of the crisis of capitalist system and reflects the fundamental weakness of the system. If we take an historical perspective, the issues become a lot clearer. Over the past 25 years the ruling class has only been able to very slowly claw back some -not all - of the social reforms and concessions won by the working class during the exceptional post-war period. But the basic strength and fighting capacity of the working class is still intact.

17. The trade unions have been weakened, but they still remain strong by any other standard except the post-war boom period. Time and again in the last decade, in long and bitter strikes the working class has shown that is willing to fight. The main stumbling block for the working class remains the leaders of their organizations, the labor unions, who, by rejecting methods of class struggle, have failed to conduct a serious struggle to defend the living standards of the working class. Most importantly, big business has been unable to erase the expectations amongst the working class in the advanced capitalist nations for the post-war boom standards of living. This represents an enormous obstacle for capitalism in its drive to reduce living conditions to pre-WWII standards.

The Collapse of Stalinism
18 Many in the left have said that the collapse of the Soviet Union and other Stalinist states shows that socialism cannot and does not work. We disagree with that analysis. Despite claims to the contrary, the Soviet Union had never been a socialist or communist country. Despite huge revolutionary waves in the immediate period after the Russian revolution, the Soviet Union became isolated and a bureaucratic caste came to power, which then brutally repressed the working class to ensure increased power and privileges for itself, resulting in a dictatorship. This monstrous caricature of a socialist society was used by capitalist rulers in the West to scare off young people and workers who were looking for a socialist alternative to capitalism. Mired in internal contradictions, the Stalinist countries of Eastern Europe and the Soviet Union collapsed or were overthrown from 1989-1991.

19. The collapse of the Stalinist states also allowed US imperialism and other imperialism's to intensify their exploitation of workers, especially in the underdeveloped world. There was no buffer anymore to the naked power of the massive corporations, who whipsawed one country against the other in order to force down prices for goods and extract more favorable terms for their investment into these countries. The collapse of Stalinism removed an enormous material obstacle to the neo-liberal offensive, and allowed the capitalists to carry out an extreme neo-liberal program throughout the 1990s which produced the qualitative acceleration of the process of globalization.

20. Imperialism seized on the collapse of Stalinism as an opportunity to launch an ideological offensive, or propaganda war, against the ideas of socialism - claiming the impossibility of economic planning and the triumph of the capitalist market. This offensive succeeded in throwing back consciousness internationally and in the US. Socialist consciousness, class consciousness, and even the idea of struggle was pushed back. Crucially the majority of the activist layer in the unions, mass workers parties, and left organizations became disoriented and demoralized by these events, because they did not have a clear Marxist understanding of the nature of Stalinism. In most countries of the world, the collapse of this activist layer led to a process of "bourgeoisification" of the "bourgeois workers parties" (mass workers parties with pro-capitalist, reformist leaderships) around the world, as they became transformed into open bourgeois parties along the lines of the US Democratic Party.

21. In the US this process also had a big effect. The activist layer in the US, while smaller in comparison to Europe, was also disoriented and demoralized by events that it did not understand. This led to the emptying out and destruction of the old activist layers and the left in the US. The left-activist layer in the unions and opposition caucuses were thrown back. Almost all the traditional vehicles of struggle which articulated resistance - community, civil rights, women's, and left organizations - were totally or partially erased due to the demoralization of the old activist layer which held together these organizations. Some disappeared, and some transformed into appendages of the Democratic Party. This has complicated perspectives. So, although living conditions have fallen and there is growing anger, there is an acute lack of leadership for the new movement, or channels through which the struggles can flow through. This has meant the movement has had to build new organizations throughout its struggles, a seriously complicating factor for the new movement, and one that is creating subjective obstacles to the working class being able to effectively fight back.

Conditions Created for New Struggles
22. The collapse of Stalinism, and Social-Democracy along with it, has had a contradictory effect. On the one hand it has created difficulties and obstacles for the struggles of the working class and the forces of Marxism in the 1990s.

23. But these complications can not indefinitely hold back mass struggles. Mass movements will - and are - emerging. With the emergence of a new cycle of revolt ushered in by Seattle in 1999, we are beginning to see the other side of this process. The collapse of Stalinism and Social-Democracy has cleared away the two main obstacles to revolutionary Marxism and the workers movement.  Genuine Marxism will now be able to play a much more prominent and central role in the new post-Stalinist period, helping to rebuild the workers movement from the ground up. While creating short- term difficulties, the 1990s have prepared the ground for a new movement to develop, and for unprecedented opportunities for the ideas of genuine Marxism to re-build the workers and socialist movement on firm foundations.

24. The period of the 20th century, the American century, has ended. US capitalism has passed its prime, and is already wracked in crisis. During the next period, it will increasingly be forced to take back the gains won by workers in the last 50 years. This is preparing for a period of increased radicalization, and the re-emergence of a new workers movement in the next period.


PART TWO: THE CURRENT CONJUNCTURE

A) US Economy: The End of the Upturn and the Developing Recession
15. The decade of the 1990s was the longest period of cyclical growth in US history, though still far weaker than the post-war upswing of 1945-1973. During this period spokesman for US capitalism spoke rosily about the vitality of the US economy, and the great future it offered future generations. For many years, with the stock market still booming, and economic growth continuing these spokesman seemed to be proved right. Now with the developing recession, all their claims are being proved to be false. The basis of the growth of the stock market, which they so adored, was due not to the underlying strength in the US economy, but instead was due to its attractiveness to speculators looking for highest rate of return on their investment. The cumulative return enjoyed by speculators on the US stock market in the years 1995-1999 was 30% a year. This should be compared to an annual growth in Gross Domestic Product of only 2.6% between 1990 and 1999, less than a tenth of the amount.

