Minnesota jobs hinge on fate of auto industry

This is a very interesting title for a story on Minnesota's economy...

More than interesting; the title, if true and accurate, begs the question:

Why wouldn't Minnesota legislators and the Minnesota Democratic Farmer-Labor Party do everything possible to keep the St. Paul Ford Twin Cities Assembly Plant (TCAP) in production?

First step... the Minnesota state legislature should pass Senate File S.F 607.

Second step: Bring the hydro dam under public ownership.

Third step: Bring the TCAP under public ownership.




Minnesota jobs hinge on fate of auto industry


by Annie Baxter, Minnesota Public Radio

December 12, 2008

The Bush administration said Friday that it will help prevent the collapse of the nation's auto industry. This comes after the U.S. Senate failed to reach agreement on a bailout package for the industry.

St. Paul, Minn. — Michigan's Congressional delegation said one or more of the Big Three automakers risk failure before year's end without assistance.

Many experts say that if General Motors alone falls, that could trigger the bankruptcy of Chrysler and Ford. That's partly because a GM collapse could shut down industry suppliers, the failure of which could then topple the other two top automakers

All of this could mean a lot of job losses -- including here in Minnesota.

"Overall, if one or more of the auto companies shuts down as a result of a bankruptcy, Minnesota would lose between 14,000 and 52,000 jobs," said economist Robert Scott. "It's about anywhere from one-half to almost 2 percent of total employment in the state."

Scott is senior international economist with the Economic Policy Institute, a nonprofit, nonpartisan think tank based in Washington, D.C. He authored a study on the potential economic effects of auto industry failures.

Scott looked at jobs directly linked to car companies and indirect jobs of suppliers. For example, Ford, with a plant in St. Paul, said it has 99 suppliers in Minnesota doing $90 million in sales with the number two automaker.

Scott also considered jobs tied to the spending habits of auto industry workers. If the auto workers get laid off, they'll spend less in their communities, and he said local businesses will suffer.

"I think that would have a very large negative impact on the Minnesota economy," Scott said. "It's not in the top ten states; the impact is slightly below average overall for the country."

One of the groups that would feel some big impacts of an auto bailout is the Minnesota Auto Dealers Association. The group held their annual meeting Friday at a hotel in Bloomington, Minn.

The group represents more than 400 auto dealers in the state, and about 60-70 percent of those dealers sell domestic autos, a big chunk of them GM autos.

Paul Walser is head of the big chain of auto dealerships that go under the umbrella of Walser Automotive Group.

"If there's a bailout, it's business as usual, and you hope that in time with these funds these companies can reorganize themselves into profitable long term viable businesses," Walser said. "In the other situation where you have a bankruptcy, then things just happen a lot faster.

"But there will be some collateral damage with that approach," he said. "Let's say there's however many dealers in Minnesota that sell GM and Chrysler products, there would end up being half that many."

Walser thinks there are too many dealers and some need to close, though he doesn't want any of his to be on the chopping block. Three of his nine dealerships sell GM or Chrysler cars.

But Walser sees an auto industry that's still holding on, especially in Minnesota. His business has slowed the past few months, but it's still up compared to last year and he isn't planning layoffs.

"Everyone's nervous, but one good thing about Minnesota is that we don't have the same kinds of peaks and valleys," Walser said. "Midwestern biz is hanging in there pretty good, there are still people buying cars."

And, Walser thinks the big automakers will remain in some fashion no matter what.

"It's a question of how big and what capacity," he said.

Rod Gramse is a manufacturing engineer with MRG Tool and Die Corporation in Faribault. The company makes parts and custom equipment, about 10-20 percent of MRG's business goes toward the automotive industry.

"We want an industry that's gonna be solid," Gramse said. "That's gonna be able to come out as a stronger company."

Gramse worries the collapse of a Big Three automaker would cause widespread pain through the manufacturing sector. But, he shares a view also expressed by car dealer Paul Walser. The main issue for business is not the health of the auto industry, but consumers' death grip on their wallets.

"We're seeing more of a trend in just the attention on where things are at in general more so than on the Big Three," Gramse said.

It's unclear how swiftly the Bush administration will act to help out the auto industry, but money to do so could come from the $700 billion financial bailout fund.

Make way for the working class to have a say…

This enormous economic mess we are now experiencing, along with the heavy debt the bankers and the politicians of both major political parties have saddled us with, can be summed up very simply: The capitalists have taken all the profits and left the working class with all the problems.

There are only two sources of wealth: Labor and Mother Nature.

Anyone with an ounce of common sense understands that if you allow labor to be continually exploited and Mother Nature to be repeatedly abused and raped there will be severe consequences.

We are now reaping the consequences for allowing this parasitical monster of state-monopoly capitalism to have spun its web of corruption in the form of a cannibalistic military-financial-industrial complex which now threatens to consume and destroy our families, our communities, our State and our Nation while wreaking havoc in other lands.

Enough!

The time has come to put the needs of people before corporate profits.

There is only one alternative; for working people to come together to build a new society on the foundation created by the socialists of the Minnesota Farmer-Labor Party.

We need to fight and struggle to re-establish the liberal, democratic and progressive socialist traditions for which Minnesota is known around the world.

We have complex problems before us… but, any country which can spend trillions of dollars on wars to steal the oil of other nations, and trillions of dollars bailing out corporations and bankers looking for using socialism to solve the problems of their own creation as they have sought to prop up their rotten capitalist system--- which they have touted to the world as being the best--- at our expense… This Nation can now come up with the resources to use socialism to solve the problems for the rest of us, too.

What is good for the goose is, in this case, is even better for the gander.

Let Barack Obama and John McCain volunteer to go off exploring the caves of Afghanistan and Pakistan looking for Osama Bin Laden; we have better things to do.

Our first priority is to end these dirty wars for oil and redeploy those funds--- as we bring home the troops--- to creating a world class socialized health care system which will create millions of new jobs; five messes the money-grubbing Wall Street coupon clippers and their bought and paid for politicians created, all solved at the same time by ending these dirty imperialist wars for oil and regional domination--- we get health care not warfare, and we begin to solve the problem of unemployment--- and when we put people to work in this way we begin to create a new--- functioning--- people oriented, cooperative, socialist economy where democracy will flourish because it will require the full participation and involvement of all people working together in order to succeed.

Second, without further delay, we need to establish the State Bank of Minnesota to accomplish for our State what the State Bank of North Dakota was set up, by workers and farmers, to do--- fund enterprises to keep people working.

Third, we need a minimum wage which is a real living wage arrived at by the calculations of the United States Department of Labor and the Bureau of Labor Statistics in cooperation with the Minnesota Department of Employment and Economic Development--- based upon the real figures relating to the real cost of living and this minimum wage should be required by legislation to be updated quarterly right along with the release of all economic indicators to assure a quality life and decent standard of living for all working people and their families.

We have finally come to the point where even the parasitic bankers and the exploiting industrialists now concede that only socialism can bail them out of this horrible mess and solve their problems... capitalism has reached the end of the line and the only thing now to be had from the system is unending human misery.

At the point where society has to pay to clean up the corrupt mess these parasitic predatory lenders and financial institutions have created, this is the time to say:

Enough!

What tax-payers finance, tax-payers must own.

If Warren Buffett and Goldman Sachs do not like these terms, these greedy pigs should make the trip to their off-shore banks in the Cayman Islands and make withdrawals from their accounts to pay to solve their own problems.

The time has come to roll up our sleeves, come together, and get to work quickly before this entire rotten system collapses---like the I35-W Bridge--- and crushes us all while leaving our children and grandchildren with the clean-up and the bills.

I firmly believe working people can run our country and our state better than any of the big-business politicians being funded by the corporate lobbyists.

Effectively using the tools of public ownership and nationalization combined with modern, scientific planning for the common good, we can put people to work in decent jobs at real living wages... we hear it all the time just before Election Day: Jobs, Jobs, Jobs... but we never see the jobs, and if we do, these jobs are poverty wage jobs no one can live on.

I intend to run for Governor of Minnesota in 2010.

I invite all working people who think that it is possible to create something better than the mess we are now in, to come together and work from where socialist Governors Floyd B. Olson and Elmer A. Benson left off in trying to create a just and decent society where people live and work in harmony with Mother Nature, to join with me, in establishing the Minnesota Party to give the bankers, the mining, forestry and power generating industries along with the industrialists and big-agribusiness a real run for their money.

Let’s run these parasites that have been living off of our labor and destroying Mother Nature right out of our state. We can get along just fine--- even better--- without them.

Alan L. Maki

Director of Organizing,
Midwest Casino Workers Organizing Council

and

Candidate for Governor of Minnesota

Former member: Minnesota Democratic Farmer-Labor Party State Central Committee

The Real Lesson of the New Deal for the US Left

The Real Lesson of the New Deal for the US Left

Written by Zoltan Zigedy

Mar 03, 2008 at 08:00 PM

Power concedes nothing without a demand.

It never did and it never will. --Frederick Douglass



Seventy-five years ago this March, the Presidential inauguration of Franklin Delano Roosevelt ushered in a new era of US capitalism in response to the seemingly bottomless decline of production, trade, and employment which began with the stock market crash in October of 1929. Dubbed the “New Deal,” the policies of the Roosevelt administration sought to restore growth and employment in new and untested ways.






Political liberals and a large section of the left fondly remember the New Deal as a great era of reform and social change that established a more benign social order befitting the nation’s democratic tradition. Conservatives and business interests demonize the period as a vast social experiment that harmfully distorted the normal functioning of a market economy, only to be corrected by the neo-liberal restoration brought forth by Ronald Reagan.



