economy

by

Work Harder to Earn Less: French Fury in the EU Cage

“Work Harder to Earn Less” : French Fury in the EU Cage.

by Diana Johnstone

The French are at it again – out on strike, blocking transport, raising hell in the streets, and all that merely because the government wants to raise the retirement age from 60 to 62.  They must be crazy.

That, I suppose, is the way the current mass movement in France is seen – or at least shown – in much of the world, and above all in the Anglo-Saxon world.

Perhaps the first thing that needs to be said about the current mass strikes in France is that they are not really about “raising the retirement age from 60 to 62”. This is rather like describing the capitalist free market as a sort of lemonade stand. A propaganda simplification of very complex issues.

It allows the commentators to go crashing through open doors.  After all, they observe sagely, people in other countries work until 65 or beyond, so why should the French balk at 62? The population is aging, and if the retirement age isn’t raised, the pension system will go broke paying out pensions to so many ancients.

However, the current protest movement is not about “raising the retirement age from 60 to 62”. It is about much more.

For one thing, this movement is an expression of exasperation with the government of Nicolas Sarkozy, which blatantly favors the super-rich over the majority of working people in this country.  He was elected on the slogan, “Work more to earn more”, and the reality turns out to be work harder to earn less.  The Labor Minister who introduced the reform, Eric Woerth, got a job for his wife on the office staff of the richest woman in France, Liliane Bettencourt, heir to the Oreal cosmetics giant, at the same time that, as budget minister, he was overlooking her massive tax evasions. While tax benefits for the rich help empty the public coffers, this government is doing what it can to tear down the whole social security system that emerged after World War II on the pretext that “we can’t afford it”.

The retirement issue is far more complex than “the age of retirement”.  The legal age of retirement means the age at which one may retire.  But the pension depends on the number of years worked, or to be more precise, on the number of cotisations (payments) into the joint pension scheme. On the grounds of “saving the system from bankruptcy”, the government is gradually raising the number of years of cotisations from 40 to 43 years, with indications that this will be stretched out further in the future.

As education is prolonged, and employment begins later, to get a full pension most people will have to work until 65 or 67.  A “full pension” comes to about 40 per cent of wages at the time of retirement.

But even so, that may not be possible.  Full time jobs are harder and harder to get, and employers do not necessarily want to retain older employees.  Or the enterprise goes out of business and the 58-year old employee finds himself permanently out of work.  It is becoming harder and harder to work full-time in a salaried job for over 40 years, however much one may want to.  Thus in practice, the Sarkozy-Woerth reform simply means reducing pensions.

That, in fact, is what the European Union has recommended to all member states as an economy measure, intended, as with most current reforms, to reduce social costs in the name of “competitivity” – meaning competition to attract investment capital.

Less qualified workers, who instead of pursuing studies may have entered the work force young, say at age eighteen, will have subscribed to the scheme for forty-two years at age 60 if indeed they manage to be employed all that time. Statistics show that their life expectancy is relatively short, so they need to leave early in order to enjoy any retirement at all.

The French system is based on solidarity between generations, in that the cotisations of  today’s workers go to pay today’s retired people’s pensions.  The government has subtly tried to pit one generation against another, by claiming that it is necessary to protect the future of today’s youth, who are paying for the “baby boom” pensioners. It is therefore extremely significant that this week, high school and university students massively began to enter the protest strike movement.  This solidarity between generations is a major blow to the government.

The youth are even much more radical than the older trade unionists. They are very aware of the increasing difficulty of building a career.  The trend is for qualified personnel to enter the work force later and later, having spent years getting an education.   With the difficulty of finding a stable, full-time job, many depend on their parents until age 30.  It is simple arithmetic to see that in this case, there will be no full retirement until after age 70.

Productivity and Deindustrialization

As has become standard practice, the authors of the neo-liberal reforms present them not as a choice but as a necessity.  There is no alternative.  We must compete on the global market.  Do it our way or we go broke.  And this reform was essentially dictated by the European Union, in a 2003 report, concluding that making people work longer was necessary to cut pension costs.

These dictates prevent any discussion of the two basic factors underlying the pension problem: productivity and deindustrialization.

Jean-Luc Mélenchon, the former Socialist Party man who heads the relatively new Left Party, is about the only political leader to point out that even if there are fewer workers to contribute to pension schemes, the difference can be made up by the rise in productivity.  Indeed, French worker productivity is among the very highest in the world (higher than Germany, for example).  Moreover, although France has the second longest life expectancy in Europe, it also has the highest birth rate.  And even if jobholders are fewer, because of unemployment, the wealth they produce should be adequate to maintain pension levels.