26. This enormous flow of foreign capital into the US economy played a decisive key role in propping up living standards during the last decade and propping up the stock market bubble and the high value of the US dollar. The massive US trade deficit and foreign debt was financed only through the influx of foreign capital. This has been crucial in propping up the unprecedented levels of consumer debt. It was only because people could borrow money that they could afford to buy the new car. They could only get a second mortgage on an inflated house price because banks were willing to gamble that the stock market and economy would keep going up and up. Future stock options were considered almost the same as cash. Under pressure from banks, consumer spending grew at 5.3% annual rate over the last two years, more than two percentage points faster than after-tax income. This could only be achieved by workers going further into debt. Private borrowing now totals a record 130% of gross domestic product. Homeowners loaded up with debt during the 1990s through second mortgages etc to a record level of $5.4 trillion. The volume of second mortgages has tripled since 1993 (Business Week (BW) 4/30/01). One in four homeowners has a second mortgage. With easy credit supplied by banks, record numbers of these second mortgages were not spent on the home but to pay off bills, consolidate debt etc. This has created problems not only for homeowners but also for banks. Mark Zandi, Chief economist at economy.com, says: "A not insignificant portions of these loans are going to go delinquent." The ratio of total debt to disposable income increased from 77% in 1986 to over 100% today (Socialism Today (ST) 4/19/99). Consumer debt has dramatically risen over the past period, artificially offsetting declining real wages as workers desperately attempt to avoid a fall in their living standards, with all the resulting explosive political implications. This has left an economy mired in debt, and dependent on foreign capital as it now enters a new economic recession.

27. The developing recession, which began in the high tech industry, and manufacturing, has now spread into services and the housing market. It has now also begun to have a major impact on employment. The rate of unemployment has started to rise, affecting all job categories. At a time when the Federal Reserve is cutting interest rates to stimulate spending, the banks are actually going in the opposite direction. Scared at the growing level of high-tech losses and bankruptcies, they are tightening their rules for lending. This action, which will make loans more difficult to get, will reduce economic activity and further slow the economy.

28. A key factor is that businesses are cutting back capital purchases and other economic activity. Total business investment in equipment fell at a 3.3% annual rate in the fourth quarter of 2000 and at a 2.1% rate in the first quarter (BW 5/14/01). "Corporate CEOs are in a profound funk over eroding profit margins. And their reflexive reaction - deep cuts in capital investment, research and development, purchasing and payrolls - is acting like a whirlpool that sucks the economy down" (BW 4/30/01). Business investment was a key factor in boosting the economy, and is now in decline.

29. On top of that they are being hit by the big increase in energy costs - gas prices, natural gas prices, electricity price increases and coal price increases. Power expenditures zoomed 39% from 1998 to 2000, and are likely to rise a further 9% this year according to Standard and Poor's DRI (BW 5/14/01). In fact the increase in energy prices since 1998 - close to $200 billion - swamps the $100 billion that might be injected into the economy this year by the Bush Administration's proposed tax cut (BW 5/14/01).

30. The single most important factor in the economy is consumer spending which represent 2/3 of the economy. All hopes for averting a major recession lie in convincing consumers to keep going into debt to maintain their level of spending. But consumer confidence has fallen, and consumers have recently become particularly concerned about the threat of job losses. As a Wells Fargo Bank spokesman put it: "Mounting layoffs are starting to batter the consumer pocketbooks and confidence." Instead of going into debt as they do at present to sustain consumer spending, consumers (workers) will be retrenching and attempting to pay off the mountain of debt they accumulated in the 1990s. It should be noted that the banks decided to protect themselves from their own irresponsible short-term lending policies that created this increased debt by tightening bankruptcy laws in the bill just passed by both big business political parties.

31. Compared to the past, more people's savings and pensions have been invested in the stock market. The proportion of Mutual Funds deposits invested in Wall Street rather than more secure government bonds more than doubled from 25% in 1990 to 56% in 1998. Tens of millions of Americans' have invested important savings and pensions in the stock market, exactly at time when the crash is imminent. This will mean that unlike in 1929, when the crash hit mainly the rich, it will have a devastating effect on households trying to keep their heads above water.

32. Other than spending by businesses and consumers, the only other domestic stimulant for the economy is state spending. However, the federal government is projecting minimal increased spending, and most state governments are looking to cut back spending. During the 1990s state governments cut taxes in the expectation of ever lasting surpluses as far as the eye could see. The economic slowdown will hit state and local governments hard with rising growing budget deficits. Rising jobless rates will increase pressure on states to provide assistance to many poor working mothers and their children. States will have to reckon with the consequences of welfare reform, which sharply limits what Washington will pay for such aid. Local politicians will look to slash programs benefiting working people to balance their budgets

Underlying Reason For Crisis
33. All of these structural problems in the economy show how utopian are the ideas of some economists that the Federal Reserve will be able to prevent a recession by cutting interest rates. The 1990s, far from strengthening the US economy, have further exacerbated the deeper structural problems of the US economy. A central feature of the last 40 years has been the process of de-industrialization of the US economy. >From being the manufacturing powerhouse of the world economy after World War II, US big business, in industry after industry, has failed to reinvest their profits back into modernizing their industries. (The exception has been the high investment during the late 1990s in the advanced, high tech sectors.) Low wages in services etc. encouraged bosses to rely on cheap labor rather than innovation. This resulted in US corporations losing market share in industry after industry, including clothing, TVs, steel, autos, shipbuilding etc. This is reflected in the following statistic. Considering goods only, excluding oil, foreign-made merchandize now accounts for 28 cents of every dollar spent on such goods, up from only 19 cents a decade ago. (BW 5/7/01)

34. While the neo-liberal offensive has been successful in restoring rates of profit to their historic highs, very little of this money has gone into investing in industry and productive capital.  Instead, it has been attracted to the stock market and other forms of financial speculation. This is because in today's economy, capitalists can receive a much higher rate of return in speculative activity than by investing in the real economy. The capitalist economy is driven by profit. When the system was dynamic and growing, capital was invested in areas that developed the productive forces. Today under conditions of a declining, decaying US capitalism, the logic of profit does not act as an engine for economic growth, but instead wasteful speculative activity that only generates paper revenues. The high rates of growth on Wall Street are only the other side of the low rates of growth of the US economy.