Much of today’s two-party politics is couched in these popular views. What remains of the Democratic Party progressive wing seeks a twenty-first century version of the New Deal while the rest of the Democrats and nearly all Republicans subscribe to the neo-liberal vision of radical individualism and unfettered markets revived by Reagan and those who followed.



Both views draw upon a flawed picture of the New Deal era.



When Roosevelt became President in March of 1933 (the last campaign to include a four-month span between the election and the inauguration), he faced both a deep and deepening economic crisis (The Great Depression) and great popular resistance to the human costs of the economic contraction. Between 1929 and 1933 gross national product in the US had fallen 46% and industrial production more than 50%. In human terms, unemployment reached 20-25% of the work force, totaling at least 13 million. Nearly half of all employees were either out-of-work or underemployed. Of those employed, average weekly earnings of production workers dropped by a third, compensated only partially by slipping consumer prices. Foreclosures, repossessions, hunger, failing health, mass migration, crime, and disillusionment plagued the working class.



The nation’s 6 million farms suffered greatly with over a million foreclosures in this period. Most farmers owned small farms or were tenant farmers (half of all farmers earned little more than $350 in 1929). Farmers were especially hard hit: their share of national income dropped from 12% in 1929 to 5% in 1932, a time when national income was dropping dramatically for every sector of the economy.



And, of course, African-Americans suffered the most. With most African-Americans living in the South under the brutal repression of institutional segregation, incomes and living standards were roughly half of that of white workers before 1929. African-Americans experienced the constant threat of lynching and a repressive apartheid regime that retained the de facto conditions of the pre-Civil War South. Conditions in the North were only marginally better. The economic decline pressed them even further behind the white working class.



The Hoover Response



From the October 1929 crash until the installation of Roosevelt in March 1933, President Herbert Hoover led the national response to the deepening crisis. Though faced with a Democratic House after November 1930, Hoover had no difficulty mustering political support for his recovery program. For the most part, he viewed the crisis as one of confidence. His deep faith in the rationality and ultimate soundness of capitalist markets led him to anti-crisis measures more dependent on confidence-building than action. Nonetheless, he moved to grant business a 1% reduction in income taxes in order to stimulate growth. Though the stock market rebounded, it crashed again in May 1930, followed by a grinding decline of prices, production and employment for the next two years.



Contrary to popular liberal lore, Hoover did not stubbornly refrain from all action. He acted vigorously to support big business, banks, and wealth. One of his first acts was to increase tariffs to the highest levels ever seen, hoping to protect the domestic market from dumping by other distressed economies. There is no reason to believe this had any noticeable ameliorative effect on the crisis.



In the face of agricultural impoverishment brought on by the collapse of prices and a persistent drought, Hoover signed a $20 million drought relief package for seed loans, but available for farm relief as well. The Hoover administration created a National Credit Corporation with assets of $500 million on November 10, 1931 to stimulate the flow of credit (gross domestic product was $91.2 billion in 1930). This move was also his answer to unemployment, assuming that increased business activity would “seep down” to the working class – an early version of what came to be called “trickle down” economics in our era.



Nearly immediately after the formation of the NCC, the administration established the Reconstruction Finance Corporation to lend money to banks, insurance companies and other enterprises with a government subsidy of $500,000,000 and another $1,500,000,000 available from the sale of notes guaranteed by the government. Nonetheless, bank failures continued through 1932. It is, perhaps, useful to note that this stimulus package totaled well over 3% of the GDP at that time, a percentage greater than the plan agreed to by Bush and the Congress this year.



Often lost in the popular view of the Great Depression is the profound role of turmoil, struggle and rebellion. Too many histories of the period recount the actions of politicians while ignoring the mass upsurge that influenced and shaped their actions. Bonus marchers – World War I veterans seeking their promised bonuses from the war – gathered in Washington DC in June 1932 to protest. The Communist-led Workers Ex-Servicemen’s League called the march after Congress rejected its demands for immediate relief. Twenty-five thousand vets and their families responded, forced to set up squalid shelters on the barren land called Anacostia Flats, across the Potomac from the Capitol. In late July, Hoover ordered the military, under the leadership of the future military “heroes,” MacArthur, Eisenhower, and Patton, to attack the bonus marchers’ makeshift city. These brave warriors shamefully drew swords and bayonets and, quoting the New York Times, “Amidst scenes reminiscent of the mopping up of a town in the World War, Federal troops… drove the army of bonus seekers from the shanty village…” Indeed, this was a proud moment for our military. As one of the protester’s slogans said, “Heroes in 1917- Bums in 1932.”



Similarly, forced evictions were met by resistance. As soon as residents and their belongings were removed, neighbors and supporters returned them to the foreclosed homes. This process was repeated again and again throughout the US. It was the Communist-led Unemployed Councils that organized and inspired these defiant actions. The National Unemployed Council was founded on July 4, 1930 from the deliberations of 1,320 delegates (by 1938, the organization had 800,000 members). The first national demonstration against unemployment was called by the Communist- led Trade Union Unity League and the Communist Party on March 6, 1930 with over 1,250,000 participating (110,000 in NYC, 50,000 in Chicago, 50,000 in Pittsburgh…).



In the Midwest, farmers fought eviction and falling prices through various organizations: the bigger farmers followed the Farm Bureau Federation and the National Grange while the more numerous small farmers supported the Farmers National Holiday Association and the Communist-led National Farmers Union. NFU leader, John Simpson, was especially vocal and respected among small farmers. The latter two organizations were famously militant, often packing courtrooms and even threatening judges bent on granting evictions.



Communists were crucially active in the southern Sharecroppers Union, an organization uniting poor African-American and white farm workers in the segregated South.



Clearly, anger and resistance to the hardships of the Depression and the callousness of the Hoover administration were growing dramatically. This judgment was expressed emphatically in the Presidential election of 1932.



The First New Deal



Many historians usefully divide the New Deal into two periods: the first beginning with the Roosevelt inauguration of 1933 and the second beginning in 1935 after the landslide electoral victory of the Democrats in the 1934 midterm elections.



Roosevelt’s career as governor of New York was suggestive of the kind of liberalism he favored (the term really only took on its contemporary meaning with the New Deal). In general, he had no principled objection to limited public ownership of some assets when he deemed it beneficial. In addition, he supported legislation, on different occasions, that would afford working people an opportunity to better their conditions. Whether this was because of the political climate in New York or because of some deeper ideological commitment is hard to determine. Clearly, however, Roosevelt understood the profound sentiment for change that was stirred by the misery of the Great Depression. He also appreciated the insurgency that was springing up around the country.



In the primary campaign leading to the Democratic Convention, Roosevelt defused the contentious Prohibition issue and emphasized farmers, relief to banks and homeowners, tariff policy and the “forgotten man.” The latter phrase struck a chord that led him to speak even more forcefully for working people: “The millions who are in want will not stand by silently forever while the things to satisfy their needs are in easy reach.” This statement clearly was presented as a reminder to the Democratic Party conservatives that the masses were in motion and needed to be heeded. An early clue to his policy approach was revealed by his unspecific endorsement of “bold, persistent experimentation.” Roosevelt won the nomination on the fourth ballot.



In the campaign against Hoover, Roosevelt supported the call for a repeal of Prohibition, a stance that would find favor with modern-day liberals advocating a live-and-let-live lifestyle. Conservatives attempted to force the issue to the center of the campaign, but Roosevelt had the good sense to subordinate the issue to economic policy.



To address the unemployment issue, Roosevelt called for greater relief. Paradoxically, he also endorsed the platform commitment to a balanced budget. His recovery program was a vague commitment to corporatism, the bringing together of all interests, all classes to cooperate under the banner of economic nationalism. To some on the left, this sounded dangerously like the program projected in fascist Italy and soon-to-be-fascist Germany. In hindsight, it may be difficult to understand this fear. But in 1932, many on the left saw the economic and political crisis of the time as intimately linked. Fascism was gaining ground in the world precisely as the world economy appeared to be spiraling towards disaster. It was not far-fetched to view fascism as a ruling class response to the growing economic disaster. Like the vague, early Roosevelt program, fascists advocated a strong state that would balance the interests of all classes under a nationalist banner. Some saw Roosevelt’s folksy, fatherly addresses to the nation as a New World version of the Old World charismatic leader.



One early left critic of the Roosevelt program was Lewis Corey, the pen name of one of the founders of the US Communist Party, Louis Fraina. Corey, an independent, eccentric, but sometimes insightful Marxist, saw state capitalism as the logical and necessary antidote to economic catastrophe. With this view, he was an early, prescient expositor of the theory of State Monopoly Capitalism. In his 1934 book, The Decline of American Capitalism, Corey sees the roots of fascism in the rise of state capitalism as a response to the Great Depression. He found state capitalism in Roosevelt’s vision and feared a desperate transition to fascism.



Nonetheless, Roosevelt’s promise of a new “economic constitutional order” proved popular with voters who wanted nothing if not change. Roosevelt won the election with nearly a seven million popular vote plurality, the largest majority since 1864, and all but five electoral votes. Such was the thirst for change.



It became clear during the transition that Roosevelt was determined to attack the Depression domestically, rather than pursue Hoover’s more often internationalist strategy. He saw the fundamental problem as a lack of domestic purchasing power to keep pace with domestic production Therefore, the key to recovery was to bring them in line. And recovery was the watchword of the first New Deal.