Aha, but here’s the catch:  for decades, as productivity goes up, wages stagnate.  The profits from increased productivity are siphoned off into the financial sector.  The bloating of the financial sector and the stagnation of purchasing power has led to the financial crisis – and the government has preserved the imbalance by bailing out the profligate financiers.

So logically, preserving the pension system basically calls for raising wages to account for higher productivity – a very major policy change.

But there is another critical problem linked to the pension issue: deindustrialization.  In order to maintain the high profits drained by the financial sector, and avoid paying higher wages, one industry after another has moved its production to cheap labor countries.  Profitable enterprises shut down as capital goes looking for even higher profit.

Is this merely the inevitable result of the rise of new industrial powers in Asia?  Is a lowering of living standards in the West inevitable due to their rise in the East?

Perhaps.  However, if shifting industrial production to China ends up lowering purchasing power in the West, then Chinese exports will suffer. China itself is taking the first steps toward strengthening its own domestic market.  “Export-led growth” cannot be a strategy for everyone.  World prosperity actually depends on strengthening both domestic production and domestic markets.  But this requires the sort of deliberate industrial policy which is banned by the bureaucracies of globalization: the World Trade Organization and the European Union.  They operate on the dogmas of “comparative advantage” and “free competition”.  On grounds of free trade, China is actually facing sanctions for promoting its own solar energy industry, vitally necessary to end the deadly air pollution that plagues that country.

The world economy is being treated as a big game, where following the “rules of the free market” is more important than the environment or the basic vital necessities of human beings.

Only the financiers can win this game.  And if they lose, well, they just get more chips for another game from servile governments.

Impasse?

Where will it all end?

It should end in something like a democratic revolution: a complete overhaul of economic policy.  But there are very strong reasons why this will not happen.

For one thing, there is no political leadership in France ready and able to lead a truly radical movement.  Mélenchon comes the closest, but his party is new and its base is still narrow.  The radical left is hamstrung by its chronic sectarianism.  And there is great confusion among people revolting without clear programs and leaders.

Labor leaders are well aware that employees lose a day’s pay for every day they go on strike, and they are in fact always anxious to find ways to end a strike.  Only the students do not suffer from that restraint. The trade unionists and Socialist Party leaders are demanding nothing more drastic than that the government open negotiations about details of the reform.  If Sarkozy weren’t so stubborn, this is a concession the government could make which might restore calm without changing very much.

It would take the miraculous emergence of new leaders to carry the movement forward.

But even if this should happen, there is a more formidable obstacle to basic change: the European Union.  The EU, built on popular dreams of peaceful and prosperous united Europe, has turned into a mechanism of economic and social control on behalf of capital, and especially of financial capital.  Moreover, it is linked to a powerful military alliance, NATO.

If left to its own devices, France might experiment in a more socially just economic system.  But the EU is there precisely to prevent such experiments.

Anglo-Saxon Attitudes

On October 19, the French international TV channel France 24 ran a discussion of the strikes between four non-French observers.  The Portuguese woman and the Indian man seemed to be trying, with moderate success, to understand what was going on.  In contrast, the two Anglo-Americans (the Paris correspondent of Time magazine and Stephen Clarke, author of 1000 Years of Annoying the French) amused themselves demonstrating self-satisfied inability to understand the country they write about for a living.

Their quick and easy explanation: “The French are always going on strike for fun because they enjoy it.”

A little later in the program the moderator showed a brief interview with a lycée student who offered serious comments on pensions issue.  Did that give pause to the Anglo-Saxons?

The response was instantaneous.  How sad to see an 18-year-old thinking about pensions when he should be thinking about girls!

So whether they do it for fun, or whether they do it instead of having fun, the French are absurd to Anglo-Americans accustomed to telling the whole world what it should do.

Diana Johnstone is the author of Fools Crusade: Yugoslavia, NATO and Western Delusions. Write her for the French version of this article, or to comment, at diana.josto@yahoo.fr

by

Mini Rant Against Retailers

Headline on Yahoo! today:  Retailers Report Weak June Sales.