35. This has been the fate of previous capitalist countries like Britain, which, under the influence of the laws of capitalism let their industrial bases decline, and declined as world powers. The production of goods is the basis of wealth. A nation cannot maintain a strong economy on services alone. All the self-congratulatory rhetoric about a rebirth during the 1990s has now collapsed in a pile of broken dot.com promises. As the Wall Street Journal said: "America has not been able to create a new golden age." (ST 4/19/99.) The growth in GDP in last period, 1990-1999, was only 2.6%. This is only half of the level during the post-war boom of 1950-1975. (Growth rates of US economy for the following periods was: 1948-1953 5.4%, 1960-69 4.3%, 1980-1990 2.8%.)

36. This collapse in manufacturing industry is reflected in the growing trade deficit (a comparison of the dollar value of goods the US exports to other countries compared to how much it imports). The trade deficit with developing nations alone was $170 billion last year. (BW 5/7/01).

37. In the 1980s the US was still a net creditor. By the end of 2000 the US current account deficit, was more than four times larger than it was at the end of 1995, and had grown to a record 4.6% of GDP. (BW 5/7/01) This is at a level that Business Week calls "unsustainable." Economists at Credit Suisse First Boston estimate that the US is already commanding more than 80% of the world's excess savings in order to finance that trade gap. (BW 5/7/01) This annual deficit has created a massive national debt to bankers in other countries. This year the net debt of the US is $3.2 trillion, or 29% of GDP (Associated Press 4/11/01). These statistics are indications of the weakening position of US imperialism relative to its economic competitors. It is a confirmation of our analysis that, in addition to the general economic crisis of world capitalism since 1975, there is an extra special crisis of US imperialism.

38. The US economy cannot overcome its internal contradictions, which are inherent to capitalism.  Most notable is the crisis of over production, or what now mainly takes the form of overcapacity. This was one of the central contradictions of the capitalist system explained by Karl Marx. The April 9th, 2001 issue of Business Week spelled this out in an extensive article titled "US Economy: The hangover of excess capacity - Too much of everything." It said: "After years of frantically investing to build up the human and physical capacity to keep up with soaring growth, the US economy is struggling with overcapacity as far as the eye can see. From Intel's half-finished building in Austin, to the multitudes of identical retail stores that seem to dot every other corner, to the gaping, empty billboards that loom over New York's Times Square, every sector is struggling with the hangover caused by too many years of too much investment." The article then documented a situation where the auto industry is now selling only 74% of the 70.1 million cars it can build each year, and that during the last eight years square footage growth among retailers has grown five times as fast as the population. It expects plant closures in industry after industry, with a resulting loss of jobs for workers. It quotes Henry Kaufman, a veteran Wall Street analyst, as saying: "It's going to be a significant retarding force on the economy for some time." The article concludes with the following grim conclusion: "By a little or a lot, there's no getting away from the fact that a host of companies spent too much, built too much, and hired too many people during the boom times. It was a giddy ride while it lasted. Now the economy is having to deal with the inevitable hangover. And the headaches aren't likely to subside anytime soon."

The Coming Recession
39. The recent gyrations of the stock market have begun to correct for the massive bubble in values created on the stock market during the 1990s. During the period 1995-99 the investors received a staggering 270% cumulative return from investment in the stock market. Clearly the real economy has not grown by such an amount, and these prices will have to come down. At the beginning of 1999, and they've gone up since then, the stocks of all US corporations were worth 26 times their collective profits! (twice the historic level) (Henwood, Left Business Observer, #87, December 1998).

40. Like in the great depression of the 1930s, this decline of the stock market will most likely come in a series of falls punctuated by brief recoveries. At present many investors still believe that magically the stock market will recover, which explains their continued, but reluctant, reinvestment in stocks. At a certain stage it will become clear that this is not the case, and that stocks are in for a prolonged period of depressed prices.

41. But as the bubble deflates, there is a strong possibility that the dollar will also collapse. The present overvalued dollar reflects the massive influx of capital into the US in the last few years. It was only because of that inflow that consumers and corporations in the US could have increased their spending by going into debt. At a certain point, the decline in the stock market, the dollar and the US economy will trigger a fundamental crisis of 'confidence' in the US economy, leading overseas investors to withdraw their funds from stocks, bonds and businesses etc. in the US. This has the potential then to trigger a serious a prolonged economic downturn in the US and internationally.

42. Business Week spelled this out in its April 2nd 2001 issue: "There is a risk that this downturn is different and that far steeper cuts in interest rates are needed to keep the New Economy from tumbling into a long and painful recession." It is this scenario that the Fed is desperate to prevent. However the laws of the capitalist economy are more powerful than Fed reserve chairman Greenspan. Any interest rate changes he puts through will take over six months to have any effect. Any minimal effect lowering interest rates will be too late to prevent the US and world economies falling into a serious recession.


World Economic Downturn
43. The decline of the US economy will be the trigger for a simultaneous world recession. Business Week in its April 2nd issue put it this way: "The consequences of a US slowdown go far beyond American shores. For a decade, the US has been the main engine of world growth, sustaining other economies by sucking up their imports. Japan's economy is as weak as it has been since its asset bubble burst in 1990, and Europe is beginning to sputter. If the US economy goes cold, it could spell a severe global downturn and possibly even a financial crisis."