The notion of increasing mass purchasing power – increasing effective demand – to overcome a slumping economy has become associated with the thinking of economist John Maynard Keynes. Of course Keynes major work was not published until 1936, too late in the life of the New Deal to count as a major influence. Nonetheless many in the New Deal administration retrospectively embraced Keynes’ work as a further confirmation of the wisdom of their approach. Keynes’ views grew to dominate mainstream economics only to be overshadowed by neo-classic, liberal economics in the last thirty years. We shall see, however, how it remains a pillar of the post-war economy in the US.



Like most inaugural addresses, Roosevelt’s churned with rhetorical flourishes and vague, but suggestive proposals. His statement “[W]e must move as a trained and loyal army willing to sacrifice for the good of a common discipline… with a unity of duty hitherto evoked only in time of armed strife” further stoked the fear of fascism. His pronouncement that “The measure of the restoration lies in the extent in which we apply social values more noble than mere monetary profit” aroused those thirsting for social justice. And the “Good Neighbor” policy promised a peaceful, fair foreign policy.



But the first New Deal was about action and Roosevelt quickly called a bank holiday and an embargo on gold before meeting with some of the nation’s leading bankers. The crisis was so demoralizing that they were in no mood to resist government action. As a historian of the New Deal notes: “If the administration had been bent upon achieving radical reforms as a condition of recovery, it could have had them… including nationalization of the nation’s banks. As it was, a conservative solution, highly acceptable to bankers and businessmen, and symptomatic of the First New Deal, was decided upon.” (Basil Rauch The History of the New Deal, p. 63-64).



The Roosevelt Emergency Banking Bill was seen by many as a move strengthening the hand of big bankers. Swift action to balance the budget came at the expense of veterans’ benefits and federal salaries. For the most part, business was pleased, resulting in a fifteen per cent jump in the stock market. Agricultural policies were largely shaped by conservative George Peek who was appointed to administer the program. The National Farmers Union and the Farm Holiday Association vigorously opposed them, calling a farmers' strike which was only postponed when the President intervened.



Roosevelt’s unemployment relief initiative was threefold: a Civilian Conservation Corps to employ 250,000 young workers in the national forests at subsistence wages, grants under the Federal Emergency Relief Administration that supplied states with monies in contrast to the Hoover administration’s loans, and the Public Works Administration, providing employment on federal infrastructure – an expansion of Hoover’s earlier program.



For industrial policy, Roosevelt hoped to achieve a compromise between labor’s demand for minimum wages and reduced hours (a thirty-hour work week) and management’s demand for a relaxation of anti-trust restraints and the tolerance of price-fixing. Labor’s gain in the resultant National Industrial Recovery Act was the famous Section 7a which promised that industrial codes would guarantee unspecified minimum wages and maximum hours along with collective bargaining rights. The NIRA was to be administered by General Hugh S. Johnson famed for organizing war production in World War I – a man not noted for liberal ideas. Roosevelt expressed the goal of NIRA as “…the assurance of a reasonable profit for industry and living wages for labor.”



In addition, the first New Deal brought the Tennessee Valley Authority into being, a project that established public ownership, if only in this exceptional instance, and brought affordable, rural electrification to a large sector of the South.



A Securities Act was passed in late May 1933 to protect the public from fraud and misrepresentation in the sales of financial instruments. And in June, the Glass-Steagall Act was passed separating investment banking from commercial banking, FDIC was established to minimally protect designated accounts from loss, and the Federal Reserve was given powers to influence interest rates and to restrain speculation. The Glass-Steagall Act was repealed late in the Clinton administration, contributing greatly to the financial chaos now afflicting the economy.



In foreign policy, the Roosevelt administration recognized the Soviet Union, but gave questionable support to the London Economic Conference, the last effort to apply an internationalist solution to the Great Depression.



For workers, the centerpiece of New Deal action was Section 7a of NIRA. The remainder of NIRA fostered the recovery of business, allowing enterprises to regulate themselves to restore prices and profits. Throughout 1933 that was precisely what the capitalists did with the encouragement of General Johnson, the administrator.



Section 7a was inspirational to labor, but in fact it was relatively toothless. Under pressure, Roosevelt urged business in June 1933 to voluntarily accept a thirty cents per hour minimum wage and a thirty-five hour work week. To further assuage labor, the Blue Eagle campaign – allowing compliant businesses to display the Blue Eagle insignia – was mounted. Neither changed the existing relationship between capital and labor. In early 1934, General Johnson conceded that that big business had accrued all the benefits of NIRA at the expense of small business, labor, and the consumer.



Nonetheless, despite the weak Section 7a and a nearly moribund AFL, workers took the spirit of 7a into their own hands, often prodded by Communists and the left. As Boyer and Morais recount in Labor’s Untold Story:



The law said that an employer had to bargain collectively with unions and millions of workers were suddenly becoming fanatically determined that employers would do just that. It became more imperative to them when the gains of NIRA as to wages and hours proved in the overwhelming majority of cases to be unsatisfactory. And when company unions were set up, their members often determined to capture them and transform them into real unions.



And it was on the picket lines that the workers struggled with their employers to make Section 7(A) of the NIRA mean something. In 1933 more than 900,000 workers went on strike for union recognition and wage increases, three times more than the previous year. Trade union membership zoomed as 775,000 workers flocked into labor organizations, 500,000 into the AFL, 150,000 into independent unions, and 125,000 into

the Communist-led Trade Union Unity League. The latter organization led strikes in steel, auto, coal mining, meatpacking and the beet sugar industry. In 1933 alone the TUUL conducted strikes of 16,000 autoworkers in Detroit, 5,000 to 6,000 steel workers in Ambridge, Pennsylvania and 2,700 meat packers in Pittsburgh. (p. 276)



Thus, the gains of workers from the first New Deal were won on the mass action front and not in the legislative chambers. As Basil Rauch recounts in The History of the First New Deal: “A wave of company union organizing swept the country when NRA was launched. Under these circumstances it became possible for businessmen to observe the child-labor and hours-and-wages provisions of the codes and at the same time reduce labor costs… [S]killed and semi-skilled categories lost more than unskilled and women workers gained, so that overall hourly earnings declined.” (p. 98)



Similarly, agricultural workers and farmers saw no gains from the first New Deal. Again Basil Rauch paints a bleak picture: “Dissatisfaction with the AAA (Agricultural Adjustment Administration) became widespread… the farm products which were benefited were raised chiefly by large landowners, farming corporations, and banks and insurance companies which had become large owners of farm lands through foreclosures… Farm laborers, who were excluded from the provisions of the NRA, sharecroppers, and tenants usually received no share of AAA checks or found themselves put off the land as a consequence of the landowners’ reduction of acreage.” (p.102) Both the National Farmers Union and the Farm Holiday Association resisted these results.



Towards the end of 1933, the administration succumbed to public pressure and empowered the Civil Works Administration thereby staving off mass dissatisfaction by employing four million workers on various civil tasks, but the program was ended, nevertheless, the following April 1.



The year 1934 was a watershed – a year of aggression on the part of capital and ferocious fight back from labor. Capital organized under the banner of the viciously anti-labor Liberty League, spent vast sums on labor spies and security services, and cracked down hard on labor organizing. The KKK, the Black Legions, and the Sentinels of the Republic were unleashed to sow discord, ethnic intimidation and anti-Communism. The Smedley Butler affair – overtures to General Butler with the hope of staging a coup – occurred in 1934.



Perhaps no event signaled labor’s determination to meet these threats than the San Francisco general strike in May of 1934. Nearly 127,000 workers shut the city down in solidarity with striking seamen. The militancy of that action both inspired and foretold the mass uprisings to come.



The Roosevelt administration suffered a self-inflicted wound when it established the National Recovery Review Board in March of 1934. The independent Board was to review business practices during Roosevelt’s presidency. Chaired by Clarence Darrow, the Board delivered a scathing indictment of the advantages gained by capital under the NIRA. Darrow’s references to the advantages of socialism embarrassed the administration which never published the three reports.



The pro-business NIRA brought rising prices in 1934 coupled with falling production, employment and payrolls. At the same time, the administration witnessed a wave of strikes unprecedented since 1922 with militia called out in 19 states and 46 workers killed resisting. In general, Roosevelt was hostile to these labor actions.



Nonetheless, labor stood by Roosevelt in the interim election producing what historian Charles A. Beard called “thunder on the left.” A new, more radical Congress came to be, with the Republicans losing 10 Senators and 10 Representatives.



At the end of 1934, the first two years of the Roosevelt administration were characterized by intense, widespread and often violent class struggle between capital and labor. At best, the administration stood aloof. At worst, it demonstrated a partisanship for capital despite rhetorical disclaim. The unusual shift in a midterm election in a leftward direction was to redirect that trend.



The Second New Deal



Roosevelt fully understood the meaning of the 1934 elections. He spoke, in his January, 1935 State of the Union address, of the “clear mandate” given. Nonetheless, he offered a tortured explanation of that mandate: “We continue to recognize the greater ability of some to earn more than others. But we do assert that the ambition of the individual to obtain for him and his a proper security, a reasonable leisure, and a decent living throughout life is an ambition to be preferred to the appetite for great wealth and great power.” It should be noted that despite these high sounding words, the administration opposed, early on, the Wagner Labor Relations Act and the Fair Labor Standards Act advocated by the new Congress.