Well, duh.  Has anyone been to retail stores lately?  Especially clothing stores?  It’s like retailers think we are all rolling in dough or something.  And even if we were rolling in dough, the prices on shitty crap made in China are obscene, especially at stores that like to capitalize on brand names.  Most of the stuff is piteously and poorly made, but it has a label in it, so the store charges a small fortune.  T-shirts that are so thin they are see-through.  Clothes have seams where the threads are already coming out before the clothes have even been sold.  Then the retailers want $50 or $60 for them.  And it isn’t just clothes.  Bottles of plain lotion are $15.  Razor blades–razor blades! those little pieces of metal that cost about .20 cents–are 20 bucks a pack, just so people can have four in a row.  Cereal is $6 a box, when the cost to make cereal is lower than it has ever been. It’s insane.

Here’s a clue stores:  Want to sell more stuff?  Lower prices to an affordable and reasonable level.  Forty bucks for a t-shirt is too much, especially a crappy, see-through t-shirt.  Seventy bucks for pants is ridiculous, especially since you can’t seem to vary your sizes so that people can buy things that fit.  $100 or more for a purse is stupid, especially since, in my experience, the straps or buckles break within a couple of months.  Marking things as “on sale” with a higher MSRP is for fools.  You may have been able to sell your crap for ridiculous prices a couple of years ago, but times have changed (and people were probably buying all your crap on credit then anyway.  Now the bills are due and the job is gone and there isn’t anything left to spend with.).

A special note to Goodwill:  Your stuff is USED.  Trying to sell a suitcase with a hole in it for forty bucks is never going to make you a penny. I can go buy a NEW one for that price, without the hole!  Used clothes for $10 or $15 is too much.  And an old, ratty, smelly couch for $150 is TOO MUCH!  Your racks are FILLED with crap you will never sell because, guess what?  Your prices are too high for used junk.  There was a bunch of flack a couple of years ago about your CEO making too much money.  Stop charging too much and giving the money you do make to the CEO.  Start helping the people you put on your trucks and in your ads in your pitiful attempts to look like d0-gooders and actually charge prices these people could afford.

by

I Gave a Man an Apple

I gave a hungry man an apple yesterday and I keep thinking about it.  I don’t want to trivialize it, but I wanted to write about him.  I keep seeing him at the other end of the subway car gnawing the apple as if his life depended on it.  And maybe it did.  I thought of him this morning in my insomniac hours.  I thought about the homeless families I read about in the New York Times and I wanted to write and comment about what homelessness is, but that seems so boring and unlikely to change anything.  People read me, but no one is going to read what I have to say about homelessness and change anything.  I don’t know what would remove the image of that man from my brain.  I don’t know that I should remove that image.  I just keep thinking about it.  So many times I have sat on the subway car and a person comes on and says, Excuse me, Ladies and Gentlemen, apologizes, and then proceeds with their spiel.  So many times I have been slightly annoyed by the interruption, yet felt guilty at the same time.  I simultaneously realize how close to precarious is my own financial situation, yet I acknowledge that we are nowhere near completely homeless and there are people in our lives who would ensure true homelessness is a most unlikely possibility.  I know also how pitiful and useless would be the change in my pocket.  And honestly, I am slightly resentful at being asked even though it isn’t fair to feel this way.  So I do nothing.  But there have been times when I have had food, times before moving to New York, when I would give food to people asking for it.  This time I had an apple, he asked for food, why not?  He told his sad story and I handed him my apple, then thought nothing more of it until I looked up minutes later to see him devouring that apple like he hadn’t eaten in days.  It was ginormous and red and beautifully ripe, a sort of dream apple.  It makes me weep to think of his hunger, swallowing the pieces so quickly he could not have had time to enjoy much of its fragrant sweetness.  It makes me wonder what would happen if I ever gave into the urge I have had in the past to ask the person to sit down and talk to me.  Sometimes I am afraid because the person seems to be mentally ill. I don’t want to be screamed at.  Other times I just don’t do it.  I’ve never done it.  But the urge has been there over and over.  I have wanted to stop my car (back when I had and drove a car) and ask the person holding the sign What happened?  How did you get here? But I haven’t done it.  I wonder if I ever will.

by

Drive Your Car, McCain

This piece can be seen on Huffington Post:
http://www.huffingtonpost.com/lara-m-gardner/a-leader-should-be-able-t_b_129341.html

Out of curiosity, I made a small survey of job postings just to see what kinds of skills employers are requiring of potential employees. Among other things, one of the primary requirements of job seekers is that they possess the ability to multitask. Multitasking is a simple concept really. It means doing more than one thing at a time. Quite a lot of jobs require it. I did this because of all of the discussion yesterday on McCain’s desire to cancel the debate, as well as his temporary cessation of campaigning, both in order to “focus on the economy.”