44. We do not have space to summarize all the implications the US economy will have on other countries. The fear of many US analysts is that the US economy could fall into a long-term period of stagnation such as Japan has suffered. Japan, the second most powerful economy in the world, has been in a period of almost zero growth for decade. Mired by high levels of debt, the Japanese economy has been unable to get above 0% growth. The Japanese economy is now dipping again into recession. If Japan went into freefall, which is very possible, the yen could fall even further, dealing a blow to world markets, and undermining the competitiveness of economies in the rest of Asia. The economies of Korea, Thailand, Malaysia, Singapore and Indonesia could then fall into recession, a region that has still not recovered from economic meltdown of 1997-98. In this situation a further shattering of expectations could provoke even larger political movements in these countries than in 1997-98.

45. Europe is the other key economic region of the world economy. European stock markets are tumbling, with a 18% decline since the high point in September last year. The economies are slowing, consumer confidence has plummeted in Germany, economists are trimming estimates for growth in European economies, and forecasts for earnings are being slashed. Overall growth is at 2% level, but there is increasing concern about the effect the US economic slowdown will have on Europe.

46. Latin America is in a much more dire situation, with much of South America stagnant for the past two years. The two year old economic recession in Argentina is already creating political crisis and big movements, where the third economics minister in three weeks has just been appointed. The previous one had to resign in the face of a 24-hour general strike by unions due to his plans to slash government spending.

47. Never before in history have the world's economies been so interrelated. Events in Japan will have an immediate response in other countries, which will then trigger further events. Considering the rapid flight of capital during the Asian financial crisis of 1997, there is a strong possibility that the coming crisis could expose major flaws in the global financial system as investors struggle to find a safe haven for their money.

48. In the US the effect of the withdrawal of necessary lifeline of foreign capital will have a dramatic effect. The US will no longer be able to sustain consumption in excess of production, or finance the trade and payments deficit. This would mean a severe contraction of the US economy. It would also trigger huge pressure to shut out foreign goods out of the economy to prevent further job losses and closures of plants and bankruptcies in the US.

49. One aspect of this will be the partial reversal of the process of globalization and the extreme neo-liberalism of the 1990s. The global downturn will place enormous pressure on the US bourgeoisie to "protect" its own economy by limiting the access of competing powers to the US market. The massive US trade deficit will no longer be economically or politically sustainable in the new conditions of a recession. The ideas of protectionism will gain force in this new situation and neo-liberal free trade will be put on the defensive. US imperialism will look to defend its markets and interests by retreating to consolidating its regional trade blocks (the Americas) from penetration from goods and services from other major rival trades blocks of Europe and Asia.

50. The capitalist system also will not die on its own. However deep the upcoming crisis, and we will need to review the process as it develops, there is no final crisis of capitalism where capitalism will just collapse. This developing recession will be followed at some point by a new upturn. But the overall direction of capitalism is towards stagnation and crisis in this period. Unless it is overthrown by an organized and conscious movement of the working class, capitalism will always find a way to continue its political domination beyond its historical usefulness. Whether this is through a systematic lowering of wages and social programs, destroying the organizations of the working class, wars, or a turn to dictatorship. As the great revolutionary Marxist Rosa Luxemburg explained, humanity faces a basic choice: socialism or barbarism.

B) The Challenges For US Imperialism
51. The 1990s was a decade when capitalist leaders in the West had enormous optimism. It began with the collapse of the Soviet Union. They then had a victory in the Gulf war, and they passed new trade agreements with GATT, NAFTA that further opened up underdeveloped countries to multi-national corporations. They had the longest period of economic expansion in history, and they saw a massive shift of wealth form the poor to the rich. This was a period almost unprecedented in history.

52. The new millennium will be a payback for all the excesses of the 1990s. Already, in the closing days of the 1990s, major protests in Seattle shocked the world, as protests in the belly of the imperialist beast of the US shut down the WTO for one day. These protests have taken on an international character, and have become increasingly anti-capitalist. Just when the imperialist countries thought they had established globalization as the new world consensus, major cracks have appeared which are now enlarging, as young people, working people and oppressed people around the world suffer under the indignities and brutal consequences of their results, and have moved into action to protest. This has provoked movements in Indonesia, the Philippines, Bolivia, Ecuador, and Brazil to name but a few countries.

53. Now, the collapsing of the US economy into recession will trigger a new world recession. This is at a time when during the last decade structural mass unemployment, poverty, hunger and homelessness have been enormously aggravated on a global scale. This will provoke an explosion of anger in the coming period

54. The major imperialist powers were enormously strengthened during the 1990s by the collapse of the Soviet Union. During the period of the Cold War (1950-1990) smaller countries were able to lean on the USSR as a big brother, to resist the demands of imperialism and in particular the US. This gave them bargaining strength. With the USSR gone, then the countries of the neo-colonial world are at the mercy of US and international capitalism. During the 1990s the major powers used this situation to ram home their advantage. Through the IMF, World Bank and WTO agreements were forced on these countries that condemned their countries to the ravages of free trade. Many of their essential services were privatized and bought up by multi-national countries. This gave super profits to multinational corporations, and opened up market to goods from the US and other major powers. In case any countries thought they could stand against this process, they had the devastating experience of Iraq - a country that invaded a neighbor, and has now been bombed and starved into a condition of abject poverty.