On January 17, 1935, the Social Security Act was placed before Congress addressing unemployment and retirement benefits. The debate on and evolution of this bill serves as a pattern for much of later New Deal legislation. For the most part, critics saw it as too limited in scope. The AFL leadership objected to its reliance for funding upon payroll taxes instead of income taxes. Earl Browder, speaking for the Communist Party, went further. He argued that funding should come from taxes on the wealthy and capital. The bill passed in August, amended to block the administration’s desire to allow private insurance companies to offer larger annuities outside of the system.



One can say that the second New Deal was a response to the recognition that “seep down” (“trickle down” in the Reagan-era jargon) policies of stabilizing prices and offering assistance and encouragement to capital had failed. Instead, the administration accepted that only by directly increasing the economic means of the masses could the economy recover. The Keynesian notion of the necessity of massive public spending on jobs and relief was largely adopted. In the view of Roosevelt’s team, increasing effective demand by putting cash into the hands of under and unemployed workers would stimulate the economy where business incentives had failed. Payrolls in December of 1934 were only 60% of those in 1926 while dividends and interest were 150% of their level in that year.



Thus the alphabet soup of New Deal programs increased and enlarged through 1935. Four billion dollars were allocated to state relief programs. The Works Project Administration (WPA) was established in May which in the next two years accounted for 1600 new schools, 105 airport landing fields, 1600 clinics, 36,000 miles of rural roads, dams, traveling libraries, millions of school lunches and medical home visits, and the well-known arts projects. Wages were below prevailing levels, but above welfare payments. An unforeseen (and likely unwelcome) consequence of this program was stirrings among the WPA workers for union representation.



The administration’s agricultural program, AAA, had only added to the process of reducing farmers to tenancy. As a result, over 40% of all farmers were saddled with tenancy. To address this, the administration established the Resettlement Administration which offered tenants farm ownership on easy terms and cooperative farm equipment. Little distribution of new farm acreage was achieved and Southern sharecroppers and migrant workers were essential ignored.



Under pressure from leftist youth organizations and massive youth unemployment and poverty, the administration created the National Youth Administration which spurred a national organization, the American Youth Congress. The organization proved to be a seedbed for left, radical recruits and an embarrassment to the administration (except Eleanor Roosevelt!). Redbaiters attacked the organization vociferously.



Under pressure from the crackpot Townsendites, the legitimately populist ideas of Huey Long, the labor movement and Communists, Roosevelt sought to revise tax policies. Like the Social Security Act, the Wealth Tax Bill was a minimalist program designed to add purchasing power to the masses without a shock to the basic mechanism of capitalism. As it passed in August 1935, corporate taxes were lowered slightly for small businesses and raised slightly for large corporations. Taxes on individuals with earnings over $1,000,000 were graduated steeply to 75% on incomes over $5,000,000. An excess profits tax was also passed.



Probably the most important legislative action of 1935 was not initially supported by the administration. Though the Wagner-Connery Labor Relations Act was overwhelmingly passed by Congress, the administration feared the hostility of capital and leaned towards extending NIRA and Section 7(a) instead – recovery was one thing, social justice another. The bill outlawed company unions and guaranteed exclusive union recognition by majority assent. NRA’s General Johnson fought the measure to the end, arguing for “minority” rights for workers who did not support the majority decision. While the AFL strongly supported the bill, President William Green made the curiously conservative argument: “We cannot and will not continue to urge workers to have patience, unless the Wagner bill is made law, and unless it is enforced, once it becomes law.” But while Green was flaunting his restraint, a maverick group of AFL dissidents, leftists, and Communists was moving to take the labor movement in a different, more radical direction, a direction that would militantly and successfully confront capital and shift the balance between capital and labor for many years.



Led by Mineworkers’ John L. Lewis, the Committee for Industrial Organization (later the Congress of Industrial Organizations) was founded on November 10, 1935. The event was electrifying, releasing all the pent-up frustration and determination of unorganized, super-exploited industrial workers. A massive strike wave swept through industrial plants through the remainder of 1935 and throughout 1936. Rubber workers, autoworkers, steelworkers, electrical workers and other industrial workers, organized and encouraged by selfless, often Communist, CIO organizers, took to picket lines, frequently resorting to the militant and effective tactic of the sit-down strike. Despite hostility and red-baiting by the AFL leadership, despite violent, organized resistance on the part of capital, despite brutal, anti-labor actions by police and militia and a hysterical media, they succeeded in organizing millions of workers into new industrial unions. Unlike their AFL counterparts, these new, fighting unions embraced democratic principles, anti-racist policies, and, most importantly, class struggle. By 1940, the CIO had organized 3.8 million members into the CIO unions.



This historic movement had two consequences seldom acknowledged in standard accounts of the New Deal. Firstly, the wage gains added much buying power to the New Deal effort to stimulate economic activity. The shift in the balance of forces between capital and labor corrected some of the crisis-inducing inequalities of the “prosperity” of the twenties. In his address to the 1939 CIO Convention, Phillip Murray noted: “[We] have increased the national purchasing power of the workers in the United States approximately $5,000,000,000 per year.”



Secondly, the organizing campaign also marshaled enormous influence over the 1936 elections, benefiting both Roosevelt and the Congress. The landslide victory of the Democrats owed much to the sympathies stirred by this powerful struggle. Despite demons concocted by the capitalist media, most voters identified with the fighting workers.



Notwithstanding the Supreme Court’s attempt to derail the New Deal in 1935-1936, the legislative agenda continued, led by a Congress generally more aggressive than the administration. To his credit, Roosevelt chose to ride the wave of change and economic justice unleashed by the CIO in his 1936 election campaign. Unlike modern “triangulators,” he spoke to and for the masses of workers and farmers. Some of his most militant rhetoric came forth in the 1936 campaign such as his oft-cited attack upon “economic royalists”. Roosevelt spoke of 200 corporations controlling half of the nation’s wealth: “This concentration of wealth and power… has been a menace to the social system as well as to the economic system which we call American democracy.” He took this message vigorously to all reaches of the country.



The 1936 election was a landslide victory for the Democrats and New Deal policies. Roosevelt received 60.8% of the votes and the new congress was overwhelmingly Democratic (3/4 of the Senate, nearly 4/5 of the House). Even the “independent” Supreme Court felt the wave and softened its opposition to the New Deal.



The Communists ran Earl Browder and James Ford in the presidential election. Though placing the dangers of fascism and reaction at the center of their campaign, they sought to raise issues that would, in fact, strengthen the popular base of the New Deal. Where the Democrats were weakest – on racial equality – the candidacy of Ford, an African-American, brought greater awareness to the forefront.



Armed with this powerful mandate, the administration curiously emphasized organizational issues over social justice. It used the early part of 1937 to advocate Supreme Court reorganization – despite the Court’s newfound spirit of cooperation – and an Executive Reorganization Bill which sought to make changes in the executive branch of the government. While Roosevelt argued that these moves would be both democratically and managerially sound, mistrust fractured the unity of the New Deal coalition. The component designed to expand civil service was clearly democratic in character, but the other elements were not nearly as unambiguous. Many wondered why a President with unprecedented power and an overwhelming mandate pressed so hard for mere formal shifts in power, for example by trying to weaken the judicial branch.



No satisfactory explanation of Roosevelt’s path is available, but clearly it was a setback for both the quest for social justice and a deepening of progressive reforms. We can only speculate that Roosevelt lacked a confidence in the support of the masses or, more likely, felt a fear of unleashing further radical change, choosing institutional changes over stoking the democratic upsurge that propelled him to unprecedented popularity. Perhaps, there are some similarities with the recent institutional changes urged by President Hugo Chavez in Venezuela. Like the Roosevelt administration, the Chavistas lost some of the momentum won by enormous electoral victories by choosing institutional change over engaging the masses more directly in the pursuit of change.



The Administration lost further steam by aggressively attempting to balance the budget in 1937. With the economy sharply rebounding, administration officials began to sound the fear of inflation, urging budgetary restraint. Federal spending was cut drastically, with the WPA nearly shut down. Consequently, the economy quickly sank into decline. Industrial production fell drastically (35% in 9 months), prices fell and unemployment jumped dramatically.



Through the first months of 1938 Roosevelt stayed firmly with the policy of fiscal restraint urged by capital. This appeasement of business only deepened the crisis. In April, Roosevelt reversed his policies, reviving WPA with $1. 25 billion for employment and further funding other programs to the total of $3 billion. The Congress overwhelming approved these moves.



The turnabout of policy led to a turnabout in economic activity. Almost immediately, industrial production, employment, prices, and payrolls begin to climb. Nonetheless, the US economy never reached pre-Depression levels of employment and industrial production until 1939, seven years after their lows. By then, the mandate of 1936 was gone, eroded and crippled by the retreat of 1937 and the fresh economic slump of 1937-1938. The momentum of New Deal progressive legislation was lost without achieving the goals of full recovery or social justice.



The Roosevelt administration passed only one important New Deal policy in 1938, the Fair Labor Standards Act. It gave minimum wage and maximum hours protection to non-union workers and restricted the use of child labor. The administration’s interest started shifting to the looming European War and managing the US attitude towards it. Defense spending began to rise and war fears were stoked, diverting attention from domestic problems. Right-wing legislators successfully exploited these fears, warning of “un-American” activities. A new red scare emerged, fueling intense red-baiting extending even to unions and the more progressive New Dealers. The attack on labor reached absurd heights: Eighty-five unions faced indictment in 1940 under the Sherman Anti-Trust Act.



Recovery came only with the massive war spending of the Second World War. The ruling class found a new economic stimulus with military employment and the Federal government pumping massive revenues into war industries. Military Keynesianism brought high productivity and labor cooperation through patriotic sacrifice and effort. Military pump priming brought huge profits through government contracts tolerant of waste and cost-escalation. The destructiveness of war and the race for more lethal weapons promised an endless growth of demand. Thus, capital found, for that moment, the answer to the challenge of the Great Depression without conceding much ground to the people.