How does this “focusing on the economy” work exactly? Does one sit and stare at numbers for a while in order to create this focus? Perhaps it means getting together with other people to talk about the economy. Maybe it means actual participation as a senator, an activity he was rightly allowed to place on hold while running for president.

What I find confusing is why McCain’s focus on the economy cannot take place concurrent with running his campaign or why it impacts his ability to debate. If he knows the issues, if he is prepared to lead this country, then he should be able to think on his feet and debate as necessary. He should be able to throw out a sound bite or two or answer some questions on talk shows for his campaign. Basically, he should be able to multitask. While debating may require some skill, certainly campaigning does not require as much. All he has to do is show up.

The man has been a senator for what, twenty-six years? Based on the number of years McCain has spent in public office, debating and campaigning should both be skills in which he is quite adept. These activities should be the sorts of things he can do without a whole heck of a lot of effort, the sorts of things at which he should be able to multitask quite well. It should be easy for him to focus on the economy.

For McCain, debating and campaigning should theoretically operate like driving a car. At first, steering and braking and shifting all at once is overwhelming, requiring our complete attention After a few years, these actions become so automatic we do not even realize we’re doing them. We can focus on other things while we’re driving, even stressful things like driving someone to the hospital or navigating through bad weather. Although our basic skills may be diminished, requiring greater attention so we do not end up in an accident, we do not suddenly stop being able to drive at all just because something bigger is happening at the same time.

I find it puzzling and distressing that rather than using the economic meltdown to display his prowess at multitasking, in order to focus McCain must stop performing skills that should be as automatic to him as driving a car. When older drivers reach the point where they cannot perform these basic functions we take away their driver’s license. If McCain has reached this point, should we really allow him to drive the country? I don’t think so.

by

Pitiful

It just makes me sick, those poor babies made ill by milk powder in China.  It reminds me of Nestle going into third world countries, telling the women to stop breastfeeding and to “use formula like western women,” all the while ignoring the fact that the water is unsafe to drink.  The result is a 50% infant mortality rate in these countries because the babies die from dysentery.  Now we have over 59,000 babies sickened and killed in China from drinking poisoned milk powder.

Fifty percent infant mortality rate.  59,000 sick and dying children.  All these giant numbers, all these sanitized words used to cover one salient fact:  some parent’s baby got really sick or died.  Each of those hurt or killed had a mom and dad who either had to sit up worrying about a sick baby or they lost a little baby they loved, not to mention the fact that these little kids had to suffer through sick stomachs, diarrhea, and vomiting.  Use sanitized words and it becomes so easy to forget that.

The other piece of this that strikes me is how truly sad it is that formula is fed to children instead of breastmilk.  I wrote a law review article calling for laws requiring employer accommodation of breastfeeding women.  For that article, I did extensive economic and medical research to back up my arguments.  The conclusion I drew was that breastfeeding saves lives and money.  We never should have switched to a system where it was not the norm.  Of course, money drove the trend on many levels.  Money, money, money.  Everyone wants it.  Everyone wants everyone else to think they have it.  Stupid decisions are made because of it, from the decision to make our babies sleep in other rooms to the decision to feed our children milk made from powder to prove we can afford it.  Later these decisions became the norm to the point where children who want to sleep with their parents are considered problems and babies drinking from mothers’ breasts is considered obscene.  No one questions why it started and what was normal for thousands of years becomes disgusting and unnatural.

I continue to marvel at the ridiculousness of human beings. We’re too smart for our own good.  Unfortunately, we aren’t smart enough to make milk that is as good as our own and the result is that it makes babies sick and kills them.  Pitiful.  Truly pitiful.

by

There Oughta be a Law…

How many times has something really catastrophic happened followed by people scratching their heads and saying, “There ought to be a law.”  I wonder how many of these same people would call such laws “regulation” because that’s exactly what they are.  Deregulation?  Deregulation is the removal of laws, including laws that protect us from harm.  In all the talk and rhetoric about less government and deregulation, this point is lost.