New World Disorder
55. However, these successes of imperialism in this period were rooted in the conditions of the 1990s. The coming period will not be so favorable for imperialism. Repeated challenges to US interests and capitalism will show how limited the US is in immediately inflicting its power. Essentially there will be too many flashpoints for the US to intervene in all of them. We are entering a much more complex, disordered period in international relations. The end of the Cold War removed the central material factor which greatly stabilized and simplified international relations. The coming apart of this glue, and the deep downturn, is creating an extremely complex set of world relations. The massive social breakdown and economic crisis unleashed by globalization has also contributed to a greatly destabilized world of wars, civil wars, mass migration and the collapse of society in certain regions such as Africa and parts of Eastern Europe.

56. The end of the Cold War removed the main factor impeding inter-imperialist competition; the need to unite the capitalist world - around the US - against the common enemy of Stalinism cut across the fundamental tendency in the imperialist epoch for ever sharper inter-imperialist competition over the world market. This special period is now over. The US has already begun to face stiffer competition from its German and Japanese rivals over the past 25 years. The coming economic crisis will intensify struggle between the different capitalist powers as they struggle to defend their share of a dwindling world market, and defend their spheres of interest.

57. Imperialism is facing a growing tide of resistance and struggle around the world. The collapse of Stalinism created an abnormally low level of class struggle in the 1990s. As we have explained, that process has reached its limits and we are now seeing the birth of a new cycle of social movements and revolutions. US imperialism will be a central target of many mass struggles around the world and will be entangled in numerous attempts to crush revolutionary struggles. With the interruption and partial reversal of the processes of extreme neo-liberalism and globalization, we will see the re-emergence of a degree of independence by sections of the neo-colonial bourgeoisie. This will be expressed in growing nationalist, protectionist and populist movements in the neo-colonial world. Examples of this can been seen in Venezuela in Chavez and Marathi Mohamad in Malaysia. This too will throw obstacles and difficulties in the way of imperialism. The breakdown in the peace process in the Middle East threatens to further destabilize that region of the world, and is a further sign of the US losing control of events and is undermining US prestige on a world scale.

58. Already, the signs are there that a new situation is developing. The process of revolution has begun to re-emerge in the under-developed countries. Following the economic meltdown in South East Asia in 1997, we saw the development of the Indonesian revolution. Big movements have occurred in the Philippines. In South America in Venezuela we see Chavez sticking his nose up at US imperialism. Through his statements and policies he has attracted widespread support in Latin America as offering an alternative the free-trade economic model offered by US imperialism. In Ecuador a peasant movement nearly overthrew the government. Social and political movements are starting to develop once again, and the Latin American revolution has entered a new phase. An important fact in this is the collapse of the Communist Parties in these regions, which were always important vehicles to contain the revolutions, and to prevent them from challenging capitalism, due to the mistaken two-stage policy of the Stalinists (first their had to be a bourgeois revolution, and then only after capitalism had developed, would the socialist revolution be on the agenda).

59. This will be the backdrop to the coming decade. Far from being defeated, the working class on an international scale is still intact and strong. It has just been ideologically disarmed temporarily due to confusion caused by the collapse of Stalinism. In the coming period it will be forced to move once more into struggle. This struggle will shake country after country as the masses look for a way out of their hell, and to create a society that can provide for human need.


US Military Interventions
60. The recent victories of the US military have not been against social movements, but against isolated dictators, or bombing raids against 'rogue states'. This has given the US overconfidence, as they have attempted to erase memories of the humiliating defeat in Vietnam. In the next period, the US will be forced to intervene again and again against mass movements and revolutionary struggles.

61. Already, the US is concerned at the development of opposition to its rule in Latin America. Not only has it seen Chavez gaining wide support for his anti-US rhetoric, but big movements have already occurred on the continent. It is in this context we should see the US increasing its military intervention in Colombia. Under the pretext of ending the drug war, which gives it a certain support at home, its policy is not aimed at eradicating cocaine. Its real aim is to put down the left-wing guerilla insurgency which is threatening to destabilize Columbia and the wider region, and to give a lesson to all those who might plan to stand up to US imperialism's policies in the region. However, the result will not be what the US expects. This policy, which has described as similar to Vietnam, is in fact more similar to El Salvador, where the US is fighting a proxy war, by sending advisors and arms so the Colombian armed forces to do its fighting for it. The end result will be to build more sympathy for the guerilla movement among young people, and more anger towards US imperialism in the region.

62. Imperialism will attempt to present these struggles to the public in terms of "democracy" and "terrorism." But without the "red menace" threat of recent decades, it won't be as easy to prevent big movements at home against US imperialist interventions against revolutionary movements. US imperialism is still enormously held back from direct military interventions by the "Vietnam Syndrome." It is still politically unfeasible for the US to go to war if it will cost American lives, unless there is a general perception that the US is directly threatened. Any military adventure which leads to US boys coming home in body bags will ignite a mass anti-war movement. This was witnessed in the 1991 Gulf War. Whereas it took over 10 years for the anti-war movement to emerge against US intervention in Vietnam, in 1991 even before the war started hundreds of thousands were protesting on the streets. This massive opposition was cut across by the overwhelming US victory, the low number of American causalities, and the effects of the collapse of Stalinism.

63. The struggle against imperialism will not only be initiated by youth and students and the most advanced workers, but also by people who migrated here from abroad. This was shown most recently with Serbian nationals and Palestinians being out on the streets against US bombing of their country.

64. A key development has been the increased integration of people of color into the US military. This is a factor that promises to greatly complicate future military interventions. The ruling class got a taste of this during Vietnam, when the black revolt spread into the army and led to widespread mutinies and unrest in the army. African Americans, with their long history of experiencing brutal racism in the USA, will tend to resist racist interventions by the US into the colonial world.