THE NEW DEAL BALANCE SHEET



We have in no way offered a complete or thorough history of the New Deal. We have, however, unlike most histories of this period, presented these six or seven years as a history of class struggle. Where most accounts stress the political maneuvers of the two parties or the legislative agenda of the Roosevelt team, we have attempted to show the impact of mass action upon the policies of the ruling class. Faced with a groundswell of dissatisfaction backed with organized opposition, desperate elites sought to treat a wounded capitalism while restraining the radically democratic expectations of those participating in this struggle.



Writers stress the two-fold goals of the New Deal as recovery and reform. In fact, the Roosevelt administration sought to stabilize a system that had, by the resounding dominance of capital over working people, run aground. As the Labor Research Association publication Trends in American Capitalism shows the average industrial worker gained only 15% in real annual earnings between 1919 and 1929 while producing 53% more than in 1919. Thus, the so-called “golden age” of capitalism was only golden for those who reaped the fruits of this increase in production and not the workers producing the “gold.” Moreover, workers were in no position to absorb the commodities generated by this rapid growth in production. The authors of Trends in American Capitalism concluded, “It was this very sharp disparity between the expanded volume of production and the relatively restricted incomes of the workers that helped bring on the violent crash of 1929 and the ensuing great crisis and depression.”



Leading up to the 1932 election, the only certainty was that Hoover had failed and change was desired. Entering office with these strong winds behind him, Roosevelt set out on a deliberately cautious and experimental course. Like Hoover, he hoped that incentives to capital would produce a growth in employment and prices which would “jump start” the economy and “seep down,” increasing the buying power of the masses. These quaint, shallow metaphors still serve conventional bourgeois economics in our time.



Unemployment remained stubbornly high and wages desperately low. But capital fared rather better after 1933. Small businesses were devastated between 1929 and 1932 (50% more failures in 1932 than 1929), a time of survival of only the fittest (and biggest) enterprises. From 1933 on, business failures and annual liabilities dropped precipitously. By 1936 failures were 40% of the failures reported in 1928 with liabilities reduced almost as much. Clearly the New Deal was successful in stabilizing the business community!



Real gross private domestic product per man hour (productivity) grew consistently from 1933 through 1939 with only a pause for the 1937 relapse. The level of productivity rose by 28% between 1933 and 1939 with the productivity level of 1929 surpassed in 1934. At a time of mass unemployment and a deteriorating standard of living, those lucky enough to have jobs were squeezed even harder – labor exploitation increased steadily during the New Deal. Likewise, farm labor failed to recover until 1942. The wage rate per day without room and board stood at $2.30 in 1928. In 1940 it was only $1.60.



The only counterforce to this trend was the intense struggle on the part of labor.



But even with the mass militancy, consumer price-adjusted spending per capita only surpassed 1929 levels in 1940! The New Deal achieved little in improving the standard of living of the masses.



Thus, contrary to the conventional liberal view, the New Deal generated a business recovery without a concomitant recovery for the working class. Despite an intense, militant class struggle bringing millions into confrontation with capital, the numbers show that the Roosevelt administration betrayed their hopes in fact.



Popular accounts view the second New Deal as an era of the reform of capitalism. While the number of programs grew dramatically, the figures cited above challenge the performance of the second New Deal if not the actual merit of the reform claim. Undoubtedly, the second New Deal brought relief, some institutional relief, like Social Security and a legal minimum wage and restrictions on child labor. But even in this arena, the record shows a measured, cautious commitment. During the Hoover years of the Great Depression, social welfare expenditures grew from 3.9% of GDP to 7.9% of GDP, an increase of over 100%. Social welfare expenditures rose even more under Roosevelt, peaking at 13.2% of GDP in 1936, the year of Roosevelt’s greatest electoral mandate. But spending dropped dramatically in the next two years to 9% of GDP, only to spike again in 1939 in response to the mini-depression of 1937-38. Even at its peak in 1936, nearly 40% of the relief total was veteran’s benefits of the long denied World War I bonus provided in the form of US bonds One might be cynically tempted to see the administration as using veterans’ relief as an election year ploy.



Where the dominance of capital was actually challenged – the Wagner/Connery Bill – the Roosevelt administration was at best neutral, at worst in opposition.



The acronymic expansion of New Deal programs brought an accompanying explosion of government employees. Paid civilian government employees rose from 603,587 in 1933 to 953,891 in 1939, topping a million the following year. Thus, the New Deal did succeed in increasing Federal employment at a much faster rate than in the private sector.



Further evidence of this failure to restore employment is demonstrated by WPA figures: Works Project Administration Employment numbers marched steadily forward, peaking in 1939 at 2,911,000. Even in 1941 1,638,000 workers were employed by WPA. Similarly, Civilian Conservation Camp employment expanded consistently to a high of 919,000 in 1941. Thus, on the eve of World War II, there was a surplus of employable citizens totally 8,117,000 engaged in WPA, CCC, or without work - roughly 8% of the entire adult population. This reserve army of workers, workers desperate for real employment, makes the successes of union organizing in the New Deal period even more impressive and the plight of the unorganized even more tragic.



Apart from the liberal myths surrounding the achievements of the New Deal, a look at the statistics regarding civilian consumption between 1933 and 1937 – the most intense period of government intervention – reveal a mixed, but significant decline. While beef, fish, fresh vegetable, and egg consumption were up, pork, chicken, turkey and – staples of the working class diet – lard, milk, potatoes, wheat flour, corn flour and meal were down. In the same period, gross national product grew by 62.6%. The fruits of the New Deal were not “seeping down” to the masses. After a decade of government intervention, earnings in key industries still trailed their 1929 levels: by 12% in manufacturing, 10% in mining, and 24% in construction.



Roosevelt’s “Good Neighbor” foreign policy proved to be neither always neighborly nor always virtuous. When fascist Italy invaded Ethiopia, the administration invoked the Neutrality Act of 1935 to deny weapons shipments to either party. This course flaunted the fact that Italy was the aggressor and Ethiopia desperately needed assistance against this unprovoked attack. And when Franco and his fascist allies attempted to destroy the legitimate government of Spain the following year, millions everywhere saw the struggle as a bulwark against the further military aggression of the extreme right militarists. The US response was to again invoke the Neutrality Act, effectively blocking any but the most determined assistance to the Republic. At the same time little effort was made to restrain the insurgents and their German and Italian allies.



Similarly, the Neutrality Act thwarted needed aid to the Chinese when the Japanese invaded China in 1937. Even the sinking of an American gunboat by the Japanese failed to change this false neutrality that, in fact, encouraged aggression and fascist audacity. Good neighbors should be able to distinguish between friendly visitors and brutal intruders.



The Roosevelt administration showed a more aggressive side to its neighbors to the south. When Mexico nationalized oil in 1938, reprisals came quickly, including a boycott of Mexican oil. Basil Rauch notes “[t]he suspicions [at the time] that the Good Neighbor policy was merely a new mask for economic imperialism…”(p. 336).



THE REAL LESSON OF THE NEW DEAL



Howard Zinn wrote of the New Deal: “The Roosevelt reforms went far beyond previous legislation. They had to meet two pressing needs: to reorganize capitalism in such a way to overcome the crisis and stabilize the system; also, to head off the alarming growth of spontaneous rebellion in the early years of the Roosevelt administration – organization of tenants and the unemployed, movements of self help, general strikes in several cities.” (A People’s History of the United States, p. 383)



Zinn gets many things right: he understands the undercurrent of class struggle that fundamentally shaped the populist aspects of the New Deal, he appreciates the imperative of stabilizing and recharging a stagnant capitalist system, and he recognizes that the Roosevelt administration brought something new to the state’s relationship with capital. But he gets some important things wrong as well.



But Zinn is not alone in misunderstanding the meaning of the period between the onset of economic decline and the beginnings of the US engagement in World War II.



Today liberal Democrats and social democrats point to the New Deal as a model for a humane and democratic society. Undoubtedly, there was a massive effort to bring relief to those harmed most by capitalism’s stumble. But the facts show how this effort was forced by the organized resistance and near rebellion of millions of working people and farmers. The ever-growing electoral mandate for more radical change was pacified by both relief efforts and moralistic rhetoric. Yet the Roosevelt administration neither proposed nor wholeheartedly accepted any change that fundamentally altered the relationship between capital and labor to the benefit of the people. There was no nationalization and little expansion of public ownership outside of the TVA. Government employment in such agencies as the Works Progress Administration and the Civilian Conservation Corps was always assumed to be temporary with the exception of a swollen Federal bureaucracy. True, hitherto untried government regulation expanded enormously, but all in the interest of establishing rules that would smooth the way for a more viable capitalism. A majority of an occasionally divided ruling class recognized from harsh experience that slash-and-burn capitalism threatened the continued existence of the system. That was the thrust of the first sentence of NIRA Title I: “A national emergency productive of widespread unemployment and disorganization of industry, which burdens interstate and foreign commerce, affects the public welfare, and undermines the standards of living of the American people, is hereby declared to exist.” Thus, NIRA was both an emergency and a temporary ameliorative to be entrusted to the administration of a conservative, business-friendly General Johnson.