This morning I opened the newspaper to read about babies sick and dying in China because of tainted milk.  I searched for articles from all over the world about the scandal.  All of them contained the same refrain:  tighter regulations.  What does this say to me?  There were not enough laws to protect these people from milk that could kill or harm their children.

When it comes right down to it, deregulation is only a good thing to people who are only concerned with making more money.  Deregulation means letting the market (e.g., greed) determine entirely what should happen and what should not happen.  Here in the US, we are experiencing firsthand what it means to let the market make decisions.  It means letting greed make moral choices.  It means letting corporations balance a baby’s life versus the cost to make its milk safer.  Unfortunately, in many cases it is cheaper to let the child die than it is to fix the milk.  There are profits to be made by putting someone into a house they can’t afford.  Who cares if a family ends up on the street in three years?  We made our money. The market made the decision for us.

When we use sanitized terms to describe real, human, moral conditions, when these terms become buzzwords, it is so easy to forget that real people with real lives are involved and affected.  Deregulation means there are no laws to protect us from harm.  Letting the market regulate itself means letting money and profit determine what decisions are made.  Too often, these decisions have nothing to do with humanity and morality and instead focus entirely on making a profit.

by

Deregulate Insurance Like We Deregulated Wall Street

Good one, McCain.  You’re on top of things.  You obviously know your stuff.  I cannot believe there are people out there who would make this man president…

http://thinkprogress.org/2008/09/20/mccain-deregulate-insurance/

Paul Krugman notes that Sen. John McCain (R-AZ) published an article on his health care plan in the current issue of Contingencies — the magazine of the American Academy of Actuaries. In his article, McCain attempts to make his case for deregulating the health insurance industry by extolling the benefits of the last decade of deregulation in the banking sector. He writes:

Opening up the health insurance market to more vigorous nationwide competition, as we have done over the last decade in banking, would provide more choices of innovative products less burdened by the worst excesses of state-based regulation.

As Yglesias writes, McCain is “such an enthusiast about financial market deregulation that he was bragging about his plan to make the health care system as awesome as the financial system.”

by

Ranting

As a bankruptcy attorney, I dealt day to day with the fallout of the “sub-prime” mortgage crisis.  It’s getting worse.  ARM loan rates go up, people have less money to pay their other bills, they get behind, call the bankruptcy attorney.  I heard story after story, helped when I could, but the system is broken.  There are no safety nets for people.

What I find ironic, and what really actually pisses me off, is that these huge banks have been screaming Deregulation! Deregulation! Deregulation! for years and they got what they wanted.  Credit card companies do what they want when they want.  Sub-prime home loans are commonplace.  What few laws that are left are ignored by greedy lenders looking to suck in any consumer desperate enough to want a home.  And now the house of cards is falling all around us and what do the big banks do?  Go crying to Congress to fix it for them.

Two years ago these banks asked Congress to punish the shit out of consumers filing for bankruptcy claiming they were losing too much and consumers were getting away with something.  Consumers need to take better responsibility for their financial decisions!  They need to pay for their mistakes!  Congress jumped on board and passed some of the worst legislation ever designed.  It ignored reality and served a very rich few.  It has not stopped bankruptcy, it has only made it a bigger pain in the ass.  Now the banks are suffering from their own stupidity and greed and they want Congress to fix it for them.  What happened to RESPONSIBILITY?  What happened to paying for your own MISTAKES?  How about we create legislation like the bankruptcy laws and stick it to their asses?  Oh no, they’ll whine.  You can’t do THAT.  It will hurt the ECONOMY!  Fuck, the economy is a mess.  Anything that looks like stability is an illusion.  Consumer purchases are paid for by borrowed money.  The US is in debt up to its eyeballs.  It’s going to come crashing to the ground.  It is inevitable.   Congress can pretend to try and bail out these stupid fucking banks, but it’s only going to be a bandaid.

Capitalism is a triangle.  It requires a bottom to keep the shit running.  It also requires a down to every up.  We have been in a pretend up for a very long time.  It’s going to come back down.  Everyone who is on the deregulation boat is going to get what they deserve.  There is a reason we don’t want pure laissez-faire capitalism.  There is a reason we need to regulate.  We only need to look at China to see what capitalism without regulation looks like…children working horrible hours for worthless pay, no safety standards, a good deal of the country in poverty while a rich few sit back with guns, shooting those who dare to question them.

Okay.  I have to stop.  I’m getting all irritated.  I just find it ironic that the same banks who worked so damn hard for deregulation are the same ones that want us to bail them out.