65. Since the 1960s there has been an explosive growth in the Latino population in the USA, where today it is the largest minority grouping, even bigger than African-Americans. This is a big gain, compared to the position in the 60s or 70s. Latinos will also tend to oppose US interventions in any part of the colonial world. Any attempt by imperialism to openly militarily intervene in Latin America would provoke major struggles by Latinos in the US, and most importantly amongst Latinos in the US military.

66. The last decade has also seen increased links between the labor movement and the environmental movement and youth movements. This started around the fight against NAFTA and continued over fast track authorization and WTO. Another important development was the AFL-CIO recent action to abandon its 100 year old anti-immigrant position, and finally take up the demand for amnesty. These struggles, and the end of the cold war, have forced the labor movement to focus more on the common interests of workers against international capital, rather than the narrow interests of US imperialism fighting communism, as in the past. The anti-NAFTA, WTO and GATT movements, and anti-sweatshop movements have posed the need to forge more links between workers in the US and other countries. This is a important gain for the coming period, which activists must fight to maintain in the next period.

67. Despite these gains, the failure of the labor movement to see capitalism as the problem means they see no solution based on the international working class. They will look for a solution under capitalism. The ideology of the labor leaders is still trapped in the idea that the only way to defend jobs is to attempt to make the system better here in the US. Thus, their support for protectionism - i.e. defending national capitalists against international capitalists. This will lead to an uneasy relationship between the developing youth movement and the labor leaders, with times of collaboration and times of separation and hostility. Some recent examples of moves taken by the AFL-CIO which has undermined their ability to link with a broader movement was their reactionary nationalist opposition to "Permanent Normalized Trading Relations" with China, opposition to Mexican truckers, and some unions support for Bush's energy plan. It is only by the development of socialist internationalism that these barriers can be overcome. An important role for our organization is to clarify that progress can only be made based on the common interests of workers against the common enemy - the capitalist class in each country.

68. All these issues will stay the hand of US imperialism, and will complicate its attempts to militarily put down the growing social movements against its influence in the coming period.

US-China Relations
69. A central contradiction for the US has been that it wants to solicit the cooperation of other countries in signing onto the new trade agreements, which will then benefit multi-national corporations based in the west. At the same time, the US does not want these countries to challenge its own economic interests.

70. With the collapse of 'communism' in Russia, and the move of China to capitalist development, then US foreign policy shifted to a policy of capitalizing on the emerging market of China. One of the finishing pegs of this policy was to be China's entry into the WTO. This major prize, opening up the massive continent of China to US corporations, has been a goal that US capitalism has been seeking for the last century. China, is a far large prize compared to the size of Japan; Singapore and S. Korea pale in comparison. In anticipation of this event, in the last year US corporations have been signing favorable long-term investment deals, and pushed for China to be host of the Olympic Games.

71. Despite an over-exaggeration by the Republicans to justify their arms policy, over the last 20 years China has begun to develop as a major regional power. China is shaping up to be the major power in South-East Asia, and a major rival to Japan, which would be a major strategic power if its military power was commensurate with its economic power. US foreign policy dictates not allowing China to develop as the dominant power in the region to challenge the US and to prevent a deterioration in relations with Japan and other countries of South-East Asia.

Bush's Foreign Policy
72. The inclusion by Bush of Rumsfeld and Cheney, Cold War warriors and ideologues of the right wing of the Republican Party; has created a certain shift in US foreign policy. This has led to statements on Star Wars, China, Korea, Taiwan, Kyoto and the Middle East which have inflamed relations between the US and long-term allies, not to mention the leaders of other countries. Particularly in relation to China, spokesmen of US big business are concerned that these policies will spoil their ability to make profits out of investments in China.

73. On foreign policy, the Bush administration has two different factions. Defense Secretary Rumsfeld and Vice President Cheney are right wing hangovers from the cold war. Secretary of State Powell has a more moderate, or centrist position, which is quite similar to Clinton's foreign policy. Powell wants the US to continue working through strategic agreements with allies. Initially, Bush has leaned more in the direction of the Rumsfeld-Cheney wing, but there is much heated debate in the administration between the two different factions on what are the strategic, long-term interests of US imperialism and its immediate strategy and tactics. Bush's foreign policy is still in flux. While the Rumsfeld-Cheney camp currently has the advantage, there will be tremendous pressure on Bush to "moderate" his foreign policy in the direction of Powell. In the past few months there has been some indications of a move by Bush away from the more right-wing positions of Rumsfeld-Cheney and towards a more centrist bourgeois position. It's too early to say in which way Bush's foreign policy will develop.

74. A key feature of the debate in the Bush administration is whether US interests are best served by working through strategic agreements and international bodies which cloak the more predatory interests of US imperialism (Powell's position), or whether more can be gained by the US going it alone by directly furthering its own interests without respect for alliances, called unilateralism (the Rumsfeld-Cheney view).

75. The push of the Bush administration on a missile defense shield (Star Wars) is being driven by the more right wing and conservative hold-overs from the Reagan administration, and their co-thinkers. For them China is a threat to national security. The missile shield was a central idea of Reagan to give US absolute control of its security, rather than the present status quo of "mutually assured destruction" (MAD). Part of the new policy of the US is to get flexibility in deploying missile defenses and developing nuclear forces to suit its own interests. This is part of Rumsfeld and Cheney's unilateralist approach.

76. This insane policy, advocated by "nuclear use theorists" (NUTs!), is irrational even from the point of view of imperialism. Besides being technically infeasible, it will cost an exorbitant sum which will drain resources away from other much needed military projects, will greatly increase tensions between the US and China and Russia and alienate US allies in Europe and Japan, and would trigger a disastrous international arms race, all of which would further destabilize the world. Star Wars has suffered a possibly mortal blow with the Democrats recapturing the majority in the Senate. It also has serious opposition from major sections of big business and foreign powers internationally.