Liberals see the New Deal as a forbearer of the welfare state that bloomed in Europe after the Second World War and less vigorously in the US. There is some truth to this, though the trend to offer relief began during the Hoover administration in the US and with mass pressure and popular front and labor governments in Europe (Social insurance was established in France in 1930, family assistance in 1932. The US was among the last industrial countries to adopt a national pension system.). Clearly what has come to be viewed as a feature of mature capitalism was directly and proportionally based upon the relative strength and organization of the workers’ movements in their respective countries. Its continuance after the War was thanks to a militant left and the necessity on the part of ruling circles to present a humane face against the appeal of socialism throughout most of the world. This is apparent from the mounting efforts to dismantle the welfare state after the fall of the Soviet Union and the simultaneous decline and confusion of the left. As neo-liberalism spread in the 1980’s and 1990’s as the dominant and pervasive ideology in capitalist countries, much of organized labor shifted from pressing labor’s interests to defending and promoting their national industries and enterprises against borderless competition. The attempted destruction of the welfare state further sapped the strength of labor, creating a larger pool of impoverished, unorganized, desperate workers forced by the market to settle for lower wages. The labor movement’s less than effective defense of the welfare state did not forestall releasing what Marx called the “Reserve Army of the Unemployed” from the bondage of relief.



Another shamefully ignored lesson from the New Deal era is the relationship between crime, poverty, and economic desperation. As in every period since industrialization, crime and incarceration are guides to the true status of the working class. Over a twenty year span, the suicide rate peaked in 1932 and the homicide rate in 1933, the crest of unemployment. Incarceration, as one might expect, reached its zenith a few years later. With more US citizens incarcerated today than anywhere else in the world, one looks in vain for a mainstream leader who makes the connection.



While welfare economics was often seen as offering a stimulus to capitalism, the capitalists found an even better, more agreeable mechanism during the Roosevelt administration. If we were to pretend that 1941-45 was not a period of unparalleled, devastating international bloodshed, we would credit Roosevelt with achieving his goals in this period: the economy recovered and grew enormously, unemployment was virtually eliminated, and there was relative peace between capital and labor. But, of course, we know that was because conscription absorbed the unemployed, war production boomed, and patriotism brought unity in place of class struggle. And this would prove to be a profound lesson for the ruling class. Even as early as 1938, with war in Europe and even greater war looming, military orders for home and abroad were accounting for more and more of the economy’s recovery. With the full hitching of the economy to military needs, unemployment was statistically non-existent by the end of 1942, wages and industrial growth rocketed past pre-depression levels, and the trend continued until the post-war recession. And the war brought an important moral reminder to the ruling class: depravation and sacrifice on the part of the working class is more palatable when clothed in nationalism and accompanied by patriotic music. An unspoken truth about the Great Depression is that it was overcome by a partly planned, “command,” non-market war economy – the economic mechanism often associated with socialism. But this was not socialism of the people, but a “socialism” of capital.



One can see the scope of this war-induced road to recovery by comparing the public debt incurred during the New Deal with the public debt accumulated during wartime. At its peak, the New Deal public debt never exceeded $59 billion (1939). At the end of World War Two, the public debt stood at $265.9 billion. From 1933 to 1939 New Deal reform and recovery grew public indebtedness by $18.4 billion. From 1939 to 1945, the debt grew by $206.9 billion! Imagine the US if the “sainted” Roosevelt and the New Deal politicians had made a similar commitment to the people’s needs, a commitment to education, public health, infrastructure, leisure, incomes, etc. But it was not to be.



The war against fascism and Japanese imperialism was justified; the elimination of Nazism, fascism, and Japanese imperialism was a costly, but necessary calling. The sacrifices were great, but not for capital. Wartime profit well exceeded historic rates.



Perhaps Roosevelt’s greatest legacy is the establishment of a war economy as the basis for expanding economic activity. Absent a world conflagration of the tragic dimensions of World War II, US ruling circles have nonetheless chosen to pursue a perpetual war economy over developing public assets, encouraging productive employment, or expanding equitably the consumption of the masses. They have created threats where little or none exists to demoralize a public that succumbs to a manipulated, media-driven trade off between the common good and bogus security. The Cold War and the current “Global War on Terror” serve as a constant, never-ending framework for imperial adventures on behalf of a state which serves monopoly capital. From covert activities, military interventions and surrogate wars in Greece, Indo-china, Iran, Guatemala and Korea to the interventions in Grenada, Afghanistan, and Nicaragua at the end of the Cold War, anti-Communism served as a handy excuse for maintaining a war footing. Those who foolishly thought that the Soviet Union’s demise would slow the tempo of military spending were rudely presented with an international “liberation mission” in Iraq and “humanitarian intervention” in the purposely dismantled Yugoslavia. Today, of course, the excuse for war comes from a new set of imaginary adversaries: the comic book “axis of evil,” “Islamo-fascists,” and exotic “terrorist cells.” The very words conjure bigotry-laced images of fanatical, childhood bad guys.



This devotion to military spending affords many opportunities for capital: nearly all of the corporate world can participate in this enormously wasteful enterprise – weapons manufacturers, construction companies, myriad services, technology firms, transportation, etc, etc; demand emanates from government orders and is predictable, precise, and ever growing; competition is minimal or non-existent; payment is guaranteed; there is little pressure for cost containment. Where once these were presented as the supposedly fatal inefficiencies of a Soviet-style planned economy, they are today wholly embraced by the titans of monopoly capital. And they are extraordinarily profitable.



Chalmers Johnson, an always insightful progressive, estimates that military spending from 1947 to 1990 added up to an astounding $8.7 trillion. Add several trillion to get us to 2008 and one gets some rough idea of the enormous opportunity lost by what Johnson calls “military Keynesianism” (Of course the costs of a war economy far exceeds the annual official budget). One cannot calculate how many lives were adversely affected by establishing this priority over a war on cancer, poverty, mental illness, environmental hazards, etc, etc.



Sixty years before Chalmers Johnson’s condemnation of “military Keynesianism”, Communist leader William Z. Foster anticipated his point by describing “big capital” Keynesianism. In a speech in 1948, he said: “Building a war economy has many political advantages for the reactionary capitalist Keynesians… Armament expenditures by the government are incomparably more favorable from a profit standpoint to the capitalists… in contrast to the less profitable reformist program of public works and the strengthening of the workers’ buying power and social security systems. Moreover, gigantic munitions orders can easily be secured under the cover of hysterical war scares, and besides this, the resultant militarization greatly facilitates big capital’s drive toward fascism… At the same time that the big capitalists readily agree to have the government spend billions yearly for the war economy, they also fill the air with strident cries for government “economy”. It will be seen, however, that their ideas of economy in government sum up pretty much to reducing the outlay of all sorts of social services and to the securing of lower taxes for themselves.”



And so it came to pass. This too is the legacy of the New Deal.



Soviet writers correctly saw the New Deal as the beginnings of the fundamental shift from monopoly capitalism to state-monopoly capitalism in the US. They perceptively note that: “American historians tend to ignore the objective fact that statist processes underlay FDR’s reforms, and exaggerate the importance of FDR himself while underestimating the working class struggle for progressive reforms” (The US Two-Party System: Past and Present, unidentified authors, p. 242) Born with the New Deal was the notion that the state had a right – more a duty – to steer the economic ship of capitalism over rough shoals. Of course government was never the neutral arbiter of bourgeois fiction. States are captured by classes and require revolutionary restructuring to serve a different class. But before the New Deal, the affairs of business were the affairs of business alone. The New Deal brought a blending of government and monopoly. Insofar as mass action may press militantly for reforms, the state will accommodate this pressure in ways that will protect monopoly capital and disarm the challenge of radical change. Otherwise, the state will oversee the workings of monopoly capital in ways that will promote its growth and dominance. This new, enlarged role for the state was necessitated by the failings of laissez-faire capitalism prior to the Great Depression. Ironically, as state-monopoly capitalism has matured, both its corporate and state managers have arrogantly assumed that there are no rough shoals in sight, embracing the neo-liberal ideology of de-regulation, privatization and rampant speculation – the “slash and burn” capitalism that fueled the Great Depression.


To a great extent, state-monopoly capital has born the responsibility of collaborating with capital, indeed merging its interests with monopoly capital, in two ways, depending upon the circumstances. In times of crisis, the state acts as they did in the New Deal periods to obviate the knots and competitive destruction that slows and obstructs the health and growth of capital. For the New Deal this included encouraging the cooperation of capital in pricing and business practices between large firms. This was the thrust of NIRA and its codes, retreating from the former laissez-faire policies of anti-trust action against combination and collusion. In addition, credit and loans were extended to businesses to encourage growth. The function of job creation and maintenance was directly assumed by government through WPA and CCC. As a result, business fared rather well throughout the thirties, contrary to popular belief, while labor struggled for its very limited gains. In better times, state-monopoly capital strives to remove regulatory fetters from capital, develop new ways to remove tax burdens from capital, and direct public funds to capital. Privatization, "non-profit" expansion, and so-called "Public-Private Partnerships" are tools in this endeavor. All of these mechanisms shift public wealth into private hands under the guise of efficiency or cost savings. The railway system is a good example. When rail transportation was extremely profitable, capital insisted that it remain in private hands. As profitability declined, the services necessary for interstate commerce were assumed by the government and supported by public funds. When rail transportation became potentially profitable again, private ownership was resumed. The marginally profitable, publicly useful, passenger services remained starved for funds.

The emergence and maturation of state-monopoly capitalism is a fundamental legacy of the New Deal.



Are there lessons for today?