77. There are two aspects to the debate between the Rumsfeld-Cheney faction and the Powell faction. On the one hand, the Rumsfeld-Cheney position is driven by a right-wing ideological agenda, which is conflicting with a more balanced, sober strategy of imperialism represented by Powell. This is clearly illustrated by the Star Wars proposal, which objectively is not in the interests of US imperialism, and is only being advocated due to the ideological agenda of the right-wing of the Republicans.

78. On the other hand, the more assertive, aggressive, unilateralist approach of Rumsfeld-Cheeney reflects to some degree a deeper urge by US imperialism in this period to be more aggressive in following its own interests. With the Soviet Union now gone, the glue that bound the interests of the major imperialist powers together has also gone. The competing economic interests are now coming to the fore among nation-states. The existence of the nation state is one of the central contradictions of the global capitalist system, creating major crises that disrupt capitalist development through trade wars and military wars. In the new post-Stalinist international relations, the US will need to be more aggressive in asserting its position, against the background of increasing inter-imperialist rivalries and conflicts and a unstable, complex world that the US can no longer control.

79. In the coming period the Bush administration will not have an easy ride on foreign policy. The recent events in China show the contradictions the Bush administration will face dealing with short-term crises where the two wings of the administration will push for different agendas. The world economic crisis will increasingly lead to challenges to regional agreements and free trade agreements such as the FTAA, which will be threatened by nationalistic and protectionist demands. Revolutionary events will develop. If we consider that the events in Seattle helped derailed the WTO talks, then once the cold blast of the recession hits, we can see how the whole free trade hurricane of the last decade can be pushed aside.

C) The Crisis of the Two Party System
80. We need to understand that there is a break from the previous period, and that we are entering a new period. We have already witnessed the development of a new youth movement. Now we are seeing the development of a new and sharp recession. These events would have important implication at any time. But this is not a normal time. Already the working class has suffered 25 years of attacks and cutbacks. The political system in the US is in a very fragile state, with the public seriously alienated from the two main big business parties, and the public disgusted with the political process in the US.

81. Over the past 25 years we have seen a slow, but continual process of the breaking up, decay and fragmentation of the two party system - big business's central tool to maintain its political domination over the US working class. The underlying force driving this process forward has been the economic crisis of US capitalism and the resulting assault on the standard of living of the working class. The past 25 years have seen a massive social and economic polarization in US society. The declining standard of living over the past 25 years has resulted in enormous anger on the part of the working class. It is upon this chasm that the two party system is breaking up. The crisis of US society means that there are continual difficulties for bourgeois politicians to maintain their political base. They must carry out a brutal neo-liberal offensive, but this very offensive attacks and outrages their very own voters. This has led to a crisis of legitimacy for bourgeois institutions and a growing crisis for big business's political system.

82. Large sections the public see the parties and political system beyond their control, and controlled by special interests and corporations. The political process has not been as discredited in recent memory. This voter anger has been expressed in numerous ways. Only half of voters even bother to vote - an historic low not seen since the 1920s. Through most of the 1990s over 50% of population have favored the creation of a new political party.

83. The 1992 presidential election saw the explosive emergence of the Reform Party and Ross Perot winning 19% of the vote. In 1996 Perot won 8.5% of the vote and Jesse Ventura of the Reform Party was elected Governor of Minnesota. We have also seen the emergence of the Christian right wing of the Republican Party since the 1980s. This is a distorted expression of the increased anger and polarization in society and the need for the Republicans to find an energetic grassroots activist base for elections. This has created tremendous tensions within the Republican Party between the dominant big business wing, and the new, right-wing petty bourgeois Christian fundamentalists. At a certain stage there is a strong possibility of a major right wing split from the Republicans, as the Buchanan split of 2000 indicated.

84. The powerful grassroots grip of the liberal Democratic Party machine in communities, among labor and people of color has been seriously eroded with the right-wing neo-liberal evolution of the Democrats and the collapse of their liberal wing. It is on this basis that a number of new political formations have emerged. A layer of environmentalists formerly loyal to liberal democrats formed the Green Party in the early 1990s, which has developed a certain electoral base on a local and regional level. In 1991 Labor Party Advocates was formed, which became the Labor Party in 1996 after Clinton rammed through NAFTA, with the endorsement of unions representing 9% of the AFL-CIO. This represented the first time since the 1940s that a serious wing of the labor movement publicly debated the idea of building an independent Labor Party. This reflected the growing anger and opposition to the Democrats amongst union workers and a wing of the union bureaucracy trying to come to grips with the destruction of the old liberal wing of the Democrats.

85. The 2000 presidential elections witnessed an important acceleration of these trends. In the Republican primaries John McCain, running as an "independent" and populist tapped into the massive voter anger, bringing into the system independents who wanted to defeat the "establishment" and "insider" candidate Bush. There was also Pat Buchanan's campaign, signifying an important right wing break from the Republican Party. Most important of all was the spectacular campaign of Ralph Nader, which was polling 8% three weeks before the election.

86. On to this must be added the judicial right-wing coup that masqueraded as a Presidential election last year. Under US laws there is the systematic exclusion of felons and immigrants. There is also disenfranchisement of African American and minority voters in the South. But this was taken to new heights in the 2000 election by the systematic removal of African American voters from the roles by the Republican Party in Florida, and the blocking of African Americans from reaching the voting booths, thus swinging the election to Bush. To top it off we saw the blatant partisan intervention of the supposedly non-political Supreme Court to hand the election to Bush. This seriously discredited the Supreme Court as an impartial legal force. Further, the undemocratic Electoral College system was clearly exposed. Millions of people, who believed in the myth of American democracy, discovered that the candidate winning the most votes lost the election! This led to overwhelming support for the throwing out the Electoral College. The crisis in Florida and the fact that Gore, despite winning the popular vote lost the election, has further weakened the faith of Americans, especially African Americans, that this is a fair electoral process. The collusion of both parties in maintaining this system was exposed by the fact that the Democrats failed to oppose such an abuse of power in the interest of protecting the present electoral system and thus also interests of ruling class of the country.

D) Growing Popular Anger and Radicalization
87. The crisis of the political system reflects growing anger at developments in US society over the last few decades. There had been a 25 year erosion of wages, increase in taxes on working people, a deterioration in social services, schools, libraries etc, and quality of life. There has been a growth in anger and resentment from workers at having to pay for the crisis.

88. In the last few years there has been a shift in consciousness to the left on a mass scale, with workers taking on a more clearly anti-corporate consciousness, i.e. opposition to the dominating role of big-business, and its effect on society at home and abroad, but without as yet clear understanding of character of capitalism. There has also been the emergence of the radical anti-corporate, and among a minority a growing anti-capitalist, consciousness among an important but still small layer of youth.

89. A poll conducted by Business Week/Harris Poll in the summer of 2000 spells this out. In 2000 82% of people agreed "Business has gained too much power over too many aspects of American life." This is compared to 71% in 1996. When asked: "In general, what is good for business is good for most Americans," this declined from 71% in 1996 to 47% in 2000. 66% of the people in 2000 agreed with the statement "having large profits is more important to big business than developing safe, reliable, quality products for consumers". In the same poll 73% said that CEO's get paid too much, and 74% said that big corporations have too much political influence, with 82% saying "entertainment and popular culture are dominated by corporate money which seeks mass appeal over quality." 43% of workers at large corporations said they "find it very difficult to balance my work and personal responsibilities" compared to 36% who said so in 1997. Also 44% said they are "very much underpaid for the work I do", up from 38% just two yeas ago. Peter Hart, Research Associates, found that 40 million employees now say they would vote for a union today if they had a chance - double the number from a decade ago.

90. The basis for this anger can be seen in the huge accumulation of wealth in the 1990s by the rich. The wealthiest 1% of households now controls 40% of total wealth. The bottom 40% of household's control 0.2%. Deducting housing, a necessity, the bottom 40% has more debt than assets (New York Times, Jan 4, 1999.) Since 1979 the average income of the highest-earning 1% of Americans has increased roughly 80%, the income of the highest-earning 20% has increased by 18%, while the bottom 60% of the population has experienced a decrease in real income (Center on Budget and Policy Priorities, ). 10% of wealthiest households own 89% of shares (Socialism Today 4/19/99). The average income (from all income sources) for each member of top 400 individual taxpayers has increased from $50 million in 1995 to $110 million in 1998, an increase of 117% (BW 5/14/01).  On top of that the top 400 taxpayers paid only 22% of their income in taxes, compared to 30% in 1995 (BW 5/14/01). This came mainly through their ownership of millions of shares and the explosive increase in their prices during the second half of the 1990s. The income of these 400 individuals was more than all the residents in 15 states (BW 5/14/01). The richest 1% of Americans earned as much after taxes as the poorest 100 million people according to a 1999 study by the Center on Budget and Policy Priorities. These statistics illustrate the enormous polarization of wealth that has accelerated in the US (and internationally) in the 1990s. There is a widespread anger that the boom of the 1990s has only benefited a handful at the top.

91. Big corporations are finding themselves increasingly under attack. Nike, Starbucks, Kmart and Wall-Mart have been dogged by local residents and protesters. Support for free trade agreements have fallen as the human, social and environmental consequences have become understood by millions of people. This has been reflected in thousands of local demonstrations, but more importantly in the explosive demonstrations against the WTO, increased student activism and then through the Nader campaign. Despite a mass media that portrayed all the protestors against the WTO in Seattle as intent on destroying property, a New York Times poll reported that 52% of Americans sympathized with the WTO protests.

92. There has also been increased opposition to the racist policies of racial profiling, police brutality, and discrimination of immigrants. Mass opposition on the issue of racial profiling and police brutality has forced police departments around the country to change its practices. The events in Cincinnati are the most recent example of public outrage, and angry protests and demonstrations. These have also included a 46,000- strong demonstration against the Confederate flag in South Carolina, and are also reflected in the demonstration against the death sentence hanging over the head of Mumia. It is also reflected in the growing awareness of the inequities of the present criminal justice system around the issue of the racist and anti-working class death penalty, with a temporary retreat announced by bourgeois politicians in the face of widespread exposure of innocent people on death row. There has also been an increase in struggle and support for amnesty for undocumented immigrants.

93. The most important development has been the explosion of the anti-globalization and anti-capitalist movement. The protest against the WTO in Seattle crystallized a new phase of radicalization in the US and internationally.  This radicalization has been mainly among young people, often college students, but also among a layer of workers. Many youth and some workers have began to understand the accelerated devastation of the environment as a by-product of the unending search for profits. They see that youth are condemned to be pawns of a system of corporate greed. They see the unfair and super-exploitative policies of big capital against workers and peasants internationally. Youth also have joined struggles against the death penalty, the sweatshop, the SOA and other movements. All these elements came together in Seattle and impelled most of the movement to the next step.

94. In the U.S., the Seattle "syndrome" continues to express itself in the form of a movement which continues through a series of protests - the first, embryonic anticipation of mass radicalization, still in its infancy and limited to important, active, but relatively small layers of the youth and workers - that is already a cause of much concern for the US ruling class because the movement has the sympathy of millions more. This passive support, under certain circumstances, can be turned into active participation.

END OF 2001 U.S. PERSPECTIVES DOCUMENT
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