The current economic crisis has generated fear and panic in ways that recall the Great Depression. We also see policies that echo the recovery efforts proffered by both the Hoover administration and the early New Deal. But unlike the New Deal period, we have yet to witness the mass upsurge that pressured and propelled the Roosevelt administration to offer reforms benefiting the “forgotten man.” Yes, there is widespread dissatisfaction, anger and even desperation. All gauges of the public mood reflect this. But these sentiments are unfocussed, confused, and, most importantly, unorganized. Howard Zinn mentions in his commendable characterization of the New Deal of “the growth of spontaneous rebellion in the early New Deal…” There was rebellion, but it was hardly spontaneous. The undercurrent of resistance and rebellion, so important to the people’s gains in this period, were highly organized. To deny this fact is to diminish the efforts and energy of the many organizations rallying workers, farmers, youth, African-Americans, and veterans to challenge a course bringing misery to the masses. Without the unions, the Communist Party, the left, the CIO, and the farmer’s organizations, the struggle would have been left to the demagogues: Father Coughlin, the Townsendites, Huey Long, the KKK, and many others of this ilk.



Those on the left who are waiting – waiting for a spontaneous upsurge of the masses – miss the real lesson of the New Deal. Those who put their confidence in the Democratic Party alone also miss the lessons of the New Deal. Putting aside our often stated criticisms of the corrupted, corporate dominated Democratic Party, putting aside our profound dissatisfaction with the two-party system, the New Deal period demonstrates that even with a “friendly” Democratic administration, nothing comes without pressure from the masses, which must be organized and led by the advanced forces.



Today, again, we have deep and widespread dissatisfaction with the past administration, economic, military, and political crises posing ominous threats to our future, and a tremendous thirst for change. But the two-party system possesses an enormous resiliency to divert, channel and absorb these hopes and aspirations unless intense pressure is exerted from outside. The false hope and cheap rhetoric accompanying the electoral season are inevitably followed by the inertia and broken promises of incumbency. The New Deal proves that this inevitability is not broken with faith, loyalty, or zeal, but with the full weight of an organized, militant movement.



Seventy-five years after the inauguration of Roosevelt and the emergence of the New Deal, we are faced with an even more powerful, resourceful, and dominant state-monopoly capitalism. This moment requires even more organization and agitation, even more militancy, and an even greater dedication to building a revolutionary movement for socialism.



A brief bibliography:



Boyer, Richard O. and Morais, Herbert M., Labor’s Untold Story (New York, 1955).

Corey, Lewis, The Decline of American Capitalism (New York, 1934).

Hosen, Frederick E., The Great Depression and the New Deal (Jefferson, North Carolina, 1992).

Labor Research Association, Trends in American Capitalism (New York, 1948).

Rauch, Basil, The History of the New Deal (New York, 1963).

Robertson, Ross M., History of the American Economy (New York, 1964)

Singh, V. B., Keynesian Economics: A Symposium (Delhi, 1956).

The US Two-Party System: Past and Present (Moscow, 1988).

Zinn, Howard, A People’s History of the United States (New York, 1980).

Soros Sees Additional Market Declines After Reprieve

George Soros views the economic problems through the eyes of a billionaire. Why shouldn't he... he is one. I put no stock in what Soros sees as "solutions." Soros' solutions are fine if one is a billionaire set to make money from the "bubble" bursting.

Most people are going to suffer terribly as this bubble bursts... unless there is the appropriate quick action taken to prevent the tragic consequences that accompany recessions and depressions.

We need to understand that George Soros is an expert at making money for himself off bad economic times which create hardships for the working class.

Therefore Soros' solutions should not be our solutions no matter how "liberal" Mr. Soros is.

The President of the International Association of Machinists has pointed out that already, with the economic crisis just in its initial stages, union pension funds have lost billions of dollars. This money did not just evaporate into thin air... this wealth transfered hands. This wealth moved from the pension funds of the working class to the banking accounts of those Wall Street "investors" like George Soros.

In fact, this present economic crisis is the result of the same thing that is behind every capitalist economic crisis... overproduction.

Overproduction results when society can not afford to purchase the goods and services produced.

No matter what the "liberal" George Soros says, there will be only one way to avoid a major depression in this country and around the world: A massive transfer of wealth from the bankers, investors and Wall Street coupon clippers to working people along with the creation of millions of new jobs.

George Soros, in spite of his "liberalism" will not discuss this solution because it would require his wealth be transferred, too.

There is only one way to make this massive tranfer of wealth quickly enough to avoid the complete collapse of the capitalist economy: A substantial increase in the minimum wage.

The United States Department of Labor should immediately begin calculations to determine what a real living annual income is taking into consideration all factors based upon a family of four using the United Nations Universal Declaration of Human Rights and the United Nations "Millenium Statement" concerning the intent to alleviate and end poverty.

In addition, all stock, bond and commodities transactions should be steeply taxed to pay for health care, housing and education.

Military expenditures are the single biggest contributor towards exacerbating economic recessions and depressions because instead of plowing this wealth back into society it is tantamount to dumping this tremendous wealth into the ocean. When asked if the war in Iraq is contributing to the present economic mess, President Bush responded with an emphatic "NO!" As we know, Bush is a liar about everything including on this issue of military spending. In response to the question, Bush said he felt that the military spending was actually helping the economy because, in his own words, he said, "This military spending is creating some jobs and providing workers with paychecks." If we end the war, slash the military budget down to what it takes to limit troops to bases here at home instead of at expensive foreign bases all over the world, and use some of that money to begin rebuilding the damage we caused in Iraq Bush should be happy because these funds will be putting pay-checks in the pockets of many more working people.

Further, the hell with bailing out the Wall Street investment community, bailout the homeowners... use the union pension funds as seed money to establish a Federal Bank on the model of the Bank of North Dakota.

In short, anything and everything must be done to help those hurting the most because it is the moral and the right thing to do; plus, it is the only way to approach the problems associated with the collapsing capitalist economy.

When we find George Soros and his Wall Street coupon clippers cutting coupons from newspapers they are pulling out of dumpsters as they search for their meals, and taking them back to the card-board boxes they call home, then we can offer George Soros and his chums a helping hand.

Can economic catastrophe be averted? Yes--- but not likely, because it takes moral and political courage focused on the plight of working people... it takes the political will.

Such political will does not exist in this country; as yet there is no social movement to exert the kind of force required to shift from making the rich, richer which causes the poor to get poorer--- to putting people's needs before the profits of big-business and the Wall Street coupon clippers.

Alan L. Maki




Soros Sees Additional Market Declines After Reprieve

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=ajkPSW_domB4


By Katherine Burton

April 3 (Bloomberg) -- Billionaire George Soros called the current financial crisis the worst since the Great Depression and said markets will fall more this year after a brief rebound.



George Soros, Soros Fund Management chairman and billionaire investor, speaks in Berlin, Oct. 17, 2007.

``We had a good bottom,'' Soros said yesterday in an interview in New York, referring to the rally in stocks and the dollar after JPMorgan Chase & Co. agreed to buy Bear Stearns Cos. on March 17. ``This will probably not prove to be the final bottom,'' he said, adding the rebound may last six weeks to three months as the U.S. moves closer to a recession.


Last summer, worried about market disruptions that started with rising subprime-mortgage defaults, Soros, 77, returned to a more active role in managing the $17 billion Quantum Endowment Fund, whose profits pay for his philanthropic projects. Quantum returned an average of 30 percent a year before Soros started using outside managers in 2000 for much of his money.


He also decided to write a book, his 10th, ``The New Paradigm for Financial Markets'' (Public Affairs, 2008). Released today online, the book explains the causes of the current meltdown, a crisis he says has been in the making since 1980, and the trades he put in place this year to protect his wealth, much of it in Quantum.


Soros has bet on declines in the dollar, 10-year Treasuries and U.S. and European stocks this year. He expected foreign currencies to rise, as well as Chinese and Indian equities. The latter bet helped Quantum return 32 percent in 2007. Quantum's returns this year have ranged from up 3 percent to down 3 percent.


`Heightened Uncertainty'


The euro has climbed 7.5 percent against the dollar this year and the Japanese yen has gained 9.1 percent. These and other currencies may continue to strengthen, he said.


``There is an increasing unwillingness to hold dollars, though there's a lack of suitable alternatives,'' he said. ``It's a period of heightened uncertainty.''


Federal Reserve officials dropped their benchmark interest rate 2 percentage points this year to 2.25 percent, and Soros doesn't see that they can lower the rate much further, given the weak dollar.


``We are close to the limit,'' he said.


New York Federal Reserve Bank President Timothy Geithner said today capital markets are still ``substantially impaired'' and policy makers and financial industry leaders must ``act forcefully'' to stem the crisis.


As for his wagers on developing markets, Soros hasn't abandoned his holdings in India, even with the 22 percent drop in the benchmark Indian index this year.


``The fundamentals remain good,'' he said. He is less certain about what will happen to Chinese H shares, which trade in Hong Kong. They've fallen 18.5 percent this year.


Credit-Default Swaps


Credit default swaps -- a way to bet on the creditworthiness of a company -- may be the next crisis area because the market is unregulated, and it's impossible to know whether counterparties can meet their obligations in the event of a bond default. The market has a notional value of about $45 trillion -- or about half the total wealth of U.S. households.


Soros recommends the creation of an exchange with a sound capital structure and strict margin requirements, where current and future contracts could be traded.


The cause of the current troubles dates back to 1980, when U.S. President Ronald Reagan and U.K. Prime Minister Margaret Thatcher came to power, Soros said. It was during this time that borrowing ballooned and regulation of banks and financial markets became less stringent.


Avoiding a `Super-Bubble'


These leaders, Soros said, believed that markets are self- correcting, meaning that if prices get out of whack, they will eventually revert to historical norms. Instead, this laissez- faire attitude created the current housing bubble, which in turn led to the seizing up of credit markets and the demise of Bear Stearns, Soros said.


To avoid a super-bubble in the future, Soros said banks must control their own borrowing. They must also curtail lending to clients such as hedge funds by demanding greater collateral and margin requirements on loans.


Asked if such moves would make it impossible to achieve returns like those of his pre-2000 days, Soros laughed.


``Since I'm designing these regulations, they would not hurt me,'' he said. ``We made direction bets but we haven't used leverage'' like the $25-to-$1 borrowing that brought down John Meriwether's Long-Term Capital Management LLC in 1998.


To contact the reporter on this story: Katherine Burton in New York at kburton@bloomberg.net

*************************

The false belief at the heart of the financial turmoil


http://www.ft.com/cms/s/0/ca1fac78-0116-11dd-a0c5-000077b07658.html?nclick_check=1


By George Soros





Published: April 3 2008

The proposal from Hank Paulson, US Treasury secretary, for reorganising government regulation of financial institutions misses the point. We need new thinking, not a reshuffling of regulatory agencies. The Federal Reserve has long had authority to issue rules for the mortgage industry but failed to exercise it. For the past 25 years or so the financial authorities andinstitutions they regulate have been guided by market fundamentalism: the belief that markets tend towards equilibrium and that deviations from it occur in a random manner. All the innovations - risk management, trading techniques, the alphabet soup of derivatives and synthetic financial instruments - were based on that belief. The innovations remained unregulated because authorities believemarkets are self-correcting.


Regulators ought to have known better because it was their intervention that prevented the financial system from unravelling on several occasions. Their success has reinforced the misconception that markets are selfcorrecting. That in turn allowed a bubble of excessive credit to develop, which extended through the entire financial system. When the subprime mortgage crisis erupted it revealed all the weak points. Authorities, caught unawares, responded to each new disruption only after it occurred. They lacked the ability to foresee them because they were in the thrall of the market fundamentalist fallacy. They need a new paradigm. Market participants cannot base their decisions on knowledge, or what economists call rational expectations. There is a two-way, reflexive interaction between the participants' biased views and misconceptions and the real state of affairs. Instead of random deviations, reflexivity may give rise to initially self-reinforcing but eventually self-defeating boom-bust sequences or bubbles.


Instead of reshuffling regulatory agencies, the authorities ought to prepare for the next shoes to drop. I shall mention only two. There is an esoteric financial instrument called credit default swaps. The notional amount of CDS contracts outstanding is roughly $45,000bn (£23,000bn). To put it into perspective, that is about equal to half the total US household wealth and about five times the national debt. The market is totally unregulated and those who hold the contracts do not know whether their counterparties have adequately protected themselves. If and when defaults occur, some of the counterparties are likely to prove unable to fulfil their obligations. This prospect hangs over the financial markets like a sword of Damocles that is bound to fall, but only after some defaults have occurred. That must have played a role in the Fed's decision not to allow Bear Stearns to fail. One possible solution is to establish a clearing house or exchange with a sound capital structure and strict margin requirements to which all existing and future contracts would have to be submitted. That would do more good in clearing the air than a grand regulatory reorganisation.


The other issue is rising foreclosures. About 40 per cent of the 6m subprime loans outstanding will default in the next two years. The defaults of option-adjustable-rate mortgages and other mortgages subject to rate reset will be of the same order of magnitude but occur over a longer period. With single family home sales running at an annual rate of 600,000, foreclosures will overwhelm the market and cause prices to overshoot on the downside. This will swell the number of homeowners with negative equity who may be tempted to turn in their keys. The fall in house prices will become practically bottomless until the government intervenes. Cutting foreclosures should be a priority but the measures so far are public relations exercises.


The Bush administration has resisted using taxpayers' money because of its market fundamentalist ideology. Apart from a bipartisan fiscal stimulus, it has left the conduct of policy largely to the Fed. Yet taxpayers' money will be needed to reduce foreclosures. Two proposals by Democrats in Congress strike a balance between the right to foreclosure and discouraging the exercise of that right. One would modify the bankruptcy laws allowing judges to modify the terms of mortgages on principal residences. Another would provide Federal Housing Administration guarantees that would enable mortgage holders to be paid off at 85 per cent of the current appraised value. These proposals will not solve the housing crisis, but go to the heart of the issue. They should be given serious consideration.

Seeing an End to the Good Times (Such as They Were)

Seeing an End to the Good Times (Such as They Were)


By David Leonhardt


The New York Times

March 8, 2008



If history is a reliable guide, the recession of 2008
is now unavoidable.


The dismal jobs report released Friday showed overall
employment to be lower than it was three months ago.
Every time such a slump has occurred since the early
1970s, a recession has followed - or already been under
way.


And if the good times have really ended, they were
never that good to begin with. Most American households
are still not earning as much annually as they did in
1999, once inflation is taken into account. Since the
Census Bureau began keeping records in the 1960s, a
prolonged expansion has never ended without household
income having set a new record.


For months, policy makers and Wall Street economists
have been predicting, and hoping, that the aggressive
series of interest rate cuts by the Federal Reserve
would keep the economy growing, despite the housing
bust. But the possibility seemed to diminish almost by
the hour on Friday.


Shortly after 8 a.m., the Fed announced yet another
measure meant to unlock the struggling credit markets.
At 8:30, the Labor Department released the unexpectedly
poor jobs report. Almost immediately, the economists at
JPMorgan Chase - who only last week had told clients
they thought the economy was still growing - reversed
course and said a recession appeared to have started
earlier this year.


Stocks fell when the markets opened at 9:30, recovered
and then fell again, with the Standard & Poor 500-stock
index closing down 0.8 percent. Traders became even
more confident, based on the price of futures
contracts, that the Fed would cut its benchmark
interest rate three-quarters of a point, to 2.25
percent, when policy makers meet on March 18.


'The question was always, ˜Would the economy hang on by
its fingernails?' ' said Ethan Harris, the chief United
States economist at Lehman Brothers. Based on the
employment report, Mr. Harris said, 'there's a very
high probability that we're in a recession now.'


Even the one apparent piece of good news in the
employment report was a mirage. The unemployment rate
fell to 4.8 percent, from 4.9 percent in January, but
only because more people stopped looking for work and
thus were not counted as unemployed by the government.


Over the last year, the number of officially unemployed
has risen by 500,000, while the number of people
outside the labor force - neither working nor looking
for a job - has risen by 1.3 million.


Employment has risen by 100,000, but even that comes
with a caveat: there are also 600,000 more people who
are working part time because they could not find full-
time work, according to the Labor Department.


'The decline in the unemployment rate,' said Joshua
Shapiro, an economist at MFR, a research firm in New
York, 'should not be viewed as good news.'


Much of the economic stimulus put in place by the
government will begin to take effect in the next few
months, which does leave open the possibility that the
country can still escape a recession. Policy makers
have reacted quite quickly to this slowdown, relative
to previous ones.


The Treasury Department will begin sending out rebate
checks - of up to $1,200 for couples, plus $300 per
child - in May, as part of the stimulus package
negotiated by President Bush and Democratic leaders in
Congress. The Fed has already cut its benchmark short-
term interest rate five times since September, and such
reductions typically take six months or more to wash
through the economy.


White House officials have predicted in recent weeks
that the economy would avoid recession, but after the
release of the jobs report, they offered a subtly
different forecast. At the White House on Friday,
Edward P. Lazear, the chairman of Mr. Bush's Council of
Economic Advisers, parried reporters' questions about
whether he now thought the economy would slip into a
recession.


Instead, he said, 'I'm still not saying that there is a
recession.'


The administration does expect growth in the current
quarter to be slower than it had previously thought,
before accelerating this summer. 'Obviously, we are
concerned,' Mr. Lazear said. But he added that he
remained hopeful that 'growth will pick up, and pick up
quickly.'


The most commonly cited arbiter of recessions is the
National Bureau of Economic Research, a group of
academic economists that is based in Cambridge, Mass.
(Mr. Lazear referred to the group at his briefing,
saying it would not be clear whether there had been a
recession until the bureau had made an announcement.)


The seven economists who sit on the bureau's recession-
dating committee began exchanging e-mail messages late
last year about whether the economy was on the verge of
a recession. But committee members said Friday that it
remained too early to know.


The bureau defines a recession as a significant,
protracted decline in activity that cuts across the
economy, affecting measures like income, employment,
retail sales and industrial production.


'Given that definition, the committee can't possibly
call a recession until it has been going on for a
while,' said Christina D. Romer, an economics professor
at the University of California, Berkeley. 'There is no
way to know if the downturn will be sufficiently long-
lasting until it has lasted for a while.'


The committee did not announce the end of the last
recession - which came in November 2001 - until more
than a year-and a half later. Robert J. Gordon, a
Northwestern University economist on the committee,
said any announcement about the start of a new
recession was unlikely before the last few months of
2008 at the earliest.


Recent recessions have inevitably brought inflation-
adjusted income declines for most families, which would
be particularly painful given what has happened over
the last decade. For a variety of reasons that
economists only partly understand - including
technological change and global trade - many workers
have received only modest raises in recent years,
despite healthy economic growth.


The median household earned $48,201 in 2006, down from
$49,244 in 1999, according to the Census Bureau. It now
looks as if a full decade may pass before most
Americans receive a raise.